Often a decedent's estate consists of the family residence and little else. There may be some small bank accounts and a car and a few other items of not too great value. If the non-real estate assets are worth less than $100,000.00 they may be transferred to the heirs, or to the legatees if there is a will, without probate. A small estate affidavit can be used for this. But what about the house? A small estate affidavit cannot be used for real estate. Record title to the house is in the decedent. No one is going to get a deed from the decedent. If the decedent's estate is probated the probate proceeding becomes part of the real estate records. This means the decedent's executor or administrator can give someone a deed passing record title to the house. Or, if the heirs or legatees wish to keep the house, something can be recorded showing they have title.

If those entitled to the house want to sell it, there is an alternative to probate. If the proper paper work is presented a title insurance company will insure the buyer's title, even if there is no probate and even though the buyer will not be getting a deed from the owner of record. The buyer gets title insurance so the buyer is willing to pay for the deed from the non-record owner. The title insurance company is taking a risk that the paper work it gets from the heirs or legatees is accurate. For taking this extra risk it charges an extra premium. This is usually in the range of 2% in the first year after death and 1% in the second year. Most houses of decedents who have less than $100,000 of non-real estate assets are not high value houses so paying the extra premium to the title insurance company is usually less expensive than probate.

What if the heirs or legatees want to keep the house? They do not have record title. If they sell a year later they can avoid probate by paying an extra premium to the title insurance company. But what if they keep the house for a long time? The longer the period of time that passes the more title problems will arise. After the death of the decedent sooner or later the heirs or legatees start dying. They also move, become disabled or develop conflicts with the other owners. These are only some of the problems. Therefore, if the heirs or legatees want to keep the house the decedent's estate should be probated so they have record title.

Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603 - Illinois Probate Lawyers
Ph: 312-782-0844 * Fax: 312-201-1436 * Email: donthompsonlaw@sbcglobal.net