Chicago Bond in Lieu of Probate Attorney

Estate Planning Lawyer Helping Clients Transfer Ownership of Real Estate in Chicago, IL

When a loved one passes away and leaves behind a house, condominium, or two-flat in Chicago, their family may assume that the property will simply pass to the next generation. In reality, a home titled in the name of a person who has died cannot be sold, refinanced, or transferred to a new owner until someone has legal authority to transfer it. In many cases, these issues will be handled during the probate process, which can take many months and require significant costs that could reduce the overall value of a person's estate.

To avoid these issues, a person and their family members can take steps to transfer ownership of real estate outside of probate. A title company may insure this type of transfer through what is known as a bond in lieu of probate. By planning for the transfer of property in advance, a family can avoid legal complications, minimize costs, and make sure family members can take possession of a property quickly.

At The Sherrod Law Firm, Ltd., our attorney helps families in Chicago understand the best options for addressing real estate during the estate planning process. With our understanding of the laws that affect residential real estate property and our experience in these matters, we can review how a property is titled, help a family make decisions about ownership of property, and recommend the most practical path forward.

Issues Related to Real Estate That May Arise After a Person's Death

When a home will need to go through probate before it can be transferred to a person's heirs, a family may experience issues such as:

• Lengthy Timelines: After a probate case is opened, a waiting period of at least six months will typically apply to allow creditors to make claims against the estate before property can be distributed to beneficiaries.
• Carrying Costs: Property taxes, utilities, association dues, and mortgage payments will need to continue to be paid while a probate case is pending.
• Insurance Gaps: A homeowner insurance policy may only provide limited coverage after a home is vacant for a certain period of time. This can lead to gaps in which coverage may not address issues such as fire, water damage, or vandalism.
• Disputes Among Heirs: One family member may want to keep a home, while others may want to sell it. This can lead to disputes during the probate process, and one co-owner may attempt to force a sale through a partition lawsuit.
• Liens and Claims: Unpaid debts, reverse mortgages, and Medicaid recovery claims may need to be resolved before ownership of a home can be transferred to a beneficiary.

What Is a Bond in Lieu of Probate?

A bond in lieu of probate is an arrangement that may be offered by some title insurance companies. A company will agree to insure a deed signed by the heirs even though no court has appointed an executor or administrator of the estate. In exchange, the heirs will provide information about the person who died, the family, and any debts, and they will pay a fee to cover the title company's risk. The fee will usually be a percentage of the property's value.

When a Bond in Lieu of Probate May Be Available

Title companies will set their own rules for bonds in lieu of probate. They may agree to these arrangements in situations such as:

1. The personal property in a person's estate falls below the small estate threshold, which will allow for assets to be distributed without the need for probate.
2. The estate consists mostly of a single real estate property.
3. Every heir is known, can be located, and is willing to sign the deed.
4. There are no disputes about the validity of the will or any pending lawsuits related to ownership of real estate property.

Planning Ahead to Keep Real Estate Out of Probate

In many cases, families can take steps to ensure that heirs will be able to take ownership of real estate quickly after a person's death. Putting the proper arrangements in place well before the end of a person's life can help avoid potential complications while minimizing the costs involved in distributing assets to heirs. Options available to families may include:

Transfer on Death Instruments

The owner of real estate property can sign a document specifying who will receive their property after their death. These instruments must be properly signed, witnessed, notarized, and recorded with the court before a person's death. The owner will be able to maintain ownership and control of their property, and they may decide to revoke a transfer on death instrument at any time.

Trusts and Joint Ownership

When a property is held in a revocable living trust, the owner may be able to continue owning and using their property, and after their death, a successor trustee will be able to transfer the home to one or more beneficiaries outside of probate. Joint ownership and tenancy may also be used in some cases, which will ensure that a co-owner of real estate will be able to assume full ownership after the death of the other owner.

Contact Our Chicago, Illinois Bond in Lieu of Probate Lawyer

Taking steps to address ownership of real estate ahead of time can help a family ensure that property can be transferred more quickly and easily. At The Sherrod Law Firm, Ltd., our lawyer can help families understand their options for using bonds in lieu of probate or other methods to protect their assets, simplify property transfers, and minimize disputes or disruptions. Contact our Chicago real estate and estate planning attorney at 312-321-6910 to schedule a free consultation.