Oklahoma Estate Planning

This category contains posts on trusts, wills, durable powers of attorney, living wills and other issues related to estate planning.

Are you maintaining proper boundaries with your neighbor?

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A dicey situation by Wonderlane from Flickr.

Everyone knows that for a well-balanced and fruitful life, one needs to maintain proper boundaries in relationships, work, play, etc. . .
The other major boundary you may need to consider is between and your neighbor; that is the line that divides your property from your neighbors.  That line is often marked by a fence.  Sounds fairly simple, right?  
Sound is deceptive here because Oklahoma land boundary issues are often complex and vexing.  Imagine being in a boundary dispute or a battle over who will maintain the shared fence that separates the two properties.
 
Consider some of the questions I answer below about Oklahoma land boundaries and fences.
 
 
What is a boundary fence?
A boundary fence is one that sets out the legally-described line, set out either in a deed or survey, separating to two tracts of land.  Normally, a boundary fence runs on the true boundary line between property owners where the boundary line is known and not disputed.  Obviously, it important when considering any fence on a shared boundary to know what the actual boundary is.  If it isn’t clear, then it makes sense to have a survey done.
 
What is a partition fence?
A partition fence is generally one that memorializes the division of a parcel of real property into small parts.
 
What is the difference between a boundary fence and a partition fence?
The Oklahoma Supreme Court considers the “term ‘boundary’ to mean the legally-described line, set out either in a deed or by survey, separating two parcels of real property. While the term “partition” describes the subdivision of a parcel o3896922807_36aa591b91_qf real property into smaller parts. Fences are often erected to memorialize a boundary line or partition line. In some instances, but not all, the fence may serve a dual role. It may mark both a partition and a boundary. In short, every boundary fence is also a partition fence, but not every partition fence is a boundary fence.”  
 
What does Oklahoma statutory law say about the obligation to maintain a boundary fence?  
Adjoining landowners are mutually bound equally to maintain [t]he fences between them unless one of the landowners chooses to let his land lie open as a public common. 
 
What does Oklahoma statutory law say about the obligation to maintain a partition fence?
Adjoining landowners are required to keep partition fences in good repair throughout the year, unless the owners agree otherwise in writing.  However, the caveat here is when one landowner is only using his land as commons.  In this case, the landowner cannot be compelled to pay for the erection or maintenance of the fence.
 
What are circumstances in which owners are mutually bound to maintain a boundary fence?
Generally, a property owner cannot be forced to erect or maintain a fence on a shared boundary.  When one owner chooses to let his land lie open as a public common, in which case, if he afterwards encloses it, he must refund to the other a just proportion of the value, at that time, of any division fence made by the latter.
 
When can a real property owner not be forced to maintain a boundary fence?
A landowner generally cannot be forced to pay to maintain a boundary fence unless the fence is necessary to keep his livestock from leaving his property. One Oklahoma statute that addresses fencing where animals are involved provides:
 
Any person not wishing his land enclosed, and not occupying or using it otherwise than as commons shall not be compelled to contribute to erect or maintain any fence between him and an adjacent owner; but when he encloses or uses his land otherwise than as a commons, he shall contribute to the partition fences as in this article provided.
Okla. Stat. Ann. tit. 4, § 143.
 
All partition fences shall be kept in good repair throughout the year, unless the owners on both sides otherwise agree in writing.
Okla. Stat. Ann. tit. 4, § 142.
 
What are the limitations on the removal or replacement of boundary fence when owner will not agree?
It appears that Oklahoma law allows one owner of a boundary fence to erect a fence without the permission of the other owner and with fence on both properties:
 
A person building a fence may erect the same upon the line between him and the adjacent owners, so that the fence may be partly on one side and partly on the other, and the owner of such fence shall have the same right to remove it as if it were wholly on his land: Provided, that such fence is not more than five (5) feet from such line.
 
Okla. Stat. Ann. tit. 4, § 152.
 
However, if removal of a boundary fence is done for malicious reasons or in a way that causes unnecessary harm to the other owner, the owner removing the fence run into legal issues.
 
What is the process for resolving disputes between owners over whether a boundary fence needs to be put or maintained?
In Oklahoma, when a controversy arises between boundary owners,  either party may apply to the fence viewers, who, after due notice to each party, may inquire into the matter and assign to each his share thereof, and direct the time in which each shall erect or repair his share in the manner provided above.  The purpose of this process is the recognition by the Oklahoma Legislature that many boundary fence disputes might resolved while young through full disclosure and open communication between the adjoining landowners.
 
whitewashing fences, and building communities online from Flickr

whitewashing fences, and building communities online from Flickr

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

Why is Oklahoma estate planning important? It may help avoid a nuclear-class disaster within the family . . .

Why is Oklahoma estate planning important?

I have asked and answered that question hundreds of times both on this blog and in real life. My answer generally is because it protects your family when you are gone. One of the primary protections is disputes over how you would’ve wanted your property to be distributed in your family taking care of.

However, nothing makes the point better than seeing the result of the failure to plan. Let me give you a factual scenario that is rooted in real life events:

Husband and wife Mary in their late 30s. Both have children from previous relationships. They own their home, another rental property and some lake-front property in another part of the state. They live happily for 35 years until husband passes away. Neither husband nor wife has a will or a trust.

Wife, who is now a widow in her late 60s, is left to administer the estate. She is guided by what she believes her husband wanted. However, the husband’s children from his first relationship don’t see things the same way as the wife. With no Will or Trust to resolve the issues, the wife and the children are left to battle in probate court over the property. Although probate is usually a fairly routine, process, this probate is akin to a full-blown adversarial no holds barred lawsuit. Everyone involved believes they knew what husband wanted but nobody has clear enough proof to prevail quickly. Thousands of dollars in attorney fees and incalculable amounts of emotional damage occur throughout the process.

How could this have been avoided?

The Husband could have expressed his wishes on paper, in a last will and testament.

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning, Oklahoma Probate

5 critical questions to answer when doing Oklahoma estate planning

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Have you ever wondered what the key questions are when thinking about estate planning for your family?

Generally, you decide what you want to with the things you have and how you want take care of your family after you pass on.  A few years ago I laid out some of the key questions to consider when doing estate planning in this post.

As you think about what you want to do with the things you own when you pass away and to best protect your family, here are several more important points to consider:

  • Who will you designate to act as your personal representative (the person or corporation who will see to the administration of your estate)?
  • If the creation of a trust appears possible, what person, persons, or corporation would you wish to act as trustee?
  • Are there any specific items of real or personal property you would wish to go to particular persons?
  • Who would you wish to take the responsibility for the care of your minor children, if any?
  • At what age or ages would you feel your children should receive substantial assets (not simply support for their health, education and welfare)?

After you think about these questions a bit, it might be worth checking out this post about Oklahoma Estate Planning Tools and this post about simple Oklahoma Estate Planning with a trust.

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

What do you stand to gain from doing Oklahoma Estate Planning?

Oklahoma Estate Planning

Oklahoma Estate Planning

 

Have you ever wondered what tangible benefit do you get when you do Oklahoma estate planning?

Have you seen one to many pitches for estate planning that simply isn’t clear about what you get out of it?

If the answer is “yes” that is completely understandable.  We (us attorneys) tend to talk in broad, generalized legalese that provides little clue as to the benefits of of the services we are selling.  The goal of this post is to bring it down to a specific set of benefits you can expect if you take the time to do Oklahoma estate planning.  Read on to find out if I succeeded.

Guardian

You can nominate the person or people you desire to be guardian of your minor children.  Although a court is not required to the appoint the person you nominate as guardian, practically, unless the person is disqualified based on a criminal history, the court will nominate who you appoint in writing.  This means you choose who cares for and raises your children.

Protect Assets

You can structure your assets to benefit your children.  If you have minor children and you pass away, the children cannot own your assets directly.  However, through using a trust you can create a structure plan for the assets to be used for the benefit of your children both now and as they grow up.  If you choose to do so, you can eventually direct that your assets go outright and free of any type of trust when your children become adults..

Avoid Probate         

If you create a revocable trust and ensure that all of your large assets are owned by the trust, your family can avoid going through the probate process when you pass away.  The probate process is public and it may cause some delay in how soon your family has access to your assets.

Privacy 

With probate, you file a lawsuit in the County Court in which the deceased person lived and all of the documents filed in the lawsuit are publicly available. Not only are the documents publicly available, but with current technology most of the documents can be accessed from any Internet enabled computer. That means anyone can view the documents that are part of the probate case including the last will and testament which often contains personal details and other private family matters.  The revocable trust is a private document that is not required to be filed with any court or government.  Contrasted with the public probate process, using a revocable trust means that there will be no public access to your private family information and decisions.

Inventory of Assets

In the process of creating the revocable trust and related documents, we will create of an inventory of your assets, broken down by category.  This list reduces the burden on children and other family members to search and gather assets after death.  It also provides the opportunity to gather and index all your financial documents together; that way your family will know what accounts you have and where.

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

When do I have to file a tax return for a gift I make?

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Gifting into a tax return

While it is not a subject that most people consider often, there are circumstances where a person can make a gift and be required to file a tax return covering the gift and potentially paying tax on the gift. Most people are aware that if you die owning a large enough estate you may have to pay the IRS tax. Many people are also aware that there is an exemption, this year in the amount of $5.3 million, under which you are not required to file a return or pay taxes to the IRS.  What a lot of people don’t think about is that the exemption can be whittled down based on gifts a person makes during their lifetime.

The Annual Exclusion

One way to avoid reducing the lifetime exemption is to take advantage of the annual exclusion.  Each person is entitled to make an unlimited number of gifts each year without any tax consequences provided that the gifts do not exceed the annual exclusion, which in 2014 is $14,000.00. Gifts above the $14,000 number require that the person making the gift file a gift tax return.

What the IRS say about gifts

As the IRS states:

The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

 The key points

So, here is a summary of how it breaks down:

  • You can gift up to $14,000.00 to just about any person without  return required or tax being owed;
  • You can gift more than $14,000.00 each year to your spouse without a return required or tax being owed;
  • If you gift over $14,000.00 to a person this year, you will need to file a federal gift tax return, IRS Form 709.  The IRS Form 709 is due on or before April 15 of the year following the year that you have made taxable gifts.

 

Remember however that the rules on gift taxes like many other taxes are complicated. You should consult a tax professional before making any final decisions including the decision whether you need to file a return or not

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning, Oklahoma Probate

Do you know the documents that are used to fund your Oklahoma Living Trust?

Have you funded your Oklahoma living trust?

 

You have probably heard that funding your living trust is really important.  I have written about the topic a couple of times on this blog including this post . . . Why do you need to fund your trust or lose it?

But what does “funding” really mean?? Simply put, funding means to legal transfer title to your property from yourself to your living trust.

If you do not fund your trust, you will probably lose most of value of it.  Below is diagram I created that identifies some of basic documents that are used in the trust funding process, with a little bit of explanation about each document.

Snip - docs

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

What is the difference between the Personal Representative and Power of Attorney?

Can you explain the difference in duties required by the person who is the Personal Representative and the person who has the Power of Attorney?  

The primary difference between the Personal Representative (“PR”) and the person appointed under a power of attorney the attorney in fact (the “POA”) is that the PR is administering the estate after the person has passed away and the POA is caring for the person while they are incapacitated, but still living.  POA powers terminate upon death.

Personal Representative

  •  The PR is responsible for securing the Last Will and Testament of the decedent (if there is one) and distributing the decedent’s property according to the terms of the Will. There are usually bills to pay, a tax return to file, personal belongings to gather and other items that need to be addressed. In some cases, a probate proceeding may be necessary.  The PR would be responsible for getting this proceeding filed and completed (with the assistance of an attorney).

Attorney in Fact

  •  The POA receives power to act on behalf of the incapacitated person when the person is determined to be incapacitated under the terms of the power of attorney document.  Typically, this is when a determination is made by at least one medical professional that person can no longer care for themselves.
  • The POA is charged with taking care of the incapacitated person’s financial needs, health and welfare needs and other day-to-day to issues.  For example, a POA may pay bills, communicate with the doctors and make decisions about the incapacitated person is going to be cared for.
  •  Legally, it probably makes no difference whether it is the same person who is POA and PR.  However, practically, many times the other spouse is the person chosen to be both the POA and then the PR.  A person who has acted as the POA and then acts as the PR has a bit of an advantage because they already have experience with the decedent’s estate.

 Is it best that whoever is appointed to act following the death of both spouses be the same person?

Whether it is best to have the same person as POA and PR for both spouses if you are both either incapacitated or pass way simultaneously depends on several things.

  • Is the person you appoint to act as POA capable of caring for two incapacitated people at the same time?
  • Will or could that person also have duties to care for minor children as well as the new guardian? Again, if the same person is PR and there is a simultaneous death of both spouses, the person must be capable of administering both estates.  It can be done, it is simply a question of the competency of the person who is appointed.
  • Practically, where there is one person who both husband and wife are comfortable with, that person is often appointed successor PR of both estates.

 

Posted by Shawn Roberts in Oklahoma Estate Planning, Oklahoma Probate

What are the critical decisions you make in an Oklahoma Will?

You have been told that you “need” an Oklahoma Last Will and Testament. But you wonder, why?

How is a Will going to help me? Read on for the answers to this question.

I thought it might be helpful to list the specific things you can accomplish in a Last Will and Testament or a Trust:

1. Determine who gets your property and in what proportions.

2. Choose the person who will take care of your estate and make sure everything is handled like the Will or Trust states.

3. Nominate people to be the guardians of your minor children.

4. Give specific items of personal property to very the person or people to whom you want them to go.

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If you want to know more about estate planning and the documents used to do it, you can check out my Estate Planning Section.

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

Why do you need to fund your trust or lose it?

Have you ever heard someone talk about “funding a trust”?

Funding a trust means making a legal transfer of your property to the trust you create.

 For example, if you own a home, you would usually sign and record a quit claim deed that transfer from your name individually to the name of your trust or in some places, the name of your trustee.  When a trust is properly funded it ends up owning your property, while you still control the trust (assuming it is revocable).  It might look like this:

 Joseph Q. Smith, an individual to Joseph Q. Smith, Trustee of the Joseph Q. Smith Living Trust, dated September 13, 2011.

Why do you need to fund your trust?  
Because without funding the Trust doesn’t have anything in it, making it virtually valueless.  Also, if you are counting on the trust to help your family avoid probate, it won’t happen.  If someone passes away owning real property that is not transferred to a trust, your family is going to probate.

Now that you understand funding and the need to fund your trust, make sure you take care of it or talk to someone about taking care of it for you.

If you want to find out more about these topics please consider listening to my podcast series which is 8 brief episodes providing more detail on estate planning. You can subscribe to the podcast, Estate Planning Demystified, in iTunes or listen to it right here.

Posted by Shawn Roberts in Oklahoma Estate Planning

When you might need to do an Oklahoma probate

Jane Austen's Will

Have you ever wondered when an Oklahoma probate is actually necessary?

Although a lot of effort is put into avoiding Oklahoma probate, there are times when it is simply the only option to change the title to a piece of property or free up funds held in a bank account.

The result of a probate proceeding is usually a Judge signing an order that transfers title to property. Below are some scenarios in which you might need Oklahoma probate:

1. Real Property.  An unmarried person dies owning a house and title to the house is solely in the deceased person’s name;

2. Life insurance.  A person dies leaving a life insurance policy with beneficiaries who are no longer living;

3. Not transferred to Trust.  A person who has a living trust dies, but has property that was never transferred to the trust such as real property or investment accounts; and

4. Accounts with no beneficiary.  Typically, with retirement accounts, investment accounts and many times on bank accounts, there is the opportunity to name a beneficiary,  This is the person or people who automatically receive the proceeds of the account (with proof of death of the owner and proof of beneficiary identify of course).  If a person does not name at least one beneficiary on an account such as this, that usually means the account is going to probate.  Without probate, the company holding the account will not release it (here are two small exceptions to the general rule: Oklahoma small estate affidavit and Oklahoma affidavit of delivery of personal property).

5. Mineral Interests.  A person dies owning an Oklahoma mineral interest but the interest is not held in a trust and the title is solely in the name of person who dies.  Many times the operator of the Well will not continue to pay royalties without an order from the Oklahoma probate court specifying who the heirs are.

These are general examples but there may be ways in the specific situation to secure the funds without probate.

Another resource for figuring out when an Oklahoma probate may be required is the Oklahoma Bar Association’s article Is a Probate needed?

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning, Oklahoma Probate