Review of the Probate Process

Review of the Probate Process

A man is signing papers, estate probate processProbate is a legal process which formally recognizes a will and appoints an executor to administer the estate and implement the terms of the will. Probate, contrary to legal marketing gimmicks, is not the death knell of an estate. Probate is merely a legal process by which the court supervises the distribution of property to heirs.

Overview of Probate

Probate is a specialized legal proceeding in which the court reviews a will and recognizes it. During probate, the court appoints an executor to oversee and implement the terms of the will.

Contrary to the naysayers, probate is a relatively painless process. Wills are legal documents that must adhere to specific requirements to be valid. In Illinois, for a will to be valid, it must be witnessed and signed by at least two or more credible witnesses. Moreover, the testator (the person bestowing the will) must be 18 or over and of sound mind and memory.

Under the Illinois Probate Act, potential beneficiaries have 60 days from the filing of the will to contest it. If they fail to contest, the will is validated by the court. Most wills are contested on the grounds that the testator was not of sound mind or memory. These proceedings, depending on the complexity of the will and the number of potential beneficiaries, could drag on for years.

However, probate is usually a painless process. The family presents the will, and the court accepts it. Most probate proceedings are fast and inexpensive. Once the will is “probated,” the court begins the process of administering the estate.

Executors

The Executor is the person who administers the will. Once a will is probated, the executor is granted legal authority to enforce the terms of the will. Executors may dispose of the estate’s property, distribute it to the heirs, and file suit in court to enforce the terms. Executors can be appointed by the court or named in the will.

If an executor is not named in the will, the court will appoint someone. Typically the court appoints the closest living relative. That person may renounce her right to be the executor, in which case the court moves to the next closest relative until someone accepts the responsibility.

Probate Process

The executor proceeds through a series of steps to distribute the assets. First, the executor notifies all creditors that the estate is being distributed. Creditors are permitted to submit claims to the estate to settle any unpaid debts.

After dealing with the creditors, the executor must pay all remaining taxes including estate taxes, gift, and/or inheritance taxes. However, most estates do not exceed the minimum threshold to qualify for any estate, gift or inheritance taxes. The executor will also pay ordinary taxes on any income that was generated after the testator passed away (most commonly this occurs when property appreciates in value).

Once all debts and taxes are paid, the executor may begin distributing the property under the terms of the will.

Avoiding Probate

While probate has become must faster and cheaper to undergo, many people still prefer to avoid the process altogether. There are some legal strategies to avoid probate.

Living Trusts

However, there are some reasons to avoid probate, for example, tax planning. In those situations, “living trusts” are the most common vehicle to avoid probate. A trust is a legal instrument that creates a separate legal “person” (similar to a corporation). The trust can own property, sue and be sued, just like a real person.

Living trusts refer to a type of trust that exists while the testator is alive. The testator can administer the trust and transfer assets to it during life. Before the testator’s death, she will designate a trustee to manage the trust.

Once the testator passes away, the trustee assumes operation over the trust. The trustee, much like with wills, administers the trust under the terms of the trust. Trusts can, theoretically, exist indefinitely.

Gifts during life

Testators may also give away gifts during life to avoid probate. However, individuals who use this method should proceed cautiously for a number of reasons. First, gifts can be subject to gift tax if they exceed the gift threshold. Second, people often give away too much while they are alive and are then unable to support themselves.

Joint Tenancy

“Property” is a legal concept that gives someone the right to exert power over a particular thing. Property rights are described in a variety of ways. One common method of avoiding probate is to hold property as part of a “joint tenancy.”

A joint tenancy means that two people have 100 percent rights to use and dispose of the property. When one of the individuals in a joint tenancy passes away, the remaining joint tenant assumes full unencumbered rights over the property. The transfer is automatic and completely avoids the probate process.

Get Help Today!

Simply fill out the our online form, and one of our attorneys or staff members will contact you to schedule your appointment.

We value your privacy. Your information will not be shared without your permission.

captcha

The use of the internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.
I have read and understand the disclaimer

Memberships & Associations