Often, when a person dies, they have real estate that must be sold.  If a person dies owing real estate that is subject to probate but their estate otherwise need not be probated (ie., no personal estate or the personal estate is less than $100,000 and there are no anticipated contested claims or controversies) in order to sell a piece of property that is titled to a deceased person, you need to do one of the following:

1. Wait for two years from the date of death. In Illinois creditors have two years to make a claim against a deceased person’s probate assets–real estate in the sole name of the decedent name would be subject to the claims of his or her creditors (known and unknown). If you waited two years, claims would then be cut off and then you can sell the property using deeds from all heirs and any legatees (takers under a will) entitled to the real property or proceeds there from. By handling the sale this way, you would avoid all probate costs and any bond premiums that otherwise may have been required (see below). Selling in this manner should not materially increase the normal legal costs that are generally incurred in a sale of real estate although there may be slightly higher due to some additional documentation that a lawyer may need to prepare.  Obviously, you may have reasons not to wait two years from the date of death and therefore would need to follow either #2 or #3 below.

2. Post a "Bond in Lieu of Probate". A sale may take place without probate and prior to the running of the above mentioned two year claim period but, sellers are required to post a bond in lieu of probate. The bond protects potential creditors or claimants. If a claim is made, the bonding company would pay the claim and seek reimbursement from the person or persons who received the sale proceeds. The premium for a bond in lieu of probate is generally equal to 2% (as quoted by Chicago Title Insurance Company) of the sale price if within one year of death and 1% if the sale occurs more than one year after death but before the two year claim period expires. As a seller, in addition to the bonding requirement, you will incur the usual and customary legal fees and expenses associated with a sale of real estate.

3. Probate the estate. If you choose to probate, you need not post a bond in lieu of probate and a sale is relatively simple. Whoever is appointed as the Estate Representative executes all required documents–the other heirs and legatees need not sign anything in most circumstances. By probating, you will incur legal fees for the probate of the estate and the usual and customary fees associated with a sale. However, it is my experience that probate with a sale of real estate may ultimately cost less than the costs associated with the bond in lieu of probate–this would be dependent upon what the sale price is and what a probate bond premium might cost (a representative of an estate is required to post a bond which requires a premium to be paid unless there is a will that waives "surety").

Each individual case and each person's circumstances would require careful analysis to determine what is the best way to deal with a potential sale of real estate."