cAt a minimum, an estate plan lets you control asset distribution and major medical decisions. Beyond this, you can make arrangements to support many goals, like protecting funds should an heir get divorced or passing on a business to new ownership. As you consider what you want, your individual circumstances and wishes deserve the careful attention of a knowledgeable estate planning attorney in Oklahoma City. The Jim A. Lyon Law Firm is your source for personal legal advice about your legacy and your family’s future.

The time to start is always now

Estate planning often feels like something that you can put off until another time. The problem with this, however, is that a sudden death can leave assets in limbo while a probate court figures out who gets them. Similarly, an incapacitating medical problem can place your family in a difficult position if you don’t have an advanced directive or healthcare proxy.

Although making an estate plan often involves thinking about uncomfortable subjects, people generally gain peace of mind once they finish the task. To start the process, you will want to consult a lawyer. We can explain how estate laws apply to your situation and perhaps inform you about some things that you might not have considered.

Common estate planning issues include:

• protection of assets
• avoidance or limitation of probate
• shielding heirs from creditors
• choosing guardians for minor children
• tax management
• selection of executor or trustee
• selection of beneficiaries and contingent beneficiaries
  trust establishment and administration
• navigation of family disputes
• consideration of future medical care
• updating an estate plan after a major life change

Estate planning in Oklahoma

To be honest, estate planning can become complicated because you are essentially sorting through almost every aspect of your life. When you speak with a lawyer, be ready to discuss your concerns about who receives what from your estate as well as other goals like delaying distributions to a minor or planning for a special needs child.

Before you make final decisions, you should understand some basic tools and concepts for estate planning in our state.

Wills

A will documents who will receive your real estate holdings. A will is submitted to a probate court to complete the formal transfer of ownership. Preparing a will with the support of an estate attorney allows you to address issues that might get overlooked if you did it by yourself. Legal advice is especially important if you have been married multiple times or own property in multiple states.

Last will & testament

You use a last will and testament to document to distribute your personal assets, such as vehicles or collectibles. A probate court also oversees the distributions dictated within this document after you pass away. Individuals without children, unmarried parents, or people with numerous personal assets often benefit from legal guidance when writing this document.

Trust administration

Trusts are legal instruments that move assets between the grantor and grantees. They work outside of the probate process and offer greater privacy and control. Setting up a trust must be done with care to ensure limitation of tax exposure, privacy, and administration by capable parties. Selecting a trustee can be difficult. Trustworthiness matters, of course, but capability is essential. Trustees must perform annual accounting tasks and manage assets. These duties can be time consuming.

Power of attorney

Power of attorney is a legal tool that assigns an agent of your choice to oversee financial matters on your behalf if you become incapacitated. As of Nov. 1, 2021, the Uniform Power of Attorney Act became effective in Oklahoma. Most notably, this act limited how a durable power of attorney could assign healthcare decision making power. Going forward, Oklahomans will need to name a healthcare proxy to assume that power. This recent law change increases the importance of consulting a lawyer when preparing the medical portion of your estate plan.

Protection of oil & gas royalties

Oklahoma property owners often require guidance about how to ensure that their property heirs continue to collect petroleum revenue. Estate planning strategies can promote your goals. Should an estate with petroleum royalties already be in probate, then legal representation may be needed to defend your rights as the court makes ownership decisions.

Why do people want to avoid probate?

You may have heard that you should make an estate plan that keeps your assets out of probate. In many cases, people see this as desirable because an estate that enters probate becomes a matter of public record. Many people value privacy for a variety of reasons.

Additionally, one of the main purposes of a probate court is to check if a deceased person has any unpaid creditors. If so, then value from the estate goes to pay off those debts first before distributing the remainder to heirs. This can be good for the heirs who receive what remains because then they know that they have no outstanding liabilities.

Keeping an estate out of probate is not necessarily a priority for everyone. Some people have few concerns about it whereas others want to make sure that their wishes are not vulnerable to financial claims that other parties might bring before a court. In fact, some estate plans have private elements while still leaving a portion that goes through probate.

The main problem with probate is the time needed to complete the process and the expense. Courts do not move quickly. Heirs must wait to acquire control of assets, which can result in great financial inconvenience. Court fees could be burdensome, and, if other parties petition the court to settle various claims, then more legal expenses will ensue. Full litigation might even become necessary, requiring the services of an expert Oklahoma City probate attorney.

The role of estate planning in the protection of business assets

Business owners can possess many different types of assets, such as:

• shares in a privately held company
• commercial real estate
• trademarks, copyrights, and other intellectual property

If you are a business owner, then you may have a desire to pass some assets to heirs and cash some out for your retirement. You could also wish to pass the reins to the next generation of owners and managers. A business succession plan made in conjunction with your personal estate plan enables you to control what happens, limit disputes, and shield yourself and heirs from creditors.

The first step in this process would be to determine how well your business structure already insulates you from creditors or a lawsuit should one occur. You may need to make adjustments that widen the barrier between liability for business activities and your personal assets.

Trusts might play a role in your estate plan. They are frequently useful to people whether they own businesses or not. Trusts protect assets by functioning as a third-party entity that would not be subject to the liability of the business or the beneficiaries of the trust.

Business owners often turn to trusts as a way to avoid probate. A business requires continuous of operation. A long wait to transfer control while a court works through the details would likely be financially devastating to a business.

Estate planning for people with minor children

Parents might not be at a point in their lives where they feel the need to get their estates in order. However, estate planning has an important role to play should parents die suddenly. Although this is difficult to think about, you would want a plan in place that assigns a guardian for your children should both parents unexpectedly pass away, such as in a terrible automobile accident.

Even if you do not have a large estate in financial terms, you can formally document your wishes about who will be the guardian. Doing this gives you an opportunity to choose the person most capable of caring for your children after such a tragedy.

On top of choosing a guardian, you may wish to establish a trust to hold your assets that will go to your children when they grow up. This would also require that you select a trustee to manage the assets and oversee their distribution. A trust provides the opportunity to delay or control the distribution of trust money. Otherwise, your children get their share upon reaching the age of 18. With a trust, you could state that money is to be authorized only for specific needs, such as housing or education, until the young adult reaches a more mature age.

How to limit family disputes when making an estate plan

There is no limit to the kinds of situations that can cause disharmony within a family. In fact, worries about upsetting family members are sometimes why people procrastinate with estate planning.

Sensitive issues in estate planning:

• Reduction of a current spouse’s share of an estate to ensure children from a previous marriage receive their shares
• The desire to give one child a greater share than a sibling
  The choice to give items of personal property to one heir when multiple family members want them
• Pressure to choose a certain person as a trustee or executor despite a lack of qualifications

When developing your estate plan, you will want to engage your family members in a series of discussions. These conversations give your loved ones a chance to express their desires and opinions. You then get to explain your reasoning behind your choices and hopefully resolve any points of contention that might arise.

Tax planning

Oklahoma does not have estate and inheritance taxes. However, very large estates will have to plan for the federal estate tax. The estate must pay this tax, and it could cut into what heirs receive by quite a bit without proper planning.

Thinking about your heirs financial problems

When you choose your heirs, you want them to benefit from your generosity. Simply bequeathing them money or real estate, however, might not enrich them if they have financial problems. Someone who is struggling with debts might have part of their inheritance seized by creditors unless you use a trust to shelter the funds from such actions.

Some people also dislike the possibility that money left to a loved one might end up partially in the hands of an ex-spouse. Divorce is commonplace, which means that one or more beneficiaries of your estate might end up dissolving a marriage. Certain situations, like co-mingling an inheritance with marital funds, could allow for a non-beneficiary to receive some of the money in a divorce.

An estate planning lawyer could propose strategies to prevent this outcome. Trusts are usually used to keep an inheritance segregated from marital assets.

Begin the necessary conversations

As you can see, estate planning means different things to different people, but it does serve important functions no matter your goals. If you have few assets, you should still document your medical wishes in the event of incapacitation. For business owners, an estate plan may be critical for preventing the liquidation of a business and directing a smooth transition to new leadership.

The Jim A. Lyon Law Firm provides a confidential setting where you can explain your concerns and goals and receive legal advice. We are fully trained in the intricacies of estate law in Oklahoma and have experience dealing with property laws specific to this state. An Oklahoma City estate planning lawyer is here to listen and help you preserve your legacy. Contact our office today.