Nov 29

How to avoid probate

Probate is the legal process of settling a deceased person’s (“Decedent”) last issues (debts owed, taxes due, who were his heirs, what property was solely his on death) and then distributing all remaining property to the heirs at law, or the persons named in the Decedent’s valid Last Will and Testament. The process is usually viewed as a necessary evil and takes anywhere from six months to two years to complete with the Court and attorneys usually in control throughout.

But probate can be avoided, all it takes is some planning while you are alive.

A revocable living trust is the most effective way for a family to avoid probate after death. An individual places assets in a trust, and all assets within the trust avoid probate. The trust passes on to the persons named by the creator or grantor. This technique, when properly maintained, allows all property to skip probate, and allows the grantor to ensure his guidelines or restrictions last well after he passes away.

Payable on death designations on banking and financial accounts (and now real estate in Oklahoma) allow a person to designate a beneficiary to receive the particular asset. This allows the property to go straight to the named beneficiaries without court involvement.

Joint tenancy with rights of survivorship is perhaps the most commonly used estate planning technique. This involves naming another individual (or more) as a current owner on property, but also stating that if you die, your interest in the property automatically transfers to the other named joint owners. This is commonly used between husband and wife and works well, but it really is just a way to delay probate, not to avoid it.

Gifting property is another way to avoid probate. I met with a nice family just today that wanted to know what all they had to do to probate their mom’s estate. My first question to them was, “What property did she have in her name when she passed?” Their answer was only a checking account, but it was POD to the daughter. She had gifted all of her other property (house, land, other cash) to her children about a year before. They were happy to hear that a probate was not needed, because there wasn’t any estate to be administered.

All of these options have positives and negatives. Some of them, in my view, have way more positives (the revocable living trust), and some have way more negatives (joint accounts subject your property to other owners’ creditors). The best way to know what is best for you and your family is to come in and talk with a qualified estate planning attorney.

Nov 27

What a Will does (and does not) do

Common Question: I have a will. It may be a few years old, but not much has changed in my life, so why do I need to review it and look at other areas of my estate plan.

Summary: A will is the standard document most people think of with estate planning. It is based off of common law and was the standard for imposing your wishes back in turn of the century (the 16th Century!!) England. That being said, a Last Will and Testament still functions in the same way that a horse still functions for transportation…it will still get you there (distributing assets after your death), but it will just take a little longer and is not as comfortable for those going along with it (your surviving family).

What a Will does: Nothing, in and of itself. It is a document where one lays out his wishes while he is alive and has capacity for who he wants to get what after he dies. The Will cannot do this on its own and has to be presented to a probate court for actual proving and following through, according to the rules of the Probate Court. It does let one name who gets what, and who is in charge, but other than that, there is little more a Will actually does. The probate court is always in charge and can override what the last will and testament says.

What a Will does not do: It does not go into effect until the maker actually dies and is admitted by the Probate Court, so it has no effect during the maker’s life. Thus, the Will does not plan for incapacity (where the maker can no longer sign for himself), taxes, or creditor protection. In addition, as mentioned above, the Will does not stand  on its own, so it has to be presented to a probate court for authentication and interpretation. If court avoidance is an objective, one should look at a revocable trust, durable powers of attorney, or other planning.

Much like the transportation example above, there are many developments in the law related to estate planning. A last will and testament can work, but you should know your options when you look at your plan. As always, if you want to specifically review what you want to do, I will offer a complimentary consultation with the mention of this website. Just call 580-318-8829 to set up an appointment.

Brent S. Howard is an estate planning attorney in Altus, Oklahoma that focuses solely on wealth transfer and family wealth building. This is commonly done through planning with wills, trusts, limited liability companies (LLC) and other family planning instruments.

Nov 25

Probate services offered

Just a reminder to everyone in Altus, Hobart, Hollis, Frederick and southwest Oklahoma, that the law offices of Brent S. Howard, attorney, offer the most affordable and time efficient probate services in the area.

Generally, if the estate only has a few items in it and the value is less than $175,000, my office will prepare all items for the probate or administration for a flat fee and can have the probate completed within seven weeks. (This is if there are no issues that arise, like siblings fighting or valuation issues.)

If the probate estate is larger, then my office will still work with your family to ensure you have an affordable probate to transition the legacy to the next generation.

If you live out of state, then call my office at 580-318-8829 or email to the link in the upper corner and discuss what options are available for you and your family with a no-cost consultation.

Nov 06

Out of Office

I will be out of the office the remainder of the week. I will be going on my final tour with the Oklahoma Ag Leadership Program (OALP). Our Class will be leaving from Stillwater and traveling to Claremore, Vinita, the Port of Catoosa, Adair, and Tulsa for three days of agri-touring. After this session, there is only one more left prior to our overseas trip to South Africa in February.

If you need anything while I am out of the office, please send an email or leave me a voicemail and I will try to address the issue as soon as possible.

Nov 05

Friendly reminder

I have been visited by two individuals this past week who wanted me to look into their tax issues. Both had similar issues and were caught by surprise when they owed taxes, but in short order, I was able to give them the information they were lacking, although it was not the answers they sought.

Both individuals had taken early withdrawals from their retirement account in order to make necessary payments on other needs. When they took these early withdrawals, there was income tax withheld and they thought they would be covered, however, as I explained to them, if a withdrawal is taken prior to the employee separating from service (for 401(k)s and similar) or prior to the taxpayer being 59 years old, there is an additional 10% penalty tax imposed.

Although I could not help them because the distributions had already taken place, I thought I would remind the world that there are penalties and taxes you need to be aware of, should you start looking at your retirement account too soon.