$675,000 is the federal estate TAX exemption. Probate itself is not a tax and does not affect tax liability. Probate simply refers to the method of transferring property titled in the SOLE NAME of a deceased person. Note that only property titled in the decedent's sole name is subject to probate, therefore property held in a trust, joint tenancy or with a validly designated beneficiary (e.g. life insurance, IRA) is not subject to probate and does not pass under the Will. In Illinois, if the total value of assets in the decedent's sole name exceeds $50,000 (or if there is any real estate), you must go through the probate process to transfer the property. Probate does several things; it certifies to third parties who the executor is (who is authorized to deal with the property), allows creditors to file claims (and time-bars those claims after a period of time), and provides a forum to settle disputes over who gets what (including will contests).
Back to taxes, if the decedent's gross estate (and this includes EVERYTHING incluiding life insurance and retirement plans) exceeds $675,000 (in 2001), then a federal estate tax return must be filed. Illinois does not have a separate estate tax (it simply takes a portion of the federal tax).
If you need help with Illinois probate and tax services, feel free to contact me. Info is on my website at
http://www.illinoisestateplan.com
