A family home, a few acres of land, or a working farm that’s been in the family for generations are all valuable assets that can be lost if there’s no plan to protect them for your heirs.
An experienced estate planning attorney can explain the probate court’s role and its interaction with your estate plans. A well-conceived estate plan ensures that your hard work benefits the people you designate.
Planning Tools Ensure Your Decisions Are Enacted
An estate plan is simply a coordinated approach to protecting your assets from public view, excessive taxation, and intestate succession laws imposed by a court.
Without a will, state probate law determines who receives your money and assets. A simple will directs assets to the causes and people you choose. A probate court prioritizes your spouse and children for inheritances, but in the absence of a spouse or children, assets are distributed to parents, siblings, or siblings’ children.
Those who inherit your property can also face a difficult and expensive court process if no planning is done. Probate in Oklahoma can take up to a year, and longer if the case is contested. Administrative costs and property maintenance costs may escalate in that time while access to property is restricted, including freezing bank accounts that may benefit a spouse or children.
Beyond designating heirs for your property and assets, it names a guardian for your minor children and an executor to manage your estate.
How a Living Trust Provides Privacy
Probate is a public process but revocable living trusts keep estate details private. A trust requires transferring assets, including titles to real estate and investment accounts. The trustee you name distributes assets of the trust according to your instructions. Living trusts also allow a way to manage assets if the owner becomes incapacitated. The assets continue to be available for the trust owner to use until their death.
Probate is a primary factor when deciding between a will and creating a living trust. Wills must be probated to transfer property to heirs while trusts transfer without probate. However any property that is not retitled and transferred into the trust is subject to probate.
How to Use a Transfer-on-Death Deed for Real Estate
A Transfer-on-Death (TOD) deed allows your one or more beneficiaries to avoid probate by moving the asset directly to their ownership.
A TOD deed only applies to specific assets and the deed must be signed, notarized, and recorded with the county clerk before the owner’s death. State law defines an interest in real property (allowable under TOD) to include surface, minerals, structures and fixtures. That expands the definition of TOD-eligible property to mineral rights and royalties, too.
Special Protections for Farm and Ranch Families
More than 90 percent of farms in Oklahoma are family-owned, creating distinct estate planning needs. Agricultural assets often lack the liquidity needed to cover estate taxes and debts. Farm families may use the following tools to retain the maximum asset value:
- Creating an LLC for the land in an estate. It requires the owner to transfer ownership to a Family Limited Liability Company (FLLC), which is owned by an irrevocable trust. This protects the farm’s value from things like Medicaid requirements while allowing the family to continue managing the asset.
- Moving ownership of land, equipment, leases, and related assets to a separate legal entity such as an LLC or S Corp separates and protects the owner’s personal and business assets.
Combine Tools With Powers of Attorney
A durable power of attorney names a manager for your finances if you become incapacitated, while a healthcare directive presents your plan for medical care in a legally binding manner. These documents are the capstone to a comprehensive estate plan that protects your assets and provides maximum benefits to your heirs.
Protecting Your Oklahoma Property With the Right Estate Plan
The estate planning experts at Kincannon Law can provide a comprehensive, personalized package to ensure your family farm or multi-generational property is preserved. Call for a consultation today.