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Selling Inherited Property in Illinois
Support GuideIllinois18 min read

Selling Inherited Property in Illinois

Yes, you can sell an inherited Illinois home. An independent representative sells without a court order under 755 ILCS 5/28-8(i). How title and tax work.

By Settled Editorial

Here is the short answer. Yes, you can sell an inherited Illinois home, and most families never ask a judge for permission. An independent representative may sell the decedent's real estate at public or private sale with no court order under 755 ILCS 5/28-8(i). A supervised representative has to petition the circuit court first. Which one you are decides almost everything about your timeline.

Two tax facts also shape the sale. Illinois collects no inheritance tax on what you receive, and the state estate tax reaches only estates above a $4,000,000 exclusion under the Illinois Estate and Generation-Skipping Transfer Tax Act. Federal law usually resets your cost basis to the home's date-of-death value, which shrinks or erases the capital gains tax on a sale soon after the death.

This guide walks through who signs the deed, when the court gets involved, what the small estate affidavit cannot do, how a transfer on death instrument changes the answer, and what happens when heirs disagree. Pair it with the Illinois probate guide for the full court process and the Illinois step-up in basis guide for the tax math.

Who Actually Has Power to Sell

Let's break it down. Illinois real estate does not sit in limbo after a death. It passes to the heirs under 755 ILCS 5/2-1 or to the devisees named in the will, subject to the claims against the estate. The catch is that a buyer's title company wants a recorded document proving who owns the home and who may sign the deed.

Three paths get you there.

The representative sells during administration. This is the common route for a solely owned home. The estate opens, the court issues Letters of Office, and the representative conveys the property by a representative's deed.

The heirs or devisees sell after the estate closes. Once the property is confirmed in their names and the claim period has run, they sell as ordinary owners.

The property never entered probate at all. Joint tenancy with survivorship, a land trust, a revocable trust, or a recorded transfer on death instrument moves title outside the estate. Pull the recorded deed before you assume anything.

The rest of this guide follows the first path, because it is the one that raises the most questions.

Independent vs Supervised Administration

This is the Illinois fork in the road, and it is worth getting right before you list the house.

Independent administration. An independent representative acting reasonably for the estate holds the power "to sell at public or private sale, for cash or on credit, or mortgage any real estate ... to which the decedent had claim or title," exercisable without a court order, under 755 ILCS 5/28-8(i). The same subsection lets the representative confirm an heir's or legatee's title by recording an instrument that releases the estate's interest. Two limits apply. Real estate left by the will to a named legatee may not be sold without that legatee's written consent, and the will can restrict any of these powers.

Supervised administration. A supervised representative sells only "by leave of court," and only when the sale is necessary for the proper administration of the estate, under 755 ILCS 5/20-4. Section 20-5 sets the procedure: file a petition describing the property, its approximate value, and every lien and interest against it, attach the proposed sale contract, name lienholders as defendants, and serve process as in other civil cases. The court may appoint appraisers under 20-8, and if it does, the property may not sell for less than two-thirds of the appraised value. On or before the court enters an order authorizing the sale, 20-5(e) puts a duty on the petitioner to comply with the additional-bond provisions of Section 12-9, and 20-15 carries that same duty to a sale made under a power in the will or under 28-8(i). After the sale the representative files a verified report of sale for approval under 20-9, unless the court already authorized the sale contract on the 20-5 petition, in which case no report is required. Within 30 days after the court approves the report of sale, 20-10 requires the representative to deliver the deed.

Sale under a power in the will. If the will itself grants a power of sale, Article XX's petition machinery does not apply. Section 20-15 says the Article's procedures do not govern sales made without a court order under a power in the will or under Section 28-8(i). A purchaser from the representative takes the same title as though the decedent had signed the deed just before death, and that title holds up even if the will is later set aside.

So the question a title company really asks is not "did a judge approve this?" It is "does this representative hold authority to sign, and can you show it?" Letters of Office plus the will's power-of-sale clause usually answer it.

The Small Estate Affidavit Will Not Move a House

Families reach for this one and hit a wall, so plan around it.

The Illinois small estate affidavit under 755 ILCS 5/25-1 transfers personal property only. The statute caps tangible and intangible personal property at $150,000 for deaths on or after August 15, 2025, excluding motor vehicles registered with the Secretary of State, and it reaches banks, transfer agents, and safe deposit boxes. For deaths before that date the older $100,000 gross personal estate limit applies, and it counted registered vehicles. Real estate is nowhere in it.

That means a modest Illinois estate whose only asset is the family home still needs a probate estate opened, or a non-probate transfer that was set up before the death. There is no affidavit shortcut for a deed. See the Illinois guide to avoiding probate for the planning tools that do reach real estate.

If the House Came Through a Transfer on Death Instrument

A recorded transfer on death instrument, or TODI, changes the picture. Under 755 ILCS 27/65, the interest transfers to the named beneficiary at the owner's death, subject to every mortgage, lien, and other interest the property carried at that moment. No probate estate is needed to move title.

Before you sell, clean up the record and watch two clocks.

  • Record a notice of death affidavit. Section 75 lets any beneficiary file one with the recorder in the county where the property sits, naming the beneficiaries, the legal description, the recording number of the TODI, and the date and place of death. Filing it is not a condition of the transfer, but a title examiner will want it.
  • Two or more beneficiaries take equal undivided shares with no right of survivorship. All of them sign the deed to a buyer.
  • A surviving spouse may renounce. Under Section 66 the spouse can claim a one-third interest if the owner left a descendant, or one-half if not, by filing a written renunciation with the recorder within 7 months of the death.
  • Contest window. Section 90 gives an action to set aside a TODI the earlier of 2 years after the owner's death or 6 months after Letters of Office issue. A bona fide purchaser for value who closes before a lis pendens is recorded takes free of that contest.
  • Creditors can still reach the property if the estate cannot pay. Section 85 subjects a TODI beneficiary to creditor, administrative, funeral, burial, and statutory claims the same way a revocable trust beneficiary is exposed under Section 505 of the Illinois Trust Code, which reaches the property only to the extent the probate estate is inadequate.

Read the Illinois transfer on death instrument guide before you rely on one.

Creditor Claims and Clear Title

Buyers and title companies care about open claims, so know the two deadlines.

The representative publishes notice once a week for three weeks and mails notice to reasonably ascertainable creditors under 755 ILCS 5/18-3. The filing deadline stated in that notice runs at least 6 months from first publication, or 3 months from mailing, whichever falls later. A claim not filed by that date is barred under 18-12(a).

The outer wall is 18-12(b). Every claim that could have been barred is barred 2 years after the death, whether or not an estate was ever opened. Section 18-12(d) adds the point that matters to heirs who sold quickly: a claim that escapes the bar can be asserted against a distributee, though only up to what that person actually received.

Practical reading. Selling before the claim date passes is legal and routine, but the safer sequence is to publish notice early, settle the claims you know about, and close after the notice date runs. Our Illinois creditor claims guide walks the publication mechanics.

Stepped-Up Cost Basis and Capital Gains

Here is where families save real money.

Capital gains tax applies to the gain, meaning the sale price minus your cost basis. For property you buy, basis is what you paid. For inherited property, federal law usually resets basis to the fair market value on the date of death. The IRS explains this basis adjustment for inherited assets in Publication 551.

Run the numbers on a typical Illinois case. A parent bought a Cook County bungalow in 1979 for $42,000. It appraises at $385,000 on the date of death. The heir's basis steps up to $385,000. Sell it four months later for $390,000, subtract roughly $25,000 in commissions and closing costs, and the $365,000 net comes in just under the $385,000 basis, so there is no taxable gain at all. Without the step-up, the gain would have run past $320,000.

A few points to hold onto:

  • Get a defensible date-of-death value. A licensed appraisal beats a website estimate if the IRS ever asks.
  • Selling costs reduce the gain. Commissions, transfer stamps, and title charges all count.
  • Basis is federal, not an Illinois rule. Illinois taxes the resulting gain as ordinary income on your state return, at the flat individual rate.
  • Retirement accounts, some gifted property, and certain trust interests do not get a full step-up.

Basis rules turn on facts, so confirm yours with a tax professional or the IRS before you file. The Illinois step-up in basis guide covers the mechanics in more depth.

Illinois Estate Tax and No Inheritance Tax

Illinois does not tax beneficiaries on what they inherit. The Attorney General's office administers only the Illinois estate tax and notes that an inheritance tax release matters solely for deaths before January 1, 1983 (Illinois Attorney General).

The Illinois estate tax is a different animal, and it catches more families than people expect. Section 2 of the Illinois Estate and Generation-Skipping Transfer Tax Act recognizes an exclusion amount of $4,000,000 for persons dying on or after January 1, 2013. That figure is not indexed to inflation and it is not portable between spouses. A paid-off suburban house plus retirement accounts and life insurance can clear $4,000,000 without anyone feeling wealthy, and the return is filed with the Attorney General while payment goes to the State Treasurer.

Selling the home does not trigger the estate tax by itself. The tax turns on the value of the estate at death, not on what you do with the property afterward. If the estate looks close to $4,000,000, get the return handled before you distribute proceeds.

Selling With Multiple Heirs

When several people inherit one house, they hold it as tenants in common, and a private sale needs every owner to sign the deed. No majority rules here.

If someone refuses, a co-owner may compel a partition in the circuit court of the county where the land sits, under 735 ILCS 5/17-101. Illinois then applies a second statute that most states still lack, and it protects families who inherited together.

The Uniform Partition of Heirs Property Act, 755 ILCS 75/, took effect August 23, 2019. The court must first decide whether the property is "heirs property," which Section 2 defines as tenancy-in-common land with no written partition agreement, where at least one cotenant acquired title from a relative, and where relatives hold at least 20 percent of the interests or make up at least 20 percent of the cotenants. If it qualifies, the Act governs unless every cotenant agrees otherwise in writing.

What the Act gives you:

  • A court-ordered appraisal. Section 6 requires the court to fix fair market value through a disinterested licensed Illinois appraiser before it reaches the merits, with 30 days for parties to object.
  • A buyout right. Under Section 7, cotenants who did not ask for a sale get 45 days to elect to buy out the ones who did, at the appraised value times the selling cotenant's fractional share. Electing buyers then get at least 60 days to pay.
  • An open-market sale, not a courthouse auction. If a sale still has to happen, Section 10 requires an open-market sale through a licensed Illinois real estate broker at a price no lower than the appraised value, unless the court finds sealed bids or an auction would serve the cotenants better.

That sequence keeps a single unhappy heir from forcing a fire-sale auction of a family home. It also takes months. Most families settle faster by agreeing on an appraisal and letting one sibling buy out the others. Bring in an Illinois attorney before you file anything.

Costs at Closing

Illinois imposes a state real estate transfer tax on the deed at the rate of 50 cents for each $500 of value, or fraction of $500, under 35 ILCS 200/31-10. Where the property transfers subject to a mortgage, the outstanding mortgage balance comes out of the taxable base. The deed goes to the recorder with a transfer declaration filed through the state MyDec system.

Counties and many municipalities layer their own transfer taxes on top, and several home-rule cities charge far more than the state does. Some also require a water certification or a municipal transfer stamp before closing. Confirm the local charges with the recorder and the municipality where the property sits, because they vary widely across the 102 counties.

Deeds of partition are exempt from the state transfer tax under 35 ILCS 200/31-45(h), as are deeds where the actual consideration is less than $100 under 31-45(e).

Steps to Sell an Inherited Illinois Home

  1. Pull the recorded deed and confirm how the decedent held title, including any joint tenancy, land trust, or recorded transfer on death instrument.
  2. Read the will for a power of sale and for any specific bequest of the property.
  3. Open the estate and obtain Letters of Office, noting whether administration is independent or supervised.
  4. Publish and mail the creditor notice under 755 ILCS 5/18-3 as early as you can, so the claim clock starts running.
  5. Order a date-of-death appraisal to fix your stepped-up basis and, where the estate is near $4,000,000, to support the Illinois estate tax return.
  6. For supervised administration, file the sale petition under 755 ILCS 5/20-5 and serve every lienholder.
  7. Get written consent from any legatee to whom the will left the property by name.
  8. Confirm every co-owner or beneficiary agrees on price and terms, and that all of them will sign.
  9. List the property, accept an offer, and clear title objections with the buyer's title company.
  10. Close with a representative's deed, file the transfer declaration, and pay the transfer taxes.
  11. For supervised sales, file the verified report of sale for court approval and deliver the deed within 30 days.
  12. Report the sale on the federal and Illinois returns, measuring gain from the stepped-up basis.

Common Questions

Can I sell an inherited house before probate is finished in Illinois?

Usually yes. An independent representative may sell the decedent's real estate without a court order under 755 ILCS 5/28-8(i), so the sale can close long before the estate closes. A supervised representative needs a court order first under 755 ILCS 5/20-4. Either way, settle known creditor claims before you distribute the proceeds.

Does an Illinois small estate affidavit work for a house?

No. The affidavit under 755 ILCS 5/25-1 transfers personal property only, capped at $150,000 excluding registered motor vehicles. It cannot move real estate. An Illinois estate whose only asset is a house still needs a probate estate or a non-probate transfer such as a recorded transfer on death instrument.

Do I owe capital gains tax on an inherited Illinois home?

Often very little. Federal law usually resets your basis to the home's fair market value on the date of death, so a sale near that value leaves almost no gain. Illinois taxes any resulting gain as income on your state return. Confirm your basis with a tax professional before you file.

Does Illinois charge an inheritance tax when I sell?

No. Illinois collects no inheritance tax on beneficiaries. The state does levy an estate tax on estates above a $4,000,000 exclusion under 35 ILCS 405/, filed with the Attorney General. That tax turns on the value of the estate at death, not on the later sale.

What if one heir refuses to sell the house?

A co-owner can file for partition under 735 ILCS 5/17-101. When the land is "heirs property," the Uniform Partition of Heirs Property Act at 755 ILCS 75/ requires a court-ordered appraisal, gives the other cotenants 45 days to buy out the ones who want to sell, and directs an open-market broker sale instead of an auction if a sale is still needed.

Who signs the deed to the buyer?

It depends on the path. During administration the representative signs a representative's deed. After the estate closes, or where the property passed by a transfer on death instrument, every heir, devisee, or named beneficiary holding an interest signs. Two TODI beneficiaries hold equal undivided shares with no survivorship, so both sign.

The Bottom Line

Selling an inherited Illinois home turns on one question: who holds authority to sign the deed, and can you prove it on paper. Independent administration answers that question fastest, because 755 ILCS 5/28-8(i) lets the representative sell with no court order and record an instrument confirming an heir's title. Supervised estates take the slower route through a petition, service on lienholders, and a report of sale.

Watch the money at both ends. Illinois asks nothing of you as a beneficiary, but the estate tax starts at $4,000,000 and does not move with inflation. Federal basis usually resets to the date-of-death value, so an early sale often produces no taxable gain at all. Get a real appraisal, publish the creditor notice early, and settle the buyout question with your siblings before anyone files a partition case.

This guide is general information about Illinois estates, not advice for your situation. Confirm the current statute, your local recording steps, and any municipal transfer tax with the county recorder and the municipality where the property sits, check your basis with a tax professional, and have a licensed Illinois attorney review a sale that involves disagreeing heirs, an insolvent estate, or a home the will leaves to a named legatee.

Sources:

It is not legal advice.

Information current as of July 19, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Illinois can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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