What is Oklahoma individual liability and why does it matter?

Diplomatic Security Service from Flickr User BSAC_Mock Dignitary Protection

We are talking about Oklahoma asset protection. That is, protecting your assets from being taken by a creditor or another party that has a judgment against you, individually.

Fortifying your assets
One way to fortify yourself and protect your assets is to do business through an Oklahoma entity. When I say entity, I am generally talking about an Oklahoma limited liability company or an Oklahoma corporation.

You form the entity, and then you use the entity to conduct business. For example, I have clients you have rental properties and they have created at least one LLC to own the rental property.

Explanation of the Mechanics
Here is how the protection works: 

For a rental property, the entity enters into a lease with a tenant. If for some reason, the property generates liability for the owner and the tenant or another party trying to recover against the owner, the creditor has to start by recovering against the entity rather than against the person who formed the entity.

The Wall of Separation
That means there is a wall of separation between what you own individually, for example, if your home and your cars, and what your business owns, which is the rental property. While there are some circumstances where a creditor could reach your individual assets, it is much more difficult when the creditor has to pierce through an entity that is out front.  For more information about piercing through the corporate veil in Oklahoma, consider – 5 Steps to prevent your Oklahoma corporate veil from being pierced

If, in my rental home example above, the owner owns the property in his or her own name and lease is the property in his or her own name then the owner is going to be liable if there is liability created which means the owner is putting all of its assets at risk. There’s no reason to have this happen using an entity to do business and if you need help getting that entity set up or getting started please reach out to me.  

 

Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma limited liability company

How do you change your Oklahoma living trust agreement when life changes on you?

From Flickr User Rob Mitchell

Sometimes you do your Oklahoma estate planning and create a revocable living trust and then life changes for you and you need your trust to change.  Fortunately, you have an Oklahoma revocable living trust so you can change it anytime while you are alive. 

To address life’s changing circumstances, there are two primary ways that you can change your Oklahoma revocable living trust agreement: 

From Flickr User Allen Warren

Amendment and Restatement.
 
Amendment is a change to one or more of the provisions of the Trust Agreement while leaving the rest of the Trust Agreement unchanged.  An example of an amendment is if you want to change the people you have nominated to be the trustee of the Trust after you are no longer able to be Trustee.
 
Restatement means creating an entirely new Trust Agreement that takes the place of the existing Trust Agreement.  The name of the Trust Agreement and its creation date remain the same through a Restatement, with the name coming out with something like this:  “The Smith Family Revocable Trust Agreement” would end up with a name like “The Smith Family Trust Revocable Trust Agreement, as Amended and Restated”.  As one writer explains “The underlying document defining the role of the trustee, the interests of the beneficiaries, and other important provisions may be altered, but the actual trust agreement keeps its same name and the same date. Think of a restatement as a total makeover for your revocable trust – the “old” trust is still there; it’s just totally updated to suit the client’s needs” (From Restatement of Trust, or Amendment? by Matthew T. McClintock at this link).
 
When should I amend a Trust?
Amending a Trust Agreement is usually appropriate when you want to make simple changes such as changes to the names of the Trustees or the names of beneficiaries.  Simple changes usually mean a change to one or maybe two provisions in a Trust Agreement, perhaps affecting only a couple of sentences in the Trust Agreement.
 
When should I restate a Trust?
Restating a Trust Agreement is usually appropriate when you want to change an entire Trust section, such as the Trust section that addresses the distribution of your property or after you have already amended the Trust Agreement several times.  Multiple amendments to a Trust Agreement can become difficult to track and to reconcile together because the “Trust Agreement” is the sum of the original Trust document plus all of the amendments.  For example, when you read Section 3 of a Trust Agreement that has been amended, you need to read not only Section 3 in the original Trust document but all amendments that address Section 3.
 
Will the name of the Trust change with a Restatement?
No.  An amended and restated trust agreement takes the place of the original trust document but keeps the same name and the original date the Trust was signed.  Keeping the same name and date means that usually, you will not have to re-title assets that are owned by the Trust.
 
For more information about Oklahoma Estate Planning, including creating a revocable trust agreement, consider this Post and this Post.
Posted by Shawn Roberts in Blogposts

What types of property requires an Oklahoma probate?

In this blog post, I talked about what types of property are Oklahoma probate property.  Below are some scenarios in which you might need to do Oklahoma probate:
 

->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 the person who dies.  Many times, the operator of the oil and gas well will not continue to pay royalties without an order from the Oklahoma probate court specifying who the heirs are.  For example, a person lives in Texas but inherited a mineral interest from a parent in Garvin County, Oklahoma.  The title to that mineral interest will need to be changed from the person’s parent to the person.

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

—>Not transferred to Trust.
Consider, a person who *has* a living trust dies, but that person never transferred their property to the trust.  For example, the person owned their home but did not change the title to the home to make the trust the owner of the home.  That failure to change the title to the home likely means the person’s heirs will need to do an Oklahoma probate to change the title to the home.  The process of transferring legal title to your property to your Oklahoma living trust is known “funding”, funding is critical and you can more about it here;

—->Accounts with no beneficiary
Typically, with retirement accounts, investment accounts and many times on bank accounts, there is the opportunity to name a beneficiary.  The beneficiary 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 (there are two small exceptions to the general rule: Oklahoma small estate affidavit and Oklahoma affidavit of delivery of personal property); and

—–>Real Property
An unmarried person dies owning a house and title to the house is solely in the deceased person’s name; although other states provide a process where title to real property can be transferred by affidavit, I am not aware of any similar process in the state of Oklahoma. I believe that the only way to transfer title to real property, where the person who died is the sole owner of the real property, is to get an order from a judge transferring title, out of a probate case.

Posted by Shawn Roberts in Blogposts, Oklahoma Probate

Did you know its against Oklahoma law for an employer to offer an employee a job that is morally offensive?

Indeed, while Oklahoma law and morality do not always square up, for Oklahoma employers and employees, the law tries to promote a moral workplace:

Employee Health, Morals & Wages It’s against the law for employers to have workers in jobs that hurt their health. It’s against the law for employers to have workers in jobs that hurt their morals. It’s against the law for employers to pay workers less than adequate wages.

https://www.ok.gov/odol/documents/WHMWPosterPlainLanguage–A.pdf

WHMWPosterPlainLanguage--A
Posted by Shawn Roberts in Blogposts

What is Oklahoma probate property?

In 20 years of practicing law, I have seen general confusion about probate property and non-probate property. 

My goal in this Post is to make the distinction between Oklahoma probate and non-probate property clearer.  And to add another [hopefully] helpful layer to this question, not all probate property requires that a probate case be filed.  More on that consideration below and in this post, When [and why] you might need to do an Oklahoma probate.

Probate Property
Probate property is any property (real, personal or otherwise) owned by someone who dies that is not set up to transfer automatically upon death.  Some examples are helpful:

  • Real Property.
    An unmarried person dies owning a house and title to the house is solely in the deceased person’s name; although other states provide a process where title to real property can be transferred by affidavit, I am not aware of any similar process in the state of Oklahoma. I believe that the only way to transfer title to real property, where the person who died is the sole owner of the real property, is to get an order from a judge transferring title, out of a probate case.

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

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

  • Accounts with no beneficiary.
    Typically, with retirement accounts, investment accounts and many times on bank accounts, there is the opportunity to name a beneficiary.  The beneficiary 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; and

  • 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 the 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.

No probate case required?
It is important to note that not all “probate property” requires a probate case.  Large-scale items such as real property and mineral interests require probate to change the title.  However, personal property with no title such as furniture, a gun collection or jewelry usually does not require a probate case.  That is, personal property is usually passed without a problem outside of a probate case. You can read more about whether a probate case is required in this Post.

Non-Probate Property
Non-probate property is any property owned by someone who dies that is set up to pass to someone else through a system or contract.  That means, there is a mechanism in place where the title to the property is transferred.  Again, some examples will be helpful:

  • Joint Tenancy Property
    This is real property (such as your house), where there are at least two owners that own the property as “joint tenants with right of survivorship.”  When one owner dies, the surviving owner becomes the owner of the property, without the need to do a probate case but with the need to do a couple of other legal formalities you can read about here.

  • Life Insurance
    An insurance policy is a contract between you and the insurance company. As part of the contract, you are entitled to choose who the policy proceeds go to after you pass away.  If you make at least one choice (i.e., designate a beneficiary), the person you choose will receive the policy proceeds without the need for a probate case.

  • Bank Accounts
    This is converse of the “accounts with no beneficiary” label above in this Post.  If you name a beneficiary on the account, then ownership of the account (or depending on the type of account, the account proceeds) should pass to the person you name, upon your death, no probate case required.

 

Posted by Shawn Roberts in Blogposts, Oklahoma Probate

A heartbreaking example of why choosing an Oklahoma guardian for your minor children is critical

We all have things in our life that might occupy a small space in our mind, small because we believe the things, while possible, are highly unlikely to happen. 

We allow these items to exist but don’t allow such items them to push us toward action.  One example is planning for your family if something happens to you. 

Motivators

I don’t write trying to use fear to motivate people.  I detest people who use fear (even if the claim is legitimate) to motivate me.  However, sometimes I come across an example so compelling I am moved to action to write about it, even though fear may function as a motivator. The story at the bottom of this post (if you watched ESPN’s College Gameday on November 30, 2019, you have seen the feature piece done by ESPN’s Tom Rinaldi), is one such compelling example. 

The Story

The story below is compelling because about 5 months before Rod and Paula Bramblett were killed by a teenage driver in a freak accident in May 2019, the Brambletts, while sitting down to dinner with their good friends, Andy and Jan Burchman, asked their friends the Burchams to be the legal guardians of the Bramblett’s children, ages 15 and 20.  The Burchams said “yes.”  Within a couple of weeks the Burchams agreeing to what seemed like the highly unlikely role as guardians, on May 29, 2019, the highly unlikely became horrifyingly real:

On May 25, 2019, Rod and Paula Bramblett were killed by a teenage driver who had fallen asleep at the wheel of his car, while waiting at an intersection near Shug Jordan Parkway and West Samford Avenue in Auburn, Alabama.

Guardianship for Minor Children

The subject matter is guardianship for minor children. 

Who will be the guardians of your minor children if you are not able to care for them? 

The State of Oklahoma has a plan for your children’s guardians if you do not make a plan. Far better, is for you to create a plan for your children’s guardians that identifies (a) who the guardians are and (b) what resources the guardians will have.   

This type of plan is usually done through an Oklahoma last will and testament.  You can name who you want to be the guardian and the Court, which has to make the guardianship official, almost always honors your choice.

 

 

Posted by Shawn Roberts in Blogposts

What are components of an Oklahoma estate plan using a revocable living trust?

Flickr User Matthew P

If you are thinking about taking care of your estate planning, it will be helpful to know what type of things we offer. 

Below is information on what our law firm provides if you choose to use an Oklahoma revocable living trust.

 
We provide an Oklahoma revocable living trust and related documents as part of a comprehensive estate planning package. The revocable trust package includes services which are necessary to establish a comprehensive estate plan including:
 
    • Revocable Living Trust Agreement (one, two or more depending on the facts);
    • Pour-over Last Will and Testament for Husband
    •  Pour-over Last Will and Testament for Wife;
    • Durable Power of Attorney – Healthcare for Husband;
    • Durable Power of Attorney – General for Husband;
    • Durable Power of Attorney for Healthcare for Wife;
    • Durable Power of Attorney – General for Wife;
    • Advance Directive/Living Will for Husband
    • Advance Directive/Living Will for Wife;
    • The documents necessary to transfer all trust-appropriate assets to the newly created trust such as:
      • Deeds to transfer real property to the trust; 
      • Mineral Quitclaim Deeds to transfer mineral interests
      • Memorandum of trust (real property and personal property); and
      • Assignment of personal property; 
    • Assistance in transferring all trust-appropriate assets to the trust;
    • Review, revise and finalize documents based on client feedback
    • Meeting at our office to sign and finalize all documentation;
    • Instruction letter on transferring property to the Trust, assistance in actually transferring certain items of property,
    • An Estate Planning binder which contains all of the original documents you sign.
 
If you have questions about any of this material feel free to reach out to me.  If you are interested in seeing what we offer to people when an Oklahoma last will and testament is the centerpiece of estate planning, check out this post.
Posted by Shawn Roberts in Oklahoma Estate Planning

How NOT to use an Oklahoma nondisclosure agreement

I have written about Oklahoma nondisclosure agreements and how businesses can and should use nondisclosure agreements with employees to protect confidential information.  The goal, in my opinion, is for a non-disclosure agreement to allow an Oklahoma business to protect information that gives it a competitive advantage over it competitors.

There is another use of nondisclosure agreements that morally wrong and legally perilous:  Using a nondisclosure agreement to cover up illegal or immoral actions.  An example is how formerly famous and now infamous movie producer Harvey Weinstein used nondisclosure agreements: 

To silence people who he had harassed and to silence people who knew about Weinstein’s harassment, essentially covering up his evil acts. 

Essentially, Weinstein used a proper legal tool-the nondisclosure agreement, to cover up his illegal and immoral conduct, allowing the conduct to continue for years unchallenged.

Mr. Weinstein’s gross misuse of the nondisclosure agreement is detailed by PBS in its Frontline series in What Happens If Someone Breaks a Non-Disclosure Agreement?

“We were not allowed to speak to anybody obviously, friends, family, press, public, private, about the alleged behavior, but also about our time at Miramax,” Zelda Perkins, a former assistant to Weinstein, said in an interview for the FRONTLINE documentary Weinstein. “This wasn’t a normal confidentiality agreement. This wasn’t us saying that we weren’t gonna, you know, give away corporate secrets. This was a deeply, personally binding agreement.”

Nicole Einbinder did excellent work demonstrating how one can misuse a tool that I recommend Oklahoma employers use for legitimate purposes.  You can check out the Frontline episode here:

WEINSTEIN

 

 

 

Posted by Shawn Roberts in Blogposts, Oklahoma non-compete

Can an Oklahoma Notary notarize a relative’s signature?

Oklahoma Notaries play a key role in finalizing many Oklahoma documents such as last wills and testaments, powers of attorney, deeds and real estate purchase contracts to name only a few examples. 

The Oklahoma Notary provides the certification that the person who signed the document is indeed that person.  An Oklahoma Notary Public is handy to have in most law offices and many business offices to notarize the signatures required by legal documents.

With the notary seal being so helpful, you might imagine there may be some issues created by a notary’s helpfulness and convenience.  One of those issues is whether an Oklahoma Notary Public can notarize the signature of a relative.  My instinct on this one, before researching the question, was that “no” a notary cannot notarize a relative’s signature, the same as a witness to a last will and testament cannot be related to the person making the last will and testament.  And, my instinct was mostly wrong.

According to the Oklahoma Secretary of State Oklahoma law allows a notary to notarize a relative’s signature:

A notary is an impartial witness. The law does not forbid notaries from notarizing the signatures of relatives. However, if the notarized document was ever the subject of a court suit, a judge might determine the notary was not an impartial witness.

With that in mind, my thought is that if there is someone else that can provide the notary seal for a relative, by all means, do not use the related notary to notarize a relative’s signature.

 

Posted by Shawn Roberts in Blogposts, Business Law

What business licenses are required to do business in Oklahoma City?

I believe that Oklahoma is perceived as a state with a relatively small amount of business regulations (a relaxed regulatory environment so to speak).  However, even in Oklahoma’s relatively regulation-lite environment, there are still regulations to consider if you are in business.

One example is if you are doing business within the Oklahoma City limits there are a number of occupational or business licenses you must have to be legally compliant.  Below is a list of most of the required occupational licenses and if you are looking for more information consider visiting the City of Oklahoma City’s website.

One more thing to know: The city limits of Oklahoma City are expansive and amorphous indeed the OKC City Limits are large enough to hold the cities of Philadelphia, Boston, Washington, D.C., Pittsburgh, Manhattan, San Francisco, and Miami!

Advertising License Alcoholic Beverage License
Auction Sales License Coin ­Operated Device License
Day Care And Day Camp License Dry Cleaning License
Food Service Establishment License Gasoline And Oil License
Hotel/Motel License Kennel License
Low Point Beer License Massage Establishment License
Mobile Home Park License Outdoor Sellers
Pawnbroker License Used Auto Dealer & Salvage License
Used Merchandise License Vehicle Food Sales
Vehicle Frozen Dessert Sales License  

 

Posted by Shawn Roberts in Blogposts, Business Law