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Like we have discussed before on a previous post, every adult needs a Last Will & Testament or a Revocable Trust in place. However, more than half of all Americans have no planning in place! For simple estates, or at least the bare minimum for everyone, a Last Will & Testament is a good start. A Will is a legal document that tells the probate court your wishes about where and whom your property should be distributed to after death. To skip the probate process all together, one should get a Revocable Trust. A trust has two purposes. First, it is to take care of the creator (Also known as a Grantor or Trustor) while they are alive, and then distribute similar to a will after the Grantor passes away. Another difference is that the distribution part of the Trust skips the court process altogether, which makes the distribution faster, easier, smoother and may help avoid unnecessary taxes and creditors and keeps your wishes private.
It’s easy for people to feel overwhelmed about getting their estate plan done, especially right now during the pandemic. However, at the most basic, it is essential to plan what will happen to your assets after death. it is unavoidable and easily planned, with the help of a qualified attorney. While a lot of people would like to avoid the subject matter altogether, it’s the best way to take care of your loved ones financially (and save them the stress of end-of-life planning) after you’re gone. Also, people do not realize that it’s mostly the attorney doing the work!
Since these are the most important documents you’ll ever get done, it’s important to plan ahead, and hire an attorney to get it done correctly.
Attorney-made vs. Do-It-Yourself Estate Planning
Our attorney sees a lot of online and “DIY” estate planning, and all the simple mistakes that are made via those instruments (read our previous post about why online wills are harmful). A single drafting mistake could make the whole trust invalid, or change the make the distribution different than what you desire. Most of these “DIY” platforms use laws from California, New York, and Texas (none of which follow the type of Trust law that Oklahoma has). These products are unlikely to meet your needs. You do not want to risk your property going to the wrong people, showing up in court to be fought over, or the trust being ambiguous and requiring a court’s interpretation just to save a dollar. All of these things are avoidable with an attorney who know what they are doing.
More complex estate distributions, like ones that include minors, special needs beneficiaries, unequal distributions, and more, absolutely need to have an attorney drafting them.
Four Reasons to Hire a Lawyer to Review Your Estate Plan
- Estate planning varies by state.
State laws can be very particular on what may or may not be included in Will, Power of Attorney, or Trust. It can even get as localized as the county judge and his/her requirements for a Will to be valid. Location may affect who may serve as personal representative; be a witness, where and how they need to sign the estate planning documents. Like referenced above, Oklahoma does not follow a unified Trust code like most states, so it’s important to recognize that we do things differently here than you see on most online blogs and sites.
- Online estate planning programs are limited and not specialized.
Online wills and trust drafting don’t support common complexities you find in Wills and especially Trusts like minor children, unequal distributions, complex real estate planning, and graduated distributions. They also cannot account for your personal situation in the family, like family dynamics (including infighting, drugs, and spendthrift family members). With simple software and templates, if you make an error, the document can become invalid or misleading. Additionally, these options don’t always update or upgrade to account for new changes in estate planning laws.
- Most people have certain complications that can affect your estate plan.
Unlike what most people think estate planners do, we do not just pop in names on our forms and call it a day. Every plan at the Skillern Law Firm is specialized, and created specifically for the client at hand. Not only do we not just go off of one form for all clients, but we do specialized planning outside the documents – like making sure our client’s beneficiary designations and business planning are done as well. Various circumstances can affect how you’ll draft your plan. As mentioned before, any mistakes can cause additional complications, expenses or make it invalid altogether. Some of these scenarios include:
- Multiple marriages
- Business ownership
- Mineral Rights
- Minor Beneficiaries
- Real estate in multiple states
- Incapacity or disability needs
- Bequests to charity
- Substantial investments
- You don’t see the whole picture – and that’s okay!
Here’s the thing: you’re not an attorney, and that’s okay! You probably don’t know which questions or scenarios to be ask or think about. You don’t know how to find the big problem areas (and sometimes the smaller issues that creep up on you in the estate plan). An attorney will also make sure to document your intent and state of mind, which is important if a dispute arises after death. An attorney will also listen to your goals and concerns and provide counsel based on your specific situation. We will make sure your estate plan is explained, detailed, and done correctly to reflect your wishes.
Have an Attorney That is There to Work for You
If you’re are interested in getting your estate plan done (and done correctly), make sure to guarantee its validity with the help of an attorney. Although educating yourself is wise, you’re hardly expected to be an expert in this complex area of law. Attempting to create your own estate plan without qualified legal representation can leave you in the in a much worse position. Plus, you’ll enjoy peace of mind knowing you’ll have ongoing support during the process, and after. We are just one phone call away for all of our clients.
If you’re ready to craft an individualized estate plan, the attorney at the Skillern Law Firm, PLLC can help. For more information, reach out to us today at (918) 805-2511 or email@example.com.
Before 2008, there was no way in Oklahoma for real property or mineral rights to skip probate except for a revocable trust. In 2008, the Oklahoma legislature passed 58 O.S. Section 1251-1258. This statute codified Oklahoma’s Transfer on Death Deed (“TODD”), otherwise known as a “beneficiary deed.” This allows the owners of real property, including surface owner or mineral rights, to deed the property to beneficiary(ies), which skips the need for probate to transfer legal title. These have been a very effective and cost-efficient way for real property to skip the probate process and the title to real property to be easily transferred after the passing of the owners.
However, Transfer on Death Deeds are not a good instrument to use in a variety of situations, and usually a revocable trust is recommended to skip probate in these situations. These are generally situations where a Transfer on Death Deed are not advisable:
- Complex distributions: Transfer on Death Deeds are very good for very simple distributions, like you want to transfer your home to your children, split equal. When you want distributions to be gradual, over time, with strings attached, creditor protected, or any other complication to a distribution, then a TODD is not a good idea.
- Per Stirpes distribution: When you want your children to inherit, but if one of them passes away, you want their children to receive their share of the real estate. Essentially, if you want your grandchildren to inherit if their parent does not survive you, then a Transfer on Death Deeds are not good for this type of distribution.
- Unequal distributions: When you want beneficiaries to receive unequal shares of the home. TODDs are great for equal distributions, but nothing more complex than that.
- Minors as beneficiaries: Minors cannot own real estate in Oklahoma, so you cannot leave a piece of property to a minor through a TODD. It would need to be held in trust for the minor until he/she reaches the age of 18.
If you have a piece of land or mineral rights that you want to leave to one or more people, split equal with no strings attached, then a Transfer on Death Deed is a great option.
There is a catch to Transfer on Death Deeds that must be said: First, the Transfer on Death Deed MUST be filed before the passing of the Grantor, or owner of the real estate. If the deed is filed after, it is not effective. Second, after the passing of the owner of the deed, the beneficiar(ies) must file a Transfer on Death Deed affidavit within nine (9) months of the passing of the Grantor. If this affidavit is not recorded within this time frame, the deed is voided and it would pass via the probate process. This is an easy thing to accomplish, but it is a time-sensitive action that is widely overlooked.
If you are interested in getting a Transfer on Death Deed done in Oklahoma, please call or contact the Skillern Law Firm today! They are inexpensive and easy to accomplish with the help of an attorney.
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!
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!
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!
Most people that come into our office expect to need a “simple” estate plan. Usually, they mean a will, power of attorneys, and a living will. No trust, no tax planning, and no trust provisions for their children or other family members. Perhaps the initial motivator for this is the lower cost, but also the understandable desire to avoid taking the time and energy to understand the workings of a more complex estate plan.
First of all, of course simple plans are less expensive and easier to understand. However simple estate plans are usually for small, straight forward estates. Small usually meaning an entire estate worth less than 100-150 thousand, and straightforward meaning married couple with adult, healthy children with no complications. Most couples estates are worth more than the smaller, especially when you consider that your estate consists of EVERYTHING you own (Life insurance, real property/homes, cars, personal property, retirement accounts, bank accounts, etc. Also, if you have children, grandchildren, or others that you care about and wish to see benefit from your estate, a simple plan offers absolutely no assurance that that will happen.
Here’s a couple of brief examples:
- John dies and leaves all of his assets to his wife Jessica. They have one child, Joe. A few years later, Jessica marries Jack, and they buy a house together with Jessica’s money, and she names Jack as the beneficiary of the IRA that she rolled over from John. Jessica then dies, with a Will that names Joe as the sole beneficiary. However, despite what the Will says, her second husband Jack gets the house, the IRA, and under Oklahoma law, one-half of all other property. John and Jane’s son, Joe, is left with little of her estate.
- Lisse has three adult children, Larry, Louise, and Lisa. Louise and Lonnie each have two children of their own. Lisse’s Will provides that each shall receive one-third of the estate. Lisse dies, and each child receives $250,000. Larry uses the money to buy a home with his wife. They then divorce, and the judge awards her the house in the divorce settlement. He is left with nothing of Lisse’s original estate. Louise uses the money to start a business, risky since she has little business sense or experience. The business fails, and she and her children are left with nothing. Lisa puts the money in a savings account in his name, but his Will provides that her husband gets everything. Lisa dies, and a couple of years later her husband remarries. Sometime after that he dies, and the new wife gets everything, and leaves nothing for Lisa’s children. After all of these events, Lisse’s children and grandchildren are left with nothing of the original estate.
These types of circumstances occur everyday and impact many, many families. Second marriages are very common, and as a consequence, children and grandchildren are unintentionally disinherited, and in-laws, spouses or ex-spouses, and creditors end up with the family legacy.
How do you prevent these types of things from happening? Call our office today about using a trust or multiple trusts as part of your overall estate plan. It will cost a bit more (at this time, but do not forget it skips probate costs), and take some more time to implement, but the savings and peace of mind can be priceless.
Most people know how to put beneficiary designations on their accounts to skip that asset from going to probate. Most of the time, it is a one or two page form that the financial institution provides you. (See more about that at our post about Beneficiary Designations). However, one type of asset that is often left behind is an automobile, boat, or any other titled vehicle. One particularly useful procedure that Oklahoma allows in these cases is the “No Administrator Affidavit” that is available from the Motor Vehicle Division of the Oklahoma Tax Commission through tag agencies in cities across Oklahoma. You can complete this form and attach a certified copy of the death certificate, and then the affiant (person who signed the affidavit) may obtain title to a vehicle, boat or outboard motor where there is no probate or administration proceeding and no other person would have a prior right.
If your estate is not large enough to justify paying for a Revocable Trust, you should look into how to set up your estate in a way that would make probate less strenuous on your family, or skip it all-together.
If you would like to know more about how to do this, or if you need to set up a Revocable Living Trust, please call the office of The Skillern Law Firm, PLLC today at (918) 805-2511.
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.