Stahl Cowen Crowley Addis LLC | Illinois' New Small Estate Affidavit
This links to the home page
News & Publications
PRACTICE AREAS

Illinois' New Small Estate Affidavit

05/17/2016
Are you using the new small estate affidavit form? On August 1, 2014 the Illinois Probate Act was amended to revise the form of the small estate affidavit. (755 ILCS 5/25-1) The new small estate affidavit form applies to estates of decedents dying after January 1, 2015. The older version of the small estate affidavit applies to all estates of decedents dying prior to January 1, 2015, regardless of when the affidavit is created or utilized.

    A small estate affidavit allows for the administration of small estates (in Illinois, personal assets valued under One Hundred Thousand Dollars ($100,000.00)) without the necessity of court proceedings. With the use of a small estate affidavit, an “affiant” makes several representations regarding the estate of a decedent and is permitted to direct the distribution of a decedent’s assets. The affidavit is then directly submitted to third parties, typically banks and other financial institutions.

    The prior small estate affidavit only allowed for the possibility of unpaid funeral expenses. Under the revised form, paragraph 7 now refers to other debts of the decedents, as well as funeral expenses. The affiant either affirms that funeral expenses and other debts have been paid, or lists known unpaid debts by class. In addition, new paragraph 7.5 requires the affiant to state that he understands that all valid claims against the decedent’s estate described in paragraph 7 must be paid by the affiant from the decedent’s estate before any distribution is made to any heir or legatee. The affiant must further state that he understands that the decedent’s estate should pay all claims in the order of class, and if the decedent’s estate is insufficient to pay the claims in any one class, the claims in that class shall be paid pro rata.

    A new paragraph 10.3 requires the affiant to provide his relationship to the decedent or the decedent’s estate. New paragraph 10.5 is to appear in bold type and not less than 14 point font. In it, the affiant acknowledges that he understands 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 the affidavit, before any distribution is made to any heir or legatee. By signing the affidavit, the affiant agrees 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 the affidavit who incur any loss because of reliance on the affidavit, up to the amount lost because of any act or omission by the affiant. The affiant further states that he understands that any person, corporation or financial institution recovering under the indemnification provision shall be entitled to reasonable attorney’s fees and the expenses of recovery.

    Paragraph 11 is also amended to acknowledge that only property remaining after payment of debts and expenses is to be distributed to the heirs and legatees. The paragraph continues, as before, to list those persons who are to receive the balance of the property and the specific sum or property to be distributed to each person.
The affidavit is now required to be notarized. Other provisions of the new small estate affidavit allow access to a safe deposit box and permit the sale and distribution of personal property. In addition, the language of the new small estate affidavit protecting and releasing third parties is strengthened and extended to all who rely in good faith on a small estate affidavit in form substantially complying with the statute.

    Finally, it allows distributions to be made to the affiant, notwithstanding the disclosure of known unpaid debts. The affiant, acting on behalf of the decedent’s estate, is obligated to pay all valid claims against the decedent’s estate before any distributions are made to any heir or legatee. As stated above, the affiant signing the small estate affidavit prepared pursuant to the revised act, indemnifies and holds harmless all creditors, heirs and legatees of the decedent and others relying upon the affidavit, who incur loss because of such reliance. That indemnification is limited to the amount lost because of the act or omission of the affiant, plus reasonable attorneys’ fees and expenses of recovery.

    If you are not currently providing your clients with the new small estate affidavit form, it’s time to do so.