Estate Liquidity: Why Is It Important

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Estate Liquidity
Why It Is Important
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What Is Estate Liquidity?
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Liquidity refers to the immediate value of an
asset
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Cash, for example, is the most liquid of all
assets because its full value is always
immediately available to the owner of the asset
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Equity in a home, on the other hand, cannot be
accessed or used immediately, making it a
non-liquid asset
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CONSEQUENCES OF INSUFFICIENT LIQUIDITY
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If you die without a valid Will you died
intestate
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The court will appoint an administrator to handle
the probate of an intestate estate
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If you executed a Will prior to death you
appointed an executor to administer your estate
during probate
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Illinois law grants both an administrator and an
executor certain power and authority to
administer an estate
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Your Will may grant your executor additional
powers
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You may waive the need for your executor to post
a surety bond
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PRELIMINARY MATTERS
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Locate original copy of Last Will and Testament
Determine who was appointed executor
Obtain certified copy of death certificate
Secure estate property
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OPENING PROBATE
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Determine if formal probate is required
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Illinois offers a small estate for estates
worth less taffidavithan 100,000 with no real
property that meets additional criteria
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If formal probate is required, executor must file
documents with court to open probate
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Executor typically retains an estate planning
attorney to assist
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Arrange for funeral and burial expenses to be
paid out of estate assets
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LOCATING, INVENTORYING AND VALUING ASSETS
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Locate all estate assets
Determine if asset is required to pass through
probate or not
Inventory all assets
Obtain a date of death value for all assets
May require professional appraisals
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CREDITOR CLAIMS
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Notice must be given to all known creditors
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Copy of probate must be published to give all
unknown creditors notice
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Creditors have 6 months to file a claim
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Executor must review and approve or deny all
claims
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Approved claims are paid out of estate assets
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Creditor may appeal to court if a claim is
denied
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PROBATE LITIGATION
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Executor must defend estate during all litigation
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Litigation may stem from creditor claim or
challenge to Will (Will contest)
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Attorney may represent your executor but executor
ultimately responsible for defending your estate
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MANAGING PROPERTY
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All estate property must be maintained and
guarded by your executor during the probate
process
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Decisions must also be made to sell assets if
necessary to pay creditor claims or to evenly
divide gifts among beneficiaries
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TAXES
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Both personal income tax returns and federal gift
and estate tax returns must be prepared and filed
by your executor
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Any tax due must be paid out of estate assets
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TRANSFERRING ASSETS TO BENEFICIARIES
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After a final inventory is filed with the court
and accepted your executor must prepare all legal
documents necessary to transfer the remaining
estate assets to the intended beneficiaries
pursuant to the terms of your Will
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LEARN MORE ABOUT THE IMPORTANCE OF ESTATE
LIQUIDITY IN ILLINOIS
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Click to visit www.NashBeanFord.com
445 US Highway 6 East, Geneseo, IL 61254Phone
[phone]
5030 38th Street, Suite 2, Moline, IL
61265 Phone [phone]