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Special Needs Planning

It seems everyone knows at least someone with special needs, whether it be a family member, a church member, or a friend. When it come to estate and financial planning, the term “special needs” applies to family members who cannot, for some reason, take care of themselves. The reasons are varied, whether it be a child with a condition, such as Down’s syndrome, a teenager with mental problems, or an elderly person with a condition like dementia or Alzheimer. Another reason someone may need special needs planning can be someone with a physical disability, such as a quadriplegic, or many other disabilities.

Most of our clients who come to us wanting special needs are parents or grandparents that need special needs planning for their children or grandchildren.  Most clients are people who want to provide for their special needs family member through inheritance, however, leaving money as inheritance or life insurance to a special needs person will usually not improve their life, in fact, it generally has a detrimental effect on their financial well-being and stability.

One of the main reasons why leaving inheritance or life insurance benefits to a special needs person can be detrimental is that it can disqualify a special needs member from Supplemental Security Income (SSI). SSI is a federal financial support program that gives money to special needs individuals. Medicaid is another federal and state program that gives financial support to special needs individuals. Your inheritance can disqualify the special needs person from Medicaid support as well, since in order to qualify for Medicaid a person must have less than $2,000 in assets (which is really, really low for someone with special needs).

Special needs estate planning can help give your family member with special needs the ability to qualify for federal and state financial support programs, while also inheriting some money from your estate. Making sure your family member with special needs is left with enough money to support their health, care, and maintenance costs, while at the same time qualifying for federal programs, requires complex planning that is best done with the advice of a qualified attorney. Skillern Law Firm, PLLC is happy to explain the benefits and inter-workings of special needs estate planning. Please call today to schedule your free appointment.

The Problems with Handwritten Wills

Oklahoma allows the probate courts to admit holographic (or handwritten) wills. There are certain considerations that are very important to consider if you think a holographic will is right for you. Today on Tulsa Estate Planning BlogSkillern Law Firm, PLLC will help you figure out if its right for you.

First, there are important, strict formalities that Oklahoma requires for a holographic will to be valid. First, the will must be dated. Second, it must be signed by the testator. Third, it must be completely in the handwriting of the testator/testatrix. And lastly, it must be clear that the document is the intended last will and testament of the testator/testatrix.

These four requirements are very strict. Without all four, and with a variation on all four, Oklahoma courts have refused to admit certain holographic wills.

One such error is the belief that getting a holographic will notorized or witnessed is a great thing. This is not true. If you remember from above, the document must be entirely written by the testator/testatrix. A notory or a witness’s tesatament are not the same handwriting. There have been some Oklahoma courts that have held that in the event it is notarized or witnesses, that does not defeat the will since it is not required to be witnessed or notarized. If you do choose a holographic will, do not chance this, and avoid a notary or witness.

Many people insist they should save the money and create a holographic will. I remember in law school, someone asked the teacher in our estate planning course whether there were really any benefits to a formal, attorney-made will. Of course there is, she said, otherwise there would be no estate planning attorneys!

There are some very common problems with holographic wills. Here are some common mistakes:

  • Proving the authenticity of the will. Getting a handwriting expert, proving it was the intent, and making sure the entire document was written by the testator/testatrix is expensive, time-consuming, and doesn’t always result in probating of the holographic will. A formal, notarized, witnessed will is much easier to prove the authenticity, and many times, that is not even an issue with formal wills.
  • Testator/testatrix omits important features of a formally prepared will that can have a severe impact of your estate. For instance, not having a residuary clause, spend-thrift clause, or many other important clauses that attorneys know are necessary.
  • Vague/Confusing/Unmanageable instructions. Attorneys are good at using legal language that the probate court will be familiar with, and understand what the testator/testatrix desired. Many individuals are not. Furthermore, most holographic wills are vague and confusing, with different instructions concerning the same property, and avoiding discussing other property. For instance, leaving everything to “mother” does not exactly tell the court who you meant. Using vague terms, without using full names, and also using vague descriptions of property is a common mistake.
  • Failure to distribute the entire estate. A problem arises when the holographic will distributes less than all of the testator’s estate. If, for instance, the will gives away his house, car, and bank accounts, but neglects to mention furniture and other personal property, there is a partial intestacy as to the assets not covered by the will. These assets will then pass to surviving legal heirs as determined by the state intestacy statutes, the result of which may not be what the testator intended.
  • Many, many, more!

Just remember, all of these problems above (and the ones not listed) involve the probate trying to figure out what the testator/testatrix intended with their holographic will. This will eventually include probate attorneys charging hourly rates on your estate and beneficiaries. The cost of holographic wills may be free when they are made, but when they are probated, the cost is often much higher to the estate than a traditional, attorney-made will due to the probate costs.

Formal, Attorney-made wills is the best idea to make sure your estate is distributed as you desire, without the added probate costs of holographic wills. Let Skillern Law Firm, PLLC help you distribute your assets effectively, clearly, and easily through a will today. Please contact us to set up a free appointment today.

Your life is not static, so why is your estate plan?

It is important to periodically review your will and estate plan. Life changes often require that you reassess your estate plan.

Children

Most parents are concerned about how their children will be cared for in the event that one or both parents suffer an accident or are incapacitated. It is important to name a guardian for your minor children in your will. Also, parents should consider a trust if they wish to stagger financial inheritance distributions for their children, instead of having the kids receive the whole of the estate at the age of majority.

Divorce

In Oklahoma, a divorce makes any trust that you had with a former spouse void. You should also consider any power of attorney documents or health power of attorney documents so that the contents reflect your current intent.

Remarriage

You may consider signing a ante-nuptial agreement in the event of a remarriage so as to legally separate your estates during marriage. A trust may be helpful in addressing any inheritance issues to children that a second marriage can create.

Middle Age

As people age, their assets tend to increase. Make sure that your money is working for you by talking to a financial planner. In addition, you should make sure that any assets that you acquire are included in any will or trust that you have already created.

Death of Spouse

When a spouse dies, you probably will need to get new health care and financial power of attorney documents.

 

The offices of Skillern Law can assist you in making changes to any and all of your estate planning needs. Call our office today!

Resolutions

It is a new year, and everyone is listing things that they want to accomplish in 2012.

You might be interested in a new healthy eating regimen, or workout schedule, but why not add updating your estate planning to that list? Twenty-twelve is the year of the estate plan!

If you haven’t established a way to distribute your estate after your death, or you need a power of attorney, we can help you accomplish your New Year’s Resolution!

Living, revocable, and irrevocable. Let’s talk trusts.

Today on the Tulsa Estate Planning Blog, we’re going to explain the difference between a living trust, a revocable trust, and an irrevocable trust. Specifically, what are the advantages and disadvantages  of the types of trusts. So let’s get started.

A living trust and a revocable trust are usually, if not always, the same thing.  Both are trusts that are set up to hold assets during the life of the settlor or grantor (the person who created the trust) for the benefit of that person. It is called a “living” trust because it is established during the lifetime of the settlor. It is also called “revocable” because the settlor can revoke the trust at any time during his/her lifetime. The purpose of the revocable, living trust is to avoid probate of the settlor’s assets after he or she passes away. The estate will avoid probate if the trust is written well and the settlor does not do anything irresponsible after the trust is created (like forgetting to transfer deeds into the trust name). After the settlor passes away, however, the trust will become irrevocable in that it cannot change. The “successor trustee,” or the person who was named to take over the trust’s management, shall distribute the property as described in the trust. Sometimes a trustee is a bank or individual who is paid for their services, but often it can be family and friends who will do it without a fee. This is one reason why trusts are less expensive than probate. The major advantage is that a revocable trust will avoid probate, and it is flexible in that the trust can be amended and changed.

An irrevocable trust is a trust that cannot be amended, changed, or revoked once it is established. Irrevocable trusts are normally formed by a person or family who wants to give away assets to another person, subject to certain terms that they do not want to be changed. Once the settlor puts the assets into the trust corpus, the settlor no longer owns or has access to those assets. There are many practical advantages to an irrevocable trust. There are tax advantages as well as creditor advantages. Creditors cannot gain access to the funds in the irrevocable trust since it is no longer in the settlor’s estate. However, the disadvantages may outweigh the advantages for many people. The trust cannot be amended or changed without going to court, and the settlor cannot get the gift back, ever.

Skillern Law Firm, PLLC can create both types of trust for your estate planning needs. Please contact us today! If you are interested in creating a will instead of a trust, please read our last post – The Difference Between a Will and a Trust.

Till Debt Do Us Part

I was researching for a client recently who asked about debt and what exactly happens after a significant other or a child passes away. The client had signed as a co-signer on some of the deceased loans and was wondering if she was responsible for that debt. Also, the client was wondering whether her new husband would be responsible for her pre-marital debt if she got remarried. Let’s go through those questions here today on Tulsa Estate Planning Blog.

First off, if you co-sign on or guaranty a loan, you are legally responsible for the debt, even if the other co-signer dies.  You have taken responsibility when you co-signed the loan, and having one of the parties of the loan die does not take away your responsibility.  It can be a hassle and can make a tough time that much harder, so don’t co-sign a loan if you are not ready to take on the responsibility of the loan should the other party unexpectedly die.

When it comes to marital debt, in the United States, there are two approaches the states take. There are communal property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) and there are common law states (everyone else). The one exception is Alaska, which allows spouses to choose to sign an agreement making their assets communal property. Few take this option.

Oklahoma is a common law state.  In common law states, spouses’ property or debt is kept separate unless the spouse shows clear an intent to integrate the property, making them communal, marital property. For instance, a spouse’s previous debt of student loans will not be forced upon the new spouse unless the new spouse shows a clear intent to be obligated to pay it off, like signing a guaranty for the loans. This goes for real and personal property, too. A spouse’s pre-existing savings will not belong to the other spouse unless there was a clear intent for the spouse to share it – like putting the other spouse on the joint account.

It’s good news in Oklahoma when it comes to pre-marital debt. Your debt does not have to belong to your spouse, and your property doesn’t either!

If you would like to know how to put your marital or separate property into a trust or keep it safe from probate by making a will, contact Skillern Law today.

Have a question about estate planning law? Send us an email at skillernlaw@gmail.com and ask it. Maybe we’ll post the answer on the next blog post!

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