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HOW TO AVOID PROBATE
Secretary: Mr. Sage, Mrs. Jones is here for her appointment.
Sage: Send her in. Hello, Mrs. Jones. How are you?
Jones: Well, not so good, Mr. Sage.
Sage: Nothing serious, I hope. How can I help you?
Jones: I've heard so many bad things about probate. How can I avoid it?
Sage: Is your husband still living?
Jones: We're divorced.
Sage: Do you own your home?
Jones: Yes, I do and it's paid for, thank goodness.
Sage: Do you have children?
Jones: Yes, I have a grown daughter and a grown son.
Sage: Who do you want to have your property after you die?
Jones: Just my daughter and my son. I don't have anyone else.
Sage: No grandchildren?
Jones: No, not yet.
Sage: Do you have any income?
Jones: Just Social Security and I need it all to live on.
Sage: Well, you probably couldn't afford a living trust. But I think you can still avoid probate.
Jones: Oh, I hope so. Tell me how.
Sage: Well, first, your home. You can make a Transfer on Death Deed leaving it to your daughter and your son and record it with the County Clerk. When you die, all they need to do is record a copy of your death certificate with the County Clerk and your home belongs to them.
Jones: That sounds good. But what if I want to sell my home before I die? It's fine for me right now, but I might want to move into one of those senior apartments when I can't handle the housework or yardwork any more.
Sage: No problem. The Transfer on Death Deed doesn't do anything as long as you live. You can still sell your home, mortgage it or give it away if you want to. If you do, then the Transfer on Death Deed is no longer valid.
Jones: That sounds good. I never heard of that before.
Sage: It's fairly new. We've only had it a few years.
Jones: What about my bank account? Who will get it after I die?
Sage: Is it is your name and one of your children now?
Jones: Yes, it's in my name and my daughter's name. Both of us can write checks on it.
Sage: Well, it will probably belong to your daughter after you die. Do you think she would give half of it to your son?
Jones: I hope so, but I'm not sure. Can I fix it so I'll be sure that it goes to both of my kids equally?
Sage: Yes. You can make the account a transfer on death account. Then, when you die, your son and daughter take your death certificate to the bank and the bank will transfer the account to them equally.
Jones: That sounds good. How do I do it?
Sage: You must go to the bank and fill out a form that they have.
Jones: Is there a charge for that?
Sage: No. Most banks don't charge for that.
Jones: If I make the account transfer on death like you suggest, will my daughter still be able to sign checks like she can now?
Sage: Yes, if you give her a Power of Attorney to do that.
Jones: What about my car? I don't want to put my kids names on it because a friend of mine did that and her son was in a terrible accident and they tried to take her car to pay part of the judgment the other people got against her son. I don't want that to happen to me. How can I give my car to my kids, but only after I die?
Sage: Make a will leaving the car to them. When you die, they can take your will, even though it hasn't been probated, to the Motor Vehicle Department, fill out an affidavit form they have and obtain a new title in their names.
Jones: I have a small life insurance policy. My husband was the beneficiary. What should I do about that?
Sage: Talk to the insurance agent. Tell him you want to change the beneficiary to your daughter and your son, or the survivor of them. He will have a form for that.
Jones: That sounds easy. Will he charge for that?
Sage: Probably not. Most insurance companies don't. But talk to your agent.
Jones: What about my funeral and burial expense?
Sage: You can buy an insurance policy that will pay them. Talk to the mortuary you would like to use and to the insurance agent they may recommend. You can't pay the mortuary its fee in advance. The law prohibits it. But you can buy an insurance policy that will pay your funeral expenses. The mortuary, as an insurance agent, may be able to sell you the policy. If not, it may be able to recommend an insurance agent who can.
Jones: My daughter lives in California and my son lives in New York. I want to tell them what I'm doing. What would be the best way to tell them about all of these arrangements?
Sage: Write them a letter now giving them all of this information. I'll give you a form for that letter. Fill it out and have it typed and mail it to your kids. That will make things easier for them after you are gone.
Jones: Well, I think those are all of my questions and I feel better already. What do I owe you?
Sage: Nothing as yet. If you decide to make the Transfer on Death Deed, I'll need the deed by which you acquired title to your home so I can get the legal description of the land. If I make the Transfer on Death Deed for you, my fee will be $100 plus tax and the recording fee.
Jones: I think I could afford that. It's a lot cheaper than a probate from what I hear.
Sage: Yes, it is. Probates are expensive. Usually at least $1,000 and they take time, usually at least six months.
Jones: Well, thank you again. I'll be back with the deed you need for the Transfer on Death Deed.
Sage: Don't thank me. Thank you. You're the client. Without clients, I couldn't pay my office rent.
FORM FOR LETTER TO CHILDREN:
This form may be modified to add or delete information
to customize it to your specific situation.
Dear Kids:
I am writing you to inform you of my assets and my wishes. This information might be difficult to obtain if I am deceased or mentally incompetent.
Persons to Notify. If I become sick or die, the names, addresses and telephone numbers of the persons to be notified are:
Medical Doctor. The name, address and telephone number of my medical doctor or doctors is:
Medical Insurance. I have the following medical insurance:
My Care if Disabled. If I become disabled and cannot live alone, I would prefer the following arrangement for my care:
Church. The name and address of my church is:
Mortuary. The name and address of the mortuary I would prefer to handle my final arrangements is:
Mortal Remains. My wishes concerning burial or cremation are:
Lawyer. The name, address and telephone number of my lawyer is:
RAY O. SAGE (575) 523-7411
205 West Boutz Rd., Bldg. 8
Las Cruces, NM 88005
Accountant. The name, address and telephone number of my accountant who prepares my income tax returns is:
Banker. The name, address and telephone number of my principal banker is:
Bank Accounts. I have the following accounts in the following banks:
Certificates of Deposit. I own the following Certificates of Deposit:
Safe Deposit Box. I have the following safe deposit box(es):
The people who have access to them are:
I keep the keys to the box(es) at:
Broker or Financial Advisor. The name, address and telephone number of my stockbroker or financial advisor is:
Corporate Stocks and Bonds. I own the following corporate stock and corporate bonds:
Government Bonds. I own the following government bonds:
Mutual Funds. I own the following mutual funds:
Life Insurance Agents. The names, addresses and telephone numbers of my life insurance agent or agents are:
Life Insurance Policies. I own the following life insurance policies:
Notes and Mortgages. I own the following Promissory Notes and Mortgages:
Real Estate. I own the following real estate. It is Mortgaged to:
Works of Art. I own the following original paintings and other works of art and art objects:
Collections. I own the following coin, stamp or other collections:
Valuable Papers. My Will, trust agreement, durable Power of Attorney, Right to Die Declaration, Deeds, bank statements, insurance policies and other valuable papers are kept at:
Credit Cards. I hold the following credit cards:
Money Owed to Me. The following debtors owe me the following amounts of money:
Money I Owe. I owe the following amounts of money to the following persons:
Military Service. I served in the United States * (branch) from * to *. My military serial number was *. The highest rank I attained was *. My date of discharge was *. The type of my discharge was *. I have * service connected disability.
Social Security. I receive $_______ per month Social Security.
Pension. I receive $_______ per month pension from my employer, (name of employer).
Persons Familiar With My Wishes and Affairs. If I have omitted something in this letter, the names, addresses and telephone numbers of persons who may be able to provide the information are:
Sincerely,
(Signature)
Ray O. Sage has been practicing law in New Mexico for over 50 years. His firm was the recipient of the 2004 Robert H. LaFolette Pro Bono Award given by the State Bar of New Mexico. His practice consists primarily of estate planning, trusts, Wills, probates and elder law. He can be reached at (575) 523-7411 or by e-mail at rosage@lawyer.com
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