You facilitate asset transfers that will take place after you pass away when plan your estate. This is typically done through the utilization of a will or a trust. Many people think that a will is a simple, straightforward document that is all you need, but this is not always the case. At Parman & Easterday, we understand the complexities of estate planning and can help you navigate the intricacies of wills and trusts in Oklahoma to ensure your assets are managed according to your wishes.
Estate Administration
You name an executor to administer your estate when you use a will, but they would not be able to act independently. Under the laws of the state of Oklahoma, the will would be admitted to probate after your death.
During probate, the court supervises the administration of the estate. Assets are identified, secured, and inventoried, and the beneficiaries are notified. The executor will pay final debts, and ultimately, the assets will be distributed when the estate has been probated and closed.
Probate Drawbacks
All of the above may sound harmless, but there are some negatives that go along with probate. First, it is a public proceeding, so interested parties can access the records to find out how the estate was planned. This loss of privacy can yield negative consequences on multiple levels.
Secondly, probate expenses include the executor’s remuneration, court costs, legal and accounting fees, appraisal and liquidation charges, and other incidentals. These expenditures reduce the value of the estate before it is distributed among the beneficiaries.
Lastly, the people who are in line for inheritances are forced to play a waiting game. Probate will take about eight months at minimum in most jurisdictions, and more complicated estates can be stalled in probate for longer periods of time.
Simple Will Limitations
The beneficiaries that are named in a will receive their inheritances all at once in lump sums. This can be a source of concern if you are providing a bequest to someone that is not good with money.
In addition, the assets that are inherited would be the direct personal property of the beneficiaries. This can be problematic if you are providing an inheritance for someone who is relying on need-based government benefits.
There is also the matter of leaving an inheritance to a minor. People who are under the age of majority cannot handle their own funds, so this is another consideration.
Revocable Living Trust
The revocable living trust is another option as an asset transfer vehicle. When you use this type of trust, you would be the trustee, so you would maintain control of the assets. In the trust declaration, you name a successor trustee along with your beneficiaries.
After your death, the trustee would follow your instructions and distribute the assets to the beneficiaries. The administration of the trust will not be subject to probate, so the drawbacks that we looked at above would be avoided.
Plus, you can include spendthrift protections. The trust will become irrevocable after your passing, and the assets that are held by the trust would be protected from creditors. You can also instruct the trustee to provide limited distributions over an extended period of time.
If you are naming a minor child as a beneficiary, the trustee would manage the assets on behalf of the minor per your recorded instructions. You can also account for incapacity by naming a disability trustee to step into the role during your lifetime in the event of your incapacitation.
Other Types of Trusts
There are also irrevocable trusts that serve certain purposes. For example, you can use a supplemental needs trust to provide resources for a loved one with a disability without impacting government benefit eligibility.
An incentive trust can be used to guide a beneficiary toward positive behavior or away from self-destructive actions. High-net-worth individuals use certain types of trusts to gain estate tax efficiency.
These are a handful of scenarios that can be addressed through the utilization of a trust, and there are others. When you work with our firm, we will learn about your situation and your objectives and explain your options so you can make informed decisions.
Create a Will or Trust in Oklahoma City!
If you are ready to work with an Oklahoma City estate planning lawyer to create a will or trust, we can help. You can call us right now at 405-843-6100 to schedule a consultation appointment.
We also have an estate planning office in Tulsa, OK that can be reached at 918-615-2700, and you can use our contact form if you would like to send us a message.
