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“We Don’t Have Very Much”

Every person/couple is as individual as a fingerprint, but there is one thing that I hear from just about everyone seeking Estate Planning services – “I/We don’t have very much”. It puts me in mind of a true story, that happened around 20 years ago.

“Mike” lived in Tulsa with his wife. Mike worked for the Williams Companies, and received shares in Williams, as well as shares he purchased in other tech companies. Mike moved to California to pursue a business interest, and shortly thereafter Mike’s wife filed for divorce here in Tulsa.

When Mike was served with Divorce papers, he found me on the Internet and called. Here is what he said: “My wife thinks we have all this money and she’s going to get half. What she doesn’t understand is that the shares have greatly devalued lately. We probably only have any more than about 12 million right now.”

The question is not whether you have a lot. It’s whether what you have is worth protecting.

Questions about Oklahoma Estate Planning? Visit http://www.ba-estatelawyer.com or call me at (918) 258-2711. If you would like to receive these updates and other special news about Oklahoma Estate and Probate Law, sign up for our mailing list at http://www.ba-estatelawyer.com/contact.html.

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DOES THE GOVERNMENT GET MY MONEY?

DOES THE GOVERNMENT GET MY MONEY?

A common concern is the amount one’s estate will be taken by taxes. For most people, it is not a major concern.

The State of Oklahoma eliminated the State estate tax in 2010. For anyone dying after 2010, the State of Oklahoma does not tax the estate at all.

The Federal Government does have a gift tax, which applies to inheritances. However, at present, the lifetime exemption on such taxation is 5.49 million for individuals (10.98 million for married couples). Nothing under those amounts is taxed.

Additionally, the money inherited by the heirs is not taxed. Property, such as land, passes to the heirs with the tax cost basis as of the date of the decedent’s death.

Questions about Oklahoma Estate Planning? Visit http://www.ba-estatelawyer.com or call me at (918) 258-2711. If you would like to receive these updates and other special news about Oklahoma Estate and Probate Law, sign up for our mailing list at http://www.ba-estatelawyer.com/contact.html.

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Estate Planning and the Medicare “Spend Down”.

Medicaid Spend Down

A common misconception is that the State of Oklahoma will take a person’s property if that person goes into a nursing home. While it is true that Medicaid will not pay for the long term (nursing home) care of a person with assets, the State does not actually take anything. Instead, a person with non-exempt assets ofer $2,000.00 will be required to pay for his/her long term care from their own assets until they have assets below the maximum allowed. This is called “spending down” one’s assets. While certain assets are “exempt” (not counted in the value of one’s property), for the most part, all personal assets must be depleted before Medicaid will pay for long term care. If the person going into long term care is married, and the spouse is not also in long term care, the spouse can keep the home, one car and the household furnishings, as well as certain other property as exempt, or “non-countable” assets.

Many times, you will see an ad for a free seminar promising to show you how to protect your assets from the State if you go into long term care. The truth is that many people do not have adequate resources to engage in the type of planning that avoids the “spend down” requirements. The seminars are free, but the goods being sold are not.

Questions about Oklahoma Estate Planning? Visit http://www.ba-estatelawyer.com or call me at (918) 258-2711. If you would like to receive these updates and other special news about Oklahoma Estate and Probate Law, sign up for our mailing list at http://www.ba-estatelawyer.com/contact.html.

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What is an “Heir”?

What is an “Heir”?

There is often confusion as to whether a person is an “heir” and whether or not it makes a difference. An heir is one who would receive part of a decedent’s estate if the decedent did not make other provision, such as a Will or a Trust. An heir is an heir regardless of whether or not that person actually receives property. One who has been disenherited is still an heir.

Heirship in Okahoma depends on whether or not the decedent was married at the time of death, and whether the decedent left any direct descendants (children, grandchildren, etc.) by birth or by adoption. Heirship is determined as of the date of the death of the decedent. If the heir dies after the decedent, the heir still stands as an heir. If the deceased heir receives part of the estate, then the heir’s share is distributed as part of the heir’s estate.

The principal significance of being an heir is that all heirs, whether or not they will receive any of the estate, are entitled to actual notice of all administration proceedings, and the right to participate in those proceedings.

Have a question about estate planning or probate in Oklahoma? Email me at mkdyer11@gmail.com or visit
www.ba-estatelawyer.com

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Oklahoma Court of Appeals Reiterates Surviving Spouse Rights

The Oklahoma Court of Civil Appeals has reiterated certain rights of surviving spouses in Probate proceedings. Surviving Spouses have always been granted special protections by our statutes.

The case involved a husband that, before he got married, transferred property into a revocable trust. Part of the property was a piece of real property referred to as “the farm”. After husband and wife married, husband, as Trustee, conveyed the farm to one of his daughters. Three statutory provisions become relevant here:

  1. When a married person conveys real property in Oklahoma, the spouse must sign the deed;
  2. When a married person dies without a Will in Oklahoma, the surviving spouse is entitled to a “forced share” that is no less than an undivided 1/2 interest in the property acquired by the joint industry of the parties;
  3.  During the administration of an estate, a surviving spouse is entitled to an “allowance”  against his/her share until the property is distributed.

Surviving Spouse first argues that the farm should be considered part of the estate because property in a revocable trust is considered to be part of the decedent’s estate. The Appeals Court ruled against her, because the “forced share” statute only allows the spouse to take half of what the parties acquired jointly as a couple. Since the house belonged to the husband’s trust prior to the marriage, it was never part of the estate that wife could claim.

Wife next argued that the conveyance was invalid, because she never joined in the deed. The Court essentially said that the wife’s claim is moot, because even if she prevails, the result will be that the land will again be the property of the trust, and it will have no effect on the Probate proceedings. Wife argued that if the property was recovered into the trust, it would be available to pay her allowance. The Court disagreed, pointing out that a surviving spouse can draw allowance only against that part of the estate that he/she will eventually receive.

Finally, wife argues that she should have the homestead right of a surviving spouse in the farm. It was undisputed that, at the time of husband’s death, the couple lived at the farm. Oklahoma allows the surviving spouse to live in the homestead for the remainder of his/her life so long as the right is not waived or abandoned. Here the Court held that the issue of title does not matter as to homestead. Even though the farm may be titled in the Trust, or even in the decedent’s daughter, the wife had the rights of homestead. The matter was sent back to the Trial Court for a determination as to whether wife had abandoned or waived her homestead rights.

 

Read the Decision here.

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Avoiding “Mass” Panic

Thirty years ago, I was sitting an a classroom at Tulsa Junior College, (now TCC), taking an “Intro to Psychology” course. During the semester, we looked at the emotions that businesses try to tap in their advertising.  Among the top emotions was fear. Often that fear is simply a product of ignorance.

Now fast forward to last night. I watched a commercial for Mass Mutual Insurance Company, where a man and woman (presumably brother and sister) are talking about their recently departed mother. Their mom had no insurance, and the couple were worriedly wondering how they would pay for the costs of the funeral and other expenses like her medical bills.  Oh, if mom had only had the foresight to purchase life insurance.

Certainly, I deal with many people every year with the same concerns. The problem is that the commercial deals in half-truths. While it is certainly true that those left behind will be responsible for any funeral, burial or other post-mortem costs that they choose, there is no legal obligation to do anything. As hard-hearted as it sounds, the kids can simply refuse to do anything, and it becomes an issue for the local authorities. Even then, a small funeral and burial policy is fairly inexpensive, and can cover these expenses.

But what about the other bills? Medical, credit card and other debt is never the responsibility of the next generation. The only way that a person can be held liable for the expenses of another (even a parent or child) is when that person signs an agreement to be liable for that debt. The only relief that a creditor has for the debts of the deceased is the property owned by the deceased at the time of death.

Two comments are appropriate here. First, a different set of rules apply to the spouse of the deceased, but here other protections are in place for the surviving spouse. Secondly, I am not advocating that you do without life insurance. It is a powerful tool in estate planning, but the cost must be considered when considering the benefit.

It costs nothing to consult with a competent Estate Planning Attorney to get answers to these and other questions. For Oklahoma Estate Planning questions, call me at (918) 258-2711.

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Oklahoma Adds to “Slayer” Statute

By now, it is fairly well known that a person who kills another cannot legally inherit, or financially gain, from the victim. Effective November 1, 2015, the list of persons covered by the provisions of the law will grow.

Under the current law, no person who is “convicted of murder in the first degree, murder in the second degree, or manslaughter in the first degree, as defined by the laws of this state, or the laws of any other state or foreign country, of having taken, caused, or procured another to take, the life of an individual” may inherit from the victim, or collect any benefit payable or transferable by reason of the death. This would include proceeds of life insurance policies, money accounts with a “pay on death” provision or survivorship interest in jointly held property.

Under the amended version of the statute, anyone who has been “convicted of abuse, neglect or exploitation of a vulnerable adult” is also prohibited from deriving any benefit from the death of the victim, whether or not the death was caused by the actions of the person so convicted.

While these amendments seem very straightforward, there will undoubtedly be challenges at some point in the future, especially in cases where the victim expresses a voluntary intent to include the offender in a distribution after the conviction occurs.

Find more information at the Oklahoma Law Website

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