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If you’ve stumbled upon this article, you are most likely looking to learn more about the probate process and how to avoid having your real estate put through the probate court in Illinois. The good news is there are several ways you can avoid having your property go through probate. The advantages of avoiding probate are that the land is not tied up for too long and can go quickly to where you want it to go after your passing. Furthermore, avoiding probate In Illinois means that your estate will likely not be paying high probate fees for things like assessments and probate attorney costs and fees. Read on to learn more about how to have your real estate avoid probate.
What is Probate?
The probate process is where a court checks the validity of a will and then oversees the proper disbursement of assets identified in the will as a gift to another person or entity. Historically people have used a last will and testament to make their wishes known regarding how their property is divided after their death and to give instructions as to things like funeral arrangements. Probate can last around a year, depending on the size of the estate, the complexity of the estate, issues with creditors, and if there are any will challenges or other legal issues.
Do I have to Use the Probate Process to Transfer Real Estate on my Death?
The short answer is no; you don’t. There are many estate planning techniques that can allow you to transfer any kind of property without going through the probate process. An experienced Illinois estate planning attorney can assist you with developing a plan to avoid any property being put into probate upon your passing. There are several useful legal tools that can be utilized. The most helpful tool to avoid probate is with a revocable, living trust.
The Revocable Living Trust
A revocable living trust is a fantastic tool to use both during your lifetime and upon your death. A trust is a very flexible instrument. You can put whatever you want to put into the trust. You can declare in the trust that you are the grantor, the trustee, and beneficiary of the trust for the duration of your lifetime, staying in control of your assets and receiving financial benefits. You can designate successor trustees if you want someone to maintain the trust after you pass and beneficiaries who will be given the property in trust upon your passing. Since the trust is revocable, you can change any term of the trust at any time for any reason or no reason at all. That means you can put property in the trust or take property out of the trust anytime you want. You can change beneficiaries anytime, just in case you change your mind about who you want to inherit. Once you pass, the property in your trust will not go through probate, and it will pass directly to beneficiaries according to the terms of the trust. An important thing to note, however, is that property in a trust is not safe from creditors, so if you owe money upon your death, the creditors can make a bid for whatever assets are available.
Another essential thing to remember is that you should also have what is typically referred to as a “pour-over will” that can address any property you did not put into the trust. Finally, you need to be aware that a trust takes maintenance; you cannot just create and fund the trust and walk away. You need to keep up with what is going on with your trust, position assets correctly, and maintain a current list of successor trustees and beneficiaries so that you can ensure your wishes will be carried out upon your passing. We recommend that you meet with an experienced estate planning attorney to discuss what you have, your plans for the future and how to create a trust that is right for you. The great thing about trusts is that they are incredibly flexible; you can create a trust specific to your needs.
Joint Ownership of Property
Another way to avoid your real estate going through probate upon death is to establish joint ownership of your property. This option has less control since you are no longer the sole owner with total control of the property. You and your partner or spouse will each own an equal share of the property. This is commonly referred to as “joint ownership with right of survivorship,” you tend to see it between a married couple. As an example, if one spouse passes first, the marital home automatically passes in its entirety to the surviving spouse, even if there is no will or the property is not in a trust. The same method could be applied to any secondary home, rental property, or vacation home. This automatic process will not require getting the probate court involved for the asset to transfer.
Does Illinois Allow Transfer on Death Deeds?
Illinois law also allows the use of a tool called a “transfer on death deed.” A transfer on death deed is a special kind of deed contrasted in such a way that you can continue to exercise complete control over your real estate until you pass away. Then, upon your death, the property will pass to whoever is named in the transfer on death deed without any involvement from the probate court. A death deed transfer is a much simpler instrument than a living trust and takes less work on the part of the grantor. A transfer on death deed is revocable, meaning the grantor can change their mind at any time.
There are some drawbacks to using a transfer on death deed. The law governing a transfer on death deed in Illinois only applies to residential housing, so if you have commercial properties you want to transfer, you will have to use another method. When making or revoking a transfer on death deed, you must meet the exact requirements regarding capacity as you would when creating a will, which could potentially open the door to legal challenges to the validity of the transfer on death deed. The deed must be properly recorded before the grantor’s death, which is never predictable. Finally, there is always the possibility that the designated beneficiary may pass away before the grantor, and the transfer on death deed does not contain provisions for the premature death of the beneficiary who is not a descendant of the grantor like a trust could. It is important to note that transfers on death deeds are still relatively new in Illinois. As such, there is almost no existing case law to govern a potential legal dispute regarding a transfer on death deed, so it would be wise to approach using one with caution. You should have a frank discussion with your Illinois estate planning attorney about the pros and cons of using a transfer on death deed to see if it is the right fit with your overall estate plan.
What is a Lifetime Gift?
A less popular way to avoid your real estate going through probate upon your passing is to give the property away during your lifetime, which is referred to as a lifetime gift. This is a less popular option since you will give away the property and all your control over it. Furthermore, there will be taxes on gifts over a specific value. You will also be exposing the property to claims by the recipient’s creditors. Think very carefully before a decision to make a lifetime gift of real estate.
Ultimately, avoiding having your real estate pass through probate can be avoided with some clever and well-thought-out estate planning. It is never too early to meet with an Illinois estate planning attorney to discuss your goals and how to get there. The earlier you meet with an estate planning attorney, the better since it can close the door on confusion, indecision, and potential challenges to your fitness and state of mind when you create any estate plan. If you are interested in meeting with an Illinois estate planning or real estate attorney to discuss avoiding probate, feel free to call O’Flaherty Law; we would be happy to help you.
What to Expect From a Consultation
The purpose of a consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Although most consultations are complimentary, some may carry a charge depending on the type of matter and meeting location.