A last will and testament is often one of the most important legal documents that you can have, for both your family and for your assets. Therefore, if you are the owner of a business, you need to include the business in the will and determine who you’ll pass the business too. Unfortunately, many individuals throughout Illinois die without creating and finalizing a will, and often, dying without a will and including that business in the will can create some serious problems.
As one of the leading Chicago IL estate planning attorneys, lawyer James C. Provenza has helped many people with their will, probate issues, and their estates following a death. Although the probate and Illinois intestate processes are complex and highly dependent on specific nuances and circumstances, it’s essential to have a skilled and experienced attorney at your side. Below, we’ll explain probate and intestate process in Illinois.
Probate and Intestate Succession in Illinois
To best understand what may happen to your business after death (and without a will), it’s important to take a refresher on two topics: probate and intestate succession. In short, probate is the legal process used to pass titles and distribute assets in a legal manner. Often, the court probate processes include filing the will (if any) with the court along with a probate to petition. Also, there is an appointment for a personal representative, a publishing notice to creditors, a determination of validity of claims against the estate, filing tax returns of the deceased, paying the deceased’s debts, and, finally, distributing the assets to rightful heirs or beneficiaries.
In other words, the probate process can be long and complex. If you die without a will, however, a section of Illinois law called “intestate succession” then controls the distribution of the individual’s property. Under intestate succession in Illinois, the distribution of your property and probate assets will depend on your all of your living relatives, and not just the surviving spouse. Some examples of intestate succession include:
- A deceased individual has a living spouse and two descendants. The individual has no will, and so Illinois law states that 50% of assets will go to the spouse, and 50% of assets will be distributed equally to both descendants (25% each).
- A deceased individual has a living spouse and five descendants. The spouse will receive 50% of assets and the remaining 50% will be distributed among the five descendants (10% each).
- A deceased individual has no spouse and two descendants. The descendants will receive 100% of assets split equally among them (50% each).
- A deceased individual has no spouse nor descendants, but two living parents. The parents would receive 100% of assets split equally among them (50% each).
Remember, intestate succession is not always this simple, and there are often complications. For instance, legally adopted children and grandchildren are considered descendants, while foster children or step-children are typically not. Additionally, there are many nuances to intestate law, and so it’s essential to consult with an attorney as soon as possible if a relative dies suddenly and without a will.
Business Assets That Pass Through Intestate Succession
Whether through asset distribution with a will or through intestate succession, it’s also important to know which assets are qualified to be distributed. Many assets aren’t affected by Illinois’s intestate succession laws, including:
- Property transferred in a living trust
- Life insurance proceeds
- Funds in an IRA, 401(k), or other retirements
- Securities in a transfer-on-death account
- Real estate in a transfer-on-death deed
- Property you own with someone else or in joint tenancy or tenancy by the entirety
In this case, the assets are passed to the surviving co-owner or to the named beneficiary. In terms of a business you own, it’s hard to say what exactly will happen to it after you die, as the circumstances of the business and options post-death play a significant role. For example, in a closely held corporation, if the stock is held in the deceased’s name alone and not jointly, and if he/she didn’t have a trust, then that stock may be subject to probate and Illinois intestate laws.
It is also important to note that the powers of a personal representative can be critical for your business if you die without a will. For instance, the powers of a personal representative typically include the authority to operate the deceased’s business during the probate process.
Contact James C. Provenza & Associates Today
Following your death, the probate assets of your business will pass to your heirs and beneficiaries through the Illinois intestate processes. Whether this process is simple and straightforward, or extremely complex and drawn-out, depends on numerous factors. To make a plan for your business before your death, it’s essential to consult with an experienced Chicago estate planning attorney. At James C. Provenza & Associates, our attorneys will work with you, one-on-one, to determine the best plan that aligns with your wishes. For a consultation with attorney Provenza, call our Chicago law firm today at (847) 729-3939.