I had originally written that the golden rule of estate planning was that you cannot take it with you. If that is true, then do you see a problem? If you cannot take your money, your home and all of your personal property with you, then this means, in a sense that the dead can not own property. The second you pass away, the title to your property is wrong. After you pass, the bank where you kept your checking account freeze the account. The title to the real estate is clouded and will not clear escrow. Property cannot be transferred or sold.
Of course, there is a way to solve the deadlock. One way is probate. Probate comes for a Latin word that means “to prove.” A better way to interpret the Latin word is “to clear” – to clear title. The title to the property has the name of a person who is no longer alive and we need to “clear” the title, i.e., change it to a person who is alive. It is that simple.
Probate involves a court procedure. In most jurisdictions, a person who is able to act as a “Personal Representative” or “Executor” will file a Petition in Court and ask the Court to appoint him or her to act as the legal authority to marshal the deceased’s assets, pay all debts owned by the estate and then legally change the title to the property to the name of the lawful heir or beneficiary. We will discuss Probate in more detail in other articles. For now, suffice it to say that Probate is a procedure in court and, naturally, requires an investment of time and money.
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