TO PROBATE OR NOT TO PROBATE
Although probate applies to both guardianship and deceased persons estates, the word more commonly refers to a decedent’s estate. In probate, a court process provides a means to assist heirs, legatees and family members collect and liquidate the assets of a deceased person, wrap up the debts and outstanding issues affecting the deceased person, and finally distribute the assets to the lawful takers. In many cases, opening a probate estate is usually necessary when a person dies, however, there are circumstances where the probate process is not required. Among those are: 1) when a decedent does not leave a probate estate and instead has a trust or other assets which pass automatically “by operation of law” or when a decedent’s probate assets are under $100,000, the other requirements for a small estate affidavit are met, and there is no other reason to open a probate estate.
When You May Have to Probate?
In the cases of living trusts, jointly held, and other “transfer on death” property, there is no probate estate to administer. In essence, the trust or asset has provisions within itself which are triggered automatically at the death of the owner to transfer the property of a deceased person to some other person or entity, removing those assets from the “probate estate”. Examples would be life insurance with a named beneficiary, joint bank accounts, real estate titled as joint tenants or tenants by the entirety, and retirement plans with named beneficiaries. In the case of a deceased person with a probate estate of less than $100,000, Illinois provides a summary procedure for administration known as a Small Estate Affidavit. A Small Estate Affidavit is created when some “interested person” of the estate signs a sworn affidavit satisfying the small estate affidavit requirements and undertakes the obligation to distribute the assets to the proper persons entitled to receive the assets. A person signing the affidavit will have the authority to reach the deceased person’s assets. The Small Estate Affidavit is not effective for the transfer of real property. The affiant, the person signing the affidavit, may be held liable for failure to deliver assets to the proper persons required.
When to Probate Even When Not Required
There may be times when, although a probate is not required by law, opening a probate estate might be advantageous. An estate with no physical or cash assets can be opened to collect debts owed to the deceased or to prosecute a claim of the deceased. A probate representative is granted the power to sue on behalf of the estate or to engage in discovery procedures to collect assets. In addition, the probate estate can pursue claims for personal injury or wrongful death actions. Any of the decedent’s rights to sue are considered an “asset” of the estate. It is not uncommon for an estate to file “wrongful death” or “survival” lawsuits against parties responsible for the death of the decedent. Any assets recovered as a result of a survival action are assets of the estate. Wrongful death lawsuits are merely prosecuted by the estate, but any recovery actually belongs to the “next of kin”, although those assets may have to be distributed via probate. An estate that holds intangible assets may wish to open an estate so that there is a legal entity to administer those assets. Probate may also be necessary when an heir or legatee wishes to challenge the validity of a will. Wills may be challenged for technical defects, such as not being executed with the proper formalities or for claims that the maker of the will lacked the required capacity to make a will or was under undue influence when the will was signed. These cases often require evidentiary hearings and cannot be solved through summary procedures. Probate can also be used to clear title to land or large value assets such as certificated securities (stocks and bonds) and bank accounts. Large value items, those over $100,000, cannot be transferred via a small estate affidavit. These assets must be transferred via probate. In those estates where the decedent owned real property, it is wise to open a probate estate. Until title is passed upon the property via an “Administrator’s Deed”, “Executor’s Deed”, or “Release of Estate Interest in Real Estate”, the property will remain titled in the name of the decedent (although the beneficial ownership will have transferred). While some title companies may allow the heirs of a decedent to sell a property and convey good title based upon an affidavit that the decedent has passed away and that the sellers are the remaining survivors, not all will do so and sometimes the cost of a probate may be equal to or less than the cost of such a procedure. The probate process allows for a clean title transfer, in the chain of title, of real property to those entitled to ownership. Another reason probate may opened is to settle disputes between heirs. Often, more than one heir or legatee of the decedent may claim an asset. In these cases where each person feels entitled to certain assets, the probate court can intervene as an impartial party and settle the dispute. Other reasons for dispute may be ambiguity in contracts or in the will or disputes as to the decedent’s actual ownership of the property in question. Finally, the opening of a probate estate reduces the period for claims against estate assets from two years to six months. The probate court can help to address all of these problems.
How to Get Started
The decision to probate or not probate depends on the facts of each situation. In each case, you should consult with an attorney to determine if probate is appropriate. To get this process started, please feel free to contact Richard Magnone via email or by phone at 773-399-1122. We are generally willing to have a short (5 to 15 minutes) initial discussion over the telephone to determine if we can assist in your situation and to determine if we might be an appropriate match to work with you. Face to face Initial consultations are by appointment only and a consultation fee is generally charged.