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As most of you will be aware, the virus called COVID-19 or “coronavirus” has changed our everyday lives during this time. As of this post, more than 340,000 people in the United States have tested positive for the virus, and it has cause around 9500 deaths. Around the country, including in Oklahoma, courts are shut down due to the quarantine initiative of the governments. In Tulsa County, the courts are shut down, including court personnel, until May 15th, 2020 (which will likely be extended). Only emergency orders and hearings are being held, and usually via an electronic video stream.
In Oklahoma, all estate planning documents need to be signed “wet ink to paper.” This means that no electronic signatures are valid, and no video-stream witnessing is allowed. There is a new law in Oklahoma that allows for electronic notaries, but a Will is exempt from this new notary allowance. In Oklahoma, estate planning documents need to be signed in person, with the testator, witnesses, and notaries all together while the signing commences. This can be a problem in the time of COVID-19, but most estate planning attorneys are taking safety precautions during this time, including us at the Skillern Law Firm.
What does this all mean for you? This means, if you do not have some basic estate planning documents in place, you should do it sooner rather than later. If the government continues to become more restrictive about gatherings and work, the chances to get your estate plan done becomes harder and harder. You should also review your beneficiary designations, and make sure they are all up-to-date.
What documents should you have done is a very common questions we receive. There are four basic documents, regardless of ones wealth or health, that everyone should have:
- You should have a Last Will & Testament that tells the probate court what you want to do with your estate should you pass away.
- You should have a power of attorney for finances. This would allow your agent to pay your bills, talk to your insurance, and make other time-sensitive decisions during a period of your incapacity.
- You should have a healthcare power of attorney. This would allow your attorney-in-fact to make medical decisions for you, and also consult with your physicians, if you were unable to make those decisions for yourself.
- You should also have an Advanced Directive in case you become so ill that end-of-life decisions need to be made.
One of the biggest reasons to get your estate plan done ASAP is the fact that the court systems are shut down in Oklahoma. If you do not have a power of attorney for finances or health, the usual way for people to be granted the authority to act would be through the guardianship process. However, since courts are shut down except for emergency situations, these guardianship proceedings are not being held. Also, if this is an emergency situation and it does qualify to have a hearing, these hearings are hard to have and can be time consuming to set up (and very stressful). This means that if you are in a situation where you need to be taken care of, and you do not have documents in place, the changes of setting up a guardianship is unlikely.
Also, since hospitals and nursing homes are not allowing outside visitors due to safety precautions, the changes of you getting emergency documents done by your attorney is extremely improbable. You cannot wait til you are on your death bed to have your documents executed during this time. You can save a lot of hassle, heartbreak, and stress by being proactive and getting your documents in place immediately.
If you want to set a free consultation (right now being held via the phone), please call the Skillern Law Firm today!
Oklahoma permits the distribution of a small estate without probate, if the estate is worth $50,000 or less in total. There are two ways to avoid probate using affidavits in Oklahoma – one for financial accounts, one for personal property.
The first type of “Small Estate Affidavit” allowed in Oklahoma is one for financial accounts worth a total of $50,000 or less. This affidavit is authorized by 6 OS § 906. Banks, credit unions and savings and loan associations are permitted under Oklahoma statutory law to pay out bank accounts under Fifty-Thousand Dollars ($50,000) upon affidavit. The account must be in the name of a sole individual (not two persons) and also have no beneficiary designated. An original certified death certificate must be presented along with an affidavit, and the affidavit must establish the time and place of death and residence of the decedent. Also, the affidavit must state that the decedent did not leave a will. If the decedent left a will, probate will be necessary. The affidavit must set out the names of the heirs of the decedent. The affidavit must be signed and sworn to by at least one of the known heirs of the decedent.
Oklahoma also allows an affidavit to take the place of probate for the distribution of tangible personal property (property other than money or land) or an instrument evidencing a debt, obligation, stock, chose in action, or stock brand belonging to the decedent upon the presentment of an affidavit. This form of affidavit is authorized by 58 OS § 393. The limit is also $50,000, so any debt or personal property worth more than that must go through probate. Any person indebted to the decedent is authorized to accept the affidavit and make the distribution, so this affidavit can also be used for creditors as well as heirs at law. Anyone who is a successor to the decedent may sign the affidavit. The affidavit must state (1) the fair market value of property located in this state owned by the decedent and subject to disposition by will or intestate succession at the time of the decedent’s death, less liens and encumbrances, does not exceed Twenty Thousand Dollars; (2) No application or petition for appointment of a personal representative is pending or has been granted in any jurisdiction; (3) Each claiming successor is entitled to payment or delivery of the property in the respective proportions set forth in the affidavit; and All taxes and debts of the decedent’s estate have been paid or otherwise provided for or are barred by the statute of limitations. Like the first affidavit mentioned, you must also present an original certified death certificate along with the affidavit. This affidavit would be useful for the transfer of household contents, a vehicle, a stock brokerage account or the transfer of private or public corporate stock which does not exceed $50,000.
The attorney at the Skillern Law Firm, PLLC can help you get these small assets out of probate by drafting a valid Small Estate Affidavit that can keep you out of probate. Call our office today!
A creator or grantor of a normal revocable living trust usually serves as the trustee of a trust until their incapacity or death. After one of those events, a successor trustee takes over the trust to manage and administer the trust assets. Some trust creators have two children or have two people they trust enough to make them successor co-trustees of their trust, which puts two people in charge of the trust simultaneously. This can create problems if the co-trustee duties are not clearly spelled out.
One common problem associated with co-trustees is if the two trustees have to act jointly with each other, meaning they need to sign deeds, checks, and other financial documents together. This can slow down the process, especially if one or both trustees do not live near one another or are not communicating with each other. This can also slow down or cause problems when one trustee goes out of town for vacation, is incapacitated, etc. A well written trust agreement should provide for replacement of a co-trustee who cannot serve for some reason, or state that the remaining co-trustee can act alone in this scenario.
Another common problem with co-trustees is what happens if there is a disagreement between them about the administration of the trust. It is amazing how many problems and family strife can occur when the matriarch or patriarch of the family passes away. If co-trustees do not trust one anther, do not get along, or just do not agree with the decision of the other co-trustee, it may require court intervention to break the disagreement. For example, if one trustee wants to sell some property and distribute cash and a co-trustee wants to retain the property, there is a stalemate. If there are three co-trustees, the majority prevails, so an odd number of co-trustees are not such an issue in regards to disagreement. However, if co-trustees are assigned equal authority and responsibility in the trust agreement, some third-party intervention will be needed, and that can get costly.
A common way to avoid common co-trustee problems is to name a trust administrating institution, like a bank or trust company, as the principal trustee, with children or other beneficiaries as co-trustees. That essentially places control of trust with an independent third party, who can be an mediator if the co-trustees cannot agree. Another way is to just name one sole trustee, like your oldest or most responsible child or friend.
One of the best ways to avoid this problem is to talk to a qualified estate planning attorney who can help solve problems like this. Consider getting your estate planning done by the attorney at the Skillern Law Firm. She can help make sure your estate plan is well written and will not problems in the future that can be easily avoided.
Whenever an attorney creates a Revocable Living Trust for a client, the trust needs to be funded. “What does it mean to fund a trust?” is a common question that our attorney at the Skillern Law Firm gets from clients. It is a very important step in the estate planning process. To see what a Revocable Living Trust can do for you, read our previous blog post about the types of trusts and their advantages. A trust, if funded correctly, will allow its creator(s) to avoid the probate process. An unfunded or partially funded trust does not allow your assets to avoid probate, because only the assets owned by the trust at your death or payable to the trust at your death avoid the probate process.
There are a few common misconceptions about the trust funding process.
Myth #1 – Since you formed a trust and have a Trust Agreement, the trust is complete and there is nothing else that needs to be done.
When you sign or form a trust with an estate planning attorney, signing to document is only the first step in the trust-creating process. The attorney, or the client, needs to make sure ALL of the assets held by the trust-creators (or “trustors”) are put in the trust’ss name, or has the trust as the listed beneficiary of the account. Otherwise, the Trust Agreement is an expensive pile of paper that will not help the creator’s avoid probate. The attorney at the Skillern Law Firm funds all of the trusts she helps create, taking this important step out of the client’s hands.
Myth # 2 – When the trust was created, there was a list of all the property on an Exhibit or Schedule that’s attached to my trust, so that transferred my assets to the trust… right?
Many trusts have an exhibit or schedule of property. This is a helpful document that helps a successor trustee in ascertaining what property they should be managing and accounting for. Updating this exhibit or schedule as the “big-ticket” items change is important so that the information on the exhibit is generally up to date. However, merely putting a description of the property on a schedule or property addendum does not legally transfer the ownership of the property into the trust. That needs to be done outside of these exhibits/schedules, most likely by property deeds and beneficiary designations.
How do you fund a trust?
To fund a trust, the attorney or client needs to file the property deeds with the county its located in, and put the trust as the beneficiary on all accounts. To fund business interest, you will need to assign closely held business interests to your trust. Like all things in life, there can be tax consequences and benefits to each course of action. You should always seek tax advice prior to making a transfer of property, because once transfers are completed, there is often no undo button for tax purposes. Whenever our attorney create a trust for a client, she makes sure she funds the trust at creation, but it is up to the client to keep the trust correctly funded after signing.
What are the benefits of a fully funded trust?
The biggest benefit of a correctly and fully funded trust is that it allows your beneficiaries to avoid probate. One more important benefit of a fully funded trust is that it allows for easier management of your property in the event of your incapacity. A truse can also can save on administration costs upon your death or incapacity, since your successor trustee and beneficiaries will not have to spend as much time and money locating your property.
Having a revocable trust in your estate planning portfolio is important for those who want to avoid probate and keep their estate administration as easy as possible. Funding your revocable trust is an absolute necessity if you want the benefits of avoiding probate and having management of your property in the event of your incapacity. Funding your revocable trust is a necessity that should be completed and worked on along with the creation of your trust. Call the Skillern Law Firm today to get your estate planning done today!
Most, if not all, timeshare owners will have to decide, at some point in their life, who they want to receive their timeshares after they pass away. Most timeshares are real property interests, that are deeded into the owner(s)’s name(s). If a timeshare is held in an individual’s name at death, just like any other piece of real property, it will have to go though probate. Most people, and some estate planning attorneys, do not realize that timeshares are a real property, and forget to put it into their Revocable Trust. The majority of real estate owners want their children to avoid the cost and delays of Probate proceedings after they die, and to avoid this, a Revocable Trust is one of the easiest and cost-effective ways.
Having a Will does not avoid probate, and especially does not avoid probate when it comes to real estate interests like timeshares. Many people think putting two names on a deed avoids probate. That is not entirely true. It is better to say it delays probate. If two owners, such as husband and wife, own the timeshare as “Joint Tenants” or as “Tenants by the Entirety,” probate is avoided when one owner dies because the co-owner has automatic “rights of survivorship” and becomes the sole owner. This can defer probate, but not avoid it; when the surviving co-owner or sole owner dies, probate will follow.
Some timeshare owners try to avoid probate for the timeshare or other real estate property by conveying the property into one of their children’s names while the owner is still alive. This can cause major headaches down the road though. First of all, there are gift-taxes associated with doing this. Also, if the child goes bankrupt, gets a divorce, or is sued, the timeshare or other real estate interest is included in their estate for these proceedings.
Not only does the timeshare or other real estate interest get included in those proceedings, but the original owner has lost full control of the timeshare. If the owner and their children disagree, they cannot act alone as they once were able to. The timeshare owner will need their child(ren)’s approval for all actions in relation to that timeshare. They could no longer sell, convey, change, or do anything without the child’s signature.
Our attorney encourages her client’s to use a Revocable Living Trust for estate planning purposes, probate avoidance and/or tax benefits. The problems of adding adult children on title to the timeshare are avoided with a trust. To read more about the benefits of a Trust, please read our previous post Living, Revocable, and Irrevocable. Let’s talk trusts.
If you have already created a trust, you need to make sure that you transfer your timeshare and other real property into the trust by way of properly prepared and recorded conveyance documents. Please feel free to call our office today and set an appointment to make sure your trust is funded correctly. If you do not have a trust but are interested in finding out if you need one, call our office today for a free consultation!
One of the most prominent cases of Living Wills or Advance Directives was the Terri Schaivo case in the early 2000s. It is prominent for Living Wills, in that Terri Schaivo did not have one, and her situation caused a legal battle that lasted years and costed thousands of dollars for her family.
In this case, there was a emotional and nationally-known legal battle in Florida over whether a woman, Terri Schaivo, would be kept alive through treatment of artificial food and water, or would pass away from the disuse of the treatment. If you remember, her husband, who was still legally married to her but estranged from her family, wanted her to pass away, but her family wanted her to remain alive through the artificial means. Since Terri Schaivo did not have a Living Will that told her family and husband what her wishes were, her family and spouse went through ten years of litigation, one-hundred thousand ($100,000) of dollars in legal fees, and endless pain and frustration for everyone involved. A Florida court ultimately decided Ms. Schaivo should be allowed to pass away.
Terri Schaivo and her family could have avoided the entire situation if she had a Living Will or Advance Directive in place. Our attorney highly recommends this document since it takes the heart-breaking and agonizing decision away from your family members, and allows you to get your end-of-life wishes. In Oklahoma, there are three situations that the state allows you to make your end-of-life wishes known. See our previous post about those specific situations here. This document is inexpensive, easy to execute, and could save you and your family money, emotional stress, and it grants you all peace of mind.
If you already have a Living Will in place, see if you need to update it by reading a previous post here.
Call the office of The Skillern Law Firm, PLLC today to schedule a meeting to discuss this document as well as other your other estate planning needs today!
What does the fiscal cliff agreement mean for my estate? The estate tax was a bit of a mixed bag – the $5 million dollar per person exemption was kept in place (and indexed for inflation continued) however the top rate is increased from 35% to 40% – effective yesterday. Other good news for estate planning – portability is kept in place and estate and gift remains unified – ie the $5 million stays in place for gift tax purposes as well. All are permanent law, so rejoice!
So, no real change for smaller estates worth under 5 million, however, if your estate is worth more than 5-10 million, the estate tax percentage increased.
Hope this helps! Please call the office of Skillern Law Firm if you have any questions or are ready to set up a trust or create a will.
One common scenario that estate planning attorneys encounter is clients who believe that deeding their home to their children solves the problem of avoiding probate. Most retired individual’s main asset is their home, which many have paid their mortgage off.
Such a situation is common for many of our clients, and the attorneys at Skillern Law Firm almost always advise against it. There are several practical and legal reasons to keep your home in your name, some of which are discussed in this article in the Huffington Post. The two main points that this article relates are property taxes and your child’s liabilities.
There are several more important reasons to avoid transferring your property rights to your child to avoid probate. These include:
- The relationship with your child could go south, or change once you transfer all your property rights to him/her. It’s amazing how a relationship can change once money or any inheritance is involve. Once the house is in their name, they have all the legal right to the home, and there is no obligation for them to let you live in it or transfer it back to you if you ever change your mind.
- If you have more than one child, this can put complications on some of your relationships with the other children, and it can create rifts between siblings. Putting your house in the name of one child can create relationship complications, but putting the house into all of your children’s names’ can create paperwork headaches, errors, and inheritance complications.
- There are other ways to avoid probate. One of the easiest ways to avoid probate is to create a Revocable Living Trust. You can read more about trusts on a previous post here. Essentially, a Revocable Living Trust are flexible, customizable depending on your situation, and usually cheaper than what probate will cost your heirs.
Do not make a common estate planning mistake that could possibly cost you to lose your home and cause problems within your family. Contact Skillern Law to discuss how they can assist you to protect your family and heirs, as well as your assets, from probate, liabilities, and common misconceptions about avoiding probate.
There is currently a legal battle in the federal courts regarding a Federal law mandating that marriage is between a man and a woman. EdiTh Windsor challenged the federal law in DOMA (Defense Of Marriage Act) as unconstitutional on equal protection grounds. The U.S. District Court for the Southern District of New York recently held that Section 3 of DOMA that created this mandate was unconstitutional. She is skipping the Circuit Court, and has petitioned for the United States Supreme Court to hear and review the case. Many legal experts expect the court to take up the case for their October term.
This legal case is important for Constitutional Law, in that it may finally rule on if gay marriage is a constitutional right or the U.S. Constitutional sees homosexuals as a protected class. However, it has further implications in the estate planning legal realm.
When Edith Windsor’s partner and wife died, she left her entire estate to Windsor. But since the Federal government does not recognize under DOMA, Windsor owed $363,000 in Federal estate tax. If Edith’s wife had been a man, and they were a heterosexual couple, there would have been no Federal estate tax. Usually a married heterosexual couple does not incur any taxes because they can use the Federal estate tax exemption. In 2012, this was up to $5,000,000. The Federal estate tax exemption, however, does not apply to same-sex couples. To many people’s surprise, Edith has managed to win the first battle at the New York Federal district court. Now, the Supreme Court is more than likely going to hear the case this fall. President Obama and his administration has stated that they will not defend the law, and so the Bipartisan Legal Advisory Group took the position to defend the law. The legal argument for DOMA and the case against Edith is that the representatives in Congress have Congressional decided that children should be raised by both a mother and a father. The legal argument against DOMA is that it is a violation of the Equal Protection Clause and Due Process.
As this legal case develops, Skillern Law Firm will continue to write about this important legal case. If you are a same-sex couple in Oklahoma, and you need your estate planning done, please feel free to call for a free consultation. We would love to help you. For more information on why estate planning is especially important for same-sex couples living in Oklahoma, please see our post Estate Planning for Everyone.
See Manuel Roig-Franzia, Edith Windsor’s Fight For Same-Sex Marriage Rights Continues, Even After Partner’s Death, Washington Post, July 19, 2012.