When it comes to estate planning, it often seems as though everyone you know has a well-meaning piece of advice. One of the most common suggestions you will likely hear is the importance of including probate avoidance as a primary goal within your estate plan. Before you can decide whether to heed that advice, however, you need to understand exactly why avoiding probate is so desirable. To help you better evaluate the need to include probate avoidance in your estate plan, an Illinois estate planning attorney at Hedeker Law, Ltd. explains the probate process and how your loved ones benefit if your estate can avoid probate.
After your death, the assets that make up your estate must eventually be transferred to their new owners. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate. There are, however, a number of steps in the probate process that must be completed before those assets can be released to the new owners. Although the probate process is unique for every estate, common steps in the process include:
- Identifying, locating, and valuing all estate assets.
- Categorizing assets as probate or non-probate assets.
- Opening the probate of the estate by filing a petition, along with an official death certificate, in the appropriate court.
- Notifying creditors of the estate that probate is underway.
- Identifying, locating, and notifying beneficiaries and/or heirs of the estate that the estate is being probated.
- Reviewing and approving or denying creditor claims.
- Prioritizing and paying approved claims.
- Selling assets, if necessary, to pay creditors.
- Defending any challenges to the Will or litigating any claims made by creditors that were denied.
- Calculating any paying federal (and state, if applicable) gift and estate taxes
- Effectuating the legal transfer of the remaining assets to the named beneficiaries and/or legal heirs of the estate.
Probate Avoidance Benefits
Although probate involves a number of necessary and beneficial objectives, it is also a time-consuming, and often expensive, endeavor. Probating even a fairly modest estate without complex assets in the State of Illinois will typically take at least six months because of the time given to creditors to file claims and appeal denials. The more complex and valuable the estate assets are, the longer it will likely take to probate the estate. If the estate becomes involved in litigation, it can easily take years to conclude the probate process. Keep in mind that estate assets remain out of reach to beneficiaries/heirs until the probate process is finished. In addition, everyone involved in the probate process is entitled to a fee, including appraisers, attorneys, accountants, and the Executor. Those expenses are paid out of the estate assets, thereby diminishing the value of the estate that is ultimately passed down to the decedent’s loved ones. Avoiding probate, therefore, is desirable because it saves both time and money.
Probate Avoidance Tools and Strategies
What can you do to help your estate avoid probate? Fortunately, there are a variety of estate planning tools and strategies designed to help avoid probate. Assets held in a trust, for example, bypass the probate process altogether, meaning the assets can be distributed to beneficiaries as soon after your death as you wish using the terms you create when you establish the trust. Trusts offer numerous additional estate planning benefits that can be combined with the probate avoidance benefits, making a trust an extremely useful estate planning tool. Certain types of joint ownership also allow your interest in an asset to pass automatically to the co-owner(s) immediately after your death, thereby avoiding probate. Accounts designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” also allow funds held in the account to be passed directly to the designated beneficiary upon the death of the account holder without going through probate. Finally, life insurance proceeds are also distributed immediately to the designated beneficiary instead of being held up in probate. Using any, or all, of these tools/strategies, can help achieve your probate avoidance goals.
Contact an Illinois Estate Planning Attorney
For additional information, please download our FREE estate planning worksheet. If you have questions or concerns regarding probate avoidance, contact the experienced Illinois estate planning attorney at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.