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Oklahoma Small Estate Affidavit

U.S. Coins and Paper Money

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!

What Happens To My Trust After I Pass Away?

Many people who create a Revocable Living Trust fail to understand what happens to the trust after they are gone (for more information about types of trusts, see Let’s Talk Trusts). One of the most common misconceptions is what happens to a Revocable Living Trust after the trustmaker or “trustor,” or the person who created and funded the trust, dies. A lot of successor trustees believe, that as long as the trust is fully funded, all that they need to do is collect an inheritance check, pay some taxes, and that is it. However, it really does not take a lot of common sense to figure out that there needs to be more than that, since you are closing and cleaning up the financial affairs of a person’s entire life.  (For more on trustee’s duties, See Duties of A Trustee).

Even though probate is not required for a correctly and fully funded trust, the successor trustee of the trust will still have quite a few responsibilities and duties to accomplish before the trust’s beneficiaries can receive their inheritance. Usually, there are taxes to be filed and paid, bills to be paid,  paying ongoing expenses of maintaining the real estate of the trust, and selling or auctioning off any property that cannot be liquidated any other way. However much work this seems, this is much better than having a court process where a judge is looking over every bill to be paid, every expense, and holding things up due to court dates needing to be scheduled. Usually the only professionals needed in this process is a good accountant, and sometimes an attorney. Cleaning up and closing a trust is still much faster and cheaper than probate.

If you are interested in getting a trust, or finding out more about how one can help you and your heirs, please call our office today.

A Common Error to Avoid Probate

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.

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.

Do You Need to Update Your Advance Directive (Living Will)?

Many clients of the attorneys at Skillern Law Firm, PLLC believe they do not need a new Advance Directive since they had one drafted many years ago. Well, if you got your living will completed before 2006, you may need yours updated.

During the 2006 Legislative Session, the Oklahoma Legislature amended the Oklahoma Advance Directive Act (“the Act”) in response to an Attorney General Opinion.  It became effective on May 17, 2006.The Attorney General’s opinion argued that, in its then old form, the Oklahoma Advance Directive Act was unconstitutional.  Before May of 2006, individuals could only designate refusal of life-sustaining treatment only if they were persistently unconscious (in a vegetative state) or if they were diagnosed with a terminal condition. The old act had no provision to allow people to choose if they want treatment or not if they were diagnosed with an “End-stage Condition.”

The Oklahoma Legislature listened to the Attorney General, and added this category to the statute. Now, individuals can discuss what they would want in an “End-Stage Condition.” An “End-stage Condition” is a condition caused by injury, disease, or illness, which results in severe and permanent deterioration indicated by incompetency and complete physical dependency for which, to a reasonable degree of medical certainty, treatment of the irreversible condition would be medically ineffective.  Importantly, this includes Alzheimer’s disease in its late stages.

At the Skillern Law Firm, our updated Advance Directives forms allow you and your spouse to refuse life-sustaining treatment and/or artificial administration of nutrition and hydration, if you so choose. It will allow allow you to designate that you absolutely want all the treatment you can receive.  Whether you choose to refuse life-sustaining treatment or to continue all treatment options, executing a new advance directive should be on your priority list.

If you have not updated your Advance Directive, or have never had one drafted with your desires, contact the offices of Skillern Law Firm, PLLC today. For more reading on what an Advance Directive can do you for, please read a past post all about living wills here.

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.

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