If you die without a will or a properly funded revocable trust, then the State of Oklahoma’s laws direct who receives your property. If you have been divorced or remarried, have minor children, have children or a spouse with special needs, are in a same-sex relationship, or simply have a different idea than the State of Oklahoma about where you want your property to go, then the default Oklahoma rules probably don’t work well for you. In other words, the default rules can give your property to people you wouldn’t have selected. In some situations, the property can even be given to the state, a process called escheat. To protect your family and to ensure your property is left to the people you want to receive it, you must have a will or a properly funded revocable trust. Don’t let the state write your estate plan. Take charge of your estate plan and protect your family today.
In Oklahoma, a will is a legal document that appoints a Personal Representative and directs the distribution of your property when you die. Wills can be simple or complex. A simple will may direct that your assets subject to probate be gathered and then distributed. A complex will may take the place of a revocable trust and include, in the will itself, one or more trusts that are created when you die. A pour-over will works in conjunction with your revocable trust. A holographic will is a do-it-yourself estate planning tool that is generally not advisable.
What is a simple will?
The term “simple will” generally refers to a will that includes no trust terms and generally has no income tax, estate tax, or GST tax planning.
These types of wills are generally not advisable if minors might inherit from you or if you want your beneficiaries to have flexibility after you die. They are generally easy to administer once in probate, but that ease of administration limits flexibility. Carlson & Copeland, PLLC generally advises against these types of wills because they limit opportunities for planning and flexibility.
What is a complex will?
The term “complex will” generally refers to a will that includes trust terms and/or has income tax, estate tax, or GST tax planning. The trusts created in a complex will are called testamentary trusts. Testamentary trusts are different from revocable trusts in that testamentary trusts are created by your Personal Representative after you die based on the terms in your will. In a revocable trust, you create the trust during your life.
Nearly all the estate tax planning that can be done with a revocable trust can be done with a complex will. A complex will is appropriate for people who are opposed to using a revocable trust during their life, but need asset protection for beneficiaries, appropriate terms for beneficiaries who are minors, or who have concerns about the estate tax or GST tax.
What is a pour-over will?
The term “pour-over will” refers to a will that works in conjunction with your revocable trust. Your revocable trust contains the disposition of your property and the terms of management of your property.
The pour-over will essentially allows any “forgotten” property to be added to your revocable trust when you die. “Forgotten” property is property that wasn’t added to your revocable trust during your life. In this way, a pour-over will is simply a conduit that adds your probate property to your revocable trust. Your revocable trust controls who receives your property and income from it – the pour-over will just ensures that everything will be funneled into your trust.
What is a holographic will?
A holographic will is a will that is signed and dated by the testator and written entirely in the testator’s handwriting. Holographic wills are not valid in many states, however they are still currently valid in Oklahoma.
A holographic will can provide a quick solution if a complete estate plan cannot be put together due to time constraints or other considerations. For example, someone may want to use a holographic will if they are having unexpected surgery and there isn’t time to get a complete estate plan in place. A holographic will is not a good foundation for an estate plan because they may not be recognized in other states. So, if you move or own property in other states a holographic will may fail to qualify for probate, resulting in an intestate proceeding (where the state’s laws decide who receives your property). Additionally, holographic wills often do not take advantage of tax planning and other cost saving opportunities.
Oklahoma Revocable Trusts
How does a revocable trust work and what it can accomplish for me?
When you place property in a trust (revocable or irrevocable), the trust becomes the legal owner of the property. The people who get to enjoy the benefits of the trust property and/or its income are called beneficiaries. This legal structure of a revocable trust, if it’s properly funded, allows most or all of your property to avoid probate, because the legal owner of the property (the trust) does not die.
If you have a revocable trust when you die, the trust becomes irrevocable upon your death and the successor trustee takes control of the trust. Your successor trustee will usually not need to visit court and can begin administering the trust property with little or no delay. Your trust may also be named the beneficiary of life insurance, retirement or investment accounts, or other payable on death property. When you die, that property is added to your trust and the successor trustee manages it under the terms of your trust instrument.
What is the difference between a revocable trust and an irrevocable trust?
With a revocable trust you can add or remove property as you please and change the ultimate disposition of the property at any point during your life. During your life you are a beneficiary of the trust. You can be the trustee of the trust. You can also name another person or a trust company to serve as trustee or as co-trustee. We work with you to help you make a good choice regarding who serves as your current trustee as well as any successor trustee.
An irrevocable trust generally cannot be changed after it is created. These types of trusts can be used to create completed gifts for gift tax purposes or to protect life insurance proceeds from the estate tax or GST tax. An irrevocable trust can contain provisions that allow the trust to terminate if it becomes uneconomical or otherwise appropriate for the trust to terminate.
Revocable trusts only work when they’ve been funded.
We work with you to ensure that your overall estate plan provides for as complete of funding as possible to minimize or eliminate the need for probate. If your revocable trust hasn’t been properly funded, a probate proceeding may be necessary.
How else can a revocable trust help me?
In addition to the benefit of avoiding partially or completely probate, a revocable trust can include an “incapacity clause.” This clause allows your successor trustee to manage your affairs in the event of your incapacity. Learn more about incapacity planning.