When most people hear the word probate, they assume it’s just another step in passing on assets, a legal formality handled by the courts. In Illinois, the probate court process can delay distributions to your heirs, expose your estate to public scrutiny, and reduce its value through court costs and legal fees. But what is probate really, and why do so many families find themselves stuck in costly, time-consuming, and frustrating situations because of it?
Congress has passed laws that allow an individual to pass over $13 million to their heirs free of Federal estate tax. The current Illinois estate tax credit amount is $4 million. Does that mean that all those folks with smaller, but sizable estates of less than $4 million, can shrug off estate planning? Only if you believe that estate planning is about avoiding death taxes, which it is not.
Actually, estate planning is about distributing your assets according to your wishes, without disputes and problems. Unfortunately, most people who have estates of moderate and significant size do not do that very well.
In this article, we’ll walk you through how the Illinois Probate "system" operates, common misconceptions, and how wills and joint tenancy work. Additionally, we will provide you with planning information that you can use for your estate.
Probate court is the legal system found in all 50 states, (it varies somewhat from state to state) by which the local court supervises the transfer of your assets to your heirs after your death. It always takes place in the county in which you reside at your death. It also takes place in any other state in which you own real estate.
Following your death, your family usually hires an attorney to file the Probate case. The first thing the Court does is scrutinize your Will (assuming you have one) to make sure it meets all requirements of the law. If the Will is properly prepared, it is "admitted" to Probate and the Court appoints the Executor named in your Will.
The Executor handles all of the legal and financial affairs of your estate (paying bills, closing accounts, selling property, distributing assets, filing tax returns, etc.). If you have not created a Will, the Court will choose the person who will handle these duties (when the Court chooses this person, he or she is called an Administrator).
This is done to allow any possible creditors you have, to file a claim in the Court so they can get paid. These claims are paid before any assets are given to your heirs. This is called the "creditors' claims period" and in Illinois, this period is six months long. Since it usually takes a few months following death, for this claims period to begin, your heirs will not receive a penny for at least eight months after you're gone.
What if you own a summer home in Michigan or a winter home in Florida? If that's the case, another Probate case must be filed in the state where that real estate is located. This is called an "ancillary" probate.
There are a number of fees and costs related to doing business with the Probate Court. For example, in Cook County, Illinois, court costs are a minimum of $750.00. Another cost is the Executor's fee, which can be as high as 3% of the gross value of the estate. And then there's the attorney's fee, which in Illinois, is only required to be "reasonable." Reasonable attorneys' fees range between 3% and 10% of the gross value of the estate.
For example, suppose your entire estate consists of your Illinois home, bank accounts, CD's, stocks, bonds, automobile and miscellaneous personal effects and has a value of $100,000.00. In that case, the average cost to Probate your estate in Cook County will be as follows: $580.00 for court costs and publication fees, $3,000.00 for Executor's fees; and $5,000.00 for attorney's fees; the total being $8,580.00.
If the summer home you owned in Michigan was valued at $40,000.00, attorney's fees, court costs, etc., to Probate the Michigan property could cost an additional $2,000.00 or more. All fees must be approved by the Probate Court in Illinois.
This is a common misconception. For Probate in Illinois, assets that are distributed through your Will must go through Probate! There is an exception, however, to this rule. If the total assets owned in your name alone are less than $100,000.00, they can pass through your Will without Probate. This is called the Small Estate Exemption. Few people fall within this exemption amount. Certainly, if you own a home in your name or have any sizable investments or accounts, your estate will require Probate.
All documents filed in the Probate Court are public records. This means that anyone can look at them. Most people never ask, “What is probate?” until they’re sitting in a courtroom and realizing anyone can look up their family’s financial details. By then, it’s too late to make it private.
Documents in the Probate file include your Will, lists of your assets, names and addresses of your heirs, how much was paid to heirs, how much was paid to your creditors, etc. Many of these records are now available through the internet. The private details of your estate can be viewed by anyone.
You probably thought that you did not need to worry about Probate because you own all of your assets in joint tenancy with your spouse. If you own assets jointly with your spouse, at the first spouse's death, those assets will pass to your surviving spouse without Probate. But watch out!
At the second spouse's death, those assets will go through Probate because there is no longer a surviving joint tenant. So, joint tenancy does not avoid Probate, it only postpones it. If husband and wife died simultaneously in an accident, joint tenancy property must go through Probate. If you're thinking about transferring your investments and real estate into joint tenancy with your children, you had better get some tax advice from a lawyer or CPA first. Title transfers into joint tenancy with your heirs may create additional gift tax and capital gains tax problems.
In addition, once you place your children's names on title to your assets, those valuable investments and real estate are subject to the claims of your children's creditors and possibly their spouses, if there is a divorce.
We’ve met so many people who assumed probate would be simple, a few signatures, some court forms, and then their loved ones would receive what was left behind. But after decades of guiding families through the process, we can tell you with certainty: probate is rarely that simple, and often far more burdensome than expected.
In fact, one of the most common questions we hear is “what is probate?” Most people have heard the term. But they don’t realize just how much time, cost, and court involvement it actually brings. It’s not until someone close passes that the impact becomes painfully clear: the delays, the legal fees, the public exposure, the uncertainty.
The truth is, most families don’t realize they’ve made a mistake in their estate plan until it’s too late to fix it. And by then, the system takes over.
If you want to protect your family from the delays and disruptions of probate, now is the time to act. Learn how a living trust works and whether it’s right for your estate. A few proactive steps today can ensure your wishes are honored swiftly, privately, and with as little burden as possible.
We’re here to help, so please call us at (847) 670-8200 or email info@kf-lawgroup.com, and we'll work with you to create a plan that does exactly that.