When considering how to minimize or avoid the time and expense of going to court and becoming involved in the probate process, it is important to be familiar with the distinction between probate and non-probate property.
Upon death, an individual’s assets are divided into two categories: probate property and non-probate property. Those assets which are non-probate property bypass the probate process. Examples are real estate held in joint tenancy or tenancy by the entirety and any asset which has a designated beneficiary (other than the estate) such as an insurance policy, IRA account, Keogh plan, 401(k) plan and pension and profit sharing plan.
Another asset which is non-probate in Illinois is real estate held by a land trust. A separate agreement is entered into which provides that the trustee holds title to the property and the beneficiary has a power of direction over the trustee. It can be provided in the agreement, that upon the death of the beneficiary, his interest passes to a particular person thereby avoiding probate.
In addition, bank accounts can be set up in a way that avoids probate. These accounts are sometimes referred to as P.O. D. (payable on death) accounts to which a named beneficiary has the right to the balance in the account upon the death of the account holder. The beneficiary presents a certified copy of the death certificate of the account holder to receive the balance in the account.
For guidance in estate planning and minimizing the probate process, contact an attorney at a law firm that concentrates in estate planning.