WHAT IS PROBATE?
Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will. If you don't have a valid will, your assets are distributed according to state law.
WHAT IS SO BAD ABOUT PROBATE?
- It can be expensive. Legal/executor fees and other costs must be paid before your assests can be fully distributed to your heirs. I fyou own property in other states, your family could face multiple probates, each one according to the laws in that state. Because these costs can vary widely, be sure to get an estimate.
- It takes time, usually 9 months to 2 years. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money to live on, they must request a living allowance, which may be denied.
- Your family has no privacy. Probate is a public process, so any "interested party" can see that what you owned and who you owed. The process "invites" disgrutled heirs to contest your will and can expose your family to unscrupulous solicitors.
- Your family has no control. The probate process determines how much it will cost, how ling it will take, and what information is made publice.
DOES JOINT OWNERSHIP AVOID PROBATE?
Not really- it usually just postpones it. With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate. But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the heirs.
Watch out for other problems. When you add a co-owner, you lose control. Your chances of being named in a lawsuit and of losing hte asset to a creditor are increased. There could be gift and/or income tax problems. And since a will does not control most jointly owned assets, you could disinherit your family.
With some assets, especially real estate, all owners must sign to sell or refinance. So if a co-owner becomes incapacitated, you could find yourself with a new "co-owner"--the court--even if the ill owner is your spouse.