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Estate Planning in time of COVID-19

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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!

What does the Fiscal Cliff Agreement mean for my estate?

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.

Edith Windsor’s Fight for Same-Sex Marriage Recognition

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.

Federal Assistance Programs are Running Out of Money

Social Security and Medicare, are the two most expensive federal social programs, and it has been recently announced that they will run out of money three years earlier than original estimates indicated. Trustees estimated that Social Security will run out of funds in the year 2033, and Medicare will be insolvent in 2024. More and more pressure is being put on lawmakers to reform these programs for millions of Americans, so that future retirees have a security net for their retirement years.

It is extremely important to get your portfolio and documents reviewed by a financial adviser and an attorney, to make sure you will not be ready if these programs go away. Please call Skillern Law Firm today to set up an appointment.

See Reuters, US Retirement Fund to Run Dry Earlier: Trustees, CNBC, Apr. 23, 2012.

Why A Joint Will Is A Bad Idea.

One common question about wills and trusts is about joint or mutual wills. Many people ask attorneys why joint wills are never recommended by attorneys. The reason is not that attorneys want to get more of your money by drafting two wills instead of one.  Also, most people may see it as an extra expense that is unnecessary since a couple can just get a “joint will” or “mutual will.” Those assumptions, however, are incorrect. Today, the attorney of Skillern Law Firm and the  Tulsa Estate Planning Blog will explain why no (rational) attorney would recommend or even draft a joint will.

First, let’s go through the different types of Wills.

A Joint Will is one document that covers the Wills of two (or more) people, usually a husband and wife. When each of them passes away, the Will is probated and administered for the deceased spouse, and the Will is supposed to then serve as the Last Will and Testament of the surviving spouse. This can and most likely will be problematic for most people. One problem, for example, is what happens if the surviving spouse moves on with their life and has a change of circumstance or even a remarriage. What if a child, who was an angel during the lifetime of the deceased spouse, suddenly abandons their family? The surviving spouse’s right to disinherit the child, or even lower the child’s rights in the joint will is unclear. It is always ambiguous how strictly a surviving spouse is bound to the terms of an old Joint Will. This can be a bigger problem when the couple created a joint will while young. What if a young spouse unexpectedly dies, leaving the spouse with a will that may bind the surviving spouse for 40, 50, or 60 years? This is a risk easily (and cheaply) avoided by each spouse creating their own will.  Historically, Joint wills were common since they were regarded as a money-saving and labor-saving technique, but through all these complications and the use of computers, these concerns are now moot.

Mutual Will is another type of will sometimes used in Oklahoma. Mutual wills are two separate wills created with a legal agreement that neither will can be cancelled or altered after one of the spouses has died. This is a difficult situation to protect legally and attorneys often encourage spouses to make a moral obligation to each other, rather than a legal obligation.

The most common solution, and one that the attorney at Skillern Law Firm supports, if  for spouses to get Reciprocal Wills or Mirror Wills. In these wills, each spouse has their own document, and each name their other spouse and the main beneficiary, with maybe their children as alternative beneficiaries.  This is very common not only for married couples but also for civil partners or those in civil unions. Each reciprocal will is separate and there is no binding, legal agreement applied to the surviving partner who is perfectly entitled to amend this Will or prepare a brand new will in the future.

Skillern Law Firm does not support joint wills and we discourage them to clients and friends. We also do not support mutual wills for the preceding reasons.

We do however allow for people to create Reciprocal or Mirror Wills and this aligns with our philosophy that every single person needs to have a Last Will and Testament in place. If you are thinking about a will, or want to know why you may need one, please read another entitled, “Why Should I Get A Will Now?” Or, if you and your spouse has decided to get a will, feel free to contact us today to set up a free appointment.

Estate Planning for Pets! Oklahoma Pet Trusts.

There is a popular trend among the states right now in estate planning law to allow people to make preparations for their pets in their will or trusts.  Oklahoma has recently joined the trend. Oklahoma now allows pet trusts since a relatively recent House Bill1641 that was signed into law and became effective August 27, 2010. If you want to read the statute in its entirety, click here.

A brief description of the law is essentially that the law has created a new section of the Oklahoma trust code that now legalizes trusts for the care of pets. The pet trust is terminated when there is no more living pets under the trust, so you can have a pet trust for more than one pet and it will exist until all the pets are deceased.  The statute then gives a description of what the rules for governing a pet trusts,  including compensation for the trustee, accounting requirements and provisions for terminating the trust. You can pick the trustee or pet caretaker, and trustees can be provided with compensation for administering the pet trust.

The code also states that the “The trustee may employ agents or contractors to provide any care and pay for the care from the assets of the trust. The trustee shall also ensure that the property of a trust authorized by this section is applied only to its intended use.”

The Oklahoma statute states that if you trust is below $20,000, the trust is exempt from fees, unless a court says otherwise. If the trust has a value of $20,000 or more, you will have to pay fees that include filing fees, periodic accounting, separate maintenance funds, and registration fees.

In the pet trusts, you can have complete control over your pet’s future needs, including their food, schedules, and even their veterinarian. The trust will be like most trusts: revocable, so you can make it go away or amend it at any time. You can make the trust be activated if you become disabled or incapacitated, which a will cannot do.

Overall, it is a good step forward in the area of pet estate planning.

Skillern Law Firm, PLLC can help you make preparations for caring for your pets when you are gone! Call or email us today.

Estate Planning for Veterans

We live in a great country. In large part, this is due to the great sacrifice that our veterans have made, and the sacrifices that men and women in uniform make every day.

Statistics say that one in two Americans will need long-term care. There are many ways to curtail the financial burden that long-term care creates, but veterans are able to take advantage of special programs through the Department of Veteran’s Affairs. One of the programs that the VA offers is the Aid and Attendance pension. The pension ranges from $1000 to $2000 per month and is paid directly to the veteran recipient to be spent for expenses incurred.

The Aid and Attendance pension is available to any veteran or surviving spouse if the veteran served at least 90 days of active duty, of which at least one day was during war-time.

If you or someone you love is a veteran who needs some assistance covering long-term care costs, please contact Skillern Law Firm, PLLC today. Taking care of our veterans is an honor.

The exciting news is that Skillern Law offers VA, Medicaid & Social Security Benefit planning in conjunction with Senior Resources & Benefits, LLC. Please feel free to look at SRB’s website here.

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