When someone dies, there is usually a certain amount of turmoil, even if the death was expected. There are relatives, friends, neighbors and colleagues to be notified, funeral and/or memorial plans to be made, and a host of emotions to be experienced beyond the anticipated grief. In addition to all this, of course, there are financial matters to be dealt with. It is all too easy for surviving loved ones to become overwhelmed. In many cases, the simple, frequently misunderstood word “probate” is enough to baffle and distress them.
The knowledgeable, compassionate attorneys at M&A Law Firm, P.C. are ready to answer all of your questions regarding probate and estate administration. We are well-equipped to assist you in handling all matters that arise after a loved one’s death. Our knowledge of the intricacies of the law will give you confidence and our skilled attention to detail will give you peace of mind.
What is probate?
Probate is the legal process of proving a will’s validity and then administering the estate according to its terms. If you leave a will behind, it must be validated judicially through the process of probate before its terms can be executed. Under certain circumstances, however, it is possible to avoid probate. This is why working with a skilled estate planning attorney beforehand can be extremely important to the outcome, both in terms of decreasing stress levels and in terms of protecting your assets and your loved ones.
Generally, a formal probate court proceeding is necessary in Illinois only if the estate’s assets are worth more than $100,000 and were owned solely by the decedent. If the estate is worth less than that amount, Illinois has a simplified probate process that involves the executor filing a simple written request. All heirs and beneficiaries named in the will, however, must consent to this in writing.
Even with larger estates, there are a number of ways in which probate can be entirely avoided. Examples of assets that do not have to be processed through probate include:
- Joint tenancy assets, such as real estate or bank accounts with “pay on death” (POD) or “in trust for” designations
- Assets with designated beneficiaries (life insurance policies, IRA and 401(k) accounts)
- Assets in carefully constructed trusts, such as revocable living trusts
It is always wise to work closely with a capable estate planning attorney to avoid probate costs and delays as much as possible.
The Process of Probate
Although the deceased may already have named you as executor in the will, in Illinois you begin the process of probate by asking the local court (in the county in which the decedent lived at the time of death) to name you as official executor of the estate. If no will has been drawn up, you will request that you be named “administrator” of the estate. Ordinarily, your request is accompanied by an application, the death certificate, and the original will. Even if the deceased individual owned real estate in more than one county in the state, you can still take care of the filing in one probate court.
As executor your responsibilities will be to:
- Prove in court that the decedent’s will is valid
- Take inventory of the deceased’s assets
- Have those assets appraised
- Pay debts and taxes
- Distribute the remaining property as directed by the will (or, if no will exists, by state law)
In order to prove that the will is valid, you’ll need a notarized statement (called a self-proving affidavit) that witnesses signed at the time they signed the bill, a sworn statement signed by a witness at present, or current court testimony from the witness.
As executor or administrator of the will, you are entitled to “reasonable compensation.” This amorphous term is interpreted by the judge, who determines the amount you will receive. If you were a witness to the will, however, you will not receive any monetary compensation since the court would consider this a conflict of interest.
The First Hearing
This hearing is scheduled to permit any and all interested parties the opportunity to object to your appointment as executor. Before the hearing takes place, formal legal notices must be sent to all beneficiaries named in the will, as well as to all heirs under state law (those who would inherit if no will existed). You will also have to notify all known creditors and to publish a legal notice in the local newspaper so that (theoretically at least) anyone else owed money by the decedent will be able to make a claim against his or her assets.
Once the first hearing has taken place, any person who wants to contest it or argue why the administrator is not the proper individual to be in charge has 6 months during which to make an objection. If the will or choice of executor is questioned, the administration of the estate may have to be supervised. With “supervised administration,” the court must approve most actions before the executor takes them.
Most of the time, the first hearing sounds more formal than it is. In many cases, you won’t even have to show up in person, but can simply have the court issue documents, known as Letters Testamentary, that confirm you as executor or administrator. If you live in another state, you may have to file another paper in which you appoint someone who lives in the vicinity in which the decedent resided to act as your agent by receiving documents from the local court.
Cost Associated with Probate
To ensure that you, the executor or administrator, deal with the estate fairly, the court may insist that you post a bond to protect the estate from any losses you may cause. There is a fee for this type of insurance, but the, as executor, you may pay for the bond with estate funds. Probate costs in Illinois also include filing fees, publication fees, and document fees.
Proceeding to Manage Estate Property
Once probate is pending, as administrator you can gather the decedent’s assets and open a bank account in the name of the estate. During this period, you can use money in the account to pay known creditors. Remember, the account must stay open for 6 months to make sure unknown creditors are provided with the chance to come forward and present their claims and you must publish a notice in a local newspaper to alert creditors who may not be aware of the decedent’s passing. Such creditors must, of course, prove the validity of their claims.
In addition, this is the period during which you should compile a complete list of the decedent’s assets and, if necessary, get these assets appraised. You cannot sell the decedent’s real estate or business holdings until you get the court’s permission, except in cases where the will has stipulated that you have the right to do so. Prior authorization is provided in many wills under a law called the Independent Administration of Estates Act.
Asset Distribution to Beneficiaries
As executor or administrator you have to make certain that there is enough money in the estate to pay all necessary debts and taxes before you distribute anything to beneficiaries. If you ensure that there is enough money banked for debts and taxes, however, you can distribute to those designated to inherit even before the probate proceeding ends.
There are a number of situations in which property should be distributed sooner rather than later. In many cases, for example, the decedent leaves one or more cars behind and most automobiles depreciate with each passing year. The same may be true of certain pieces of household equipment. Also, there are the needs of the beneficiaries to consider, for whom waiting for an inheritance may require borrowing at high rates of interest.
Closing the Estate
Once the necessary 6 months have passed, and all debts and taxes have been paid, you can finish distributing assets to beneficiaries as designated in the will and close the estate once and for all. In order to legally close the estate, you will have to give the court an accounting of your estate managerial activities, basically a list of all asset distributions to creditors, the government (in taxes), and the beneficiaries. You’ll also be expected to keep a tally of the monies that were received by the estate during the interim and of any property that has depreciated in value. Once you have closed the estate, your duties as an executor are completed.
How long do probate and estate administration take?
The time involved in the process is variable, depending on the size and complexity of the estate. Even larger estates may be put to rest within about a year. When there are disputes among family members or other potential beneficiaries and/or wills are contested, there are inevitable delays. If a court battle ensues, it usually concerns claims that:
- Someone, often a caregiver, exercised undue influence over the decedent
- The deceased person lacked sufficient mental capacity to make a valid will
- There was an irregularity in the execution (signing or witnessing) of the will
- The language used in the will is confusing or ambiguous
- Creditors’ claims have not been fulfilled
- The executor has committed wrongdoing
- The heirs have been improperly designated under state law (when no will exists)
If you have used M&A Law Firm, P.C. for your estate planning, we will continue to serve you well through probate and estate administration. If you come to us for the first time after the death of a loved one, we will treat you with equal care and compassion. We are committed to giving you our undivided attention, listening carefully to your particular concerns, and providing you with the best possible legal service. Our attorneys have a well-earned reputation for integrity. We can be reached by telephone or through the convenient contact form on our website.