How to Avoid Illinois Probate Court

By John Cromwell

Probate is the process of settling a decedent’s debts, using his assets, and distributing what remains to his beneficiaries. The process is overseen by a court and can delay the distribution of assets to heirs as well as be expensive. In Illinois, the estate includes all assets the decedent solely-owned at the time of his death along with any outstanding debts owed to him and any property owned as a tenant in common. In Illinois, a "small" estate -- currently valued at less than $100,000 -- that includes no real estate and has no outstanding debts against it does not have to be probated. For larger estates, there are other ways for all or part of an estate to avoid the probate process.

Probate is the process of settling a decedent’s debts, using his assets, and distributing what remains to his beneficiaries. The process is overseen by a court and can delay the distribution of assets to heirs as well as be expensive. In Illinois, the estate includes all assets the decedent solely-owned at the time of his death along with any outstanding debts owed to him and any property owned as a tenant in common. In Illinois, a "small" estate -- currently valued at less than $100,000 -- that includes no real estate and has no outstanding debts against it does not have to be probated. For larger estates, there are other ways for all or part of an estate to avoid the probate process.

Named Beneficiary and POD

Insurance policies, Individual Retirement Accounts, annuities, employer retirement accounts, such as 401(k)s, and other assets in accounts with named beneficiaries are not included in probate unless the estate is named as the beneficiary. Bank accounts and securities can be constructed to avoid probate through pay-on-death or transfer-on-death accounts. These allow assets to transfer to a beneficiary immediately after your death. You retain control of the assets in these accounts for as long as you live. The process for establishing one of these accounts depends on the financial institution that holds the assets. A Transfer on Death Instrument can also be used to transfer real estate to someone immediately after your death without having to pass through probate. The instrument must be a written document clearly identifying the property and who will receive it. You must be of sound mind and sign the document in front of a notary and two credible witnesses.

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Living Trust

In Illinois, property contained in a living trust that a person created, or was a beneficiary of, is not included in probate. A living trust is created during your lifetime and allows you to donate property to others, subject to conditions you provide. The property must be legally transferred to a trustee who is explicitly instructed to hold the property for the trust’s benefit, however, you may serve as both the trustee and beneficiary during your lifetime.The trustee is responsible for managing the trust and distributing the property to the named beneficiaries. It is important to note that while a living trust allows you to transfer property to beneficiaries quickly, claims against the trust can continue longer than they would against your probated estate because the trust is its own legal entity.

Joint Ownership

Property that is jointly-owned with a right of survivorship is generally excluded from an Illinois probate estate. The right of survivorship means that when a co-owner dies, his rights to the property automatically transfer to the other owners. This continues until there is one surviving owner, who then owns the property outright. To create joint ownership in Illinois, the deed must say that all of the owners are taking an equal, undivided share in the property subject to a “right of survivorship.”

Tenancy by the Entirety

Property held as tenants in entirety is also excluded from an Illinois probate estate. Like joint tenancy, when one owner dies, the entirety of the ownership rights in the property goes to the survivor. However, in this case, the co-owners must be spouses. To create this tenancy in Illinois, you must transfer the deed of the property to you and your spouse with a version of the following grantee clause recorded on it: “To Jack and Diane Smith, his wife, not as tenants in common, nor as joint tenants with the right of survivorship, but as TENANTS BY THE ENTIRETY.”

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