In this article, we explain how probate works in Illinois and the necessary steps taken throughout the proceeding. This includes how probate is started in Illinois; how assets, debts and taxes are handled in an Illinois probate estate; and the closing of an Illinois probate estate.
Probate, as discussed in our Introduction to Probate article, is a court-supervised legal procedure that’s sometimes – but not always – required after someone passes away. The objective of probate is to clarify who inherits the deceased person’s property and to make sure legitimate debts and taxes are paid, and to also prevent fraud from occurring after someone’s death. Let’s take a look at how probate gets started.
Probate is typically initiated by an individual seeking to be named as “Personal Representative” of the estate. The Personal Representative is the individual who is given the responsibility to handle matters of the estate once the person has died.
If the deceased person had a will, he or she would have named an executor, and this person will typically be appointed as the personal representative. In the absence of a will, interested parties can agree on an estate administrator or have the court make this determination.
Probate gets started when the executor files the will in the county where the deceased person lived; this should be done within a reasonable amount of time after the person’s death. An attorney is generally hired to draw up and file the necessary papers and documents needed to start the probate process.
Notice of the proceeding must be sent to heirs and beneficiaries at this time. A notice will also be put in a local newspaper to notify potential creditors of the proceeding.
The court will issue “Letters Testamentary” that indicates the legal authority given to the executor to act on behalf of the estate.
Sometimes, an executor will need to post a bond, unless the will specifically waived that requirement. A bond, when dealing with probate, acts as an insurance policy to protect the estate from potential losses caused by the executor throughout probate.
An executor’s job during probate is to gather and inventory estate assets and provide this information to creditors, beneficiaries of the estate, and the court.
If creditors have valid claims, they have six months to file those claims. After that deadline, the creditors have lost the chance to file a claim and receive any payment.
The estate is a taxpaying entity and is separate from the deceased person. The executor will need to get a taxpayer ID number from the IRS to report income, gain and possible deductions during the administration of the estate. Both state and federal tax returns must be filed for the estate. An Illinois estate tax return will be due if the estate has a value of over $4 million. A federal return may be due if the estate is worth more than $5.45 million.
Once assets have been gathered and inventoried, and any debts and taxes have been paid, the executor can begin closing the estate. The executor must file a final accounting with the court showing how estate assets were handled.
The accounting will list the assets, possible income the estate generated, the amount paid for any debts or other expenses, and the distributions made to beneficiaries. If there’s any additional property, the accounting will also need to show how the executor plans to distribute the rest of it.
Once this is done, the executor provides a final report to the court at the estate closing hearing. The executor will also receive receipts from the heirs and beneficiaries who received any assets and/or property from the estate.
Most probate cases are just paperwork and can be completed within a year. However, the process can take much longer and become more costly if there are contests and disputes over the will.