How to Secure Your Assets and Avoid Probate in Illinois
How to Secure Your Assets and Avoid Probate in Illinois
Put not your trust in money, but put your money in trust.
- Oliver Wendell Holmes
Probate can tie up property for months, sometimes more than a year. And, it can be expensive - attorney and court fees can eat up to 5% of an estate's value. Most of what happens during probate is essentially clerical - legal research, drafting and clerical processes.
Probate involves inventorying and appraising the property, paying debts and taxes, and distributing the remainder of the property according to the will. The probate attorney fills in forms and keeps track of filing deadlines and other procedural technicalities.
All of this expense and delay can be avoided with estate planning.
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Living Trust is just one of the many ways to avoid this court proceeding after your death and spare the surviving family the hassle and possible conflict when it comes to their inheritance. In addition to a living trust, you can choose other methods that are probate free. The best estate planning approach for you and your family depends upon your unique condition.
Estate Planning to Avoid Probate
Revocable Living Trust
A revocable living trust is a document similar to a will. It specifies your assets and who you want to inherit various assets. It is a probate free way of ensuring that there will be clarity and minimal strife amongst your heirs. Essentially, you place your assets into a trust. After you pass away, your surviving family members can transfer your property quickly and easily, without probate. More of the property you leave goes to the people you want to inherit it.
Bank Accounts that are Payable-on-Death (POD)
Bank and retirement accounts can be converted to payable-on-death (POD) accounts. This can be done by filling out a simple form naming your beneficiaries. No more probate proceedings, the money will go directly to your POD beneficiaries with your bank or financial services provider. The same can be done for securities and vehicle registrations and in some states, real estate, as well. Upon you death, all these assets automatically transfer to your POD beneficiary without going through probate.
You can avoid probate by owning property as follows:
1. Joint tenancy with right of survivorship. A surviving owner of a joint tenancy automatically inherits the property of the one who passes away without undergoing probate.
2. Tenancy by the entirety. This is similar to joint tenancy but can only be applied to married couples or registered same sex partners. It is also probate-free.
3. Community property with right to survivorship. Refers to properties located in different states that is co-owned by married couples. If one partner dies, the surviving part automatically owns the assets.
Gifts
Probate can also be avoided by giving away your property while you are still alive. If you no longer own the asset when you die, it won't go through probate. Most gifts are also not subject to federal gift tax.