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Why Is a Will Probated?
The probate process is the official mechanism our society uses to transfer a deceased person’s property to living people.
An entire court system has been established in every county in the nation to do probate. Probate courts are separate form the civil and criminal courts. If each courthouse has a separate area for probate, probate has got to be a huge part of the system’s burden. 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.
The "legal trick" of choice for most couples, who want to avoid probate, is joint tenancy with rights of survivorship.
You probably shouldn’t be using joint tenancy even between a husband and wife, and definitely never with anyone other than your spouse. When you use joint tenancy, you are creating a tax and an asset protection disaster. Oh, you might avoid probate, but you are going to pay dearly just to try and avoid probate. Other legal "tricks" including life insurance policies, retirement accounts (401(k)s, IRAs, POD accounts, etc will avoid probate.
Assuming there will be a probate, you certainly need a will to express your desires to the court. You’ll either have to write your own will, or the probate court will use the state’s statutory will. Trust me, you’ll love your state’s will – NOT! At least take the time to prepare just a simple will. After you die, only the property that requires your signature to make a transfer will have to be probated. Bank accounts, safe deposit boxes, brokerage accounts, car titles, and of course real estate all need a signature to transfer ownership.
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. Then the title company sees your name on the deed, they will ask for you to come and sign the deed. Of course you are not signing a lot of deeds, because you are dead. 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. However, she isn’t going to be able to have her signature accepted by the title company. It’s a certainty that the buyer won’t accept her signature.
Your daughter will have to get a probate order to sell the house she has been living in. Just producing a will isn’t going to be proof enough for the probate court. The probate court will demand proof. She will have to prove that you didn’t have any creditors or at least that your creditors have been paid off. Your daughter must find all of all of your creditors and notify them.
Once your daughter has provided everything that the court requires, she can sign your name to transfer the deed under an order called a " letters testamentary" issued by the court. The recordings 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.
My book, Guaranteed Millionaire, explains the probate process in detail. Order now and get a FREE 90 minute audio CD bonus. The CD is a $20 value, so make sure you click for or ask for the bonus!