Oklahoma Estate Planning for the Married Couple —-> 1 Family Trust vs. 2 Separate Trusts, one for each Spouse

Usually, the threshold estate planning question is: Do I need an Oklahoma revocable trust or an Oklahoma Last Will and Testament?

Once that question is answered and the answer is an “Oklahoma revocable trust”, the question becomes ___ Does a married couple need one joint trust or one trust for each spouse? 

The answer to this question is relatively easy for me:  Almost always it is a joint trust.  However, there are circumstances where a married couple can use a trust for each spouse more effectively than they can use one joint spouse. Below is a table summarizing the benefits of a joint trust versus separate trusts for each spouse:

1 Family Trust  2 Separate Trusts
Easy to administer during the couple’s life since there is only trust rather than two separate trusts Allows a couple to maintain separate assets to comply with a pre-nuptial agreement
Easy to track and transfer property when there is only one trust to which to make transfers In a few cases where the marital estate is very very large (probably at least valued at $23,000,000.00), there may be some federal estate tax planning benefit to each spouse having their own trust
Less expensive and less complex to administer when the first spouse passes away Protecting inheritance property.  If one spouse is going to inherit property, having a separate trust for the inheriting spouse allows the inheritance property to [usually] remain separate from the marital estate

 

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

Oklahoma “Force Majeure”: A term with which you need to become familiar

KONICA MINOLTA DIGITAL CAMERA

Despite the fancy French name, Force Majeure is not a French pastry or some act that adults perform with each other in adult settings. Force Majeure is a term that you will hear with ever-increasing frequency as the global coronavirus pandemic continues. 

What is Force Majeure? How is Oklahoma Force Majeure treated? Read on to find out.

Continue reading →

Posted by Shawn Roberts in Blogposts, Business Law

Oklahoma’s Price Gouging Law & the Coronavirus: If you don’t know it, you need to know it now

The coronavirus has paralyzed most of the country and it has not spared Oklahoma.  The virus has disrupted our lives in ways that couldn’t have been imagined even a few weeks ago:

  • Grocery stores have empty shelves;
  • Items like hand sanitizer and toilet paper, items you probably though little about before, are gone and when available they are treated like treasures;
  • Conscienceless people have bought up vast quantities of critical goods and are now selling at a King’s Ransom;
  • Schools and stores are closed; and
  • We are being told (ordered?) to stay home and stay away from people.

Enter the Oklahoma Emergency Price Stabilization Act, a law that was made for these times, no doubt about it. 

Oklahoma’s Anti Price Gouging Law
The Act protects people from unscrupulous merchants, sellers and landlords raising the price of goods or services sky-high, at exactly the time people most need the goods or services and are least able to find the goods or services. 

The Act (typically known as an “anti-gouging” law) was activated when Oklahoma Governor Kevin Stitt declared an Emergency for all 77 Counties in Oklahoma on March 15.  Below are some answers to key questions you need to know about the Oklahoma Emergency Price Stabilization Act.

To whom or what does the Act apply?
The Act applies to:

“Goods” which all things which are movable at the time of sale, rental, or lease other than the money with which the price is to be paid and includes any services which are incidental to the sale of the goods

“Services” means any duty or labor to be rendered by one person to another and includes any goods which are incidental to the performance of the service including:

  1. Sale of utilities (including electricity, natural gas, telecommunications, and cable television)
  2. Sale, rental, or lease of transportation, freight, carriage, moving, and storage, and
  3. Rental or lease of vehicles, trailers, and other equipment.

To whom or what does the Act NOT Apply?
The Act does not apply to growers, producers, or processors of raw or processed food products, except for retail sales of such products to a consumer.

What does the Act prohibit?
The Oklahoma Emergency Price Stabilization Act provides:

No person for the duration of a declaration of emergency by the Governor of this state or by the President of the United States and for thirty (30) days thereafter shall sell, rent, or lease, or offer to sell, rent, or lease, for delivery in the emergency area, any goods, services, dwelling units, or storage space in the emergency area at a rate or price which is more than ten percent (10%) above the rate or price charged by the person for the same or similar goods, services, dwelling units, or storage spaces immediately prior to the declaration of emergency unless the increase in the rate or price is attributable.

 Essentially, the Act limits prices for goods to 10% unless the price increase meets one of the Act’s exceptions, which you can find here.

What are the penalties for violating the Act?
A violation of the Act is considered a violation of the Oklahoma Consumer Protection Act.
This means a person violating the Act could be subject to a lawsuit by the Oklahoma Attorney General or an Oklahoma District Attorney for damages caused by the violation and a court order telling the violator to stop (i.e., an injunction).  




Posted by Shawn Roberts in Blogposts

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 who own 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 require 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