Useful information to help guide
your probate process

How Do I Keep My Assets from Having to Go Through Probate?

The passing of a loved one can be a time full of stress and sadness – particularly if matters relating to the decedent’s estate are left up to chance.

When someone dies and leaves lingering questions or disputes about their property, family and friends may have to enter into prolonged legal proceedings, known as probate.

Put most simply, we can think of probate as the legal process by which the assets of a deceased person are properly distributed, in accordance with the decedent’s wishes and in line with all state and local laws. This process can drag on and prove costly, particularly when there’s room for claims and disputes to crop up.

Fortunately, it may be easier to avoid this costly and time-consuming process than many might think. In fact, many Chicago estates never end up going through a probate court!

What can you do now to ensure that your friends and family can avoid the hassle of probate down the line? Here are some ideas…

1.) Create a Trust

When you create a revocable trust, you essentially place your assets and property in the care of a trustee, who manages them for the benefit of your heirs or beneficiaries. Because you are giving ownership of the property to your chosen trustee, it is no longer part of your estate, meaning that it can be transferred without going through probate.

While this will allow you avoid the costs of probating a will, it is important to remember that setting up a living trust can be tricky in its own right. You may lose control of some property, and there may be specific costs and time involved.

It’s also important to ensure that your trust includes all of the special provisions that you may need, and that you are in compliance with Illinois law. We can assist you in determining the best approach for setting up your estate plan and whether or not a trust should be included in it.

2.) Establish Joint Tenancy with Rights of Survivorship

Broadly speaking, it is primarily assets owned solely by an individual that are required to go through probate. In most cases, property held jointly, with clearly established rights of survivorship, does not go through probate, since your share of the ownership passes automatically to your surviving co-owner in the event of your passing.

This is an effective way of ensuring that real estate, motor vehicles, financial accounts, and other “big ticket” assets are taken care of swiftly and seamlessly, for the sake of your beneficiaries.

One thing to keep in mind is that it is only joint ownership/tenancy with rights of survivorship that bypasses probate in Illinois; assets owned by “tenancy in common” do not avoid probate. In this type of ownership, the deceased’s share is distributed to their chosen beneficiaries as directed in their will, rather than transferring immediately to the other owner. Often, tenancy in common will be assumed if it is not clear whether or not survivorship rights were intended.

3.) Create a “Payable-on-Death” (POD) or “Transfer-on-Death” (TOD) Designation

Many of your most valued assets can be transferred to a beneficiary without having to go through probate, including many bank accounts, investments and retirement plans, insurance policies, pension plans, and more.

All you have to do is create POD and/or TOD designations for the relevant accounts, securities, or assets. When you create this designation, you still have sole control over the asset, and can use it as you see fit – but when you die, your stated beneficiary can claim the money or property directly, without having to go through probate.

You may want to consult with an attorney and your financial institutions/brokerages about discussing POD/TOD arrangements for:

  • Bank accounts
  • Certificates of deposit
  • Stocks and bonds
  • Vehicle registration
  • Real estate deeds

To discuss these options further, or to see whether you may able to qualify for simplified “small estate” probate procedures, don’t hesitate to get in touch! Whether you’re beginning the process of estate planning or preparing to serve as an executor or administrator, our team knows what it takes to handle complex and simple probate estates in Chicago. Get in touch here.

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