So, you decided to do estate planning. Congratulations! You are doing the right thing to protect your loved ones if something happens to you. However, that’s just the first step. It’s critical that your documents be set up correctly in order to avoid future problems. With that in mind, let’s take a look The Top 3 Mistakes To Avoid In Your Estate Planning.

Naming a trustee or executor is one of the most decisions you’ll face in your estate planning. There are several different types of trustees and executors from which to choose, be it a bank/trust company, a CPA or a family member. But have you thought about naming a successor trustee or executor? If the person or entity you selected cannot serve and no successor is designated, then a court could end up appointing a trustee or executor for you. This may or may not be someone with whom you’d be comfortable. For that reason, be sure to name at least one alternate in your will or trust. In addition, your durable power of attorney should name an alternate agent and your advance directive for health care should name an alternate health care proxy.

The second mistake to avoid in your estate planning is designating a minor or your estate as beneficiary of retirement accounts and life insurance policies. If a minor is a beneficiary of a 401(k), IRA or life insurance policy, then guardianship proceedings in court will be necessary. Guardianship can be both expensive and time-consuming. On the other hand, if your estate is beneficiary, then probate is required — even if you have a trust. This could subject the account or policy proceeds to the claims of creditors and disgruntled family members.

Finally, you want to avoid what’s known as an unfunded trust. A little-known fact about trusts is that simply drafting the trust document itself does not put your assets in the trust. Rather, you must re-title your assets in the name of the trust by executing deeds for houses and other real property and signing new signature cards for bank accounts as well as a written assignment for items of personal property such as jewelry, antiques and furniture. If this is not done, then your goals of probate avoidance, maintenance of privacy and tax avoidance/minimization might be defeated, rendering your trust worth little more than the paper it’s on.

The foregoing is not a comprehensive list, but if you avoid these mistakes, you are well on your way to a solid estate and peace of mind knowing that your loved ones are protected.

Whether you have $20 million or just own a modest home and small bank account, everyone should have an estate plan. Wills, trusts, durable powers of attorney and medical directives protect your loved ones, ensure that your wishes are followed and ease the burden on the people to whom your assets pass down. Without these crucial legal documents, your estate could be tied up in probate court and your family may incur unnecessary taxes and administration costs.

Most people do not have even a basic estate plan. Furthermore, a lot of people are unaccustomed to working with attorneys or believe that the legal fees associated with estate planning are too high and not worth the investment. That’s why I believe public education on this topic is imperative.

On Wednesday, October 14, 2015, at 2:00 p.m., I will be presenting “Understanding Estate Planning and Living Trusts” at the Moore, Oklahoma Public Library. This free seminar is open to the public. Anyone who has thought about estate planning but just doesn’t know where to start is encouraged to attend. We will discuss the basics of estate planning and living trusts and how estate planning can give you peace of mind, leaving you free to enjoy what you’ve worked so hard to earn knowing that your loved ones will be taken care of.

Attendees will be entered into a raffle for a $100 gift card to Charleston’s Restaurant in Norman. Attendees will also have the opportunity to signup for a free initial estate planning consultation with me as well as receive free digital access to my upcoming eBook on estate planning. Check back in the coming weeks for more information and updates. I hope to see you there!

Earlier this summer, I wrote about the importance of keeping your estate plan up to date. How do you know if your estate plan is up to date? In making this determination, there are several things you should think about. Here are a few of the key indicators.

First, do you have a will or trust?  This may seem like a silly question, but the reality is that the most common estate plan is not having an estate plan at all. In surveys, the reasons cited most often for not having an estate plan are the high cost of legal fees and the mistaken belief that only the wealthy need an estate plan. With regard to the former, it’s true that advice and services from a good estate planning attorney can be expensive, running anywhere from several hundred to a few thousand dollars. However, consider this: the AARP found that, nationwide, attorney’s fees in probate cases could total $1.5 billion a year. The fees and expenses of probate are paid not by you, but instead by the loved ones to whom your assets pass after your death. What’s more, if you do not have a will or trust, then state law determines how your assets pass, to whom they pass and when they pass, tying up your estate in probate court and possibly leading to your estate being consumed by creditors. The good news is that you can take control, and even avoid probate with a revocable living trust or other estate planning techniques.

Another indicator that your estate plan might need to be updated is if your will or trust has not been professionally reviewed within the last two years. The laws impacting your estate planning are constantly changing, as Congress, the courts and state legislatures are always busy rewriting the rule book. With the American Taxpayer Relief Act of 2012 (ATRA), Congress made major changes to the estate and income tax laws. Depending on your particular situation and the size of your estate, your will or trust might not account for these changes, potentially resulting in additional taxes and administration costs for your family.

Finally, if you have a will or trust, do the beneficiary designations on your retirement plans and life insurance policies align with the distribution of your assets as set out in the will or trust? Your choice of beneficiary can have significant tax consequences. Further, inadvertently naming a minor child or your estate as beneficiary (even as a secondary or alternate beneficiary), could lead to guardianship proceedings for the minor child or may subject the proceeds of your retirement accounts and life insurance policies to the claims of creditors in probate. Consulting with an estate planning attorney is the only way to be certain that you have made the proper beneficiary designations on your retirement accounts and life insurance policies.

These are just some of the indicators that your estate plan needs to be updated. If it has been a few years since you signed your estate planning documents, it’s a good idea to review them with a lawyer. Estate planning is not a one-time event. Rather, it’s the continual process of protecting what you’ve worked so hard to earn.

Earlier this week, President Obama hosted the 2015 White House Conference on Aging. Experts as well as advocates for older adults and their families convened for the event, which has been held about once a decade since 1961. Among other things, attendees discussed a proposal to help states establish retirement savings programs for people whose employers do not offer a 401(k) or pension plan.

Source/more: AARP

The durable power of attorney is an important document to have in your estate planning portfolio. It allows a person you trust to make financial and health care decisions on your behalf if you cannot make these decisions on your own. Absent a durable power of attorney, court-ordered guardianship is the only way someone else can deal with your affairs in the event you become incapacitated.

At minimum, a durable power of attorney should give the named agent the ability to handle routine financial and health care matters, such as paying bills, opening mail, buying and selling real and personal property, making deposits to and withdrawals from bank accounts and consenting to medical treatments. In addition, there are less obvious things that one should consider including. Among these are the power to manage digital assets and obtain passwords to email and social media accounts, the power to fund recreation and travel and the power to provide for pet animals. If there’s a possibility that you could someday require long-term care in a nursing home, you might also want to empower your agent to make gifts and spend down your estate in order to qualify for Medicaid benefits.

This is not a comprehensive overview of everything that goes into a durable power of attorney. In doing your estate planning, you should talk with your estate planning lawyer not only about what powers to include but also about who to name as your agent, which is a crucial decision.

With the recent decision of the U.S. Supreme Court legalizing gay marriage nationwide, same-sex couples — especially those who are going to marry — should think about their estate planning needs. Now that states must allow same-sex couples to marry and honor same-sex marriages legally performed in other states, there are several estate planning tools available to same-sex couples that were previously limited to people in heterosexual marriages.

For more information, check out the link below to an op-ed I wrote for the Norman Transcript, which appeared yesterday in the paper’s business section.

https://www.normantranscript.com/news/business/u-s-supreme-court-opens-new-doors-for-same-sex/article_41e98733-ca44-5d00-bc66-a7b65dc35160.html

In the past, lawyers attracted new clients primarily through word of mouth referrals and, perhaps, ads in the yellow pages. Today, however, many people turn to the internet in order to find a lawyer and meet their legal needs. Two of the most prominent online lawyer directories are Avvo and Justia. These sites allow prospective clients to search for a lawyer by both geographical and practice area. You can also post legal questions for lawyers to answer. While nothing substitutes for going to a lawyer’s office and receiving in-person counsel, online lawyer directories are a good starting point because they help people flesh out what exactly their legal issue is and determine whether they even need to hire a lawyer in the first place.

Check out my Avvo and Justia profiles at the links below:

https://www.avvo.com/attorneys/73069-ok-tyler-barrett-4635916.html

https://lawyers.justia.com/lawyer/tyler-r-barrett-1505489

My post yesterday focused on when probate is necessary. As I discussed, probate is required whenever a person dies owning property in his or her name alone. There are several downsides to probate, namely, the time and expense to your heirs and the potential for creditor claims and disputes by disgruntled family members. Therefore, when planning your estate, trying to avoid probate is something that makes a lot of sense in most cases. How you do that is the subject of today’s post.

There are a few primary mechanisms for avoiding probate. Each has its advantages and disadvantages. It’s best to consult with a knowledgable estate planning attorney to determine which strategy is right for you based on your goals as well as your personal and financial circumstances.

One way of avoiding probate is through the use of beneficiary designations and transfer-on-death deeds. Beneficiary designations refer to naming one or more individuals who receive the proceeds of your life insurance policies, bank accounts, 401(k) or IRAs and pensions upon your death. Typically, this costs nothing and is accomplished by filling out a simple form provided by the financial institution. A relatively new phenomenon, transfer-on-death deeds are used to pass down your house or other real property without going through probate. Transfer-on-death deeds are recorded in the county land records like a normal deed; however, as the name implies, the deed does not take effect until after your death. All your heirs have to do is file a short affidavit within 9 months after you pass away. The advantage of beneficiary designations and transfer-on-death deeds is their simplicity. Yet, this method of avoiding probate may only work well for small, simple estates — as it does not give you the ability to minimize or eliminate estate taxes or to control the manner in which your heirs receive their inheritance (meaning they are free to spend it however they choose).

Another method of avoiding probate is owning your property and assets in joint tenancy. If you are married, it’s likely that you own your house this way. Title to property or accounts owned in joint tenancy usually reads, “A and B, as joint tenants with right of survivorship.” Like beneficiary designations and transfer-on-death deeds, the value of joint tenancy is its simplicity; you just need to make sure the wording shown above is on your deeds, policy forms and account signature cards. That said, there are significant drawbacks to joint tenancy. First, joint tenancy only avoids probate on the death of the first joint tenant to die; whenever the surviving joint tenant dies, their estate will go through probate. Second, and perhaps more importantly, joint tenancy can entail negative tax consequences in the form of increased capital gains taxes.

Finally, you can avoid probate by setting up a revocable living trust. Although more expensive than the other options, a revocable living trust affords the most flexibility in your estate planning. You retain full control of your property and assets while you are alive. Furthermore, if you ever become incapacitated due to Alzheimer’s disease, stroke or other illness, a successor trustee can take over and manage your finances on your behalf. Best of all, a revocable living trust permits you to decide what your heirs do with the inheritance you leave them and to protect that inheritance from lawsuits, creditors or your heirs’ ex-spouses. For instance, you could give your successor trustee full discretion in making distributions from the trust and direct that distributions be made for specific purposes, such as education or down payment on a first home.

Beneficiary designations and transfer-on-death deeds, joint tenancy and a revocable living trust all avoid probate. There is no one-size-fits-all in estate planning. A combination of these options might be used. Estate planning is highly individualized, so a knowledgable estate planning attorney can help you create an estate plan that will give you peace of mind.

Probate refers to the court-supervised process of settling a deceased person’s affairs and distributing their property and assets to the rightful heirs. When is probate necessary? Probate is required any time someone passes away owning property in his or her name alone. One example is a deed for a house that lists only the deceased person. Another example is a bank account or life insurance policy which is titled solely in the name of the deceased person and does not designate a beneficiary to receive the proceeds upon the death of the account owner or policyholder.

Depending on the size of the estate and whether there are creditor claims or other disputes, a probate can take anywhere from 4 or 5 months to over a year to complete. Obviously, this can entail significant attorney fees and costs. Therefore, if possible, it’s best to avoid probate. A common misconception is that having a last will and testament avoids probate. It does not. However, there are other ways you can bypass the probate process and ensure that your family and loved ones are provided for and able to enjoy their inheritance in a more efficient, cost-effective manner. How to avoid probate will be the subject of my next post.

I was listening to National Public Radio this morning when I heard a story which was very interesting to me on both a personal as well as professional level. It was about the coming “silver tsunami”, referring to the retirement and aging of the Baby Boomer generation. The primary focus of the story was the impact on caregivers, but what really struck me was a statistic: according to a recent estimate, 7 million Americans will have Alzheimer’s disease by the year 2025, and millions more will be afflicted by various other types of dementia.

This got me thinking about my clients. Two of my grandparents suffer from Alzheimer’s, and I’ve seen firsthand how this terrible disease can not only rob a person of their memory but also jeopardize their finances and the future of their family. With nursing home costs on the rise, many people will be forced to turn to Medicaid to pay for their care. Unless proper measures are taken, the result could be having to “spend down”, i.e. lose, most of your assets and property in order to qualify for benefits. What’s more, if you do not put in place a Durable Power of Attorney and Advance Directive for Health Care before you become incapacitated, then your family and loved ones may not be able to provide for your care without going to court and obtaining a guardianship — a costly and time-consuming proposition.

Nobody wants to get older or think about the possibility that they will get Alzheimer’s disease of dementia. For that reason, many of us neglect to properly plan for the future. However, a much worse outcome is the burden your family and loved ones could face and the tough choices they might have to make if you wait to do estate planning and long-term care planning until it’s too late.

Here is a link to the text and audio of National Public Radio’s story: https://www.npr.org/sections/health-shots/2015/06/29/417205451/can-technology-ease-the-burden-of-caring-for-people-with-dementia