Real Estate & Property Law
Less-expensive transfer on death instruments become more popular in Chicago
Twenty-nine states, including Illinois, have legalized transfer on death instruments, according to the Chicago Tribune, citing information from the online estate planning company Trust & Will. Image from Shutterstock.
An increasing number of homeowners in Cook County, Illinois, which includes Chicago, are using transfer on death instruments to help their heirs avoid a “tangled title” that has to be resolved in a time-consuming probate process.
When a property owner dies without a will, land trust or transfer on death instrument, relatives of the property owner must go through probate and resolve the tangled title, a process that takes at least six months in Cook County, the Chicago Tribune reports. Most cases take longer, though, closing within 14 months.
An heir who seeks to be the representative in probate court for the property with a tangled title, which is known as “heirs’ property,” has to pay a bond equal to one and a half times the estate value, the article explains. The heir has to track down all family members with a legal entitlement to the property. There is a possibility of foreclosure during this time.
Heirs still have to go through probate if a property owner dies with a will but not if there is a land trust or a transfer on death instrument. The transfer on death instrument is “a cheaper and simpler estate planning tool” that can preserve intergenerational wealth, the Chicago Tribune reports.
Twenty-nine states, including Illinois, have legalized the instruments, the article says, citing information from the online estate planning company Trust & Will.
The initial recording cost after Illinois legalized transfer on death instruments in 2012 was $98 in Cook County. The cost was lowered by ordinance to $50 during the COVID-19 pandemic. The fee was recently raised to $59.
In Chicago, the Greater Auburn Gresham Development Corp. has hosted about a half-dozen workshops in which most attendees sign up for transfer on death instruments. The group can help fund costs for homeowners who can’t afford the fees.
Linda Johnson, director of housing and senior services at the Greater Auburn Gresham Development Corp., says transfer on death instruments “could actually save our communities.”