The ABC’s of Inheritance Law in Illinois

The ABC’s of Inheritance Law in Illinois

When a person dies, his or her estate, assets, and property is passed along, or inherited by the deceased person’s heirs or named beneficiaries through either a last will and testament or, if no will exists, through Illinois Intestacy Laws. These estate, assets, and property are called the inheritance and an identified receiver is known as the beneficiary. Inheritance law can be confusing, and the process must be timely. This is why it’s a good idea to work with an estate planning attorney when finalizing your estate plan – and of course M&A Law Firm has the best estate planning legal experts in the Chicago area!

Estate Division

There are assets which do not get passed through a will and therefore will not be affected by intestate laws. Whether there is a will or not, if a deceased person has accounts or trusts which transfer on death, the named beneficiary is able to inherit the property. Some examples include property transferred in a living trust, life insurance proceeds, retirement accounts, securities held in a transfer-on-death account, real estate held by a transfer-on-death deed, payable-on-death bank accounts, and property owned in joint tenancy or tenancy by the entirety.

In the case a deceased person left non-probate property or debts remaining at the time of death, beneficiaries, named or not, may not inherit anything if the value exceeds that of the probate estate. In this incident, it makes the estate insolvent.

The federal government and the State of Illinois both will collect estate tax on inheritance from a deceased person. An estate tax is imposed on the value of property when a person dies before any property is inherited.

An executor of the estate is named to dictate who gets what property upon the death of the deceased. A person may appoint the executor in their will and that person will be responsible for carrying out the wishes stated in the will.

However, if there is no will, the closet family members will appoint someone as the executor of the estate. In the event that the family members cannot decide who shall be the executor, a judge will determine who the executor should be.

Intestacy Laws

When a person dies without a will or without a valid will it is called intestate. A will is a document stating what an individual would like to happen to their belongings when they die. A properly done will states the assets and objects in the persons possession and to whom they would like those assets to be given to. Assets may include personal property, bank accounts, and investments.

Intestacy laws found in Illinois statutes determine who receives the assets of a person who dies intestate. Intestacy laws only apply to probate property, which is property that must be distributed by the probate court and includes assets owned solely by the intestate. In other words, joint property, (like real property held in joint tenancy, life insurance policies, and retirement accounts) will not be subject to probate. The probate process can be complicated, but in its most straight forward and simplest terms, Illinois Intestacy Laws are as follows:

  • If a deceased person is survived by a spouse and descendants (children, grandchildren, great-grandchildren), the spouse will receive half of the property and the other half will be divided by the children. This is known as per stirpes.
  • If a deceased person is survived by only a spouse, the spouse will receive the entire probate property.
  • If the deceased person is only survived by decedents (children), the children receive the entire probate property to divide among them.
  • If a deceased person is only survived by their parents, siblings, or descendants of deceased siblings, the parents and siblings equally inherit the estate. In the case where one parent is deceased, the living parent will receive a double share of the estate. In the case where a deceased siblings’ surviving descendants are inheriting the estate, they will divide the deceased siblings share, per stirpes.
  • If a deceased person is not survived by parents or siblings, the estate is divided equally between maternal and paternal sides of their family. If either the paternal or the maternal side of the family do not have any survivors, then the entire probate estate will go to the surviving side of the deceased family.

When the state determines if descendants are children, it considers the following:

  • Legally adopted children are considered biological children and will receive an intestate share of the deceased property.
  • Children never legally adopted, including foster children and stepchildren, will not automatically receive an intestate share of the deceased property.
  • Children who were placed for adoption by the deceased person and who were legally adopted by another family will not receive a share unless there is an explicit statement for inheritance rights.
  • Posthumous children (children conceived by the deceased but not born before the death of the deceased) will receive a share of the intestate property.
  • Children born outside of marriage but determined paternity (either by acknowledgment or court establishment) will receive a share of the intestate property.
  • Children born through artificial insemination with consent of the deceased and within 36 months after the deceased person’s death will receive a share of the intestate property.
  • Grandchildren whose parent is not alive to receive their share of the intestate property will receive that parent’s share of the intestate property.

What Else is There to Know?

This may seem like a lot, but it’s only the beginning! Additional Illinois inheritance laws to know:

  • Illinois has a survivorship period law that states an interstate successor must outlive the deceased by 120 hours to inherit from their property.
  • Half-relatives will inherent as whole relatives.
  • Relatives, regardless of their citizenship will be entitled to an intestate share of the deceased property.
  • A relative who killed the deceased person will not be entitled to a share of the intestate property.
  • A relative or non-relative who commits offenses against an elderly deceased person will not be entitled to a share of the intestate property.
  • If a deceased person gives property to a relative during the deceased lifetime, the value of the property will be subtracted from that relatives share of the gift if documented in writing.

If you don’t have an estate plan, contact M&A Law for a free consultation today. By the time you get into the nitty-gritty of Illinois estate planning law, you’ll be glad you did!