Distributing the estate to beneficiaries in Lombard is a task that an attorney could help you with. While you may not be as familiar, an attorney could help you vet valid creditors, pay them first, and then use the remaining assets to distribute among beneficiaries. If you were to not follow either the will of the testator or the rules governing distribution, you could be made liable for the estate. To prevent that, reach out to an attorney.
Assets are distributed to heirs and beneficiaries in Lombard through the estate process. Generally, it is distributed to heirs if it is an intestate estate (an estate without a will). In Illinois, there is a series of statutes which provide for how that property is distributed. It follows the closeness or the familial relationship between the decedent and their family members as to who gets what. For example, if a person dies in Illinois with a spouse and children, then that property is distributed 50 percent to the spouse and 50 percent to all the children in equal shares. If a person passes away without a spouse but with children, 100 percent of that property passes to the children, but they divide it among themselves in equal shares.
A will allows a person to distribute their property outside of this basic statutory scheme. The intestacy statute could be described as the Illinois legislature’s best guess as how one would want their property to be distributed. A will could name specific beneficiaries that do not fall within that best guess of the Illinois legislator and it allows a person to pick and choose in what amounts, to whom, and where their property goes. Assets, whether it is intestate or testate, are distributed by a representative through the probate process. While distributing the estate to beneficiaries in Lombard may seem relatively straightforward, it is still wise to have an attorney guide testators through the will-writing process.
A beneficiary designation is a designation of an individual to receive specific property upon the death of the person making the designation. The classic example is a beneficiary designation on a life insurance policy. In that case, according to the terms of the life insurance policy, the proceeds are paid directly to an individual. Beneficiary designations are a very popular way for individuals to pass property to others upon their death without using an estate.
Generally, property that passes via beneficiary designation passes outside of that individual’s probate estate and is distributed directly from the financial institution to that beneficiary. A lot of times people could avoid probate by using beneficiary designations. Many accounts today have the ability to be passed via beneficiary designation. This includes retirement accounts, brokerage accounts, and regular bank accounts. This could also be referred to as a payable-on-death distribution, or designation, or a transfer-on-death designation. Both are very similar. It is a mechanism by which property could pass outside of a probate estate.
The order of priority is determined by the Illinois estate legislature and establishes priority as to who could serve as the administrator of an intestate estate because a person who dies with a will has the opportunity to name an executor. However, in the event that there is no will, someone needs to come forward to manage the estate and become the representative. However, if there is uncertainty and no overt designation of an administrator, Illinois has established an order of priority as to who has priority to represent an estate and become the administrator.
This is also primarily which is based on the family relationships between a decedent and other individuals interested in becoming a representative. For example, the top priority is given to the spouse and then, in descending order, it is given to the kids, siblings, parents, and guardian of one of the beneficiaries. It is also important to note that a creditor could open an estate for a decedent as opposed to a family member. However, they are the lowest priority.
The priority is a strict rule. In Illinois, a judge would pay attention to the priority as their main concern. If there are competing petitions and one petition takes priority over the other, most often the judge is going to grant that petition with greater priority.
Where it gets tricky is when petitioners have similar priority levels or are on the same level of priority. The classic example is when there is no spouse and the only petitioners are two children of a decedent. The judge needs to make a determination as far as the best interests of the estate as to who should be representative.
Priority commonly comes into play beyond the distribution of assets when it comes to debts and claims. A priority as to where money goes is superseded by claims. For the amount available for beneficiaries distributing the estate in the order of priority to the heirs, debts and claims jump in front. The heirs and beneficiaries are only entitled to the net estate. The net estate is all the receipts that an estate has and all the assets in an estate reduced not only by the expenses of administration, but also the claims.
In Illinois, this is addressed where, as part of the claims statute, all expenses of administration are first-class claims against the estate.
This means that if the entirety of the estate is paid to a creditor, there could result in a situation where nothing is available for distribution to the heir. Priority among the heirs does not come into effect until all the claims are paid, and then the net amount is distributed in the order of priority.
It is not uncommon for people who have been elected as an estate representative to find it challenging. Distributing the estate to beneficiaries in Lombard does not, however, need to be challenging. With the help of an attorney, you could pay off creditors and valid claims. All it takes is a call to a local attorney. Reach out today.
