“Putting all my assets in joint tenancy avoids probate.” Maybe, but there are potential problems with using joint tenancy as a probate-avoidance strategy. First, adding someone as a joint tenant on your assets can expose your assets to the other person’s creditor claims or other liens. Second, there may be gift tax implications when making someone a joint tenant. Third, it requires the joint tenant to survive you. This isn’t as sure a thing as one might expect. Fourth, an untrustworthy joint tenant could abscond with bank or brokerage account assets.
“If I avoid probate, I won’t have to pay any estate taxes.” Not true. Your taxable estate includes everything you own or have an interest in at death, whether it goes through probate or not. Avoiding probate eliminates certain statutory fees paid to your lawyer and to your executor, but it does not eliminate estate taxes.
“If I have a will, that means my estate won’t have to go through probate.” Not true! People think that their estate will only go through probate if they don’t have a will. Actually, an estate will go through probate whether you have a will or not if the estate is large enough and you don’t have a valid plan in place for avoiding probate. This is not the result when assets are held in a living trust which will not have to go through probate.
“Some people simply don’t bother with a probate when their spouse dies and they don’t have any problems, so probate isn’t really necessary.” WARNING: many who have done this still have the deceased spouse on title to real estate or other assets, and some day they will find that it may not be possible to sell or take ownership of these assets until the deceased spouse’s estate has been probated or addressed by some other lawful means.
Get answers to matters like this from a qualified California probate attorney. Call Mitchell A. Port at (310) 526-3433.