Common Assets That Must Pass Through Probate Court

Sorting through a relative’s property can quickly raise questions about what you can actually transfer, sell, or distribute. In Illinois, assets owned solely by the deceased person often become probate assets when no surviving joint owner, beneficiary designation, trust, or other valid method allows the property to transfer at death. Even so, an estate with no more than $150,000 in qualifying personal property may transfer those assets without opening a full probate case. 

At Zapolis and Associates PC, we help families in Mokena review how property is owned and determine what belongs in the probate estate, so you know which assets require court administration before you transfer or sell anything. Schedule a consultation today for comprehensive legal assistance.

Why a Will Does Not Avoid Probate 

A will can determine who receives probate property, but having a will does not keep that property out of probate. For example, if someone leaves an individually owned bank account or home to a child in a will, the will identifies the intended recipient. It does not change how the asset is owned or provide another way to transfer it at death. 

The reverse is also important. Property with a valid beneficiary designation, survivorship right, or other method of transferring outside probate generally passes according to that arrangement rather than through the will. That is why the will is only one document to review when identifying probate assets. 

Bank and Investment Accounts Without Beneficiaries

Bank and investment accounts can become probate assets when the deceased person owned them individually, and there is no surviving joint owner or valid beneficiary designation. 

For a checking, savings, money market, or similar account, a payable-on-death designation can allow the funds to pass to the named beneficiary. Stocks, bonds, and brokerage accounts can work similarly. Illinois permits securities to be registered in beneficiary form using transfer-on-death or payable-on-death designations. If no beneficiary survives the owner, securities registered this way belong to the deceased owner’s estate. 

Having access to an account does not necessarily give a family member legal authority over it. Knowing a password, possessing a debit card, or being named in the will is different from being a joint owner, designated beneficiary, or court-appointed representative. 

For families trying to identify and collect these assets, probate services can include determining which accounts belong to the estate and obtaining the authority needed to deal with institutions holding estate property. 

Retirement Accounts and Life Insurance

Retirement accounts and life insurance usually pass directly to a named beneficiary, not through probate. They may become payable to the estate, however, if the estate was named as beneficiary, no beneficiary was named, or every named beneficiary died before the account owner or insured person and the governing documents do not provide for another recipient. 

For retirement accounts, the plan or IRA documents and beneficiary designation should be checked rather than assuming the will controls who receives the money. Life insurance policies should be reviewed the same way. 

Real Estate and Property Ownership

Whether real estate requires probate often depends on the deed. A home, vacant land, rental property, or other real estate owned solely by the decedent may have to be handled through the probate estate when no other transfer arrangement applies. 

Real estate held in joint tenancy with right of survivorship generally passes to the surviving joint tenant. Tenancy in common is different: tenants in common do not have the same survivorship right, so a deceased owner's share does not automatically become the surviving co-owner's property. 

Illinois also allows an owner to designate who receives real estate at death through a transfer-on-death instrument. The Real Property Transfer on Death Instrument Act governs this method of transferring real property outside the owner's probate estate. 

The distinction becomes particularly important for a small estate. Illinois's small-estate affidavit procedure applies to personal property, not real estate. An estate that otherwise falls below the $150,000 personal-property limit may still require another way to address real property owned by the decedent. 

Vehicles and Other Titled Property

A vehicle titled only in the deceased person's name may require action by the estate, but Illinois also allows an eligible sole owner to name a beneficiary on the vehicle title. When the owner dies, the named beneficiary can claim ownership of the vehicle rather than having it pass through the probate estate. 

If there is no effective beneficiary designation, the Illinois Secretary of State provides specific requirements for transferring a vehicle after the owner’s death. The procedure depends on factors such as whether the vehicle was individually or jointly owned and whether the estate is being probated. 

Business Ownership Interests

An interest in a closely held business, partnership, or limited liability company may become part of a probate estate, but the answer can depend on the type of business and its governing documents. 

Operating agreements, partnership agreements, buy-sell provisions, and other agreements may affect what happens to an owner's interest at death and should be reviewed before deciding how to handle that interest. 

Property Held in a Trust

Property transferred to a living trust during the owner's lifetime is generally administered under the trust rather than passing under the will. That can include a home, investment account, or other property held in the trust. 

Creating a trust document, however, is not the same as transferring every intended asset into the trust. If someone establishes a trust but leaves an account or property outside it, that asset may still become part of the probate estate unless another way of transferring it at death applies. 

When Formal Probate May Not Be Necessary

Illinois's small-estate procedure can allow qualifying personal property to be transferred without opening a formal probate estate when the statutory requirements are satisfied. 

The procedure may be available when no letters of office are outstanding, and no petition for letters is contemplated or pending, and the qualifying tangible and intangible personal property does not exceed $150,000, excluding specified motor vehicles registered with the Illinois Secretary of State. Personal property can include items such as jewelry, artwork, collectibles, equipment, and furnishings in addition to financial assets. 

Using the affidavit also carries responsibility. The person signing it must address valid estate claims before distributing remaining property to heirs or beneficiaries and can be responsible for losses caused by their own acts or omissions in using the affidavit. 

Determine What Belongs in Probate With Zapolis and Associates PC

Before distributing property, someone must determine what belongs in the probate estate and what can pass another way. Our knowledgeable attorneys bring more than 40 years of legal experience to our estate planning and probate practice, including probate and estate administration, estate planning, and wills and trusts. 

We can review deeds, account ownership, estate-planning documents, beneficiary arrangements, and other relevant records to help determine which assets require probate administration and what procedure may be appropriate. From our Mokena office, we serve clients in Will County, Kankakee County, and Cook County. 

If you are sorting through property after a death and are unsure what requires court administration, contact us to discuss the estate and the next steps for handling its assets.