Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. You should consult a licensed attorney in Illinois for guidance on your specific situation.
Under Illinois law, a personal representative (also known as an executor or administrator) typically must open a separate estate account to manage the estate’s funds. Illinois Probate Act section 27-1 authorizes the personal representative to deposit estate assets in a separate bank or trust account to preserve the estate and pay valid claims, taxes, and administrative expenses. 755 ILCS 5/27-1.
Why a Separate Estate Account Matters
Opening a dedicated estate account helps:
- Prevent commingling of personal and estate funds.
- Maintain clear financial records for accounting and court review.
- Protect the personal representative from personal liability.
How to Open an Estate Account in Illinois
Follow these general steps:
- Obtain letters of office from the probate court after appointment.
- Visit a bank or credit union that accepts fiduciary accounts.
- Present the letters of office, personal identification, and the estate’s Tax ID (EIN).
- Name the account clearly, for example: Estate of Jane Doe, Deceased, John Smith, Personal Representative.
When Court Approval Is Required
In most cases, you do not need separate court approval to open an estate account. However, if the will or a court order imposes special restrictions, seek the court’s permission before proceeding. The probate court can also review your account statements when you file your final report.
Consequences of Not Opening an Estate Account
Failing to segregate estate funds can lead to:
- Accusations of mismanagement or breach of fiduciary duty.
- Difficulty in preparing accurate accounting for heirs and the court.
- Personal liability for creditors’ claims and taxes unpaid from the estate.
Helpful Hints
- Open the estate account promptly after appointment to avoid delays in paying bills.
- Keep detailed records of every deposit and withdrawal.
- Use online banking to download statements and reconcile transactions regularly.
- Limit withdrawals to valid estate expenses: funeral costs, taxes, creditor claims, and court-approved fees.
- File interim accountings if the estate administration extends beyond a year.