Your Ultimate Guide to Probate Administration of Real Estate in Illinois

This article discusses probate administration of real estate in Illinois in depth and covers the following:

• Administration of the decedent's estate and possession of the decedent's real estate
• Real estate leasing
• Ward's real estate can be sold or mortgaged
• Real estate owned by the decedent can be sold or mortgaged
• The procedure for selling or obtaining a mortgage on real estate
• The court's authority in probate administration
• The location and terms of the transaction
• Report of Sale
• Mortgage terms
• Accounting for the sale or mortgage proceeds
• Compelling real estate lease, sale, or mortgage
• Under a power of attorney, real estate may be leased, sold, or mortgaged
• Completion of the decedent's real estate acquisition deal
• Completion of contract for the sale or lease of real estate
• Oil, gas, coal, and other mineral discoveries as they relate to leasing
• Taking part in a sale or mortgage with a ward's spouse
• Accept the sale without the ward's consent
• It's possible that the representative will be authorized to pay taxes
• Recorder's filing of a notice of probate

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Administration of the decedent's estate and possession of the decedent's real estate

1. During the period of administration, every representative shall take possession, subject to the exempt estate of homestead, of all real estate of the decedent and, while in possession, (1) shall collect the rents and earnings therefrom, (2) shall keep the buildings and fixtures in tenantable repair, (3) shall pay the taxes, mortgages, and other liens thereon in accordance with their terms, (4) may protect the real estate by insurance, (5) may employ agents and custodians, (6) and may make all reasonable expenditures necessary to preserve the real estate. He or she may bring an action to obtain possession of or determine the title to real property, but no action to determine the title to real property may be brought without the permission of the court that issued his or her letters.  

2. Unless otherwise provided by the decedent's will, or unless the court determines at any time that possession is necessary for the payment of claims, expenses of administration, estate or inheritance taxes or legacies, the preservation of the real estate, or any other paternal obligation, the representative may not take possession of real estate or the portion thereof occupied by the heir or legatee thereof as his residence.  

3. Upon the petition of any interested individual, the court will grant possession of real estate to the heir or legatee thereof on such terms as it finds necessary, if it appears that the real estate or income from it will not be required for the payment of claims, administration expenses, estate or inheritance taxes, or legacies. An order authorizing possession of real estate does not imply that the property's title has been determined.

Real estate leasing

1. A representative may lease the real estate of a decedent or ward on such terms and for such period of time as the court may allow, subject to the provisions of the decedent's will, if any. Leasing of particular bequeathed real estate is prohibited without the legatee's written consent, which must be submitted with the court.  

2. Before leasing real estate, a representative must file a petition with the court that granted his letters, detailing the real estate to be leased, its improvements, and the facts and circumstances that support the petition. The petition must include a copy of the proposed contract. The court must schedule a hearing within 10 days of the petition's filing. The petitioner must mail a notice of the hearing and a copy of the petition to the decedent's heirs or legatees, or to the ward, as the case may be, at least 5 days before the hearing; however, where the duration of a ward's real estate lease does not exceed 5 years or extend into the ward's minority, the court may hear the petition without notice.  

3. A representative who had a lease of farm property owned by a decedent or ward in place on or before the date he or she assumed the duty of representative may continue to follow the terms of the lease until (1) the decedent's estate is closed, (2) the wardship is terminated, or (3) a court order is entered finding that the lease terms are unfair or that service as a representative is no longer necessary. The fact that the representative derives profits from the lease does not constitute a breach of the Act's fiduciary obligation.

Ward's real estate can be sold or mortgaged

When the court deems it necessary or expedient for the support and education of the persons entitled thereto under this Act, for the payment of the ward's debts, or for reinvestment, a representative of a ward may sell or mortgage the ward's real estate or any interest in real estate, including the oil, gas, coal, or other mineral interest therein, by leave of court and on such terms as the court directs, a representative of a ward may sell or mortgage  

Real estate owned by the decedent can be sold or mortgaged

1. When required for the proper administration of the decedent's estate, a representative of the decedent's estate may sell or mortgage any real estate or interest therein to which the decedent had claim or title, including any oil, gas, coal, or other mineral interest therein, with the permission of the court and on such terms as the court directs.  

2. Real estate that has been expressly bequeathed or ordered by the testator not to be sold will not be sold or mortgaged unless it is required to pay claims, administration costs, estate or inheritance taxes, or the proper distribution of the estate.

The procedure for selling or obtaining a mortgage on real estate

1. Before selling or mortgaging real estate, the representative must file a petition in the court that issued his letters, setting out the facts and circumstances upon which the petition is based, a description of the real estate or interest therein, or of the oil, gas, coal, or other mineral interest involved, the approximate value thereof, the ward's or decedent's interest therein, and the nature of the ward's or decedent's interest therein. The petition must include a copy of the proposed mortgage or, if applicable, the proposed contract for sale of the real estate.  

2. Except for the ward, all persons with liens against or an interest in the real estate, oil, gas, coal, or other mineral interest, or any part thereof, mentioned in the petition, in possession or otherwise, whose rights are sought to be affected by the order shall be made parties defendant.  

3. Procedure shall be released, served, and returned in the same manner as in other civil cases upon the filing of the petition.  

4. Any party to the proceeding who is a ward and is not represented by a guardian shall be appointed a Guardian ad Litem by the court. If it appears that any person not yet born is or will become or claim to be entitled to any interest in the property sought to be sold or mortgaged, the court shall appoint a competent and disinterested person as guardian ad litem to appear for and represent such interest in the proceeding, as well as to defend the proceeding on behalf of the person not yet born.  

5. The petitioner must comply with the requirements of Section 12-9 on or before the entry of an order approving a sale or mortgage under this Article.

The court's authority  

In any proceeding to sell or mortgage real estate, the court may:  

1. examine and resolve all questions of conflicting and controverted titles arising between any of the parties, clear any clouds from any title or interest involved therein, and grant the mortgagee or purchaser a good and indefensible title to the property sold or mortgaged; 

2. direct the sale or mortgage of the property free of any mortgage, judgment, or other liens that are due, arrange for the satisfaction of all those liens from the sale or mortgage proceeds, and resolve and amend all equities and questions of priority among all interested parties;

3. direct, with the consent of the owner of an unpaid mortgage lien, that the property be sold or mortgaged free of the lien and that the lien be satisfied from the proceeds of the sale or mortgage;

4. set off the homestead and order the sale of the balance of the premises, or if the value of the premises exceeds the exemption and the premises cannot be divided, the court may order the sale of the entire free of homestead with or without the consent of the person entitled thereto, and shall determine the value of the homestead and order that a sum of money equal to the gross value of the homestead be paid to the person entitled thereto;

5. order the sale or mortgage free of the estate upon the filing in court of the written consent of the person entitled to an estate for life or for years, but the court shall determine the value of the estate and order that a sum equal to the gross value of the estate be paid from the proceeds of the sale or mortgage to the person entitled thereto, or that a proper proportion of the proceeds of the sale or mortgage be paid to the person entitled thereto;

6. direct the sale of the property free of any State lien or claim for lien (except the lien for general taxes), provide for the satisfaction of the lien or claim for lien out of the proceeds of sale according to its relative priority in relation to other liens to the extent the proceeds are available, and adjudicate the State's lien or claim for lien with respect to all other liens. The State's lien must be specified in the petition. The petitioner must inform the Attorney General of the petition's filing at least 20 days before the hearing by sending or mailing two copies of the petition to the Attorney General's office in Springfield, Illinois. In the proceeding in which the estate is being handled, the applicant must file evidence of delivery or mailing. The Attorney General has the authority to interfere and take any action he finds necessary to protect the State's interests.

The location and terms of the transaction

1. The court has the authority to determine the location and manner of the transaction, whether private or public, and whether it will be conducted for cash or on fair credit. The sale may take place over the Internet or via any other electronic medium that the court has authorized. When only mining, oil, or gas rights are sold, the court can demand protection from the buyer and order the sale to be made on a royalty basis or for a lump sum in the manner and on the terms that appear to the court to be in the estate's best interests.

2. Except for sales performed over the Internet or by any electronic medium, all public sales under this Article must take place between the hours of 10:00 a.m. and 5:00 p.m. on the same day. The notice of the sale's time, location, and conditions, as well as a description of the property sought to be sold, must be published once a week for three weeks in any newspaper published in the county where the property sought to be sold, or the greater part thereof, lies, the first publication being no less than 25 days prior to the sale.  

A sale conducted over the Internet or through another electronic medium must follow the terms and notice provided over the Internet or through another electronic medium. The notice required by this paragraph must include a declaration that public libraries have free Internet access. 

Appraisers are appointed.  

The court may appoint one, two, or three disinterested appraisers who, after taking an oath to reasonably appraise the property, shall visit the premises, conduct an appraisal, and report the results of the appraisal to the court in writing. The court will set a fair fee for the appraisers' services, which will be allowed as costs along with the appraisal expenses. When a property is located in multiple counties, the court can appoint appraisers for each county's tracts. If an assessment is performed, the sale cannot be for less than 2/3 of the appraised value of the property being sold, but each tract does not have to carry 2/3 of its appraised value if the total amount collected for all tracts equals 2/3 of the appraised value of all tracts.

Report of Sale  

1. The representative must present a verified report of the sale to the court authorizing the sale, describing the property sold and stating the name of the purchaser, the date and terms of the sale, and the manner in which the terms of the order were carried out, but no report of sale is required if the sale was made under a contract approved by the court upon petition undisclosed. Both persons who have entered their presence in the proceeding shall be given notice of the hearing on a report of sale, along with a copy of the report, as the court directs.

2. The court can either approve the report and confirm the sale or reject the report and order the property to be resold upon the hearing.

Conveyance or deed

1. The representative must execute and send to the purchaser a deed or other conveyance conveying the ward's or decedent's interest in the property ordered to be sold within 30 days after the court approves the report of sale.  

2. If the representative dies, becomes incapacitated, or is removed from office before the deed, conveyance, or mortgage is executed, his successor in office shall proceed to the premises and execute the deed, conveyance, or mortgage as if he were the petitioner.

Mortgage terms

An order authorizing the creation of a mortgage must specify the maturity date, the amount of the loan, and the rate of interest to be paid on it.

Accounting for the sale or mortgage proceeds

In his next current or final account filed in the court where the estate is being handled, the representative must account for the proceeds of any sale or mortgage.

Compelling real estate lease, sale, or mortgage

The court may issue all required orders compelling the representative to lease, sell, or mortgage the real estate or any interest therein.

There will be no strict foreclosure.  

Any mortgage executed or joined in is not subject to strict foreclosure, but redemption is permitted as provided by statute in cases of sale for the execution of a judgment for the payment of money.

Under a power of attorney, real estate may be leased, sold, or mortgaged

The rules for the lease, sale, or mortgage of real estate or interest therein do not extend to leases, sales, or mortgages made without a court order by a representative under a power granted in the will, but it is the representative's responsibility to comply with all relevant laws before making a sale or mortgage of real estate. If the decedent's contract to convey or lease real estate or an interest therein calls for warranties, the instrument provided by the representative in fulfillment of the contract must include the warranties, which bind the estate as if created by the decedent but not the representative directly. If a representative rents, sells, or mortgages a decedent's real estate or interest, the lease, sale, or mortgage is valid regardless of whether the will is later set aside or some other action is taken to limit or restrict the representative's right to lease, sell, or mortgage the real estate or interest. The rights and claims of all parties claiming under or through the decedent are transferred to the consideration obtained or to be received from such lease, sale, or mortgage by a lessee, seller, or mortgagee by a representative as though the instrument were performed by the decedent immediately prior to his death, and the rights and claims of all parties claiming under or through the decedent are transferred to the consideration received or to be received from such lease, sale, or mortgage.

Completion of the decedent's real estate acquisition deal

1. If a decedent's representative has contracted to purchase real estate but has not completed the payment, the representative may file a petition in the court that issued his letters, asking for permission to complete the payment or for instructions on how to proceed with the real estate. The court may order the representative to deal with the real estate in a certain way or authorize payment from the decedent's estate in the name of the representative or the persons entitled to the estate. This section does not take precedence over the decedent's will or the vendor's rights under the contract of sale.  

2. The petition must provide a summary of the real estate in question, the purpose of any changes made to it, an estimation of its worth, and the amount owed on the purchase price. The court must give notice of the time and place of the petition hearing as directed by the court, or the court can hear the petition without notice if it determines that notice is not necessary to protect the interests of any interested party.

Completion of contract for the sale or lease of real estate

Upon the petition of a representative of a decedent's or ward's estate or other interested person, the court may direct the representative to perform a contract of the decedent or ward that was legally subsisting at the time of his death or adjudication, to convey real estate or an interest therein, and to execute a deed, lease, or other instrument in fulfillment thereof, without notice or upon such notice as the court orders. The petition must provide a summary of the property as well as the facts that support the right to a conveyance or lease. The representative may be authorized by the court to waive a default or to compound or compromise any balance due on the court's terms. If the contract calls for warranties to be issued, the representative's instrument must include certain warranties, which will bind the estate as if made by the decedent or ward, but will not bind the representative directly.

Effect of proceedings.  

Deeds or conveyances executed by a representative to the purchaser convey to and vest in the purchaser all of the decedent's or ward's land, right, title, and interest, lawful or equitable, in the real estate or interest therein sold. Mortgages executed by a representative convey to and vest in the mortgagee all of the decedent's or ward's assets, right, title, and interest, lawful or equitable, in the property mortgaged for the purpose of, and as protection for, the indebtedness specified in the mortgage and intended to be secured by it.

There is no exoneration for encumbered real estate interests. Unless the decedent's will specifically states otherwise:

1. If any real estate or leasehold estate in real estate subject to an encumbrance, or any beneficial interest under a trust in real estate or leasehold estate in real estate subject to an encumbrance, is specifically bequeathed or passes by joint tenancy with right of survivorship or by the terms of a trust agreement or other nontestamentary instrument, the legatee, surviving tenant, or beneficiary to whom receives or inherits the real estate, leasehold estate, or beneficial interest does so according to the encumbrance and is not entitled to have the debt paid from the decedent's other real or personal property.

2. If the representative pays all or part of the debt with assets other than the real estate, leasehold estate, or beneficial interest, or the income or proceeds therefrom, he is entitled to reimbursement from the legatee, surviving tenant, or beneficiary, and in the event of nonreimbursement, the court may adjudge a lien on the real estate, leasehold estate, or beneficial interest for the amount owed with interest.

3. If the encumbrance includes or applies to other land, the refund is limited to the proportion of the sum paid by the representative that the value of the real estate, leasehold interest, or beneficial interest bears to the total value of all property subject to the encumbrance as of the decedent's death.

Oil, gas, coal, and other mineral discoveries as they relate to leasing

1. A representative may lease the real estate or any interest in real estate of the decedent or the ward for oil, gas, coal, or other mineral production on such terms and conditions as the court may approve. This includes the right to join or engage in a cooperative coal marketing group or any related organization.

2. A lease for oil, gas, and other minerals, excluding coal, may be for a duration of not more than ten years and for as long as oil, gas, or other minerals, except coal, may be extracted from the premises covered by the lease, even if the term of the lease can extend the ward's time of disability. The coal lease or participation in a cooperative coal marketing association or similar entity may be for a term of not more than 15 years, or for as long as coal can be generated from the mining area described in the lease or cooperative coal marketing association agreement, even if the term of the lease or cooperative coal marketing association agreement can exceed 15 years in the case of a ward.

3. The representative must file a petition for authority to lease the real estate or an interest therein for oil, gas, coal, or other mineral production in the court where his letters were given. The petition must provide a summary of the real estate or interest in real estate to be rented, as well as reasons why entering into the lease is in the best interests of the decedent's estate or the ward. The petition must include a copy of the proposed contract.

4. Within 10 days of the petition's filing, the court will schedule a hearing. The complainant must mail a notice of hearing and a copy of the petition to the decedent's heirs or legatees, or to the ward, as the case may be, at least 5 days prior to the hearing. There is no need to name a Guardian ad Litem for any ward unless the court deems it appropriate for his safety.

5. The court may allow the representative to execute and deliver a lease of the real estate or interest therein by a private letting with the proposed lessee on the form proposed or other form as is appropriate to the court, or the court may order the leasing of the real estate or interest therein to be done at a public letting, following the hearing. If a public letting is required, the court will specify the time, location, and manner in which the letting will be held, as well as the time and manner in which notice will be issued. In the case of a public letting, the delegate must file a validated report with the court within 10 days of the letting, explaining the real estate or interest therein let, the lessee's name, the terms of the letting, and the manner in which the terms of the court's order were carried out. Any individual with an interest in the leased property has five days after the deadline to file an appeal to the report has passed. The court may either approve the report, confirm the letting, and allow the representative to execute and deliver the lease, or it can disapprove the report and reoffer the land. The representative shall execute the lease after it has been approved as given in this Section, and it shall be true and binding.

6. The court may authorize a representative who has leased the real estate or interest therein of the decedent or ward for oil, gas, coal, or other mineral purposes to enter into agreements unitizing any part or all of the real estate or interest therein so leased with adjacent lands so that the entire unitized tract may be d upon the filing of a petition and upon such notice as the court directs. Similarly, the court may authorize a delegate to sign agreements that are supplemental to or amendatory of any oil, gas, coal, or mineral leases, including, but not limited to, agreements relating to secondary recovery operations on the decedent's or ward's lands alone or in combination with other lands.

7. The court may allow a representative to sell all or any part of the oil, gas, coal, or other mineral estate reserved to the lessor in any contract, including all or part of the royalty or other income reserved to the lessor by the lease, on such terms as the court directs.

Taking part in a sale or mortgage with a ward's spouse

A representative of a ward may participate in the execution and delivery of a deed or mortgage in the ward's name, or otherwise release or convey the ward's right to homestead, with the court's permission and on such terms as the court directs. Leave of court must be sought in a way that is as similar to that of leasing a ward's real estate as possible.

Accept the sale without the ward's consent

When a court in this state is about to order the sale of real estate in which a ward has an estate of homestead or any other interest, the representative may assent in writing on behalf of the ward to the sale of the homestead or other interest pursuant to the court's direction. When the assent is filed in the court where the real estate sale is pending, the court will order the sale of the real estate free of the ward's homestead or other interest, but the court must determine the value of the homestead or other interest and order that a sum equal to the gross value of the homestead or other interest be paid from the proceeds.

It's possible that the representative will be authorized to pay taxes

When it appears to the court that paying taxes on real estate forming a part of the estate not in the representative's possession is in the best interests of the estate being administered in that court, the court can allow the representative to pay taxes from any money on hand.

Recorder's filing of a notice of probate

1. A notice of probate must be signed and recorded if a decedent's estate in controlled or autonomous administration contains an interest in real estate that is not sold or conveyed by the representative during administration. The decedent's name, address, and date of death must be included in the notice, as well as the legal description and street address (if any) of the real estate, the court name and case number used to describe the estate, the date the representative was named, and the representative's name and address. Before the representative is discharged, the notification must be registered in the county where the real estate is located.

2. Any heir or legatee (or successor in interest to such an heir or legatee) who claims title to an interest in real estate from a decedent for whose estate no notice has been registered can record a notice of probate.

3. A representative acting under independent administration can combine the notice of probate and the release into a single instrument.

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