Illinois Probating Insolvent Estates

If a husband dies with many unpaid debts, it is often tempting for the surviving wife to want to do nothing regarding opening a probate estate. She may feel that there are more debts than assets, so why get into it. However, there is good reason to pursue probating an insolvent estate.

The Illinois Probate Act addresses the situation where the debts and claims of an estate exceed the estate’s assets.

At Section 18-13 of the Probate Act, a determination of the priority of payment is set out. That Section provides that the estate shall pay all claims in order of their classification. The classification of claims is provided in Section 18-10 and reads as follows:

(1) Funeral and burial expenses, expenses of administration, and statutory custodial claims.
(2) The surviving spouse’s or child’s award.
(3) Debts due the Untied States.
(4) Money due employees of the decedent of not more than $800.00 for each claimant for services rendered within four months prior to the decedent’s death and expenses attending the last illness.
(5) Money and property received or held in trust by decedent which cannot be identified or traced.
(6) Debts due this State and any county, township, city, town, village or school district located within this State.
(7) All other claims. (General Creditors.)

In other words, a surviving spouse may pay the costs of the funeral and burial, the attorney’s fees and is entitled to receive a minimum of $10,000 for herself and a minimum of $5,000 for each child — all before any creditor is entitled to payment. The creditors are entitled to receive a fractional share of whatever is left in the estate after the earlier claims have been paid.

The surviving spouse should bear in mind that if she does not open en estate because of the various claims that would be filed and charged against the estate, Section 9-3(j) of the Act gives creditors of the decedent the right to petition for Letters of Office and open the estate if the spouse or others designated with authority to do so will not.

In other words, if the wife doesn’t open an estate because of the claims against it, the creditors very well might. This provision provides even more reason for the surviving spouse to open the probate estate despite its insolvency.

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