What Happens to Your Illinois Property After Your Death?
When planning your estate for the future, your real estate is one of the most vital aspects to consider. Frequently, this involves deciding who will get your home.
However, the process of transferring ownership of a property after death may not be as simple as you would expect. In Illinois, there are several methods and catches to consider.
Read on to learn from our McHenry, Illinois, estate planning attorneys at Diamond Legal about how long you have to transfer property after death in Illinois and what happens to your property during this process.
Can My Property Stay Under My Name After I Die?
In the United States, a dead person cannot own property – this includes your family home, vacation house, or any place of business you may own.
After you die, you must transfer your property to an inheritor via one of many methods.
Let’s take a look at what some of these methods entail for real estate in Illinois so that you can decide what is best for you and your loved ones.
What Happens To Your Property Without An Estate Plan?
Without an estate plan, such as a trust or a will, your property may go to probate court. The probate court will decide where your properties go. In Illinois, if you don’t have a will this will frequently be a half interest to your surviving spouse, and a half interest to your children in equal shares.
When you die without a will or a trust, your property may not go where you intended. This issue exemplifies why it is vital to plan your estate ahead of time.
At Diamond Legal, we can help you plan your estate to ensure that your property passes ownership to whoever you want.
Transferring Your Property After Death
Thankfully, transferring your property after death does not need to be difficult for you or your beneficiaries.
This transfer is one of the most common and vital parts of estate planning, so our experienced lawyers can help you set up an estate plan that transfers your property to the people you choose.
There are three main transferrals your beneficiaries may encounter after death transferring via:
- will,
- trust,
- transfer on death instrument, or
- co-ownership
Let’s take a closer look at what each of these transferrals entails.
1. Transferring Via Will
Transferring your properties via will is a common method of transferring your property after death.
A will tells your executor, the person in charge of your estate, what to do with your property. If the property did not pass automatically upon your passing, to transfer or sell your property, the executor will either need to go to probate court or purchase a bond in lieu of probate from a title company.
If the executor needs to go to probate court and it is not a contested case, the process will usually take between 9 months and a year. If the case is contested, it can take years to settle or close the case. Once the probate case is started, the executor can ask the court for permission to sell the property.
If the executor decides to purchase a bond in lieu of probate from a title company, the estate will usually need to:
- Pay a bond from 1% to 3% of the sale price or value of the property;
- Have all of the heirs of the owner:
- Sign a deed either to the executor or to the person receiving the property;
- Sign an indemnity agreement with the title company providing the bond;
- Sign an affidavit of heirship verifying all of the heirs of the estate; and
- Provide any other documentation required by the title company.
If all the heirs do not agree to provide all this paperwork, the executor will usually need to open a probate case to sell or transfer the property.
2. Transferring Via Trust
Transferring a property via a trust is much easier than transferring via a will.
Unlike a will, a trust usually does not have to go through probate court – it is a private document. As such, transferring property via a trust is similar to a sale and usually does not require court approval.
A trust is like a suitcase. You put your property into the suitcase when you are alive and hold the suitcase yourself. Most trusts will allow you to sell or transfer the property while you are alive.
When you pass, the person you designate to be pick up the suitcase called the Trustee, will take over for you and can sell or transfer the property in the trust based on the rules you set up in the trust.
If a trust allows a trustee to sell or transfer your property, the trustee simply signs a deed to the recipient of the property.
3. Transferring Via a Transfer on Death Instrument (TODI)
In Illinois, a property owner can create and record a transfer on death instrument, commonly referred to as a TODI, that designates who receives the property upon the owner’s passing. If a TODI is properly drafted, signed and recorded, it can automatically transfer the property to the people you want upon your passing.
You can revoke or change a TODI any time before your passing. While you are alive, you control your interest in the property and can do anything you want with it. A TODI can be a useful tool to transfer property upon your passing without giving any interest to the recipient when you are alive.
A TODI is only tied to the property it is recorded on. If you sell the property and purchase another one, you will need to record a new TODI on the new property.
4. Transferring Via Co-Ownership
Transferring property via co-ownership can be tricky. It depends on how you own the property.
If you own property with someone else, upon your death, it may or may not transfer to them. The automatic transfer of property to a co-owner of a property is called the right of survivorship.
Typically, if you co-own a home with someone else you usually have ownership as Tenants in Common. This means upon your death, your portion of the ownership will automatically transfer to your heirs or as designated by your will.
However, if you own the property as Joint Tenants or as Tenants by the Entirety, the property will automatically pass to the other owner or owners upon your passing.
The deed giving you ownership of the property will usually specify how you own your property. By looking at the deed, your estate planning attorney should be able to tell you how your property will pass after your death.
No matter what your plans are for your property after death, Diamond Legal is ready to help you enact them.
Summary: How Long Do You Have to Transfer Property After Death?
The short answer to this question is – it depends.
As discussed earlier, if the property needs to go through the probate process, it can take 9 months to a year before the executor can sell or transfer it. However, if there are complications or disputes, it could take much longer.
If the property is being transferred via trust or TODI, these methods usually do not require going through probate court and can be completed much quicker, depending on how quickly the trustee or beneficiary acts.
In some cases where co-ownership already exists, and the deed specifies ownership with the right of survivorship, the transfer can happen immediately upon your passing.
Contact Diamond Legal Today
Property ownership and transfer after death can be complicated. That’s why it is essential to plan ahead and have a well-thought-out estate plan in place.
To ensure that your property is transferred to the right people and according to your wishes, you should seek the help of an experienced estate planning attorney. The attorney can guide you through the process and ensure that your wishes are carried out.
At Diamond Legal, our experienced lawyers can help you set up an estate plan that includes the most appropriate transferral methods for your specific situation. We can also assist with the drafting and execution of wills, trusts, TODIs, and any other legal document necessary to ensure your property is transferred seamlessly and in accordance with your wishes.
Don’t wait until it’s too late. Contact Diamond Legal today for a consultation and take the first step towards protecting your assets and securing the future of your loved ones. Let us help you create an estate plan that gives you peace of mind and ensures your legacy lives on.
Frequently Asked Questions About Property Transfer After Death
How Quickly Can Property Transfer After the Owner Dies?
The timeline varies significantly. Jointly owned properties with rights of survivorship can transfer automatically upon filing a certified death certificate with the county recorder’s office. For properties subject to probate, the process may extend over a year, especially in complex estates where disputes arise or estate taxes must be settled.
Do I Need a Death Certificate to Transfer Property From a Deceased Person?
Yes. A certified death certificate is essential documentation for any property transfer after death, regardless of whether the transfer occurs through probate, a trust, or TOD deeds. The county recorder’s office requires this legal document to process ownership changes.
What Happens to Jointly Owned Property When One Owner Dies?
This depends on how the property was titled. Joint tenancy properties automatically transfer to the surviving owner without probate. However, properties held as tenants in common don’t automatically transfer—the deceased person’s share becomes part of their estate, subject to the estate administration process.
Can Creditors Claim the Property Before It Transfers to Heirs?
Yes. Before distributing assets, the personal representative must notify creditors and settle the estate’s debts. Unresolved debts can significantly delay property transfer after death, as creditors have the legal authority to file claims against the estate’s assets.
How Does Intestate Succession Affect Property Transfer?
When a property owner dies without a will or other legal document specifying inheritance, Illinois intestate succession laws determine who receives the property. This complex process typically requires probate court involvement, slowing down the transfer timeline considerably.