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I have many clients that come into my office that have written, scribbled, crossed-out, or marked all over their estate planning documents. This can be a big mistake with big consequences!
What should you do if you have a Will or a Trust that you wish to change, amend or revoke? One thing people frequently try to do when they want to amend a Will is to cross out whatever change they want, and write in new directions and initial next to their marking.
A thing to remember is that your Last Will and Testament and/or Revocable Trust typically serves as the foundation for a comprehensive estate plan. Similar to most legal documents, your Will or Trust should be reviewed and formally amended on a regular basis (usually every 3-5 years); however, this needs to be accomplished with the assistance of an attorney, and done in the formal matter required by statutes. For a Will, that includes two witnesses and a notary. For a Trust, that includes whatever way the Trust document prescribed (usually a notary). Your Will and Trust is not like other legal documents where simply marking or crossing something out and initialing the change will suffice. In fact, usually it revokes the entire document.
I recently had a client who did such a thing – she wanted to get rid of a beneficiary, and simply crossed out the beneficiary she wanted out and initialed and dated next to the marking. She then passed away before we could do a formal amendment. The problem with this action is, at least in Oklahoma, marking and changing any Will or Trust without the formal amendment process actually revokes the entire document! The small amendment my deceased client wanted actually completely changed her entire estate plan. Her intention was for a friend to receive the entire estate. However, due to her scribble on her Will, her estate went through the intestate probate process, which means her (distant) family inherited her entire estate, which was completely against her intention.
Wills and Trusts have formal statutory requirements to keep fraud and misunderstandings from happening in the important process of estate administration and probate. If there is a question as to the authenticity of a Will, the Will, with markings on it, would no longer be clear as to what the Testator’s intentions were. This is precisely why the execution of your Last Will and Testament must be witnessed by an uninterested witness and a notary authenticating the signatures. Requiring a Will to be witnessed and notarized is the only way to be sure the Testator actually signed the document. If, however, you write on the Will or Trust after the original signing, there is no sure way to determine if you actually wrote the words or if a third party took the liberty after your death. If the probate court declares the Will or Trust to be revoked , your estate may end up being distributed as an intestate estate which could have very different results than if the Will is used to probate your estate.
If you desire to amend your Will or Trust, or even revoke it entirely, don’t try to do it yourself by writing on the documents. Take the time to consult with your estate planning attorney and make the changes or the revocation the right way, in front of witnesses, to ensure that your estate doesn’t wind up in costly litigation after your death.
If you have additional questions or concerns about wills, trusts, or estate planning in general, contact the experienced Oklahoma estate planning attorney at the Skillern Law Firm by calling 918-805-2511 or email firstname.lastname@example.org to schedule your appointment.
Most of our clients come to us to help make their loved ones’ lives easier – not more difficult. Many people will come in wanting a very simple estate plan because of the cost or because they believe their estate is not large enough to cause anyone any issues. However, often, very simple estate plans can complicated matters and cost heirs and beneficiaries more time and money in the future.
In general, even with a perfect estate plan, heirs and beneficiaries have numerous tasks to attend to, including paying the death expenses, handling creditors and transferring ownership of assets. If the deceased person did not properly complete the estate planning process before his or her demise, or did not execute the right estate plan, complications could arise.
There are several issues and events that could make an estate plan less effective. One of the most common mistakes in estate planning is to never update your estate plan. Our attorney recommends reviewing or updating your estate plan after every major life event (death of a family member, marriage, divorce, inheritance, etc.). It is important to update your documents in case there is a significant change in the situation from when you drafted it. Also, it is good to have your estate plan reviewed by an estate planning attorney in case important updates are needed in your will/trusts/power of attorneys/advanced directives due to change in the law.
Furthermore, conflict could arise if a person did not provide enough detail about how his/her assets should be distributed. It is allowed for individuals to leave the distribution decisions up to surviving family or even state law, however, some individuals may not agree. This often leads to contention and conflict that could build to a point where costly and prolonged litigation is necessary. In order to have a more effective plan, parties need to consider their assets and make decisions themselves, and they should put specific directions and details inside their estate plan to ward off any future issues and conflicts.
Sometimes, people may start out with an estate plan that simply consists of a Will and Power of Attorney. While young and without a lot of assets, that may be enough for your beneficiaries and heirs to handle your estate efficiently. However, as we age and accumulate more property and our lives become more complex, a Trust is often better for more complex estates. This is another area in which people keep their estate plan stagnant, and yet reviewing their plan or even making an entirely new one would’ve been a better option for their particular situation.
Many people do not realize that having an estate plan is an ongoing process. Just as your life changes through the years, so should your estate plan. It may seem inconvenient, but it can help ensure that your wishes and desires are known and executed correctly at the time of your passing. If any Oklahoma or Tulsa area residents are concerned about whether their plans cover all their needs and desires, they should review those plans and have their documents reviewed by a professional, including the attorney at the Skillern Law Firm. Gaining more information on planning tools and possible errors to avoid could also prove useful.
Estate planning is not just for after you pass away, it can also be very important for when you become ill or incapacitated during your life. The attorney at the Skillern Law Firm can assist with the creation of a comprehensive incapacity plan, as well as your estate planning for when you are gone. It is hard to contemplate and plan for if or when you will experience a major medical issue, but it is also necessary. Illnesses and medical issues can strike at any time, either through a disease or illness, or a carwreck or accident. Let’s go through some reasons how you can plan for an illness, and why you should.
The most common estate planning documents to get done so your affairs can be handled by someone you trust while you’re alive but ill are the Durable Power of Attorney and the Advanced Directive. Please read those previous blog posts about those documents for more information. Our attorney usually creates and implements those documents in conjunction with a Will or Trust, taking care of our clients both through their life and their passing. Why are these recommended? There are three major reasons:
1. To Have A Say In Your Future Medical Care
Through a Health Care Power of Attorney and an Advanced Directive, you are able to direct your health care when you are too ill to talk to the doctors. In the Advanced Directive, you are able to have a say in if you’d like to accept or decline life sustaining treatment or heroic measures (like CPR or the defibrillator). You can also have a say in whether you’d like to be kept alive using a feeding tube. You can answer these important questions that will need to be answered if you suffer a serious medical emergency. If you suffer from an illness or get into a sudden medical emergency, these documents can be valuable to answer medical questions.
2. To Protect Your Assets And Staying Out of Court
If you become ill or incapacitated, and you do not have your estate planning documents set up, your family will have to go to court to obtain authority to manage your assets. This is usually through a court process called ‘guardianship” or ‘conservatorship.’ Anytime court is involved, there are time delays, and usually some surprises. Going to court can also have high stress on the family while you are ill (which is already a stressful situation), and can cost thousands of dollars in unnecessary legal expenses. Also, these delays can cause your investments to suffer losses due to lack of management, and your real estate to become abandoned. There is also the risk that the court may select someone you do not want to manage your assets. You can get rid of those delays and risks by being proactive and getting a written incapacity plan, outlining who you want managing your wealth if something happens to you.
3. To Spare Your Family Difficult Decisions
An Advanced Directive can take away stress and anxiety from your family members, who will not be forced to decide whether to pull the plug or withhold lifesaving care from you. If you express your preferences in legal documents, ahead of time, it can alleviate that stress. A Durable Power of Attorney can also alleviate stress because the Power of Attorney you nominate to take over your financial affairs will be able to seamlessly take over your accounts, so your day-to-day bills and medical bills can be paid.
The attorney at the Skillern Law Firm can help guide you through the available methods, including advanced directives, trusts, powers of attorney and more. We can explain the different ways through which you can plan ahead for incapacity and help put a plan in place that provides you and your loved ones with the protections you deserve. Call us for a free consultation today!
As an estate planning attorney, most of my clients are meeting with me to help avoid probate as much as possible. I have written previous posts all about how to avoid probate. However, sometimes, probate can be beneficial in certain circumstances.
A lot of estates go through probate, which is the court process to distribute assets and pay off debts when someone has passed. Unless there was planning ahead, when most people die where they leave behind real property and assets, their estate will typically go through the probate process. A Personal Representative will be appointed, and the Will will be filed with the court. If there is no will, the assets will be distributed through the state’s “will” – which is called intestate.
If you are a beneficiary of the estate, you may be surprised by the long, drawn-out court procedure which you are at the mercy of. In Oklahoma, a typical probate now lasts around 4-6 months unless it is contested or if selling real estate is involved (which can prolong the process). However, the probate proceeding serves several purposes and once you understand them, it can make it easier to accept the waiting period.
Once the will is validated, the next step in the probate process is to appoint an executor whose responsibility will be to collect the estate’s assets, appraise the assets value, pay creditors, file taxes (if necessary) and finally, distribute the property to the beneficiaries or heirs according to the Will or the state statutes. What is beneficial about Probate is that is a court-monitored proceeding in which the Personal Representative is not only supervised, but he or she must comply with specific procedures and legal requirements. For estates where there may not be a trustworthy person to take control, this is a huge benefit. Even for estates where everyone is honest, having a court oversee everything makes it to where there cannot even be the appearance of impropriety. The court won’t allow dishonorable or unethical conduct by personal representatives/executors.
There are more benefits to probate, though. Personal Representatives are required to provide accountings, unless waived by all the beneficiaries/heirs. The court requires all of the beneficaries’ names, ages and residences, and all the beneficiaries are legally required notice of the court proceedings and any and all court dates. Probate also allows any person interested in the estate to contest the Will.
One note about contesting a Will should be made, however. A beneficiary or heir can contest a Will for reasons which include: 1) mental incapacity of the decedent to make a will, 2) duress, 3) fraud, 4) undue influence, and 5) any other reasons questioning the validity of the will. Beneficiaries and heirs cannot contest based solely on that they do not like what the Will says, because will-makers are allowed to make a will that includes their wishes, but they can be contested based on that the will-maker was not in the right mind to make a Will.
For more information regarding the probate process and how it can protect the rights of beneficiaries, contact our attorney at the Skillern Law Firm, PLLC.
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.
When handling people’s estate plans, I am often asked how life insurance, retirement accounts, and other “beneficiary” property should be handled with regards to the young children. More often than not, people with children want some or all of the proceeds of these accounts to go to their minor children.
For example, if a client has a $100,000 life insurance policy and has a minor child of 5 years old, she would most likely tell me or the insurance agent that she wants her child to be the beneficiary of the life insurance. The questions presented in this situation are:
- What happens to the money and any other property when her minor child inherits or receives it?
- Is there a better way to handle life insurance proceeds or other property that you want to leave to a child?
To answer the first question presented, let’s look at Oklahoma’s law on minors. Children or minors are legally incapable of holding and managing that property until the reach the age of majority, which, in Oklahoma, is the age 18. While they are still considered minors in Oklahoma, any property or money a minor owns must be managed by another person, such as a guardian or custodian. IMPORTANTLY, for the most part, the financial institutions will require the guardian to go to court and receive Letters of Guardianship before the institution will release the funds into the guardian’s control. This applies to parents. Therefore, if a grandparent left a minor as a beneficiary of an account, the minor’s parent would have to go through the court process of Guardianship (which can be expensive), before the parent will gain control of the minor’s assets. This is an expensive complication to leaving an asset to a minor child, because court processes comes with attorney fees, accounting fees, filing fees, just to name a few.
In the above scenario, when the child turns 18, he or she can take over the management and control of the property or money. Oklahoma law generally does not require a specific level of financial literacy, planning, or common sense to manage or control your own property. Thus, the young teenager may squander the monies that was given to them very quickly, since they have full control of it once they turn 18. And how many 18 year old teenagers do you know that would know how to handle a lump sum of $100,000 responsibly?
THE GOOD NEWS is that there are other, more responsible approaches to leaving minors an inheritance. Rather than naming your child directly to receive the proceeds of a life insurance policy, or any other beneficiary account, you can set up a revocable or irrevocable trust that has your minor child as a beneficiary. This allows you to provide for appropriate use and management of the property with certain guidelines and control that will not let the minor child to squander their inheritance, and it won’t include any court process or fees. Unlike custodial arrangements discussed above, a trust does not necessarily terminate at age 18 and can continue to provide supervised management of the property into adulthood, including planning for education and other life-events. To read more about trusts, read a previous article by our attorney here.
The Trustee, or the person who manages the trust’s money and property, can also be empowered to use the Trust’s money for the benefit of the child, without the need and cost of court supervision. This can be helpful because it allows you to have more control over the types of expenses you want to provide for your child, including health, education, and general expenses one might occur as a young adult.
Remember, selecting a beneficiary for any type of monetary account is an important decision with potentially far-reaching consequences. There are important legal implications depending on your choice. Selecting a beneficiary is part of your overall estate plan, and the attorney at the Skillern Law Firm, PLLC can help plan for your minor children or grandchildren. Call our office at to speak to our attorney today!
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!
If you do not have a Revocable Living Trust, your estate will need to be probated or be small enough for a simple affidavit. Probate is the legal process required for estate administration and asset distribution. To read more specifically about what probate is, read our previous post “what is probate.”
One important thing about about probate is that is is time-consuming and typically expensive. There are court costs, publishing fees, and of course attorney fees. For this reason many people are able to shrink their probate estate using simple ways to avoid probate like beneficiary designations or a revocable living trust. A trust allows you to put all your assets into a trust, you then name a successor trustee to take over when you are incapacitated or pass, and your named beneficiaries who would receive distributions without having to go through court. It’s usually very simple and clean.
Regular probate is most likely going to be necessary for most people with a normal sized estate. However, those who have a smaller amount of assets may be able to pass along property outside of probate altogether or through the utilization of a simplified probate procedure. In Oklahoma, if the estate is worth less than $20,000, a simple affidavit can be used to claim the estate after a ten day waiting period.
For estates larger than $20,000 and smaller than $150,000, Oklahoma allows for a “Simplified Probate.” The executor or executrix can contact the probate court to request simplified probate if the estate that he or she is administering is valued at less than $150,000 ($175,000 beginning November 1, 2013). This includes all personal property as well as other assets. The benefits are that it is quicker than normal probate and the attorney fees will be less.
Whether your estate is too large for simplified probate or small enough, the best way to make sure your affairs are in order is to contact a qualified estate planning attorney. The attorney of the Skillern Law Firm can help you plan out your estate so your heirs are taken care of in the best and efficient manner possible. Call our office today!