Is it true that not all wills have to be probated?

When  you pass away, will your executor have to probate your will? Most people don't know the answer to that, but they assume that going through probate is a bad thing. This reader asked me for information about whether wills must go through probate, and I thought many of you would like to read the answer, so here goes:

  

"If both husband and wife die leaving a will and leaving their entire estate to their children would their estate need to go through probate? Someone told me that all estates do not have to go through probate, is this correct?"

 

There are two related questions here. I'll start with the second one first, as it sets up the first one. Yes, it is correct that not all estates need to go through probate.

 

Whether or not a will has to go through probate depends on several factors, not all of which you can control ahead of time. The first factor is the type of asset held in the estate. Real estate (including raw land, homes, cabins, commercial apartment buildings, mineral titles etc) that is held by the deceased alone cannot be transferred or sold without going through probate.

 

The value of an asset will also be taken into consideration. For example, a bank may not insist on receiving a probate document to release an account with only a couple of thousand dollars in it. The same bank would insist on having probate to release an account that held a couple of hundred thousand dollars in it.

 

Some assets that do not require probate regardless of value are those that name a specific beneficiary, such as a life insurance policy, RRSP or pension, or those that are held in joint names with a right of survivorship (assuming the other owner is still alive).

 

Probate may also be required where there is some doubt about the validity of the will or the instructions in the will appear to be contradictory. And sometimes probate is required simply to set a legal date for the limitation periods set out in legislation such as family relief laws.

 

I've often been asked by clients to "make a will that won't need probate". Unfortunately my crystal ball has never really worked that well, so I can't guarantee that probate won't be needed. Not to mention the fact that I don't agree with the "avoid probate at all costs" hysteria that seems to take over some individuals and cause them to make mistakes that cost much more than getting probate ever would.

 

On to the second question. If a husband and wife both pass away, probate may be needed. In most cases, it is required because of the type of asset that is owned by the husband and wife. There is no special rule that exempts an estate going to children from going through probate.

 

There are a number of special tax and legal arrangements that can be set up between a husband and wife. For example, on the death of one spouse, the surviving spouse can receive an RRSP without any tax being immediately payable. Shares of a privately held company can be rolled over to the spouse. Homes are usually held in joint tenancy. When things are set up properly, there is often no need to go through probate when the first spouse dies. However, almost none of these arrangements can be set up between a parent and child.

 

I'd like to suggest a couple of things. The first is that anyone who has decided, without legal advice, that their primary estate planning goal is to avoid probate should talk to a lawyer in their area. Find out whether probate would be needed and whether it would even be a good idea to try to avoid probate. The second is that you avoid like the plague taking any home-made estate planning such as making assets joint with your children without talking to a lawyer.

 

If people only knew the problems they bring on their families by assuming that probate should be avoided and assuming they know how to achieve that,nobody would ever do it. I'd lend them my crystal ball if I could get it up and running.

 

 

 

 

 

 

 

 

To probate or not to probate

The Financial Post recently carried an excellent article called "To probate or not to probate", which contains an explanation of what probate actually is, as well as a discussion of some of the reasons people may choose to probate a will or not.

Click here to read the article.

This kind of background information is very valuable to executors who are trying to figure out what they should be doing. It's hard to make decisions if you don't understand the general rules! But this is also great information for people who are making their own wills, because it explains what kind of assets would not be included in a probate application.

Executors should know, though, that they won't always have a choice about whether or not to go through the probate process. Certain assets owned by the deceased simply can't be transferred without probate. An executor who isn't sure about whether or not he/she needs to go through probate should take the will, a rough inventory of the assets and liabilities of the estate, and a list of all beneficiaries and family members to a lawyer or trust company for some guidance.

Joint tenancy as a defence to probate costs

It's very common these days to hear people say that they've put their assets in joint names with their children "to avoid probate". But is probate really that bad? Do these people even know how much they'd actually pay if they left the assets in the estate? And most importantly, do they have even the faintest idea of the risks they are taking and the problems they may be creating by putting their kids' names on their assets?

The answer to all of these questions is "no". People really don't see how something apparently so simple can end up with so many problems. If you're considering putting your assets in joint names, or you've already done so, protect yourself by finding out what your risks are while there is still time to take additional steps, or even remedial steps. To illuminate the issue, I've attached an article by Don Shaughnessy of The Protectors Group. He talks about this very situation, and uses a monetary example from Ontario. Click here to read this very well-written article.

Joint accounts - will my daughter share with my son?

A reader has brought up a question about putting his daughter's name on his bank accounts as joint owners. This is always a hot topic at seminars and meetings, and I know that many of you want information on this as well, so I'm sharing my answer here.

Here is the question:

"I have added my daughter's name to the majority of my bank accounts and been told that they are marked 'with rights to survivorship'. We live in Ontario. I have asked my daughter to do whatever she sees fit with the money which includes sharing some with my son. My son is bad with money. Would I still need to put in my will that the money is her's to spend as she wants?"

There are a few things to consider here. First of all, if your daughter gets divorced or is sued or is influenced by her husband, or just wants to go on a spending spree, you can kiss your money goodbye. You have taken some steps to address things when you pass away, but you still have to live in the meantime. You have just placed your money at great risk.

Next, who is receiving the tax T-slips for the accounts? Have you just placed a tax increase on your daughter?

As for your daughter actually receiving the money as a joint owner after you pass away, yes, including a statement about it would help clarify your intentions. There is a question about inter-generational bank accounts such as yours being true joint ownership. The law changed in 2007, though banks have been very slow in coming to terms with the change. Currently the law states that when a parent owns an asset then adds a child's name to that asset, on the death of the parent the asset is frozen and held in trust for the parent's estate. This is to acknowledge that so many people put the kids' names on things during their home-made estate planning to avoid probate, or to allow the kids to help the parents with their banking.

Right now that new rule is being applied very unevenly across the country and it seems to me there is quite a bit of confusion in individual estates as to whether an inter-generational account is really meant to be joint. If you want it to be a true joint account so that your daughter inherits all of the money in the accounts for her own purposes, then mentioning it in your will is a good way to clear up that confusion.

That leads me to my next question. Are you sure that what you really want is for your daughter to inherit all of it? If so, why didn't you just give it to her outright and not leave it in joint accounts? You mention a son. Keep in mind that under your current arrangement, she doesn't have to give him a cent. He may be somewhat upset about this and even try to sue her over it, but legally the money will be hers if you confirm this in your will.

You mention that your son is bad with money. Are you thinking that your daughter will share with him and look after the money, in that way protecting him from blowing any money he might inherit? If so, you have chosen possibly the worst possible way to bring that about. You've created no legal right for him to inherit. Your will probably says to divide your estate between your kids, which will likely upset  your son when he realizes much of the estate is already in your sister's name and out of his reach. You've placed your daughter in the unpleasant role of having to be a parental figure to her brother, deciding whether he is fit to get an allowance and doling it out to him.

I don't know which role would be worse - the brother who has to beg for money, or the sister who has to decide what to give him.

Since you're making a will anyway, you might consider putting a share for your son into a simple trust using your will. You can prescribe the terms such as when he gets the money and in what amounts.

It doesn't really make sense to me that you'd make a will, but also make all of these accounts joint with your daughter unless you really do intend to cut your son out of those accounts and ensure that only your daughter gets them for her personal use. It feels as if you're using certain tools to achieve things they were never designed to achieve. My recommendation to you is that you find a really good wills lawyer and frankly discuss your goals with him or her.

Home-made estate planning can be dangerous

Last week I met with a widowed woman to talk about estate planning. Let's call her Mrs. Jones. She was anxious to tell me that what she really cares about is making provision for her disabled son. He is in his 50s, lives with his mother, and is unable to handle finances without help. Mrs. Jones is worrying about what all parents of disabled children worry about - what will happen to the child when the parent is no longer here to look after him. Her primary goal in doing her estate planning was to make sure that he was cared for.

This was a good start. Mrs. Jones told me that she owned her home and some non-registered savings, enough to set up a trust for her son's lifetime and still give an equal share to her other child, her daughter.

Then I discovered the problem that would make Mrs. Jones' plans impossible.

She had already given all of her assets to her daughter years ago. Her home had been transferred, though she still lived in it. Her non-registered investments had all been transferred. This wasn't even a transfer into joint ownership; it was an outright gift. Mrs. Jones owned nothing but her personal possessions and her RRIF (only because a RRIF can't be owned by anyone else), which names her daughter as her beneficiary.

Mrs. Jones said she wants to make a will and set up a trust for her son. She wants him to be able to live in their house as long as he wants. I replied that she doesn't own a house anymore, nor any money to leave for the upkeep and running of a house. It took me a while to make her understand that with her current legal and banking arrangements, she has not a penny to leave to her son.

She was so aghast at this news that I admit I at first suspected coercion on behalf of the daughter, but Mrs. Jones assured me that she had willingly signed over the assets. She just figured they were still "really" hers and that she could still do what she wanted with them. She hadn't realized she'd transferred ownership. She couldn't really explain why she had taken these steps, other than it felt pro-active to do "something" with the house and she wanted her daughter to be able to help her. Had she simply left it all alone and not transferred it to her daughter, Mrs. Jones could have made the will she wanted.

This is an extreme example of the kind of home-made estate planning moves that people make without legal advice. Without meaning to, Mrs. Jones had set things up so that her primary goal - looking after her disabled son - could not be reached. It was the opposite of what she meant to do. The worst case scenario is that the daughter will sell the house and spend the investment money, leaving no assets at all to support her brother. The best case scenario would involve the daughter voluntarily agreeing to transfer assets back to her mother (we'll have to see what tax implications are involved) or to put assets into a trust for her brother.

If the assets are not in Mrs. Jones' name, she cannot give them away in her will. She can't put them into a trust for her son, nor can she name the trustee to look after the funds. She'll have to rely on her daughter to do the right thing in supporting her mother if RRIF funds are not enough, and to look after her brother.

Call me cynical, but I'd prefer to see Mrs. Jones' son looked after by his mother's will than his sister's good intentions. After all, she could run into financial difficulties, or be sued, or get divorced, any of which could leave her elderly mom and her disabled brother in dire straits.

Home-made estate plans are commonplace of course, but they are dangerous. Many Canadians transfer important assets like their homes, cottages and bank accounts to family members because they intend to avoid probate or get help with the banking. In a dismaying number of cases, they don't think far enough ahead. Before taking major steps such as transferring your home or your life savings to someone else, see a lawyer. Find out what the long-term implications are for you and your family.

Using beneficiary designations to avoid probate? Be smart about it

I get the feeling that when estate planning lawyers such as myself say that it's dangerous to try to avoid probate without understanding the full implications of what you're doing, people aren't really listening. They somehow suspect that things will be okay for them no matter what we doom-and-gloomers say. Unfortunately for the families of those people, it truly is sometimes a bad idea to make "avoiding probate" your first and only estate planning goal.

I really like this article from http://www.legacyplannerblog.com/ because it gives some real-life examples of exactly how it can go wrong. It's also fair about the fact that avoiding probate can work if done properly and in the right circumstances.This article talks about a couple of examples in which individuals named beneficiaries of certain assets, and in the process messed up their own estate plans. Click here to read the article.

Avoid probate and estate tax

This article from http://www.capitalmagazine.ca/ talks about how to avoid certain estate taxes by using various kinds of trusts. Trusts aren't something most people can set up on their own, as there are plenty of rules that apply to them, but they are still very popular and very flexible. Click here to read the article. Maybe you'll find it worthwhile to talk to your own estate-planning lawyer or accountant about trusts.

Proceed with caution when planning to avoid probate fees

We've talked about the pros and cons of putting parents' assets in joint names with the children a number of times on this blog (and we will again). This new blog post from http://www.allaboutestates.ca/ discusses the fact that when property is put into joint names, the tax imposed on a beneficiary in the long run can actually be more than the amount saved on probate fees. Click here to read the article.

In estate planning, know the hazards of joint ownership

This new article from today's Globe and Mail is essential reading for any of you out there considering putting your home or bank account in joint names with anyone other than your spouse. In this article, the possible outcomes are presented as things that could happen, but I would like to reinforce that they DO happen on a regular basis. Please read this if you've put your home, cottage, investments or any other property in joint names with your children or other people. I strongly recommend that you don't make this kind of title change without discussing it with an estate planning lawyer first. Click here to read the article from Tim Cestnick of the Globe and Mail.

Where there's a will: how to minimize probate fees

I'm not a fan of home-made estate planning, except when matters are extremely simple. The problem is that people hear a nugget of information and take action based on it, without really understanding the consequences of it or even whether the information really applies to them. I can't even tell you how many lawsuits are going on and how many families have been destroyed by what seemed like a simple action at the time. I'm talking about actions like putting a parent's home or account in joint names with the kids or naming a beneficiary of a registered plan such as an RRSP or RRIF.

I'm attaching an article by Tim Cestnick of the Globe and Mail. It summarizes a number of ways that people can reduce or eliminate probate fees. However, I suspect that the most important part of Mr. Cestnick's message - that you should understand what you're doing before you do it - will be lost. I say this based on many years of unwinding the home-made estate planning mistakes that well-meaning individuals have made. Click here to read the article.

I'd like to add my own message to this article. The information in the article is accurate and is important for people to know. But before anyone jumps in to reduce probate fees, find out (not by guessing or by asking your buddy at work whose aunt died a couple years ago, but from a lawyer) the following information:
- what would the probate fee on your estate actually be?
- is the probate fee worth the trouble of taking avoidance steps (e.g. in Alberta your fee can't be more than $400 no matter what you own)
- what would taking an avoidance step do to your over-all estate plan? e.g. could it disrupt your plan to treat your kids equally? Could it cause a dispute among the kids?
- what are the tax consequences of this action, both now at the time of the action and on your estate?
- what are the risks to you while you're alive? e.g. a house held jointly with a child is at risk if that child gets a divorce
- are there other ways of reducing probate that might be better suited for you?

Don't leave your family a mess to clean up by taking legal steps that you haven't thought all the way through. Talking to a lawyer for even an hour may protect your estate and your family.

Probate fee planning - income tax, estate & legal issues to consider

This excellent article comes from Mark Goodfield, an experienced accountant who blogs at www.thebluntbeancounter.com. It goes into tax and legal consequences of the various ways that people try to avoid probate fees. It's a really good read if you are wondering about how probate fees might affect your plans. Click here to read it.

Which wills must be probated?

Not all wills need to be put through the probate process. The question is, which ones do and which ones don't? The answer is a bit complicated.

Each will must be evaluated in the context of the deceased and his or her assets. In other words, the decision about probate is usually made on a case by case basis after the testator dies.

It is possible to set up your affairs so that your estate won't have to go through probate, but be cautioned. It's not as simple as you might think. Don't try this without professional help. The number of people who have cobbled together bits and pieces of various probate-avoiding strategies on their own and ended up leaving endless mess and disputes is through the roof. They try to save a few dollars and end up costing their estate thousands in legal fees and taxes.

Whether or not your will has to go through probate will depend in large part on the type of assets (regardless of value) that you own, and how you own them.

Whether you've made beneficiary designations on the assets themselves will be important. For example, you might own a life insurance policy worth $100,000. If you have named a beneficiary, he or she will get the insurance money without need for probate. 

Another example is that you might own an RRSP or RRIF with $500,000 in it. If you have named an individual person as your beneficiary, he or she will get the money from the RRSP or RRIF without any need for probate. However, even this isn't carved in stone. Unless the person you name is your spouse or a handicapped child, your estate still has to pay the taxes on the RRSP or RRIF. You could end up being required to file for probate just to deal with taxes.

You don't need probate to deal with any asset is held as joint owners with a right of survivorship. That type of ownership means that the surviving person keeps the property without a need for probate. The most common assets of this type are real estate and bank accounts. This of course is where most people shoot themselves in the foot. They put their homes and other assets into joint names without giving thought to the consequences. Believe me when I say that it's common - very common - for children whose parents put their names jointly on bank accounts simply to clean out the account. Don't think it won't happen in your family; that's what all those other people thought too.

Don't put any assets in joint names with your child/children without sitting down with an estate planning specialist (not someone who does conveyancing or corporate or criminal law) and talking it through.

One of the main reasons probate may be required is that institutions may have internal requirements. For example, the land titles registry in your province is not going to transfer real estate (unless jointly owned as discussed above) without a grant of probate. Neither are banks, insurance companies or investment houses which hold large sums of money.

This requirement arises because a grant of probate is an order from the superior court in each province or territory that confirms that the will is valid, the executor appointment is valid, and that everyone who follows it properly is indemnified for his or her actions. For example, if a bank pays out $350,000 to the beneficiary named in a will, and has a grant of probate to rely on, someone coming out of the woodwork later on can't claim that the bank paid it to the wrong person.

Another reason that an executor might choose to apply for probate is that the family members are arguing about what to do about the estate. There might even be a question from family members, banks, the deceased's business partners, etc, about whether the will is properly valid. The executor may wish to protect himself or herself from blame and possible liability by having the court confirm the will and the distribution.

The general attitude that I encounter from customers and the general public is that probate must always be avoided at all costs. I couldn't disagree more! There are significantly more estate disasters out there because of people trying to avoid probate than there are for almost any other reason.

Pitfalls of joint ownership of accounts - EVERYONE should read this post!

I'm attaching a link to an article from Parksville Qualicum News in BC. It answers the question "to avoid probate fees, should I consider adding my adult children as joint owners of my investment accounts?' The answers are clear and to the point. Everyone should read this, as I know that many of you have questions about joint assets. Click here to read the article.

Top ten posts about Wills and Probate

I've prepared a list of the top ten posts on my blog (in terms of number of people reading them) and brought them all togther here in a list. There are a couple of really frequent questions covered in this list. Enjoy!

Click on the title to go to the article:

1. What do people in a second marriage have to consider when making a Will?

2. The avoiding probate at all costs issue.

3. Chart of probate fees across Canada.

4. Who can witness a Will?

5. Can I leave my child out of my Will?

6. Can I appoint my lawyer as my executor?

7. Can my executor also be a beneficiary?

8. Can a blind person sign a Will?

9. Do I have to leave anything to an illegitimate child I haven't seen in years?

10. If I die without a Will, my wife gets everything. Doesn't she?

Should I put my home in joint names with my kids?

I am always surprised at the large number of people who put their homes in joint names with their adult children. If only they could see that transaction from a lawyer's perspective! When I ask people who advised them to do this, the majority reply that they did not use professional advice.

Before you decide to add your children's names to the title to your home, consider this: the child whose name you put on the title will own your house just as much as you do. It won't matter in most circumstances that it's "really" your home or that you're the one who paid for it. Think about what that could mean to you.

Risk #1: You put your son Frank on the title to your home. A few years later, Frank gets divorced. He and his wife divide their property between them as fairly as possible. She claims half the value of your house. Because Frank is the owner of the house too, she actually has a viable claim. Does Frank have enough assets to give his wife an amount equal to half the value of your house? If so, what will that do to Frank's financial picture? What happens if he doesn't have enough to pay her out? You risk at worst losing your home, and at best leaving Frank a couple of hundred thousand dollars poorer.

Risk #2: Frank opens a business of his own. He gets bank financing, and as is usually the case, he signs a personal guarantee for the loan. After a while he realizes that his business is not working out, and he closes up shop, owing the lender much more than his business is worth. The lender has the legal documentation that allows it to realize on Frank's personal assets, which includes your home. If Frank can't pay off his business debt, are you in a financial position to bail him out to save your home?

Risk #3: Frank is driving too fast and causes a motor vehicle accident in which someone is severely injured or killed. The settlement amount is in the millions of dollars. Frank has only $1,000,000 in public liability insurance. He is sued for the rest. It's going to take everything he owns, and more, to satisfy this judgment. Since he owns your house, it could well be seized and sold to help pay off the judgment.

Risk #4: You and your spouse decide that the old family home is too big and that it's time to downsize to a condo. You're ready to put the house on the market, but Frank won't sign the Transfer of Land. He believes that the housing market is too low right now and just might recover if you hang on for a year or two. You and your spouse won't be able to sell your home because the other owner, Frank, isn't co-operating.

I could go on, but I'm sure you get the point.

The bottom line is that it's risky to put names other than your spouse on the title to your home. It is usually one of the most significant assets on anyone's financial sheet and not something that most people can afford to have taken away.

So why do so many people take this risk? Usually it's because they have been advised to avoid probate fees by putting everything in joint names. It seems like a good idea as long as you're willing to avoid thinking about the potential downside. In my view, people take this step knowing too little about the process itself, and too little about how it actually applies to them.

For example, in Ontario and BC, probate fees are quite high and it's understandably tempting to find ways to reduce those fees. But why would anyone in Alberta, where probate fees cannot exceed $400 no matter how large the estate, want to reduce probate? Who would risk a $500,000 asset to save $400? It's often because they don't know the fees are that low and added names to the title without ever finding out how it applies to them.

If you are considering putting your child's name on the title to your home, you need to get professional advice that is geared towards you personally by someone who has all the facts about you, your children, your assets and your liabilities. This could be an estate planning lawyer or a certified financial planner. While it is certainly legitimate to consider this step as part of estate planning, make sure it's also kept within the larger context of your risk.

The mythical "will that doesn't need probate"

Earlier this week I spoke with a customer who told me that some years ago he had asked for, and paid his lawyer for, a "Will that doesn't need probate". He seemed annoyed when I told him that based on the assets he currently owned, his Will would have to be probated if he should pass away.

There is no such thing as a "Will that doesn't need probating" because the Will itself is not the only determinant of whether probate is necessary. Whether or not you need to probate someone's Will often depends on what kind of assets they own, and how those assets are held (e.g. jointly owned, owned solely but with a designated beneficiary, etc.). If you own certain assets, your Will must be probated, or if you don't have a Will, someone must be appointed as an administrator.

The customer I was dealing with owned a mineral title. On talking with me in more detail, he remembered that the lawyer had said if he didn't want his Will to be probated, he had to change or get rid of his mineral title. The customer hadn't done that.

An estate plan is a jigsaw puzzle, and the pieces are the Will, the assets, the family, the beneficiary designations, the jointly owned property, the incapacity documents (Power of Attorney and health-care directive) and the taxes. All of the pieces have to work together.

When you ask an estate-planning lawyer for a "Will that doesn't need probate", what you are really asking is for a plan in which all of your assets are dealt with during your lifetime. This is achievable, as long as you're willing to own absolutely everything from your car to your business to your bank account in joint names with other people, or to name beneficiaries (where that is possible) other than your estate. This is generally only practical for married people and even then, not always. People do get divorced, after all.

You have to ask yourself why you'd live your life that way just to avoid probate. Particularly in those provinces where the probate fees are low, probate isn't expensive so it simply makes no sense to put your assets at risk this way. You may think that avoiding probate is simpler, but if you have to change the ownership of everything you own, and possibly lose some of those assets to other people, is that really easier?

So if you're thinking of asking your lawyer for a "Will that doesn't need probate", get the facts about probate first. Don't rely on anecdotes told by co-workers or friends about what they think happens on estates. If you're reading advice in magazines or blogs, check with a lawyer in your area to see whether it applies to you. Think about whether avoiding probate is actually worthwhile - and workable - for you.

Does every Will have to be probated?

This is one of those questions that I am asked over and over again, so I thought I'd mention it here. The short answer to the question is "no", but that doesn't tell the whole story.

Probate is not needed to transfer certain kinds of assets. Specifically, you do not need probate to transfer property that is held in joint names. This is because joint ownership carries with it a right of survivorship of the other owner(s). For example, if a husband and wife own their home jointly and the wife passes away, the husband owns the house by right of survivorship and doesn't need probate to put the title in his name alone. Take note that this rule does not necessarily apply to assets that were jointly owned by the deceased and his or her children.

You also do not need probate to transfer assets that have a named beneficiary. These assets include RRSPs, RRIFs, life insurance policies, pensions and some other assets. When the owner of the asset passes away, you only need to provide a Death Certificate and some information in order to transfer that asset to the person who is named.

Because of these rules, it's quite possible, and in fact is the norm, that a husband and wife can set up their financial affairs using joint property and beneficiary designations so that when one of them dies, the other one does not need to go through probate.

For anyone who is not in that situation, and whose assets are not all going to pass to someone automatically due to joint tenancy or beneficiary designation, the question of whether probate is needed is going to depend at least partly on the type of asset they own.

If you own real estate in your own name alone, or if you own it as a tenant-in-common, your executor will need a Grant of Probate to transfer or sell your property.

If you have assets that will form part of your estate after you die, such as life insurance policies and RRSPs that name your estate as beneficiary, your Executor will need to get probate. This also applies to any assets held in your name alone, such as a bank account, investment, or expensive personal items (e.g. art collection).

If you have a significant amount of money in your estate, your Executor will need probate before he or she can gain access to it.

There are other, less common, reasons why executors must go through probate. For example, the executor might have to finish litigating a lawsuit on behalf of the deceased. There could be a dependent who wants to make a claim against the estate. There could be some question about whether the Will itself is valid or some of its terms might need to be clarified.

It's sometimes hard to tell right at the beginning of an estate whether or not you need to go through the probate process. Sometimes the only way to know for sure is to take the Will to an experienced lawyer, together with information about the deceased person and his or her assets, and ask for an opinion.

NOTE TO READERS: this post now has more than 200 comments, which is the most the system can handle. I can't see or reply to any new comments. I'd really like to see your questions, so please post them on another thread, or on the "feedback" page.

Answering your questions - joint property with parents

Further down in this blog, I recently received an interesting question from a reader, which was:

"What are the implications for me and my elderly parents of purchasing or jointly owning their home? I am single and will remain so, so joint assets with a partner are not an issue."

Here is the answer I provided:

"When you and your parents are deciding whether or not to put you on as a joint owner of their home, it's a matter of weighing risk against benefit. Everything you do in estate planning boils down to that.

What are the risks?
For you the risks are minimal, as you are not the one who financed the asset in the first place. It's not where you live (as far as I know). So if for some reason the property were to be lost, you wouldn't lose your home or a significant part of your assets.

Your parents, however, stand to take a pretty big hit to their finances should the property be lost.

As you've mentioned, there is no spouse and therefore no potential divorce to worry about. That's a big risk removed.

However there are other ways in which you could inadvertently cause your parents' home to be lost. For example, you could cause a major car accident in which you are being sued for millions. You could give a personal guarantee for a business venture that fails. Either of those situations could cause creditors to go after all of your assets, including your parents' home.

Another downside for your parents is that if your name is on the title as a joint owner, they can't sell or mortgage their home without your written consent. This means a loss of control and independence for them.

What are the benefits?
You haven't mentioned whether you are an only child or not. If you are, you are likely the person who is going to inherit the house in any event. Putting the house in joint names with you might avoid the need for getting probate from the court, but that's only the case if your parents have no other assets.

If there are investments, a fairly large bank account, a cabin, mineral rights or any business interests, the executor will have to apply for probate anyway.

In other words, if the house is being put in joint names just to avoid probate, that may or may not be effective, depending on what else is in your parents' estate.

If you are not the only child and your parents want to treat their children equally, and you get the house, there has to be enough in your parents' estate to give the other children an amount equal to the value of the house. For most people that's not possible.

I hope this answer gives you the information you need."