I have a checking account that I use to pay bills, a car with a loan and a life insurance policy with my children as benefactors
The insurance has a beneficiary, so that will not go through probate. The rest should be divided up according you your Will after all debts are paid. If you don't have a will, I can help.
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Who owns your life insurance determines whether the proceeds are included for estate tax purposes. Section 2042 of the Internal Revenue Code states that the value of life insurance proceeds insuring your life are included in your gross estate if the proceeds are payable to named beneficiaries, if you possessed any incidents of ownership in the policy at the time of your death. Since the congress in its infinite stupidity ensured that the estate tax is revived in 2013, you need to contact your life insurance company and transfer ownership of the policy to the beneficiaries. It is a simple matter of filling out and signing a form. (Most policies are written with the person who is insured as the owner.)
The car can be transferred through the tag office without probate- most simply, by putting other people on the title. If money is still owed on it at the time of your death, as a practical matter, if your heirs keep the payments up, there should be no problems.
The checking account can be designated "POD"- payable upon death- to designated beneficiaries, or can be made a joint account by putting their name on the account, if they are very trustworthy.
No one would be responsible for your credit card debt, if you die intestate; but if you have a will, the creditor can come against your estate. When all you have is a car and a small checking account, often the cost and trouble of going through probate is not worth it. But if there are other assets, it is a good idea. Either way, you should have an attorney prepare an Advance Directive for Health Care ("Living Will") and a Durable Power of Attorney, so if you are incapacitated in your last days, your heirs can pay the bills and know what your wishes are.
Note, however, that if either you or any of your children ever declares bankruptcy or are sued, having your car or checking account in joint ownership would cause problems.
Divorce / Separation Lawyer
It is possible to set up an estate like yours where much of it bypass probate. Whether than is a good idea depends on the amount of insurance, the amount of debt, whetehr your children are minors or not, etc. You need to spend some time with a lawyer, probably do need a will, and may need at least some simple related documents and planning. If your estate is not large, this will cost very little and save your children a lot of grief.
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