What Happens to an Estate After Someone Passes in Illinois?

When someone passes away, the future of their estate—including their property, finances, and belongings—must be handled according to their wishes and in compliance with state laws. In Illinois, the process of managing and distributing an estate is governed by both the decedent's will (if one exists) and the state's laws. The procedures involved can be complicated, which is why it’s important to consult with experienced legal professionals like those at The Real Estate Law Firm to guide you through the process.

Understanding the Estate and Probate Process in Illinois

The term "estate" refers to everything the deceased person owned at the time of their death. This includes real estate, personal property, financial accounts, and any other assets or liabilities. The estate must be managed and distributed according to the decedent's wishes, if specified in a valid will, or based on Illinois state law if no will is present.

Probate is the legal process through which a deceased person's estate is administered and distributed. Probate courts oversee this process, ensuring that the decedent's debts are paid, and assets are distributed according to the will or Illinois inheritance laws.

Step 1: Determining if Probate is Required

Not all estates in Illinois require probate. Whether probate is necessary depends on the value of the estate and the type of assets involved. Generally, if the estate consists only of small assets, such as life insurance policies, joint bank accounts, or assets that pass through a trust, probate may not be required.

In Illinois, if the value of the decedent’s estate is under $100,000 (excluding real estate), a simplified probate process or "small estate" procedure may be used. However, if the estate includes significant real estate, financial accounts, or other valuable assets, probate will almost certainly be necessary.

Step 2: Filing for Probate

The probate process typically begins when the executor or personal representative named in the will, or a court-appointed administrator if no will exists, files a petition for probate in the county where the decedent lived. At The Real Estate Law Firm, we help our clients navigate the paperwork and legal complexities involved in filing for probate.

In Illinois, the probate court will require several documents, including:

• The death certificate of the decedent.

• The decedent’s will (if one exists).

• A list of the decedent’s assets and liabilities.

• Proof of the executor’s or administrator’s appointment.

  
  

Once the petition is filed, the court will schedule a hearing to determine if the will is valid (if applicable), and if the nominated executor is suitable to manage the estate. In cases where there is no will, the court will appoint a suitable administrator.

Step 3: Appointing an Executor or Administrator

If the decedent had a will, the document typically names an executor—someone responsible for managing the estate. The executor is tasked with collecting the decedent’s assets, paying any outstanding debts, filing necessary tax returns, and distributing the remaining assets according to the will.

If no will is present, Illinois law provides a hierarchy of people who can be appointed as the administrator of the estate. Typically, a spouse, adult child, or other close family member may be appointed. At The Real Estate Law Firm, our experienced attorneys can assist you in ensuring that the right person is appointed, and that they fulfill their responsibilities according to the law.

Step 4: Inventorying and Valuing the Estate

Once the executor or administrator is appointed, one of their first tasks is to inventory and value all assets in the estate. This includes:

• Real property, such as homes, land, and commercial properties.

• Personal property, such as cars, jewelry, and household items.

• Financial accounts, including bank accounts, retirement funds, and investment portfolios.

• Debts, including mortgages, loans, and credit card balances.

  
  

In Illinois, the estate’s value must be reported to the probate court, and the inventory must include an appraisal of real estate, if applicable. If real property is involved, such as a home or land, The Real Estate Law Firm can assist in coordinating appraisals and ensuring all legal steps are followed to handle real estate properly.

Step 5: Paying Debts and Taxes

After inventorying the estate, the next step is to pay any debts and taxes the decedent owed. This includes:

• Outstanding debts: This may include credit card bills, medical expenses, mortgages, or loans.

• Funeral expenses: These must be paid from the estate before other distributions are made.

• Illinois estate tax: Illinois imposes an estate tax on estates worth over a certain threshold. The threshold varies and may change annually, so it’s important to consult with a tax professional to determine if estate tax applies.

  
  

If the estate does not have enough liquid assets to cover debts, the executor may need to sell assets, including real estate, to pay these expenses. At The Real Estate Law Firm, we can help ensure that the real estate is sold in compliance with Illinois law, and that the best price is obtained.

Step 6: Distributing Assets

Once debts and taxes have been paid, the remaining assets are ready for distribution. If there is a valid will, assets will be distributed according to the decedent’s wishes. If no will exists, Illinois intestacy laws will determine who inherits the estate, which typically follows a set order of priority (spouse, children, parents, etc.).

In the case of real estate, the distribution could include transferring titles or selling properties to divide the proceeds. Executors must ensure that all real estate transfers are properly recorded with the county clerk’s office to maintain legal ownership.

At The Real Estate Law Firm, we assist clients with real estate transfers, whether by deed or sale, and ensure that all legal documentation is properly filed.

Step 7: Closing the Estate

Once all assets are distributed and the estate’s debts and taxes have been paid, the executor can request the probate court to formally close the estate. The executor will need to file a final accounting of all transactions, including payments made and assets distributed. After the court reviews this, they will issue an order to close the probate case.

FAQs

1. Do I need a lawyer for probate in Illinois? 

   While it is not mandatory to have a lawyer for probate, it is highly recommended, especially when dealing with complex estates, real estate, or potential disputes. The Real Estate Law Firm offers expert legal assistance to ensure the process is handled properly.

   
   

2. What happens if there is no will? 

   If someone dies without a will, Illinois intestacy laws dictate how their estate will be distributed. Typically, a surviving spouse and children will inherit the estate, but this can vary depending on family dynamics.

   
   

3. How long does probate take in Illinois? 

   The probate process in Illinois generally takes 6 months to a year, depending on the complexity of the estate. Larger estates, those involving real estate, or disputed estates may take longer.

   
   

4. What is the Illinois estate tax rate? 

   Illinois imposes an estate tax on estates valued over a certain threshold. As of 2023, estates exceeding $4 million are subject to estate tax. The rate ranges from 0.8% to 16% based on the estate’s value.

   
   

5. Can an executor sell real estate? 

   Yes, an executor can sell real estate as part of administering the estate, but they must get approval from the probate court, especially if the decedent's will does not specifically authorize the sale.

   
   

6. What if the executor or administrator is not following the will? 

   If an executor is not fulfilling their duties properly, interested parties can petition the probate court to have the executor removed and replaced.

   
   

7. Can a family member contest a will in Illinois? 

   Yes, family members can contest a will in Illinois if they believe it was invalid or if they were unjustly excluded from inheritance. However, contests must be filed within six months of the probate court’s approval of the will.

   
   

8. How are debts paid from an estate in Illinois? 

   Debts are paid from the estate before any distribution of assets. This includes funeral costs, taxes, medical bills, and credit card debts. The estate may need to sell property, including real estate, to cover these costs.

   
   

9. Can the decedent’s home be sold during probate? 

   Yes, real estate can be sold during probate to pay debts, or if it is part of the estate’s distribution plan. The sale must be approved by the probate court.

   
   

10. What happens if the estate is insolvent?

    If the estate’s debts exceed its assets, it is considered insolvent. The probate court will prioritize debts, and creditors may not receive full payment. Family members and heirs typically do not inherit anything in such cases.