Author Archives: Tyler Barrett

“The cost is more than I expected.” I’ve heard this on several occasions during estate planning consultations, which is understandable. You’ve got a mortgage and other bills to pay, a family to support. Many people think of estate planning as a luxury: sure, it’d be nice to have, but it’s not something you absolutely need. Unfortunately, the absence of estate planning can cause families to self-destruct upon the death or disability of a loved one. No will or trust may lead to bitter disputes over how property should be distributed. Not having a durable power of attorney could force family members to seek guardianship of someone who is incapacitated in order to manage that person’s financial affairs. The lack of an Advance Directive for Health Care might require you to make agonizing decisions about your loved one’s end-of-life medical treatment. In each of these scenarios, protracted and expensive litigation may follow. I’ve seen this in my own family. Helping others prevent the same thing from occurring is my passion. It’s what motivates me.

Like contributing to your 401(k) or IRA, estate planning is an investment in your future. You’ve worked hard your whole life. You have built a legacy that is worth protecting. And you deserve the peace of mind in knowing that your family is taken care of if anything happens to you. That peace of mind is truly invaluable.

Whenever somebody creates a last will and testament, they designate a personal representative (also called an executor). What are the duties of a personal representative, and what should you expect if a family member or loved one appoints you as personal representative under their last will and testament? Answering these common questions is the subject of today’s post.

Initially, there are no responsibilities upon being named personal representative under a family member or loved one’s last will and testament. That’s because a last will and testament does not take effect until after the death of the testator (i.e. the person who made the last will and testament). After the testator has passed away, the personal representative’s work begins.

First, the personal representative should locate the original last will and testament. While some probate courts accept a copy of the last will and testament, most require the original. Next, the personal representative should contact a probate attorney. Oklahoma law allows personal representatives to represent themselves in probate. That said, probate procedures are complicated, and any mistakes by the personal representative could lead to costly and time-consuming litigation. Once the probate case is filed in court, the personal representative must give notice to creditors as well as to parties interested in the deceased’s estate. In addition, the personal representative needs to ensure that all necessary tax returns have been filed.  Lastly, the personal representative is responsible for distributing the deceased’s property and assets to the heirs and beneficiaries as ordered by the court.

Serving as a personal representative is no easy task. However, you can lessen the burden by coordinating with the testator during their lifetime and hiring a competent probate attorney before filing for probate.

You signed the trust documents. Your estate planning is complete, right? As Lee Corso of ESPN’s College GameDay would say, “Not so fast, my friends!” For a revocable living trust to work as intended, it must be fully funded. Otherwise, the trust is worth little more than the pieces of paper on which it is written.

Trust funding refers to the process of re-titling your assets in the name of the trust. This means drafting new deeds for your house and other real property, signing new signature cards at the bank, completing new beneficiary designation forms for retirement accounts and life insurance policies and possibly more. Sounds like a lot of work, huh? It is. However, this is a vitally important — and often overlooked — part of estate planning.

Some estate planners contend that trust funding rests solely on the client’s shoulders. Others, such as myself, believe trust funding is a responsibility shared by both client and attorney.  I provide all of my clients with detailed instructions for transferring assets to their trust, and I coordinate with the client as well as their advisors, financial institutions and employers to make sure everything is in order.

Revocable living trusts offer significant benefits including probate avoidance, increased privacy, dealing with incapacity and greater flexibility for your heirs and beneficiaries. While trust funding entails a bit of extra effort, it is definitely worth your time.

Our society highly values private property rights and the freedom to contract. As a result, the legal system gives significant deference to an individual’s choices regarding the disposition of their estate. Provided a will or trust was executed according to law, courts are very reluctant to declare it invalid. One exception is in cases of undue influence.

What is undue influence? It is not merely influence of a general nature; for instance, a son or daughter suggesting that their parents contact an estate planning attorney. Rather, undue influence exists whenever there is a level of coercion such that another person’s wishes are substituted for those of the person making the will or trust. The classic example of undue influence is a caretaker abusing the trust and confidence of an elderly patient and convincing the elderly patient to disinherit family members in favor of the caretaker.

Keep in mind, however, that the burden of proving undue influence lies with the party contesting the will or trust. Typically, this is a difficult hill to climb. Some factors that give rise to a presumption of undue influence include whether the will or trust’s maker was of advanced age or impaired faculties, whether the person charged with undue influence was present and/or active during preparation of the will or trust and whether the will or trust’s maker had independent and disinterested advice.

If you think a loved might have been unduly influenced in making their will or trust, then it is a good idea to consult with a knowledgable attorney about your options.

In my opinion, a revocable living trust is the best estate planning tool available to avoid probate, maintain the privacy of your affairs and provide for incapacity or disability. However, for some people, a revocable living trust may not be the right fit. In these instances, it makes sense to consider a transfer-on-death deed, which is authorized by Title 58, Section 1251, et seq., of the Oklahoma Statutes. A transfer-on-death deed is signed by the record owner of an interest in property, designating a grantee beneficiary or beneficiaries of the interest. Like other types of deeds, it is filed in the county land records. Yet, a transfer-on-death deed does not take effect until the owner’s death. At that time, the grantee beneficiary or beneficiaries accept the property by executing a short affidavit, attaching the affidavit to a copy of the owner’s death certificate and recording the affidavit and death certificate in the county land records. This must be done within 9 months of the date of death.

Assuming all of the legal requirements are complied with, transfer-on-death deeds avoid probate. Transfer-on-death deeds also allow one to retain control of their property while they are living. Finally, transfer-on-death deeds avoid some of the negative tax consequences involved with joint tenancy and other forms of co-ownership.

I recently read an article on Forbes.com discussing Americans’ attitudes regarding long-term care insurance. Unsurprisingly, most were price sensitive and hesitant to use their home equity as an alternative method of financing their care. That’s why it makes sense to consider planning for the possibility of long-term care in your estate plan. Through the use of special trusts, promissory notes and structured gifting, one can protect most of their assets from the costs of long-term care and make it easier to qualify for assistance from Medicaid in the event that’s necessary. However, these measures must be put in place well in advance of the need for long-term care in order to be fully effective.

You can check out the Forbes article at this link: https://www.forbes.com/sites/howardgleckman/2015/08/19/when-it-comes-to-long-term-care-insurance-americans-dont-get-it/

Last month, President Obama hosted the White House Conference on Aging. The gathering of elder care advocates and experts has been held every decade since the 1960s. Now, the federal government has launched a website to serve as a one-stop shop for older Americans seeking resources on aging. The website covers everything from filing for Social Security benefits to planning for retirement and long-term care. I definitely recommend checking out the site, which you can visit by clicking on this link.

Maybe you want to provide for yearly family vacations. Or perhaps you’d like to help with the cost of college education for your grandchildren. Whatever the reason, we instinctively seek to ensure that the next generation has it just a little bit better than we did. But how safe is your children’s inheritance? The answer is: not as safe as you think.

A variety of factors could mean that what’s here today is gone tomorrow. However, the two main dangers to the legacy you pass down are creditors and predators. Creditors come in different forms. It could be credit card debt or medical bills. There is also a less obvious type of creditor: the holder of a lawsuit judgment. Imagine this: you work hard to build a nest egg for your family. You put in place a will, trust and other estate planning documents. You enjoy a long, healthy retirement. It seems as though you’ve done everything right, and on the surface, you have. Now imagine this: the day after you pass away, your son or daughter is involved in an auto accident. Then the other driver brings a lawsuit against that child, which the other driver wins. That money you left behind? The court could order that it be paid to the driver with whom your child was involved in the auto accident. Scary thought, right?

The other primary threat to your legacy are predators. Think Bernie Madoff or the business partner who defrauds your loved one. More worrisome are divorcing spouses. Here is the common scenario: Party A receives an inheritance and deposits the money into a joint account with his or her spouse, Party B. The inheritance has now become marital property. Thereafter, Party A and Party B divorce. In divorce proceedings, marital property is usually split 50/50. That means Party B is likely to be awarded a portion of the inheritance. Surely the parents of Party A did not intend to benefit their now former son-in-law or daughter-in-law. Yet, that’s the result.

Fortunately, you can structure your estate plan so as to alleviate many of these concerns. It’s called continuing trusts, something we will discuss in detail next time.

Anyone who knows me is aware of my love for Mad Men, the critically-acclaimed AMC drama which concluded its run in May. Like most fans of the show, I was sad to see it end. Apart from its entertainment value, Mad Men tackled serious subjects such as identity, race relations and sexism. Reflecting on the final episodes, it is also clear that we can learn much from the show’s iconic lead, Don Draper, and the other cast of characters. In that spirit, here’s what Mad Men can teach us about estate planning.

1. A Durable Power of Attorney is important. Mad Men’s final season saw the advertising agency Don and his longtime colleagues had worked so hard to build absorbed by the much larger firm of McCann Erickson. Combined with the turmoil in his personal life, this prompted Draper to set out on a cross country road trip that took him from Manhattan to Alva, Oklahoma and eventually to California, where he would find the inspiration to create Coke’s famous “Hilltop” commercial. In typical fashion, Don told no one (except for daughter Sally) where he was or what he was doing. That may have created the space Don needed to finally come to terms with himself as a person, but going missing can leave one’s financial obligations neglected and make things difficult on loved ones who lack the legal authority to deal with your property and money. Believe it or not, a well-drafted Durable Power of Attorney can account for a sudden disappearance by allowing an Attorney in Fact to step in and manage your affairs in your absence.
2. As your life changes, so should your estate plan. If one thing other than being an advertising genius defined Don Draper, it was his love for the ladies. Over the course of seven seasons, Don had numerous flings, one-night stands and affairs. Now, it’s a bad idea to cheat on your spouse or lie to your family about your past. However, the fact is that many marriages do end in divorce. In the event you find yourself in this unfortunate situation, you should definitely update your estate plan. Under the laws of Oklahoma and most other states, gifts to your former spouse in a will or trust are automatically revoked. Nevertheless, this does not affect beneficiary designations on IRAs, 401(k)s and other retirement accounts — which comprise a major portion of most people’s net worth. Furthermore, much of the estate and income tax planning done in the will or trust of a married person hinges on their marital status. Therefore, after a divorce, it makes sense to explore other ways of reducing the future tax burden to your heirs. Notwithstanding the possibility of divorce, it is prudent to reevaluate your estate plan as you age and your values change over time. In “Person to Person”, the series finale of Mad Men, we see Roger Sterling change his will to benefit the son he had with longtime lover Joan…which brings us to our next lesson.
3. Never leave property to a minor outright. If you have provided for your children or grandchildren and they are still minors at the time of your death, property left to them outright in your estate plan will require a guardian to be appointed. Obtaining a court-ordered guardianship can be an expensive and time-consuming process. Therefore, the better practice is to set up a trust for the minor or name a custodian to hold the property on their behalf pursuant to the Oklahoma Uniform Transfers to Minors Act.

We’ve all likely heard of probate. However, most of us probably aren’t aware of the intricacies involved in the court-supervised process for distributing the property of a deceased person. Keeping that in mind, here are five little-known facts about probate.

1. It is avoidable. You can prevent your estate from ending up in probate court by transferring all of your property to a revocable living trust. You can also avoid probate by designating beneficiaries on your financial accounts and life insurance policies and utilizing transfer-on-death deeds for real estate.
2. You typically must notify all immediate family members, even those who aren’t named in the will.  The Oklahoma probate statutes require that formal notice of the proceedings be given to everyone named in the will and to all heirs-at-law, meaning those who would have been entitled to inherit had the deceased died intestate (i.e. without a will). Heirs-at-law are usually the deceased’s surviving spouse, children or grandchildren.
3. The Personal Representative must publish a Notice to Creditors in the newspaper. Under Oklahoma law, the Personal Representative of the estate must search the deceased’s files and other personal effects to determine whether the deceased had loans or unpaid bills. Even if it appears that there are no creditors, the Personal Representative still must publish a Notice to Creditors in the newspaper and allow time for anybody with claims against the estate to come forward.
4. Not all of the deceased’s property goes through probate. As discussed in #1 above, property titled in the name of a revocable living trust does not go through probate, nor do accounts or policies with beneficiary designations and real estate subject to a transfer-on-death deed. In addition, property owned in joint tenancy passes automatically to the surviving joint tenant without the necessity of probate.
5. More than one probate could be necessary. Initially, the deceased’s estate will need to be probated in the county and state where he or she resided at the time of death. After that, additional probate cases may have to be opened and completed in other states where the deceased owned property in order to transfer that property to the people named in the will.

As you can see, probate has the potential to be an expensive and time-consuming process that diminishes privacy and opens the door to claims by creditors and disgruntled family members. If you are responsible for an estate,  it’s imperative that you retain legal counsel to ensure that everything is done properly. On the other hand, those thinking about estate planning should strongly consider a revocable living trust or other options to avoid probate.