Detailed Answer
When a loved one passes, the personal representative (executor) must identify and pay valid creditor claims before distributing assets. Illinois law, under the Probate Act (755 ILCS 5/18-2 and 5/18-3), sets the process and deadlines.
Step 1: Publish and Mail Notice to Creditors
Within a reasonable time after appointment, publish notice in a newspaper in the probate county and mail written notice to known creditors. Under 755 ILCS 5/18-2, creditors have six months from the date of first publication to file claims: 755 ILCS 5/18-2.
Step 2: Identify and File Claims
Creditors present claims to the court clerk. Each claim must state the amount owed and include supporting documents. Late claims are barred.
Step 3: Review, Approve, or Contest Claims
The personal representative reviews each claim. To contest a claim’s validity, file objections within 30 days after the claim’s filing, per 755 ILCS 5/18-3: 755 ILCS 5/18-3. Disputed claims may require court resolution.
Step 4: Prioritize and Pay Claims
Illinois does not enumerate every claim in statute, but courts apply this general order:
- Funeral expenses and costs of last illness
- Administrative expenses (court fees, bond premiums)
- Taxes (federal, state, and local)
- Secured claims (paid from collateral)
- Unsecured claims (paid pro rata if assets remain)
If the estate is insolvent, distribute assets according to this hierarchy until funds are exhausted.
Step 5: Final Accounting and Distribution
After paying approved claims, prepare and file a final account with the court. Distribute any remaining assets to beneficiaries under the will or Illinois intestacy rules.
Helpful Hints
- Track all deadlines — late claims are barred.
- Maintain a claims register with filing dates and amounts.
- Document notices published and mailed.
- Communicate promptly with known creditors, even if you intend to contest their claims.
- Consider court approval for settling complex or disputed claims.
- If the estate lacks sufficient assets, notify creditors of insolvency and follow the priority order.
Disclaimer: This article is for informational purposes and does not constitute legal advice. For guidance on your specific situation, consult a licensed attorney in Illinois.