Your estate plan should answer two main questions:
- Who will be authorized to manage your finances and medical treatment in the event you can’t?
- What happens to your property after you pass?
Knowing the answer to these two questions is vital to eliminating unnecessary stress when a major life event happens. The first step is Incapacity Planning followed by designing a plan for distributing your assets including; Probate Avoidance, Asset Protection, and Estate, and Gift Tax Planning.
To begin this process, fill out our intake form by clicking here.
Who has the authority to take care of you if you’re unable to take care of yourself? The first step in your Estate Plan should include documents that appoint someone to manage your affairs in the event you become incapacitated (i.e. mentally/physically unable to make decisions). Documents such as a Financial Power of Attorney, Medical Power of Attorney, HIPAA Authorization, and Advance Directive (also known as a Living Will) are legal documents stating who you would like to appoint to carry out certain should you become unable to do them yourself. We call these people “agents” of the person granting the power. These documents can provide families with answers instead of questions when life decides to throw you a curveball. Without these documents, in the event someone becomes incapacitated, a Guardian would need to be appointed by the Court before any actions could be taken on your behalf.
Probate is the court-monitored transfer of assets from a Decedent’s estate to their heirs. In Oklahoma, if a person dies with a valid Will, that Will must be submitted to Probate in order to be enforced. The average uncontested probate will take 6-9 months to complete and typically incurs attorney’s fees in the range of $4,000-7,000. Avoiding Probate can be accomplished with a variety of tools such as beneficiary designations, payable-on-death (POD), transfer-on-death (TOD), transfer-on-death deeds (TODD), and/or a revocable living trust (RLT). Depending on the assets you own, your estate plan will use a combination of those tools to transfer your property to the people you name.
Asset Protection involves protecting your assets from potential future creditors or liabilities. A common creditor for many may end up being Medicaid. If a person needs Long-Term Care such as a Nursing home, they will not be eligible for Medicaid until they meet the required limitations for assets and income. When an application for Medicaid is made, the applicant’s financial records for the previous five (5) years are reviewed (“the Lookback”). Any assets gifted or transferred for less than fair market value during that time period may subject the Applicant to disqualification from receiving Medicaid coverage for an extended period of time.
This planning method is not necessary or appropriate for every client. However, depending on your situation, the pros and cons of an Asset Protection plan should be discussed.
Estates valued over a certain threshold may be subject to Federal Estate tax. The current exemption threshold for 2023 is $12.92M per person or $25.84M for a married couple. This amount currently subjects less than 1% of estates in the US to Estate Tax. However, this exemption is set to expire in 2026 and the current political environment seems poised to make a change in this area before then. Until a change is made, the current rate is 40% tax on all assets over the exemption threshold amount ($12.92M/25.84M).
When a person dies owning property in their name, that property must be distributed to living heirs. This is done either by a Will or by the laws for intestate succession (84 O.S. Sec 213). This process is known commonly as Probate. In Oklahoma, if a person dies with a valid Last Will and Testament, that document must be submitted to the Court. If a person dies without a Will, their property will be distributed to their descendants as defined by 84 OS Sec 213.
During the probate, a person will be appointed as the Personal Representative of the estate. Once appointed, the PR is required to submit an Inventory of the estate property, provide notice to any creditors of the estate, satisfy any claims against the estate or estate property, sell property if necessary, and finally distribute the estate property to the appropriate heir(s).
An uncontested probate case usually lasts between 6-9 months and carries an Attorney Fee somewhere around $4,000-7,000, depending on the work required. Contested cases will typically require more court appearances and higher costs. Common contested issues include: Will Validity, Who should serve as PR, Will Interpretation, and Distribution Issues.
The Probate process is difficult to navigate alone. Some estates are eligible for a shortened version of Probate known as Summary Administration. Many cases do not become contested despite attorneys representing multiple heirs. If you are involved in a Probate case as a Personal Representative or an Heir, hiring an attorney to represent can help avoid issues before they develop.
To begin this process, fill out our intake form by clicking here.
If you are running a small business or plan to start one, it is important to take a few simple steps to protect yourself from unnecessary liability:
- Consult with a CPA about the type of business you plan to operate and determining what type of entity to form. The most common type of small business entity is the Limited Liability Company or LLC, however, your CPA may advise setting up the company under another type such as a Corporation or Partnership.
- File the Articles of Organization/Incorporation with the Secretary of State (sos.ok.gov). This process is relatively simple but click here (link to article) to see an explanation of each step.
- Go to the IRS website to apply for the Tax Identification number (link to IRS website).
- If your business involves multiple owners, members, shareholders, etc., you will need to draft an Operating Agreement to identify important details such as voting rights, transfer/redemption rules, buy/sell agreements, and more. The rules contained in the Operating Agreement state how the business will be governed. It is highly recommended that you have an Attorney draft or review your draft of an Operating Agreement before signing.
In the event Grant Estate Law is unable to help with the specific problem you are faced with, we will do our best to help you find an attorney that practices in the area of law your problem requires. Our number one goal is that people get the legal assistance they need.