Illinois Small Estate Affidavits
Personal property (not real estate) titled in the decedent’s name alone can sometimes be negotiated through a Small Estate Affidavit. For example, bank accounts, investment portfolios, vehicles, refund checks, etc. Illinois law provides that a small estate may avoid court probate proceedings via a Small Estate Affidavit if the gross value of the decedent’s entire personal estate does not exceed $100,000.00 (see 755 ILCS 5/25-1(b)6).
If you seek to liquidate your deceased loved ones’ assets and receive the small estate affidavit form from an asset holder (such as a bank or investment company), be sure to see an attorney before you just blindly fill it out and sign it. It is not simply a company form that is a means to an end to liquidate an account. It carries risks and obligations with it that last for 2 years after the decedent’s date of death, and could even be longer if a creditor can prove their identity was easily ascertainable but they were never notified.
There are serious liabilities associated with signing a Small Estate Affidavit. An “affidavit” is a sworn statement. A fraudulent statement made under the penalties of perjury is perjury, as defined by the Illinois Criminal Code. Recently, Illinois amended the law at 755 ILCS 5/25-1 to provide that all the decedent’s known unpaid debts are listed and classified in order of priority and that the affiant must state on oath that all valid claims must be paid by the affiant from the decedent’s estate before any distribution is made to any heir or legatee and that there is no known unpaid claimant or contested claim against the decedent. The “affiant, acting on behalf of the decedent’s estate, is obligated to pay all valid claims against the decedent’s estate before any distribution is made to any heir or legatee. The affiant signing the small estate affidavit prepared pursuant to subsection (b) of this Section shall indemnify and hold harmless all creditors, heirs, and legatees of the decedent and other persons, corporations, or financial institutions relying upon the affidavit who incur loss because of such reliance.” (755 ILCS 5/25-1).
In addition, the affiant of a Small Estate Affidavit must swear that they are not aware of any dispute or potential conflict as to the heirship or will of the decedent.
The Small Estate Affidavit should only be drafted by an attorney and signed after all the decedent’s total assets and creditors/expenses/debts are completely known. Many times assets or creditors can arise after an affidavit has been completed, making the affidavit erroneous on its face. If an asset becomes known after the fact, it could cause the total personal estate to exceed $100,000 in value and a Small Estate Affidavit was not applicable in the first place. If a creditor comes along after you believe all debts have been paid, you could be personally liable to pay that creditor. The affidavit must contain the following indemnification language:
“I understand that the decedent’s estate must be
distributed first to satisfy claims against the decedent’s estate as set forth in paragraph 7.5 of this affidavit before any distribution is made to any heir or legatee. By signing this affidavit, I agree to indemnify and hold harmless all creditors of the decedent’s estate, the decedent’s heirs and legatees, and other persons, corporations, or financial institutions relying upon this affidavit who incur any loss because of reliance on this affidavit, up to the amount lost because of any act or omission by me. I further understand that any person, corporation, or financial institution recovering under this indemnification provision shall be entitled to reasonable attorney’s fees and the expenses of recovery.”
Considering the liability associated with a Small Estate Affidavit, we highlly recommend you consult our Oak Brook Estate Administration Attorneys for a consultation before signing one. There are specific case by case considerations which may cause us to recommend probate for your specific matter and for your protection.
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