Illinois Estate Planning: Wills, Trusts, and Probate

This reference explains how estate planning works in Illinois and points to the detailed articles on each document and procedure. It covers what makes a will valid, who inherits when there is no will, the trusts and beneficiary tools that keep property out of probate, the powers of attorney that cover incapacity, and the Illinois estate tax. It describes the law and the vocabulary the other articles assume; it does not recommend a particular plan.

What estate planning covers in Illinois

Estate planning directs two separate things: who controls your property and medical care if you become unable to act, and who receives your property after you die. Illinois law supplies a default answer to each question, and estate planning documents let a person replace those defaults with their own choices.

Most Illinois plans are built from four pieces: a will, a revocable living trust (used in some plans, not all), financial and health care powers of attorney, and beneficiary designations on accounts and real estate. Which pieces a plan uses depends on the size of the estate, whether it includes real estate or a business, and family circumstances. The Illinois Probate Act of 1975 governs wills, inheritance without a will, and the court process that follows a death.

Two ideas run through the whole subject. Probate is the court-supervised process of proving a will, paying the decedent’s debts, and distributing what remains. Incapacity planning covers the period while a person is alive but unable to manage money or make medical decisions. A plan that addresses only death leaves the incapacity question to a court.

The core documents and terms

The spoke articles in this section assume a working vocabulary. The terms below appear throughout.

• Testator. The person who makes a will. Under 755 ILCS 5/4-1, any person 18 or older and of sound mind can make one.
• Executor. The person named in a will to carry it out. Illinois also uses the term “representative” for the executor or, in an intestate estate, the administrator.
• Beneficiary. A person or organization that receives property under a will, trust, or beneficiary designation.
• Intestate. Dying without a valid will. The estate then passes under the statutory rules of descent rather than the decedent’s own instructions.
• Probate. The court process, handled in the circuit court of the county where the decedent lived, that administers the estate.
• Trust, settlor, and trustee. A trust holds property for beneficiaries. The settlor creates it, and the trustee manages the property. Trust creation is governed by the Illinois Trust Code.
• Per stirpes. A method of dividing a share among a deceased person’s descendants by branch of the family. Illinois intestacy uses it throughout.

What makes an Illinois will valid

Illinois sets two basic requirements for a will: the person must have capacity, and the document must be executed the right way.

Capacity is defined in 755 ILCS 5/4-1: a testator must be at least 18 years old and of sound mind and memory. A will signed after a court has appointed a plenary guardian for the testator carries a rebuttable presumption that it is void, which can be overcome only by clear and convincing evidence of capacity at the time of signing.

Execution is defined in 755 ILCS 5/4-3: every will must be in writing, signed by the testator (or by another person at the testator’s direction and in the testator’s presence), and attested by two or more credible witnesses in the testator’s presence. Illinois does not recognize a handwritten will that skips the witnesses, and it does not recognize an oral will.

A will does not avoid probate. It names who inherits and who serves as executor, but the estate still passes through the circuit court unless the property is held in a form that transfers outside probate. The statewide court forms include standardized probate documents used once a case is opened.

What happens when there is no will

When an Illinois resident dies without a valid will, 755 ILCS 5/2-1 controls who inherits. The statute follows a fixed order:

• A surviving spouse and descendants split the estate: half to the spouse and half to the descendants per stirpes.
• A surviving spouse and no descendants: the entire estate to the spouse.
• Descendants and no surviving spouse: the entire estate to the descendants per stirpes.
• No spouse or descendants: the estate passes to parents, siblings, and their descendants, then to more distant relatives in the order the statute lists.

These rules are rigid. They make no allowance for stepchildren, unmarried partners, close friends, or charities, and they cannot be adjusted for the family’s actual circumstances. A person who wants any of those results needs a will or another transfer tool. The intestacy rules also decide nothing about guardianship of minor children or who administers the estate; those are separate court decisions.

Trusts and other ways to avoid probate

Several tools move property to heirs without a full probate case. Each works on a specific kind of asset.

A revocable living trust holds property during life and distributes it at death under its own terms. Under 760 ILCS 3/402, a trust exists once the settlor has capacity, indicates an intent to create it, names a definite beneficiary, and gives the trustee duties to perform. Property titled in the name of the trust passes outside probate, which is why living trusts are common in estates that hold real estate.

A transfer on death instrument passes Illinois residential real estate to a named beneficiary at death. Under 755 ILCS 27/40, the instrument must be executed and witnessed like a deed and, critically, must be recorded with the county recorder before the owner dies. An instrument that is signed but never recorded is void and transfers nothing.

A small estate affidavit avoids probate entirely for modest estates. Under 755 ILCS 5/25-1, a person can collect a decedent’s personal property by sworn affidavit when the value of the entire estate, less liens, does not exceed $150,000 and no real estate is involved.

Beneficiary designations on life insurance, retirement accounts, and payable-on-death bank accounts, along with property held in joint tenancy, also pass outside the will. Because these transfers ignore the will entirely, an out-of-date beneficiary form can override a carefully written estate plan.

Powers of attorney and health care directives

The documents above deal with death. A separate set deals with incapacity during life, and Illinois treats them under the Illinois Power of Attorney Act.

A power of attorney for property lets an agent manage finances if the principal cannot. Illinois publishes a statutory short form for this purpose at 755 ILCS 45/3-3; using the statutory form is not mandatory, but it gives banks and other institutions a document they recognize.

A power of attorney for health care names an agent to make medical decisions when the patient cannot communicate them. Illinois also recognizes a living will, which states a person’s wishes about life-sustaining treatment in a terminal condition. Together these are often called advance directives.

A power of attorney ends at death. From that point the will, the trust, and the beneficiary designations control, and the agent under a power of attorney has no further authority.

The Illinois estate tax

Illinois is one of the states that imposes its own estate tax, on top of the federal estate tax and with a much lower threshold. Under the Illinois Estate and Generation-Skipping Transfer Tax Act, the exclusion amount is $4,000,000 for a person dying on or after January 1, 2013, as set by 35 ILCS 405/2.

An estate valued above the $4 million exclusion files an Illinois estate tax return with the Illinois Attorney General, which administers the tax. The Illinois exclusion is far below the federal exclusion, so an estate can owe Illinois tax while owing no federal tax at all. The amount and the way the tax is calculated once the exclusion is crossed are covered in the dedicated estate-tax article.

Specific procedures and topics