Probate Lawyer in Edmond, OK, Clarifies the Confusion

Probate court is complicated and confusing for people. That is why it is important to seek expert advice when it comes to will, trusts, and other matters of estate planning. To determine what option would be best for you, it is important to determine how you want your property and money to be “handled” upon your death. Further, the value of your estate needs to be ascertained to determine whether a trust could have tax benefits. At that time, our probate lawyer in Edmond, OK, can present all options, along with the costs, risks, and legal effect each one will have in your specific situation.

For a small consultation fee of $150, our estate planning attorney can sit down and educate you about all of your options. Should you decide to hire Zeaman Law, we will apply the consultation fee against the costs of representation. In some cases, a short consultation may light the way and provide you with the know-how to avoid certain pitfalls without the need of hiring our firm. At the very minimum, you will have greater peace of mind by knowing what options are out there and available for you.

Wills

A will is a legal document that when drafted and executed correctly, devises all property in accordance with the desires and wishes of the decedent. In order to properly execute a valid will, several things must be followed:

  • The testator must clearly identify himself.
  • The testator must declare that he revokes all previously-made wills and codicils. A will made subsequently revokes wills and codicils made before this if they are inconsistent. When a later will is largely inconsistent with the previous one, then the earlier version will be revoked.
  • The testator must demonstrate that he has the capacity to dispose of his property and does so freely and willingly.
  • Signing and dating the will is essential. The usual requirement is to have two or more witnesses. These are disinterested parties who are blood relatives or beneficiaries themselves. It is best that a notary is used for all witnesses, including the testator.

After the testator has died, a probate proceeding may be initiated in court to determine the validity of the will, i.e., whether it satisfied the legal requirements, and to appoint an executor. If it happens that the probate court declares the will invalid, then it is as if the will were never drafted with the inheritance following the laws of intestacy.

In some instances, family members may divide property pursuant to a will without the need for filing probate. There is no requirement that a will and the estate addressed in such be submitted to probate. However, if property or title has not passed properly, a probate proceeding will need to be filed. However, in most cases, the probate proceedings are relatively inexpensive unless an heir contests the will or any aspect of the proceedings.

Of course, without a will, one’s estate will have to go through probate so it can be divided pursuant to Oklahoma statute. It is important to note the court will divide the assets based on blood lineage only to the exclusion of all others, including those you love and care about (friends, partners, churches, charities, etc.) who are not related to you.

For these reasons and many others, a will is something everyone should consider, especially since the legal costs are inexpensive and affordable to all.

Trusts

A trust is an agreement under which money or other assets are held and managed by one person for the benefit of another. Different types of trusts may be created to accomplish specific goals. Each kind may vary in the degree of flexibility and control it offers.

Trust arrangements provide a number of common benefits, such as:

  • Helping the beneficiary to avoid or postpone unnecessary taxes.
  • Safeguarding personal and financial information and interests.
  • Taking into account business or social goals.
  • Providing the means to administer or control property.

A living trust can be revocable or irrevocable. In a revocable trust, the trustor may change the terms or cancel the trust. Upon revocation, the trustor resumes ownership of all trust property. There are certain situations when a revocable living trust is most beneficial. This includes when the trustor wishes to retain permanent control of the property in the trust, has concerns about the administration of the trust, or is uncertain of the proper duration for the trust. With a properly drafted revocable trust, you may:

  1. Add or withdraw some assets from the trust during your lifetime.
  2. Change the terms and the manner of administration of the trust.
  3. Retain the right to make the trust irrevocable at some future time.

The assets in this type of trust will generally be includable in the trustor’s taxable estate, but may not be subject to probate.

An irrevocable living trust may not be altered or terminated by the trustor once the agreement is signed. There are three distinct advantages of irrevocable trusts:

  1. The income may not be taxable to the trustor.
  2. The assets may not be safe from execution of judgment.
  3. The trust assets may not be subject to death taxes in the trustor’s estates.

However, these benefits will be lost if the trustor is entitled to:

  1. Receive any income.
  2. Use the trust assets.
  3. Otherwise, control the administration of the trust in a manner that is inconsistent with the requirements of the Internal Revenue Code.

It is important to note that once a grantor transfers property to an irrevocable trust, he can no longer take the property back.

Specific Types of Trusts

Testamentary trusts are created as part of a will and must conform to the statutory requirements that govern wills. This type of trust becomes effective upon the death of the person making the will (the “decedent”) and is commonly used to conserve or transfer wealth. The will puts the trustee in charge of administering a portion of all of the decedent’s estate and handling distributions to beneficiaries.

Before the trust property becomes subject to the testamentary trust, it will normally pass through the decedent’s estate. When the estate is probated, those trust assets will be subject to probate. The estate and generation-skipping transfer tax may apply to the assets, which make up the corpus of this type of trust.

A testamentary trust gives the trustor substantial control over his or her estate distribution. It also may be used to achieve significant savings in the future. For example, by using a testamentary trust, a trustor can provide for a child’s education or can delay the receipt of property by a child until the child gains financial maturity. Moreover, given the proper form of trust, property may be exempted from death taxation on the later death of a trust beneficiary. However, a generation-skipping transfer tax may still apply.

*IT IS IMPORTANT TO NOTE THAT TESTAMENTARY TRUSTS ARE AN INEXPENSIVE OPTION AS COMPARED TO CREATING A TRUST AND DO NOT REQUIRE THE PERSON TO IMMEDIATELY TRANSFER ASSETS INTO THE TRUST, NOR DO THEY REQUIRE TRUSTEE EXPENSES UNTIL THE DATE OF DEATH.

Special Needs Trust: Established for a person who has received governmental benefits. A person who is receiving such benefits might no longer be eligible or may have the benefits reduced because of an inheritance. By establishing a trust that provides for luxuries or other benefits that otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the trust without defeating his eligibility for government benefits.

*IT IS IMPORTANT TO NOTE THAT FEDERAL LAW NOW HAS A FIVE-YEAR LOOKBACK PROVISION WHEREIN THEY WILL LOOK BACK AT THE TRANSFER OF ASSETS. IF THE TRUST WAS CREATED DURING THAT TIME PERIOD, THE GOVERNMENT COULD REQUIRE THE ASSETS BE EXPENDED BEFORE GOVERNMENT MONEY IS USED. THIS INCLUDES MEDICARE AND NURSING HOME COSTS.

Spendthrift Trust: Established for a beneficiary in order to protect him from selling or pledging away his interests in the trust. Such trusts are beyond the reach of the beneficiaries creditors, until such time as the trust property is distributed out of the trust and placed in the hands of the beneficiary.

Power of Attorney

A Power of Attorney is a document that allows you to appoint a person or organization to handle your affairs while you’re unavailable or unable to do so. The person or organization you appoint is referred to as an “Attorney-in-Fact” and is authorized to perform any act that you authorize in the Power of Attorney document. For instance, if authorized, a Power of Attorney can open bank accounts, sign checks, sell property, convey title, etc. Therefore, as you will note, a Power of Attorney document is a very powerful tool, and what is authorized and who you appoint must be given great consideration.

  • A General Power of Attorney authorizes your agent to act on your behalf in a variety of different situations.
  • A Special Power of Attorney authorizes your agent to act on your behalf in specific situations only.
  • A Health Care Power of Attorney/Advanced Directive allows you to appoint someone to make health care decisions for you if you’re incapacitated.
  • A Durable Power of Attorney can be applied to all of the above. By adding text to the general, special, and health care powers of attorney, these documents can be made “durable.” This means that the document will remain in effect or take effect if you become mentally incompetent.
  • The Revocation of Power of Attorney allows you to revoke a power of attorney document.

Nearly all Power of Attorney documents created by our office cost from $200 to $400. Our office handles all copying and filing and provides witnesses and a notary at no additional cost to the client.

Important Message about Taxation

The use of a trust or any estate planning tool may help you achieve certain goals, such as reduction of taxes. However, while trusts can offer a number of tax advantages, tax avoidance should not be the sole motivation for using this estate-planning tool. It also should be recognized that the laws governing trusts and their taxation are complex and subject to constant and abrupt change.

For these reasons, you should always consult a licensed tax professional to determine whether or not a specific estate planning tool is best for you and your family.

Contact us today to set up a will or trust that will stand up in probate court. We proudly serve clients in Edmond, Oklahoma, and the surrounding area.