Writing Your Tulsa Estate Planning Blog

It is easier to get wills today than it ever has been, since forms can be downloaded and filled out on your own. However, that ease has led to many people not understanding the potential dangers of wills.

That everyone should have an estate plan is a principle which most people understand when the reasons are explained to them. Estate plans, even as simple as a will, at the very least can help prevent families from fighting over estates.

Since you do not know when you will pass away, you should go ahead and get an estate plan.
While most Americans still do not have a will, a greater percentage of Americans have them than ever before. It is easy and cheap to get wills today, since you can purchase downloadable forms from several different services.

However, there are some hidden dangers in doing that, as The New York Times explained in “Wills Can Avert Family Warfare, but Have Their Own Hidden Traps.”

The biggest issue is that the probate process is different in every state.

Submitting a will to probate for administration, in some states, is very expensive and can take a long time. That suggests that probate avoidance strategies should be used, which could lead some people to utilize a trust instead of a will as their primary estate planning vehicle.

Trusts, however, are more expensive to get than wills and in some states probate is relatively quick and inexpensive. Consequently, trusts may only be needed for people with larger estates.

There are other probate avoidance strategies that can be used, but they also have their drawbacks. For example, retitling an asset as joint property with a child, which is a common tactic, can make the asset vulnerable to the child’s creditors.

The best thing to do is to hire an experienced estate planning attorney in your state, so that attorney can help you with the best estate planning strategy for your state and your estate.

Reference: New York Times (April 21, 2017) “Wills Can Avert Family Warfare, but Have Their Own Hidden Traps.”

It is important to keep your will and other estate planning documents in a safe, secure location where they can be easily found, when needed. A safety deposit box in a bank is not one of those places.

A will is only effective if it can be used after you pass away to administer your estate. If no one knows where your will is or if it has been destroyed, then it cannot be used by the courts.

You could have the most detailed will that has ever been created, but it is worth nothing if it cannot be found.

For this reason, it is important to make sure your will can be found and accessed quickly by those who need it after you pass away. Many people believe that a good storage place is somewhere safe and secure.
That is true.

Many people also believe that the safe and secure place is at a bank in a safety deposit box.
That is not true, as Noozhawk recently explained in “12 Things to Keep in a Safe at a Home, Not at a Bank.”

The biggest drawback to safety deposit boxes is that they are secure because access to them is extremely restricted. The bank is not going to let someone show up and access your box, even if that person has your key and your death certificate.

Access normally requires a court order, which can be time-consuming to get. Courts are often reluctant to give them to anyone other than the executor of the estate. However, without seeing the will, it would not be known who the executor of your estate is supposed to be.

The better option is to keep your original will on file with the estate planning attorney who drafted it for you. Take a copy home and put it in a secure place, such as a safe.

Reference: Noozhawk (April 23, 2017) “12 Things to Keep in a Safe at a Home, Not at a Bank.”

Sometimes when we hear about another person’s estate plan, we may tend to get upset, if we think we are slighted in some way. It is a good idea to think about the plan from the other person’s point of view.

There is a very human tendency to get upset whenever we initially feel slighted by someone else. A recent advice column in philly.com, “Wife upset by in-laws’ plans for their estate,” illustrates why it is sometimes better to hold off on the anger and look at things from other people’s points of view.

A woman wrote in to say that her husband had a teenage son from a previous marriage. The woman was cleaning out papers from their office and discovered a printed out email from her father-in-law to his attorney. The father-in-law was asking how to set up his estate, so it would be certain to go to the teenage son, and not the woman, after her husband passed away.

This upset the woman, since she felt that she was being viewed as not being trustworthy enough to make sure the teenage son received an inheritance after her.

The problem here is that if the woman had seen this from the father-in-law’s point of view, she might not have been so upset.

He wanted to make sure that his assets were kept in the family and that his grandchild would eventually receive them. The woman could have possibly gotten remarried or had a falling out with the son after her husband passed away.

From the father-in-law’s perspective, he merely wanted to make sure his grandchild was taken care of, which was not necessarily making a judgment on the woman’s character.

Reference: philly.com (April 23, 2017) “Wife upset by in-laws’ plans for their estate.”

Even a great estate plan cannot help your family, if they do not have the cash they need to meet expenses before the estate plan can be executed.

People often go to great lengths to get an estate plan carefully crafted that covers every possible need their family could have. That is a good thing, but it might not be enough.

If you are your family’s sole breadwinner and most everything is in your name, then you also need to think about how your family is going to make ends meet while your estate is being administered. Bank accounts in your name are supposed to be closed as soon as you pass away, so your family cannot legally access them.

Unfortunately, that is not going to stop any bill collectors from making calls, and grocery stores are not going to sell their food on credit to your family.

As a result, you also need to plan for your family to have access to cash.

Some advice on how to do that comes from South Africa by way of Personal Finance in “Will your family avoid a cash-flow crisis on your death?” The advice is also applicable to the U.S.

Getting an estate through probate can take a lot of time, depending on the size of the estate and the probate laws in the state.

Your family will not receive the cash from your will for a while, in most circumstances.

If you do anticipate that your family will need cash after you pass away, the most effective way to provide it is normally to take out a life insurance policy. These policies pay out almost immediately upon learning of death.

Another idea is to open a joint bank account with a trusted family member and to put some money in the account that will only be used in the event of your passing.

Reference: Personal Finance (April 22, 2017) “Will your family avoid a cash-flow crisis on your death?”

A recent survey found that most Americans think they know how the Social Security program works. The same survey found that most actually have some important misunderstandings about the program.

The Social Security program seems simple enough. When you reach retirement age, you can stop working and the government will send you a check, the amount of which is based upon your income during your working years.

People understand that much which leads them to believe that they know all they need to about the program.

However, a recent survey found that most people between the ages of 55-61 believe some myths that need to be corrected, as CNBC reported in “The three biggest myths about how Social Security works.” The myths include:

•Many people think that when they become eligible for Social Security, the government will know and automatically start sending them a monthly check. That is not true. You need to apply for Social Security and you need to do so, three months before you plan to receive it.

•Another common misconception is the retirement age to receive full benefits. It depends on when you were born.

•People also believe that if an ex-spouse claims Social Security benefits under their work history that it will decrease the amount of their benefits. This is also a myth. An ex-spouse’s claim will result in no changes to any benefits that you will receive.

Reference: CNBC (April 25, 2017) “The three biggest myths about how Social Security works.”

After much anticipation, President Trump released his long awaited tax plan. While there is much for wealthy people to cheer in it, including eliminating the estate tax, no one will want to cheer too much or too soon.

Since taking office, President Trump had been promising that he would reveal a plan for tax reform. He gave very few details about it, except that it would contain some of the biggest tax cuts in history, if not the biggest.

Last week, the White House finally released the anticipated plan, although many details are still missing.

The plan, if passed, would be one of the biggest tax cuts in history. Most experts agree that it includes large tax breaks for wealthy people, including eliminating the estate tax and the alternative minimum tax.

Income tax rates on the highest earners would be cut dramatically, as would corporate tax rates.

The proposal does not just cut the taxes of the richest. Some middle class and lower income earners would see tax decreases coming from a doubling of the standard deduction.

The New York Times reported on the plan in “White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy.”
The President’s tax plan has a long way to go before it is passed.

What was released was a one-page list of bullet points without any accompanying details. It will be up to Congress to determine the details of how to implement the plan.

The list did not indicate how the tax cuts should be paid for, which is likely to displease Republican deficit hawks.

Democrats are also likely to oppose the cuts and might filibuster them in the Senate.

Reference: New York Times (April 26, 2017) “White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy.”

Wills might seem like a bunch of dry legal words, but they can be quite beautiful, if done well.

The average layperson reading a legal document is unlikely to find it beautiful. No layperson has ever read, for example, a petition to the court in a personal injury case and been struck by the beauty of the document. Even plaintiff’s attorneys are unlikely to find a lot of beauty in even the most well written petitions in personal injury cases.

The fact is that most legal documents are dry, technical and unlikely to ever appear in anyone’s list of the most beautiful things they have ever read.

But, wills are different.

Wills can be beautiful, as Nasdaq points out in “A Will Can Be a Beautiful Thing.”

The potential beauty of a will is not in the actual words themselves.

That much should be obvious, because most wills are, in fact, dry, technical and boring legal documents to read. They often contain formal required language that does not change very much from will to will.

The true beauty of a will is in what lies behind the words.

A will, at its best, tells how a person wants his or her loved ones to be taken care after the person passes away.

It is an expression of caring and love.

A will shows that we have carefully thought about what will happen to the people we love, after we pass away.

That can be a beautiful thing, even if the language itself is dry and boring.

Reference: Nasdaq (April 10, 2017) “A Will Can Be a Beautiful Thing.”

One of the most common questions that people have about estate planning, is how to avoid probate. You probably cannot do so entirely, but you can make it quick and painless.

For most people, the word “probate” conjures up nightmare scenarios of protracted estate battles that cost lots of money and tear families apart. It is an ugly word for most people.

As a result, most people generally want to avoid having their estates go through probate.

In fact, one of the most frequently asked questions of estate planning attorneys is how to avoid probate, as Forbes points out in “Probate, Wills, Executors: Your Estate Planning Questions Answered.”

It is important to understand that probate is merely the type of court that a will or an estate without a will has to go through.

Most of the time, it is a relatively simple process, especially with the assistance of an estate attorney. However, there are times when it can be long and expensive, so the desire to want to avoid it are not unjustified.

The key is to have an estate plan that utilizes instruments that do not have to go through probate. The most typical of these are trusts, but there are other more complex legal instruments that can also be used.

However, even the most airtight probate avoidance estate plan might have to go through the probate process briefly.

All estate plans should have at least a simple pour-over will that directs any unaccounted for assets into a previously created trust.

If there are enough unaccounted for assets, they will need to go through probate. However, the process should be quick and easy.

Reference: Forbes (April 7, 2017) “Probate, Wills, Executors: Your Estate Planning Questions Answered.”

Spouses will often agree to get wills. They or their heirs believe that a contract has been entered into that prevents those wills from being changed. It is not true.

It is fairly common in estate planning attorneys’ offices, for a husband and wife to come in and declare that they both want similar wills drawn up. These wills are often referred to as “mirror image wills.”

The most common form they take, is that each spouse gets a will leaving everything he or she owns to the surviving spouse. The second to pass away spouse, then gives everything to the children or other agreed upon heirs.

Despite their seeming simplicity, these wills are an unusually common source of litigation, as the National Law Review discusses in “Contracts to Make Wills or Trusts.”

The problem starts when the surviving spouse has a change of plans and changes his or her will to divide things differently or to give the estate to different heirs.

The heirs of the original mirror image wills routinely argue in court, that the spouses entered into a contract to make the original wills. Unfortunately, that is simply not the case in almost all circumstances.

To be valid, a contract requires that a person receive some sort of compensation, called consideration, for whatever promise it is that they are contracted to perform.

In the case of mirror image wills, spouses rarely receive any form of consideration for promising not to change the will later.

It is important to understand this point, because the issue frequently comes up in estate litigation. It costs estates a lot of money, when the issue is raised.

Reference: National Law Review (April 10, 2017) “Contracts to Make Wills or Trusts.”

There are many reasons to plan for your estate. The most important is probably that with proper estate planning, you can help to prevent your family from fighting over your estate.

Only the most sadistic people among us, would really want their families to fight over their estates. The goal for almost everyone is for our families to get along with each other, even after we are no longer around.

However, families do often fight over estates.

Some of those fights are unavoidable, since they stem from longstanding family dynamics and family members who do not trust each other or get along with each at all.

Many of those fights are avoidable, as Wealth Management discusses in “How to Prevent Feuds Among Heirs.”

The single most important thing that needs to be done to prevent family fights over an estate, is to get an estate plan.

Sound estate plans can often cut off any reason for families to fight. Proper planning can ensure that everyone gets their fair share of the estate. The estate plan can set forth reasonable means for resolving any disputes that do come up.

However, just getting an estate plan is not enough.

The next thing that needs to be done, is to communicate with your family about what is in the estate plan.

People who know what they are going to get and why that was the choice of the departed, are much less likely to be upset and start fights with other family members over the estate.

If you do not already have an estate plan, get one.

If you do already have one, then make sure that you review and update it regularly to ensure that it will be effective in preventing your family from fighting.

Reference: Wealth Management (April 10, 2017) “How to Prevent Feuds Among Heirs.”