Part of my practice is spent helping clients solve problems after a parent or spouse has passed away. Many times, these problems arise because the estate plan included a “shortcut” intended to avoid probate.
Probate is a process to transfer the assets after someone dies. For example, when a home owner passes, probate allows for the home to be sold or transferred even though the owner is no longer alive to sign a deed.
Many have been told probate is a process they should avoid, usually (they are told) because of its cost. To avoid probate, many take shortcuts – sometimes even spending more on the shortcut than probate would have cost!
In some cases, there are legitimate reasons to avoid probate and its cost. But the alternative must be effective. A shortcut should never jeopardize the assets ending up where the deceased wanted them to be.
Let me give an example. A client once provided a deed that claimed to transfer land from parent to child. It was signed and recorded with the recorder’s office like a typical deed. However, this deed had one significant difference. It provided that the transfer from parent to child would not be effective until the parent’s death certificate was also recorded.
At first glance, this may seem like a great shortcut to avoid probate. Unfortunately, the law does not consider this type of transfer to be valid. As a result, even though the parent has long since passed, the land has never been properly transferred to the child. Filing for probate now may allow us to get the property transferred to the child, but this is not yet clear. Other issues will need to be addressed before we will know the answer. Much more clear is the reality that a Will and the probate process would have made sure this land ended up with the intended child. Avoid shortcuts that may cost you control over your own estate plan.
© 2016 Steven J Wright