Taxation & Estate Planning

Michael Jackson's Estate, Part 7 -- "Allowance"

By Joel A. Schoenmeyer

Probate takes time, especially a probate a complicated as Michael Jackson's. And when probate lasts a really long time, the spouse and/or dependent children of the decedent are at risk of being unable to reach money that they will (hopefully) inherit. In these cases, you have to proceed a little differently than you would typically, where you collect assets, pay all claims, and then (only then) make distribution to the beneficiaries.

Enter the concept of an allowance, or what's know in Illinois as a child's award or spouse's award. This is what attorneys for Katherine Jackson are discussing in this article.

In Illinois, spouse awards and child awards are discussed in Article XV of the Probate Act. Note the amount to pass to the surviving spouse:

a sum of money that the court deems reasonable for the proper support of the surviving spouse for the period of 9 months after the death of the decedent in a manner suited to the condition in life of the surviving spouse and to the condition of the estate...

Two other points:

1. Illinois law doesn't allow for an award to a dependent parent of a decedent (the above article seems to indicate that, to the surprise of no one, Katherine Jackson was dependent on her son for support). But it would allow Katherine to receive money as guardian of the minor children (and for their benefit).

2. A spouse or child award is considered a 2nd class claim against the decedent's estate under Article XVIII of the Probate Act. A 1st class claim is a claim for "[f]uneral and burial expenses, expenses of administration, and statutory custodial claims" -- those are the only types of claims that would take precedence over a spouse or child award.

Full post as published by Death and Taxes Blog on July 24, 2009 (boomark / email).