Probate is a legal process that occurs after someone passes away. It involves the court’s verification of a will, ensuring that it is valid, and that the person named as executor (a person appointed to mandate the deceased person’s estate during the probate process) has the authority to manage the deceased’s estate. Essentially, probate confirms that the deceased person’s wishes, as outlined in their will, are honored.[1] Although the probate process is a necessary procedure for many estates, the process can be lengthy, costly, and public which leads many individuals to seek ways to avoid it. For these compelling reasons, many individuals may want to avoid probate.
Breakdown of How Probate Works
The probate process can vary significantly on whether the deceased left a will (testate) or did not leave a will (intestate) and varies depending on the state. However, the steps below are generally as followed:
- Initiation of Probate: The probate process typically is initiated by filing a petition in the court of the proper county. [2] If there is no will, an administrator may be appointed by the court to oversee the estate.[3] The executor or administrator must submit documents such as the original will (if applicable), a petition for probate, or death certificate to initiate probate proceedings.
- Validating the Will: If there is a will present, one of the first tasks in probate is to validate it.[4] Which involves confirming that the documents meet all legal requirements for authenticity and that it reflects the true intention of the deceased.
- Appointment of Executor or Administrator: Once a will is validated, or if there is no will, the court formally appoints an executor or administrator. This individual gains legal authority to act on behalf of the estate and must fulfill the responsibilities throughout the probate process.[5]
- Inventorying Estate Assets: The executor or administrator must compile an inventory of all assets owned by the deceased at their time of death.[6]
- Paying Debts and Taxes: Before distributing any assets to beneficiaries, debts and taxes owed by the deceased must be settled.
- Distribution of Assets: After all debts and taxes are paid, remaining assets can be distributed according to either the terms outlined in a valid will or state intestacy laws if there is no will.
Effective Strategies to Avoid Probate
- Establish a Revocable Living Trust: One of the most effective ways to avoid probate is by creating a revocable living trust. This legal entity allows you to transfer ownership of your assets into the trust while you are alive. You retain control over the trust assets, including the power to revoke or amend the trust, as long as the trust document expressly provides for such powers. Upon your death, the assets held in the trust do not go through probate; instead, they are distributed directly to your named beneficiaries according to your instructions.[7]
- Joint Ownership with Right of Survivorship: Joint ownership with right of survivorship allows two or more people to own property together. When one owner dies, their share automatically passes to the surviving owner(s) without going through probate. This method is commonly used for real estate but can also apply to bank accounts and other types of property. It’s crucial that the title clearly states “joint tenants with rights of survivorship” to ensure this outcome.[8]
- Designate Beneficiaries on Financial Accounts: Many financial accounts allow you to designate beneficiaries using a pay-on-death (POD) arrangement.[9]This means that upon your death, the funds in these accounts will go directly to the designated beneficiary without entering probate. This applies not only to bank accounts but also to retirement accounts like IRAs and 401(k)s, as well as life insurance policies.
- Make Gifts During Your Lifetime: Transferring ownership of certain assets as gifts while alive can help reduce probate after death by removing those assets from the decedent’s estate, thereby avoiding the probate process for those particular assets. It is crucial to note that the Internal Revenue Service (IRS) allows individuals to give gifts up to a certain amount each year without incurring gift tax or affecting their lifetime estate tax exemption. Further information on the IRS Estate and Gift Tax can be found on irs.gov .
- Utilize Transfer-on-Death Deeds for Real Estate: Some states allow property owners to execute transfer-on-death (TOD) deeds for real estate, which enables them to name beneficiaries who will receive the property upon their death without going through probate.[10]
Conclusion
By employing these strategies effectively, individuals can significantly reduce or eliminate their estates’ exposure to probate court processes. Engaging a qualified legal advisor not only simplifies the complexities surrounding estate management but also provides peace of mind by ensuring that one’s wishes are honored why minimizing potential delays and costs associated with probate.
[1] London & Lancashire Indem. Co. v. Tindall, 377 Ill. 308, 311-312 (1941).
[2] 755 ILCS 5/6-2 Petition to admit will or to issue letters.
[3] 2 Illinois Estate Planning § 23.12 (2024)
[4] 755 ILCS 5/6-4 Admission of will to probate – testimony or affidavit of witnesses.
[5] 755 ILCS 5/6-3 Duty of executor to present will for probate.
[6] 2 Illinois Estate Planning § 24.01 (2024)
[7] Shakman v. Dep’t of Revenue, 2019 IL App (1st) 182197, ¶27.
[8] 765 ILCS 1005/1b [Estate with right of survivorship]
[9] 205 ILCS 625/4 Payable on Death Account Incidents.
[10] 755 ILCS 27/40 Requirements.
Isabella R. Hernandez, Guest Blog Post