When we talk about “probate,” what we’re referring to is a legal process wherein a court presides over the management of a deceased person’s property and assets. In going through probate, the goal is to ensure that all of the deceased’s debts are paid, and that all of his or her property and assets are transferred to the appropriate parties, in line with their wishes.
To help determine the distribution of the deceased’s assets, the most important first step is to determine if they had a will. From there, we will be able to know if probate is needed to administer the estate.
Here in Illinois, the law states that if a person left a will, then that will must be filed in that person’s county of residence within 30 days of their passing.
Usually, if there is no will, a probate estate will be needed and the laws of Illinois will govern the distribution of the estate; in some cases, even if the deceased did leave a valid will, there may be certain assets that still need to go through probate.
While this can seem daunting, there is some good news that many people overlook: Even if you do end up needing to conduct a probate court proceeding for the deceased’s estate, not everything will have to be included. In fact, there are plenty of assets that, broadly speaking, do not need to go through probate.
Generally, these assets can be divided into three broad categories:
- Jointly-owned assets
- Assets with beneficiary designations
- Assets in a trust
Let’s explore each of those categories in a little more depth…
Jointly-Owned Assets
In most cases, jointly-owned assets that transfer to the surviving owner do not go through probate. Known as “joint ownership with right of survivorship” or “joint tenancy with right of survivorship,” assets that often fall into this category include real estate, motor vehicles, and financial accounts co-owned by a couple.
In situations where there is joint tenancy with right of survivorship, transfer of ownership happens immediately upon the first owner’s death.
This type of joint ownership is not to be confused with “tenancy in common,” which does 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. In many cases, “tenancy in common” will be consumed if it is not clear that survivorship rights were intended.
Assets with a Designated Beneficiary
Assets that allow you to designate a beneficiary – including life insurance policies, IRAs, retirement plans, some bank accounts, and some securities – do not need to go through probate, assuming that a beneficiary is named prior to death.
When everything works smoothly, these assets are paid directly to the person or persons that the deceased has named as beneficiary, without probate. Sometimes, however, this is more easily said than done, and there are instances in which these proceeds need to go through probate.
Most commonly, this occurs when the deceased names their estate as their beneficiary, or if their listed beneficiary has already died; in these cases, the asset will become part of the probate estate, as the court determines exactly who will be included in the estate. A probate court may also need to get involved if the designated beneficiary is a minor, or if he or she is somehow incapacitated.
Trust Assets
Prior to death, many individuals set up trusts for their noted benefits, including tax planning, asset protection, and privacy.
Assets placed in a living trust, revocable or irrevocable, do not need to be probated. Instead, upon death, the trustee transfers the trust property to the trust beneficiaries.
With that said, if a will creates a trust, or stipulates that assets should be given to an already-existing trust, the will and the assets will likely have to go through probate.
What Assets Do Need to Go Through Probate?
So, with all of this in mind, when is probate absolutely going to be necessary?
Broadly speaking, a good rule of thumb is to consider probate a must for property that was owned solely in the name of the deceased person. Often, this applies to personal property that does not necessarily have title documents, such as furniture, appliances, clothing, or other household goods.
Have any more questions? Looking for guidance? That’s where Chicago Probate Law comes in.
We can assist with the basic steps of administering the probate estate, including matters of heirship, wills and trusts, independent or dependent administration, estate accounting, and distributions.
Beyond administering the probate estate, we will assist in transferring or clearing title to real or personal property, as well as collecting assets and disposing of any property that you do not want to keep.
In short? We’re here to provide peace of mind, at every step of the way. Don’t hesitate to reach out for more information!
