This is a court case which protects creditors, then assures that what is left over goes to where state law requires. The probate process can completely deplete all of your assets and lasts close to 18 months on average in Illinois. In addition, if you own assets in more than one state, your estate may face a probate in each additional state.
Probate court raises issues of privacy, control and predictability. A probate case is traditionally a public case with notice inviting creditors to file claims published in the newspaper and court records available for anyone to examine. One probate attorney has said of the process, “You never know who will show up in court – creditors, predators, in-laws, and outlaws.”
A Revocable Living Trust (RLT) is a private document controlled by the successor trustee you choose during your lifetime. With an RLT, no one sees the documents controlled by your trustee – except in limited situations – and then only in confidence. Probate court raises issues of the immediate availability of assets. By avoiding probate, beneficiaries can receive assets shortly after your death or at any time you specify in the RLT. Beneficiaries do not have to seek permission from a judge to use assets you intend for them to have.
Probate court protects creditors first. Even claims you would deem unreasonable may be made against your assets after your death. A well-drafted RLT may offer after-death protection against claims your trustee deems unreasonable. In addition, a two-trust plan for a husband and wife may protect one spouse’s assets from the creditors of the other spouse during your lifetime. Also, unlike the approach of owning assets jointly with children used by some, an RLT offers the same probate avoidance, while not losing any control over the assets and not exposing you to the risks of taxes and claims of your children’s creditors which could result from joint ownership with children.
Moderate Assets and Probate
The myth is that you need a large estate to need a trust. An Illinois fact is that the Probate Act requires that if you have any real estate or more than $100,000 in your name alone when you die, a probate court case is required. Probate is a court case to protect creditors and can completely deplete the value of an estate. In addition, if you own assets in more than one state, you may face a probate in each of those states. Even if you have a $50,000 home with only $500 of equity, a probate court case is required to transfer title to your loved ones or to transfer title to a charitable cause that you value. Every legal rule has exceptions and we recommend that you consult an attorney who focuses his or her practice on estate and trust law to discuss your unique situation.