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Tuesday, September 24, 2013

Similar But Not The Same

Jill has been appointed independent executor of her father’s estate.  She has negotiated the price on a contract for the sale of his home.  Next, she needs to have the contract reviewed by the Estate’s attorney, as would any other seller of a home. 

Selling the home from her father’s estate turned out to be very like selling her own home last year.  Jill had to wait until her buyer’s financing was in place and then wait for closing.  Before closing, she had to take all remaining personal items out of the home, so that the buyers move into an empty place to give them a fresh start. 

But she did not have to fill out a “Seller Disclosure Report” to provide to the buyer, because the Illinois law that requires that report exempts Estates from providing one.

At closing, she did notice some differences.  For example, she saw that the legal documents prepared by her attorney were a bit different.  Jill signed an Executor’s Deed at closing to transfer ownership to the buyers.  At her own closing, she had signed a Warranty Deed. 

And she also noticed that her attorney had discussed the probate and provided a certified copy of the “Letters of Office” issued by the court to the title company. 

 For advice about proper after-death legal procedures, either with or without probate, please call our office at (815) 436-1996 for an appointment. 

©2013 Gruber Law Office, Ltd.


Tuesday, September 17, 2013

Waiting and Watching

Jill has been appointed independent executor of her father’s estate.  So she now has authority to sign to list his home with a realtor to sell.  She also has authority to accept or challenge any bills that her father’s creditors submit.

Now that she has listed his home, and has sold the smaller items for immediate cash to preserve the home’s value, she must primarily wait for the home to sell and the bills to be submitted.

She will be watching for bills that are or are not correct, and will agree to “allow” the ones that are correct.  She may choose to challenge the ones she thinks are incorrect in whole or in part.

Allowing a bill or claim submitted is not the same as agreeing to pay it.  It merely says that when the estate is ready to be closed, that bill or claim will be considered for payment at the allowed amount according to its priority. 

The statute sets out the priority of payment.  Most credit card bills are seventh class claims, which means they’ll be paid only after all sixth class or higher priority claims are paid. 

If some money is left to pay seventh class claims, the seventh class creditors will receive an equal proportionate share of their claims as every other seventh class creditors.

For advice about proper after-death legal procedures, either with or without probate, please call our office at (815) 436-1996 for an appointment.  ©2013 Gruber Law Office, Ltd.


Tuesday, September 10, 2013

Gathering Cash

Jill has been appointed independent executor of her father’s estate after her petition was considered by the probate court. 

We know that not every creditor will be paid in full at the closing of the estate, as we earlier discovered that his money and property will not be enough to pay all of his bills.  Thus, we plan to leave most bills unpaid until later to be sure we pay them according to the priorities set out in the probate act. 

Obviously, the most pressing need is to turn Jill’s Dad’s assets into cash, so the estate can pay the bills necessary to “preserve” those assets until sale and the expenses of administration.  After all, Jill did not save cash of her own to loan to her Dad’s estate for the up-front expenses, as his death was sudden and unexpected. 

First, Jill must ready the house for sale, which means all the normal home pre-sale activities.  She should make the home as presentable as possible without major expense; for example, she could rearrange furniture to show the home to its best advantage, and have basic cleaning done. 

Meanwhile, she should contact realtors about listing and selling the home.  They are great sources for ideas about what to do to improve the salability of the home.

For advice about proper after-death legal procedures, either with or without probate, please call our office at (815) 436-1996 for an appointment. 

©2013 Gruber Law Office, Ltd.


Tuesday, September 3, 2013

Insurance Coverage Important

Jill has been appointed independent executor of her father’s estate after her petition was considered by the probate court.  We know that not every creditor will be paid in full at the closing of the estate, as we earlier discovered that his total amount of money and property will clearly not be enough to pay all of the bills we already know about. 

Therefore, it is generally safest to leave most bills unpaid entirely until the six month probate time limit for all creditors to send in their claims has passed. 

We’ve written about some exceptions to this rule – payments necessary to “preserve an asset” of the probate estate.  Jill’s dad’s house is vacant for the time being.  However, insurance is protection against fire, tornado or other unpredictable damage to the property.  Thus, keeping insurance in effect should also be considered to preserve the value of the estate.

Similarly, secure storage of Dad’s car should be arranged until it can be sold, or insurance maintained for authorized use of the car.  Loan payments connected with it may need to be paid, if the value of the car is more than the amount due and owing on the loan.

For advice about proper after-death legal procedures, either with or without probate, please call our office at (815) 436-1996 for an appointment.  ©2013 Gruber Law Office, Ltd.


Tuesday, August 27, 2013

Jill's Probate Priorities

Before his death, Jill’s dad owed about $10,000 in back taxes, $5,000 to the federal government and $5,000 to Illinois.  The probate laws say that the IRS claim is a third class claim, and the Illinois claim is a sixth class claim.

So, after the funeral expenses and expenses of probate are paid and the $30,000 child’s award is paid to support Jill’s little sister, the IRS will receive payment on the $5,000 it is owed.  Only after the IRS receives its whole $5,000 back will Illinois get any of its $5,000. 

If Jill’s dad’s money runs out before Illinois is paid, Illinois and all other “lower class” creditors (like most credit card companies) are simply out of luck and will not ever be able to collect on the debts Jill’s dad owed them.

Sometimes even taxes take a back seat to certain debts.  The probate act is one place that can happen.  And our Illinois Probate Act says that federal taxes get paid before state taxes.

For advice about proper after-death legal procedures, either with or without probate, please call our office at (815) 436-1996 for an appointment.  ©2013 Gruber Law Office, Ltd.


Tuesday, August 20, 2013

Jill Gathers The Bills

Jill’s father died without enough money to pay all of his bills.  Fortunately, Illinois probate law has a partial solution to the problem of finding money to pay for the living expenses of Jill’s younger sister, 16-year-old Pam.

The only “second class” claim in her dad’s estate is money to support Pam for 9 months after her dad’s death.  The law calls it a child’s award.  Their mom had died some years ago, so there will be no “spouse’s award” made by the probate court. 

Since there is no surviving spouse, the statutory minimum amount for the child’s award for Pam will be $30,000.  That means that $30,000 will be available for Pam’s support before any of her dad’s debts are paid (except for the first class funeral and probate expense claim we talked about in our last column). 

That does not guarantee that there will be $30,000 for Pam’s support.  But it does mean that her dad’s back taxes owed to Illinois and his credit card bills, for examples, should not be paid unless the $30,000 or other amount approved by the judge has already been set aside for Pam’s support.

For advice about proper after-death legal procedure, either with or without probate, please call our office at (815) 436-1996 for an appointment.  ©2013 Gruber Law Office, Ltd.


Tuesday, August 13, 2013

Jill Opens A Probate

Jill’s father died without enough money to pay all of his bills.  Fortunately, the probate laws are set up to resolve Jill’s questions about who will or will not receive payment.

It does this by defining seven classes of claims.  First class claims must be paid in full before any second class claims are paid.  Second class claims must be paid in full before any third class claims are paid, and so on through seventh class claims.

Funeral and burial expenses are in the first class of claims.  Other first class claims are the expenses of administering the probate, such as court filing fees, costs to obtain appraisals, attorney’s fees and the fees charged by the executor.

Jill is the named executor of her dad’s estate in his Will.  She will be appointed by the court to figure out what his bills are and to determine how much money is available to pay them with.

The only second class claim in her dad’s estate is money to support Jill’s 16-year-old sister, Pam, for 9 months after her dad’s death.  The law sets a minimum amount for that.

For advice about administering the estate of any of your loved ones using probate or not, please call our office at (815) 436-1996 for an appointment to review the situation.  ©2013 Gruber Law Office, Ltd.


Tuesday, August 6, 2013

Jill's Money Problem

Jill lost her father to a fatal car accident about one month ago.  Now she has had time to look through all her dad’s papers and discover a distressing fact:  Her father did not have enough money to pay all the money he owed.

Jill was named executor under her dad’s Will but wonders how to proceed when she can’t pay off his bills.  In particular, she is worried about her younger sister, Pam, who is only 16.  How will Pam be supported, especially in this first year?

Jill can find a partial solution for her sister through probate.  Jill’s dad’s estate is called an “insolvent estate,” because his debts and the costs of his burial are more than his assets.  Probate specifically deals with what kinds of bills get paid first, second and so on.

In a way, when you have an insolvent estate, probate acts like a bankruptcy.  There are seven “classes” of claims.  These claims must be paid before anyone else receives any amount Jill’s father said they would get in his Will. 

For advice about administering the estate of any of your loved ones using probate or not, please call our office at (815) 436-1996 for an appointment to review the situation.  ©2013 Gruber Law Office, Ltd.


Tuesday, July 30, 2013

Free At Last

Jack has distributed the proper shares of his mother’s estate to everyone she named in her Will just as he told the court he planned to in his proposed distribution.  In exchange for their shares, the heirs each signed a Receipt acknowledging that they received their rightful share as shown in the proposed distribution. 

With those receipts in hand, Jack is ready to shed his responsibilities as the personal representative named under his mother’s Will.

Jack may file those Receipts in the probate court.  After showing they correspond with his proposed distribution, Jack can obtain an order from the judge closing the case and releasing Jack from the “individual bond” he posted at the start of the case. 

With that bond, Jack had pledged double the amount of the value of his mother’s estate to guarantee he would faithfully carry out the duties of being the estate’s representative. 

To plan your estate to minimize the job of a personal representative or even eliminate probate and its costs, call our office at (815) 436-1996 for an appointment to begin planning or to review your current estate plan.  ©2013 Gruber Law Office, Ltd.


Tuesday, July 23, 2013

Finally Handing Out Money

Jack has sent out copies of his Final Accounting and Proposed Distribution to each interested party in the probate case regarding his mother’s estate.  No one objected, and the Judge reviewed the documents and approved them. 

So now Jack has an Order authorizing him to distribute as planned.  Jack cannot, however, just send out checks or sign over other property to the people his mother named in her Will and as approved by the probate court. 

He must obtain Receipts from the heirs first or at the same time he hands out the checks or signs over other property.  Usually, the heirs sign Receipts and return them to the attorney’s office. After that the checks or proper transfers are done. 

Jack must collect the Receipts, because the probate case cannot be closed and ended without filing them with the court and receiving another court order after they have been reviewed.

To plan your estate to help minimize or eliminate probate and its costs, call our office at (815) 436-1996 for an appointment to begin planning or to review your current plan to be sure it will accomplish your goals.  ©2013 Gruber Law Office, Ltd.

 


Tuesday, July 16, 2013

Planning to Pay Out

Jack has come up with a plan to distribute his mother’s estate to the various people she named in her Will.  He included that with the Final Accounting he prepared for the probate court supervising the administration of his mother’s estate.

Of course, that is not the end of the story.  Nobody’s actually gotten any money.  And that’s how it is supposed to be.  Before Jack can distribute the money, he must receive approval from the court to do it as planned.

To get approval, he may make a Motion for Approval of Final Accounting and Distribution.  Notice of that motion must be sent to all interested parties as shown on the list the court has for notices of its proceedings.  Among others, that list may include all heirs his mother named in the Will and Jack’s sister who will not inherit under the Will. 

Those people then have the opportunity to object at a hearing if they believe there is a problem with the plan or Jack’s records.

To plan your estate to help minimize or eliminate probate and its costs, call our office at (815) 436-1996 for an appointment to begin planning or to review your current plan to be sure it will accomplish your goals.  ©2013 Gruber Law Office, Ltd.


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