Oklahoma Estate Planning is something that every Oklahoma family and person needs to consider. Estate planning is about looking at what you have, who your family and how you want to take care of your family.
Intentional Disinheritance
Distribution of Property
Attestation Clause
This is the clause that makes Will “legal” under Oklahoma law.
Self-Proving Affidavit
The unified credit is automatically provided by the IRS Code to every US citizen at their birth. This credit is the amount of property that a person can gift away before they owe any tax to the IRS.
That means that all the gifts you make during your life are added to all the gifts you make at your death (through an Oklahoma Trust, Oklahoma Will, or otherwise) and that is the basic amount that the IRS considers for taxation.
Tender Leaf Tea Coupon from Flickr User AVI
Well, the IRS’s “coupon” is not exactly like scoring big with a $2.00 off coupon for Tide Detergent. The IRS administers the unified credit.
The unified credit is automatically provided by the IRS Code to every US citizen at their birth. This credit is the amount of property that a person can gift away, either during life or at death, before they owe any tax to the IRS.
The coupon analogy is helpful because when a person passes, the person’s heirs can apply the IRS Unified Credit against against tax that might be owed by the deceased person.
For more specifics about the IRS unified credit, check this post, How does the IRS Unified Credit work?
Since the word “gift” is at the heart of federal estate taxation, it makes sense to understand how the IRS views the term IRS Gift. The IRS states that a gift is:
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.
Definition
Summary probate is a shorter, quicker version of a full-blown probate. Rather than there being two hearings in front of the Judge, there is only one hearing, at the end of the process. To give you an idea of what to expect, below is a diagram of how the Oklahoma summary probate process usually flows through the court:
Visualized
Does your estate qualify?
To qualify for summary probate (technically referred to as “summary administration”), the estate must meet one of the following criteria:
1. The value of the estate is less than or equal to $200,000.00;
2. The decedent has been deceased for more than five (5) years; or
3. The decedent resided In another jurisdiction at the time of death.
Living Trust vs. Simple Will
This table compares the benefits of the revocable living trust and a simple last will and testament. A revocable living trust is an agreement that determines how a person’s assets are handled during their lifetime and how it is distributed after death. A simple Will distributes a person’s assets after death.
You can rest easier knowing you have provided for your family and created an orderly plan to transfer what you have to who you want it to go to. Once you have this done, there are several times in your life when you may need to consider updating the Will or Trust to match current your circumstances. Let me mention a few:
1. You have another child.
2. Someone named in your Will to act as your personal representative (executor) either is no longer around or no longer wants to serve.
3. Someone in your Will who you left a large part of your estate to has passed away.
4. Children named in your Will or Trust have grown up and are ready to receive their inheritance with fewer strings attached to it or no strings at all.
5. You have divorced, suffered the death of a spouse or remarried. (It is particularly important in a second marriage that involves children from previous relationships to carefully plan your estate).
6. You have simply changed your mind about what you want to give, who you want to help administer your estate or who to whom you want to give your property.
You update your Will or Trust because you want it to reflect your current thoughts and circumstances. If circumstances have changed, feel free to contact me to discuss updating your Will or Trust at sjr@shawnjroberts.com.
While it is not the most exciting part of the estate planning process, nominating the people you want to be the guardian of your children obviously has a huge impact. When parents pass away, the guardianship of minor children is established by a court. The court either follows a statute which lists relatives who are entitled to be named guardians or, looks to your nomination. If the court is required to name a person listed in the statute, there is more potential for conflict over who is named the guardian.
Conversely, the nomination is important because unless there are specific facts that make the people you nominate unfit, the Court usually appoints the people who are nominated. You “nominate” people by simply naming them in a Will or Trust. In the process of addressing many other estate planning issues, people can cover the issue of guardianship.
Tomorrow, I will discuss the factors to consider in determining who your guardian(s) should be.
Vic from Flickr https://www.flickr.com/photos/59632563@N04/6239670686 License: https://creativecommons.org/licenses/by/2.0/
I have talked quite a bit both on this blog and in my Oklahoma estate planning podcast about how the living trust in last will and testament work together. However, I realize there are still some questions about why someone would have a will if they already have a living trust. Also, the question comes up “why would I need a trust if I already have a last will and testament”?
Usually when you have a living trust you will also have a last will and testament which is often known as a pour-over will. The purpose of this will is to send any property that has not been transferred to your trust at the time you pass away to the trust. The living trust is still the primary document that controls your estate and disposes of your property. The pour-over will is a safety net that simply provides that all of your property goes to your living trust.
If you have a fully functional last will and testament, you probably will not have a living trust. In this case, the last will and testament will actually determine where your property goes, nominate guardians for your minor children and address other issues related to death in the transfer of property.
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.
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