One of the most often misunderstand terms in estate planning is “probate” and what it mean We answer the most common FAQs about probate here:
WHAT IS PROBATE?
The term “probate” refers generally to the process by which the estate of a decedent (person who died) is administrated and distributed to the people who are the lawful beneficiaries of that person's estate. Probate is a court proceeding that is overseen by a judge, and handled by a personal representative of the estate represented by an attorney. The probate process is generally guided by the rules and provisions of the Illinois Probate Act.
I HAVE A WILL, DOESN’T THAT AVOID PROBATE?
This is, perhaps, the most common misunderstanding. Having a Will does not avoid probate. Rather, the Will allows you to control parts of the probate process by naming an executor of your choice, by indicating who will receive your assets, and in other ways. Without a Will, the probate process, including who handles it and who receives your assets, is governed completely by the Probate Act. You can deviate from the default rules of the Probate Act by doing a Will. Therefore, a Will does not avoid probate, but it allows you to control aspects of the probate process.
ARE ALL OF MY ASSETS SUBJECT TO PROBATE?
Probate is the default mechanism by which assets pass on to the lawful beneficiaries of an estate, but not all assets are subject to probate. Assets that are held in more than just the decedent’s name may not be subject to the probate process. For instance, assets held in joint tenancy with a right of survivorship (or tenancy by the entireties with a right of survivorship) are not subject to probate because the surviving joint tenant will become the owner automatically by operation of law when the first joint tenant passes. Assets with beneficiary designations will pass automatically by operation of law to the designated beneficiaries. Other examples of assets not generally subject to probate include life insurance, IRAs, 401(k)’s, payable on death accounts, and trusts (provided that the designated beneficiaries or designated recipients survive the decedent). When assets have “built in” mechanisms for passing upon death to specified individuals, probate is not necessary or required.
WHAT IF I HAVE A SMALL ESTATE?
The non-monetary benefits of probating a small estate can be outweighed by the monetary drain of probating a small estate. The Legislature, therefore, has determined that small estates should not be automatically subject to the probate process. In Illinois, a small estate is any estate in which the total gross value of the personal property of the decedent is less than $100,000. If your estate qualifies as a “small estate”, the administration of the estate could be handled by a person using a Small Estate Affidavit without any oversight from the court. Of course, a person could still choose to open a probate estate if there are complex issues or claims to be resolved.
WHO HANDLES THE PROBATE PROCESS?
If the decedent left a Will, the person designated as the “executor” in the Will handles the probate process, but the executor must be approved by the court before the executor has the authority to act. The court provides this authority by issuing “Letters Testamentary” after a petition is filed seeking the court’s approval, and if there are no objections by interested parties. When the decedent does not have a Will, any qualified person may seek to be appointed as the administrator of the estate by filing of a petition seeking that approval and authority to act. People who have an interest in the estate have a lawful right to object to the appointment of an executor or administrator. A generic name for an executor or administrator is a personal representative of the estate.
WHAT ARE THE RESPONSIBILITIES OF THE PERSON HANDLING THE ESTATE?
The executor or administrator must retain an attorney to represent him or her and the Estate. The attorney will assist in preparing the necessary documents to open the Estate and guide the process according to the Probate Act. Among other things, the executor is obligated to give notice to all of the natural heirs and to any additional people that are named as beneficiaries in the Will. Notice must also be sent to all known creditors and then published in a newspaper of general circulation in the county in which the decedent died, once a week for three (3) successive weeks. The executor's duties include identifying and locating all of the assets that were held by the decedent along with identifying all of the debts and obligations of the decedent. The personal representative is obligated to protect and preserve all of the estate assets, pay off all of the debts and claims, resolve all of the complaints, and issues that come up, maintain an inventory of the assets, generate an accounting of all of the income and expenses of the estate, provide a copy of the accounting to the heirs and legatees (other people named in the Will) and follow all of the requirements of the Illinois Probate Act along with all of the directions in the Will. The final thing a personal representative does is to distribute all of the net assets of the Estate and file the final tax return for the estate. An executor or administrator is a fiduciary who is bound to the highest standard of duty in the law, including a duty to refrain from self-dealing, to handle everything according to the requirements of the law, and the intentions of the decedent, to treat all beneficiaries fairly, to provide an accounting, to preserve and protect the assets, and other things.
HOW LONG DOES THE PROBATE PROCESS TAKE?
In Illinois, the probate process cannot be accomplished in less than seven (7) months, but usually takes longer (about 9-10 months). After all of the notices go out to the required individuals, and notice is published in the newspaper, there is a six (6) month claims window that must pass before the Probate Estate can be closed. If the executor takes one month after the decedent passes to get the probate estate opened (which is moving very quickly) and takes one month to get all of the notices out and published in the paper, and takes one month to do the final inventory accounting and prepare the necessary documentation to close the probate estate, together with the six (6) month claims window, that makes a total of nine (9) months. In reality, the probate process often takes longer because of delays in doing some of those things, or due to claims or issues that arise that must be handled.
HOW DOES THE PROBATE PROCESS GET STARTED?
Probate begins with the filing of a petition to open a Probate Estate in the local circuit court in the county in which the decedent was living when the decedent died. An attorney is required to represent the Estate. The petition must be filed with the necessary documentation that the Probate Act requires and any specific requirements of the local circuit court. Local circuit courts often have their own forms that are required to be used, and certain minimum information must be provided in the petition and other documentation to open the Probate Estate.
WHAT IS THE COST OF PROBATE?
The cost of probate consists of court costs, attorneys’ fees, accounting fees, publication and other administrative costs, and fees for the executor or administrator. Until the Illinois Supreme Court prohibited the practice, probate attorneys in years past charged a percentage of the Estate. Since a Supreme Court case in the 1970’s, attorneys’ fees are now a calculation based on a number of factors, including the time involved in handling the necessary aspects of the probate process, the complexity of the estate, the knowledge and experience of the attorney, and other things. In practice, that means that attorneys’ fees are usually calculated on the basis of time spent multiplied by the hourly rate of the attorneys and/or legal assistants who handled the process. Executor/Administrator fees are handled in the same way. The same factors apply (time, ability, education, experience, complexity, etc.). Costs will include filing fees a, publication costs, mailing, and any other costs associated with the handling of assets. Even a small estate in Illinois will cost in the neighborhood of $2500-$4,000, which consists of attorneys’ fees, executor’s fees, accounting fees and legal costs. For even the simplest of small estates, there are certain minimum things that must be done, no different than larger estates. For larger estates, and estates in which issues and complexities arise, that cost can increase dramatically.
WHEN DOES THE READING OF THE WILL OCCUR?
This is a common question that is often asked because of movies and television shows. In fact, there is no requirement that a Will be “read” in person to anyone. People named in the Will may get a copy of the Will as part of the initial notice from the Executor, but anyone can obtain a copy of the Will because the Will must be filed with the Probate Court whether a probate estate is opened or not. The Court records are public records, so a copy of the Will can be obtained from the local circuit court clerk. Some circuit courts have records online, and others do not.
Understanding “probate”, and what it is and is not, is necessary for anyone who wants to do estate planning. Estate planning is the process of putting the necessary documentation in place that will direct the process of the handling of your estate (which may include Wills, Trusts, Powers of Attorney, Living Wills and other things). Good estate planning cannot be done without a good understanding of “probate” and the probate process.
- Kevin G. Drendel
- Drendel & Jansons Law Group
- 111 Flinn Street
- Batavia, IL 60510
- (630) 406-5440
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