My wife and I own everything jointly. If I die first, my spouse will get everything without probate. If my spouse dies first, I get everything without probate. So why do we need an estate plan to avoid probate, it looks like we will avoid it right?

Wrong. If you die, your spouse will indeed own everything without probate. If your spouse dies first, you will indeed own everything without probate. The problem is when the last of you die, there will be a probate. Owning everything jointly does not avoid probate, it just puts it off until the last of you passes away. The only way to avoid probate is to prepare a valid trust and make sure it is properly funded.