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

Like and Follow my Facebook Page

Nuts and Bolts of the Oklahoma Power of Attorney

I am often contacted by someone who says “I need to get a Power of Attorney for my mom”. My first question is “What is her current mental state?” About half the time, the response is that Mom has deteriorated in recent years, and has trouble with memory, not only about happenings, but about people, including family. At this point I have to tell the caller that it’s too late for a Power of Attorney, which is something given, not something taken.

A Power of Attorney is something that must be given by a person who is mentally competent to a person chosen by the person given the Power. The person who is granted the Power is referred to as the Attorney in Fact (AIF). The person giving the Power is the “Grantor”. The Power states the limits of the power (little “p”) granted to the AIF. In granting the Power (capital “P”), the person has choices to make as to the scope of powers granted, and the duration of the Power.

SCOPE OF POWERS

The powers granted fall into one or both of two categories. Financial powers, which often allow the AIF to sign and enforce agreements, write checks, enter into business transactions and make other business or financial decisions on behalf of the person granting the Power, are the most common powers given. Additionally, the Power of Attorney can grant medical powers, which allow the AIF to make routine and everyday medical decisions which do not include end of life decisions. Medical powers often allow the AIF to choose the Doctors, Hospitals and other health care providers, as well as approve medication changes for the person giving the power. Often the medical powers specify that they may be exercised only if the grantor is not capable of making the decisions for him/herself.

DURATION OF POWERS

The issue of when a POA becomes effective and terminates usually centers on four happenings: the execution of the Power; a valid revocation; the loss of mental capacity of the Grantor; the death of the Grantor. A POA always terminates with the death of the Grantor or the valid revocation of the Power by the Grantor. To be valid, the revocation must be in writing, and must be executed while the Grantor has full mental capacity. Subject to these terminating events, the duration of the Power depends on the type of Power given. There are three types.

A General POA takes effect immediately upon execution and terminates upon the death or mental incapacity of the Grantor.

A Durable POA only takes effect upon the loss of mental capacity by the Grantor, and continues until the death of the Grantor, or until it is trumped by the imposition of a Guardianship by an appropriate Court.

A General Durable POA takes effect immediately upon execution and remains in effect, even if the Grantor loses mental capacity, until valid revocation, subsequent Guardianship or the death of the Grantor.

Powers of Attorney must fall under one of the three “Duration” types, and must specify the extent of the powers, whether financial, medical or both, and must be executed while the Grantor has full mental capacity. As for the caller, whose Mom is beyond the point of capacity, the only solution is to make application to the Court for a Guardianship.

Find more information at the Oklahoma Law Website

Like and Follow my Facebook Page

The Risk of “Do It Yourself”

I encounter it frequently.  Well meaning and well-intentioned people who only want to do what the law allows – avoid probate or taxes.  Unfortunately, these well meaning people all too often rely on their own Google research, or the advice of other well meaning people (friends, family, co-workers).

Here is a quote from Bankruptcy Judge Terence Kern in a recent matter decided in Tulsa:

Whether for carpentry or estate planning, it is usually a good idea to use the right tool for the job.  Unfortunately, when it comes to estate planning and asset transfer, people are often ill-informed about the tools available to them and the perils of choosing the wrong one.  If a parent wants to gift an asset to a child only upon the parent’s death or incapacity, state law provides tools to accomplish that end.  Unfortunately, use of the wrong tool could unwittingly result in a present transfer and the unintended loss of the asset.

In the case before Judge Kern, a couple had transferred their home to their daughter by Quitclaim Deed.  The purpose was to avoid Probate after they passed.  The couple continued to make all insurance and tax payments on the house, as well as all repair and upkeep costs.  When the daughter declared Bankruptcy, the couple argued that the intent was to create a trust, where the couple retained all “equitable” interest and the daughter received only “naked legal title”.

Unfortunately for this couple the bottom line is that Judge Kern ruled that the Bankruptcy could seize and sell the couple’s home – not because the property was conveyed to the daughter, but because of the way i was conveyed.

There are ways to avoid probate that will not put the property at risk, keeping in mind that if the real intention is to keep the property from the State in the case of a Nursing Home stay, such transfers may be incredibly difficult or even impossible.  As with carpentry, the discovery that the wrong tool was used may come too late.

Find more information at the Oklahoma Law Website

Like and Follow my Facebook Page

New Year’s Resolution – Estate and Medical Planning

One of the most common comments that I hear from clients in divorces, real estate transactions, HOA Disputes and adoptions, is :I need to make an appointment to discuss a (here you can insert “will”, “trust”, “Power of Attorney”, “property”, etc.).  I actually hear back from less than 5 percent of them.  The phrase “out of sight, out of mind” seems truer every year.

I also find that part of the hesitation is an embarrassment that the person is not more knowledgeable about the estate and end-of-life tools that are available.  Here is a list of the major items, and some considerations for each:

Will:  A will is a written set of instructions to a person or persons (the executor) relating to disposition of the property left behind.  A will has no legal significance whatsoever unless and until it is introduced in court by way of a Probate action.  Only an original will may be introduced to the Court.  It can be “holographic” (entirely written, dated and signed by the hand of the person making the Will), or “statutory” (executed in the presence of two witnesses that have no interest in the estate and a notary).  The property that belonged to the deceased becomes property of the “estate” and the executor has the power to dispose of or distribute, property of the estate.  If a person dies owning property without a will, then someone must petition the Court to be the representative of the estate (the Administrator), and a statute specifies how the property is to be distributed. (Which varies depending on whether or not the deceased was married or not, had children or not, etc.).

Trust:  A trust is a legal entity, capable of owning property and conducting personal and professional business.  The person(s) creating the trust is/are the Trustor(s).  The person authorized to act on behalf of the trust is the Trustee.  The Trustor and the Trustee may be one and the same.  The persons who will ultimately receive the Trust property are the beneficiaries.  After the Trust is created, the Trustor(s) transfer their property to the Trust.  When the Trustor dies, there is no need for probate, as the successor Trustee will take over the duties, and distribute the property per the instructions of the Trust document.  The Trust is more expensive than the Will, but it is less expensive than a probate, and the transition of ownership of the property is seamless and immediate.  Issues other than probate avoidance (such as protection from creditors) involve more discussion and more restrictive choices).  Aside from probate avoidance, many have considerations of immediate distribution.  Some fear that transferring a sizable amount of money/property to their next of kin may not be advisable, as young adults are not always ready to handle such an amount.  For these people, the Trust can designate that their heirs will only receive the property in installments over time, or upon the attainment of a certain age.

Joint Ownership:  Certain property (bank accounts, land, motor vehicles, etc) can be jointly owned so that title to the property passes immediately to the survivor upon the death of the other.  This avoids probate, but can only be used when there is only one beneficiary, such as an only child.

POD/TOD:  Bank Accounts, 401(k) accounts, brokerage accounts, or other monetary holdings can be transferred by the “POD” (Pay on Death) provision of the account.  Simply notify the Bank that you want to have a designated POD and the bank can provide you with the paperwork.  Land can be distributed by way of the TOD (Transfer on Death) Deed.  Once recorded, this Deed allows the survivor to record an affidavit within 9 months of the death of the property owner, which vests full title in the survivor.  The TOD Deed only takes effect if it is recorded prior to the death of the owner, the owner still owns the property at death (the owner has complete ownership, and can sell or give away the property prior to death), and the Deed is still effective at the death of the owner (it may be revoked at any time by recording a revocation).  The property is still subject to any liens or mortgages on the property at the time of death, and the successor must satisfy the encumbrances in order to take full title.

Also related to the TOD Deed is the “Dresser Drawer” Deed.  In this case, the owner executes an actual Deed to whoever the owner wants to have the property after death.  The property then belongs to the successor as soon as the Deed is delivered to the successor.   With this arrangement, the successor agrees not to record the Deed until the owner dies.

Another important consideration for most people is the conduct of their personal and medical affairs if they lose the ability to make decisions.  This can be due to catastrophic illness or injury, or conditions related to aging.  A different set of tools are available to plan for such events.

Power of Attorney:  A Power of Attorney (POA) transfers to another (the Attorney in Fact), the authority to take action on behalf of the maker of the POA.  It can be “General” (taking effect immediately, but losing power upon the mental incapacity of the maker), “Durable” (only taking effect upon the mental incapacity of the maker, but lasting until the death of the maker) or “General/Durable” (taking effect immediately and remaining in effect if the maker loses mental capacity).  All POA’s can be revoked by the maker at any time, so long as the maker has mental capacity.   All POA’s lose effect totally upon the death of the maker.  The attorney in fact cannot do anything under the power upon the maker’s passing.  Another important consideration is that only a person with mental capacity can make a POA.  If mental capacity is lost, creating a POA is no longer an option.  The only option at that point is to seek a Guardianship through the District Court.

Medical POA:  The Medical POA grants the Attorney in Fact the authority to make medical decisions, which may include end of life decisions, on behalf of a person who does not have the capacity to make such decisions because of debilitating illness or injury.  An important consideration is to insure that HIPPA language is as broad as possible so that the Attorney in Fact has the ability to access necessary medical records, and receive full reports from the health care providers.

Advance Directive:  The Advance Directive, sometimes called a “living will” is a document that explains the makers wishes if the maker is ever suffering from an “end of life” condition, and is not capable of communicating decisions to health care providers.  The Oklahoma form also provides for anatomical gifts and the appointment of a health care proxy (person empowered to make medical decisions for the maker).  Once completed, this document should be provided to the maker’s primary care physician and/or the designated health care proxy.

The POA, Medical POA and the Advance Directive (or any combination of two of them) can be combined into the same document, but can only be for one individual.  There cannot be a joint document for both husband and wife.

For additional information related to Estate and Medical planning, please call me at (918) 258-2711.  You can also follow me on this blog and Twitter.

Find more information at the Oklahoma Law Website

Like and Follow my Facebook Page

Ohio Court Approves Will Written on Samsung Tablet

An Ohio Judge has allowed the admission of a will that was written with a stylus on a Samsung Tablet.  According to the man’s two brothers, the decedent had no paper, and was in the hospital expecting to die.  He told one of his brothers how he wanted his estate distributed, and his brother wrote the provisions on the tablet.  The decedent then signed the tablet in the presence of his brothers.

In Oklahoma, it is likely that a Judge would rule the same way.  Oklahoma recognizes three basic types f wills

1: Nuncupative Wills, which are wills that are dictated to another when a person believes his or her death is imminent while in military service or where the person suffered a mortal trauma on the same day as the will was dictated.  The amount of the estate can be no more than $1,000.00 and there must be actually witnessed by two people.

2:  Holographic Wills, which are wills that are entirely written, dated and signed by the hand of the decedent.  There is no requirement for witnesses, but the entire will must be hand written.

3:  Statutory Wills, which must be signed in the presence of at least two witnesses and declared by the person to be his/her last will and testament.  The will must be signed by the person, or by another at the express direction of the person making the will.  The statutory will  can be made “self proving” by having a Notary execute an acknowledgement of the signatures of the person making the Will and the witnesses.  If a Will is self-proving, it is not required that a witness to the Will testify when the Will is offered for probate.

In the Ohio case, and in Oklahoma if presented, the Will presented is the Statutory Will, but is not self proved.  Therefore the witnesses were required to testify to have the will admitted.

Oklahoma Supreme Court Limits Use of Joint Accounts in Estate Planning

On April 5, the Oklahoma Supreme Court held that the use of joint account holders as “accommodation” parties will be greatly limited, if not prohibited altogether.

William Metz (Decedent) added his nephew to his bank account as a joint holder.  The account signature card, which contained the contract between the bank and the account holders stated that “all sums heretofore deposited by them, or either of them, shall be as joint tenants with right of survivorship, and not as tenants in common, and payable to either during the lifetime of both or to the survivor(s) after the death of one of them”.

After Mr. Metz died, his children sought in the probate court to have the account declared part of the estate, to be divided among the heirs.  Evidence was presented that would indicate that the decedent’s intent was to have a fund from which his nephew could pay medical bills, and that he desired the balance after the bills were paid to be divided among his children.  The District Court held that the intention of the decedent controlled, and ordered the balance of the account to be collected by the estate and distributed to the heirs.

The Supreme Court reversed, holding that the court will not look beyond the plain language of the contract.  By the terms of the contract, the joint account holder became the sole owner of the account funds at the death of the decedent.

Using joint account holders has a limited place in estate planning.  Before using it, however, one should consult an experienced estate planning attorney.

The Supreme Court’s opinion can be found here.

More information is available at the One Stop Oklahoma Law Site.

 

Find more information at the Oklahoma Law Website

Like and Follow my Facebook Page

Avoiding Probate

The term “probate” is commonly thought to mean the judicial process of dividing a person’s assets after that person dies.  Although it is a bit more complicated than that, the term can be given that meaning for purposes of this post.

If the desire is to avoid the court’s involvement in the distribution of your estate, some things need to be understood.

First, you need to determine just what will be in “your estate” when you die.  Many items are not part of the estate.  Any property that passes automatically to someone else on your death is not part of your estate.  Life insurance payable to a person or persons existing at the time of your death passes directly to those beneficiaries without becoming part of the estate.  Likewise, any money or brokerage accounts, CD’s or other liquid asset with a valid beneficiary designation will pass outside the estate.  Most bank accounts, annuities and CD’s allow you to designate a “POD” (pay on death) beneficiary.  Property held in a trust is also outside the estate.  The court is only involved with property that is left in the estate.

Secondly, you need to understand the significance of “certificated property”.  Certificated property is anything that you need a piece of paper to prove that you own.   You need a deed to prove you own your house, a title to prove that you own your automobile, etc.  You do not need a piece of paper to prove that you own your sofa, or TV, or camera.   Certificated property can only be transferred with the signature of the owner.  If the owner is dead, someone must be appointed by the Court to have the power to sign the appropriate documents.  Avoiding probate means that you have adequate provisions for your certificated property.

Thirdly, you need to account for the debt.  Any money owed by the deceased does not disappear by reason of the death.  The estate is liable for that debt, and the creditors can force a probate if they are not paid.  The heirs are not liable for the debt, but the debt must be satisfied before anything passes to an heir.

Finally, you need to have an understanding of what happens to your estate if you die without a will.  Many think that it automatically goes to a surviving spouse.  In Oklahoma, this is not correct.  The estate will be distributed in shares that are determined by which part of your estate is “coverture” (marital property, and which part of the estate is separate property.  The fractions are determined by determining just who your “heirs” are.  Typically, they are the surviving spouse, surviving children and children of deceased children.

For any asset, there is at least one method for passing outside the estate.  If probate avoidance is the goal, you should explore the options, which include trusts, joint ownership and POD designation, with an experienced estate planning attorney.  There is no “magic bullet” that will apply to all.

Other posts about this and other topics of Oklahoma Law can be found at my Oklahoma Law Website.

 

Find more information at the Oklahoma Law Website

Like and Follow my Facebook Page