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Bond in Lieu of Probate and Real Estate Closings

 Posted on May 21, 2024 in Real Estate Legacy Planning

IL probate lawyerProbate is best avoided if at all possible. The taxes and court costs that come with putting an estate through probate can significantly diminish the estate’s assets, leaving the beneficiaries with much less than the decedent intended. Even when there is a will controlling who should receive what, there is a substantial risk that probate fees will force beneficiaries to sell property - including real estate - that they should have been able to keep in order to cover estate taxes. One way to keep your real estate properties out of probate is to use a bond in lieu of probate. If you plan to use this legal strategy, it is best to prepare for using a bond in lieu of probate when you close on the property. A Yorkville, IL real estate transactions and estate planning lawyer can help you prepare.

How a Bond in Lieu of Probate Works in Illinois 

When an estate goes through the probate process, no assets can be transferred to the beneficiaries until the process is complete and a court has formally approved the transfers. A bond in lieu of probate can provide a way to transfer real property without going through the probate court.

Title companies and other financial institutions generally will not transfer the title to real property without the approval of a probate court when the owner’s estate is subject to probate. If the title company or financial institution prematurely transfers title and later discovers that the person it transferred title to was not the rightful inheritor, it could become liable.

However, you can make arrangements with the title company or financial institution so that they will accept a bond from the person you choose to inherit your real property in exchange for transferring the title without the prior approval of a probate court. Your chosen beneficiary would simply go to the title company or financial institution with your death certificate, pay a bond, and have the title transferred into his or her name.

How Bond in Lieu of Probate Matters During a Real Estate Closing 

When you close on a real estate property, it is important to have your attorney make it clear that you intend to posthumously transfer the property using a bond in lieu of probate. You will need to ensure that your title company is willing to accept this arrangement. It may want to take steps prior to closing to help protect your beneficiary’s future interest in the property.

Contact a Yorkville, IL Bond in Lieu of Probate Attorney

Gateville Law Firm can begin helping you prepare to transfer property by bond in lieu of probate before you have closed on the property. Experienced Kendall County, IL real estate and estate planning lawyer Sean Robertson has extensive experience in handling complex estates. Contact us at 630-780-1034 for a complimentary consultation.

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