Why Is a Will Probated?
Our society uses probate as the "official" way of transferring a dead person’s property to a living person.
An entire court system has been established in every county in the nation to do probate. The probate courts are generally separate courts from the criminal and civil courts. That should tell you just how big of a deal probate is. Any property requiring a transfer signature that passes to an heir will have to pass through the probate system, unless it passes by contract or other "probate avoidance" trick.
Joint tenancy with rights of survivorship is probably the most common "legal trick" people use to get around probate.
Joint tenancy is a type of ownership vehicle that probably shouldn’t be used, even between a husband and wife.When you use joint tenancy, you are creating a tax and an asset protection disaster.Yes, joint tenancy might avoid probate, but the cost of avoiding probate is too high. Legal tools, like IRAs, retirement plans, benefit plan accounts, POD accounts, life insurance policies, and others, will avoid probate.
If property has to go through probate, you want to have a will to direct the court to fulfill your wishes. The probate court will use your will, or if you don’t leave a will, the probate court will use the statutory will that your state provides. If you haven’t seen your state’s will, you need to take a look, because I don’t think you are going to like it. Please at least prepare a simple will for yourself. After you die, only the property that requires your signature to make a transfer will have to be probated. To transfer ownership, bank accounts, safe deposit boxes, brokerage accounts, car titles, and of course real estate all require a signature.After you die, when your kids want to open your safety deposit box, who can sign? In order to sell your home after you die, the deed will need to be signed. Who will sign it? There will be no problem if your youngest daughter moves into the house and lives there for years, until she tries to sell it. Assume she sells the house immediately after you die, without living in it, with your name on the deed, the title company will ask for you to come and sign the deed. Of course you are dead and not signing a lot of deeds. Your kid is going to argue that she has lived in the house and it’s hers. She could even cough up your will that gives the house to her. When all the dust clears, the title company isn’t going to accept her signature. The buyer can’t accept her signature on the deed.
She will have to go to court and probate the house. The probate court can’t take her word when she says it is your will. The probate court will make your daughter prove it. Your daughter will have to show the probate court that you didn’t owe money to anybody and that your creditors have all been paid. She can do this by publishing in the papers to find any creditors she doesn’t know about.
The judge will authorize your daughter to sign your name on the deed to make the transfer. The title company is going to want that letters testamentary and they will actually record the letter with the title to let the world know that the probate process has been met and the buyer has good title to the property, even though your signature isn’t actually on the deed.
The probate process is explained in detail in my book, Guaranteed Millionaire. Order it now and get a FREE 90 minute CD bonus. Make sure you click or ask for the bonus, which will be at least a $20 value.