Probate

In Oklahoma a simple form called a Transfer on Death Deed allows the owner of property to pass it on to another person without a Will, Trust or probate court.  (I’ll occasionally use the abbreviation TODD in this post.)

The form is very simple to create.  You just need some basic information.  Click the Get Started Here image.

Here is how the Transfer on Death Deed works:

Step 1) After the deed is created, the owner or owners sign it before two disinterested witnesses and a Notary Public.

Step 2)  The deed is filed with the county clerk (recorder of deeds) in the county where the property is located.

Step 3) Within 9 months after you pass away, your beneficiary accepts the property by filing a form with the county clerk with a copy of your death certificate.  We can help with that.

Step 4) Once the form accepting the property is filed, the property becomes your beneficiary’s property.

 

Facts About Transfer on Death Deeds:

 What does it cost to set up a Transfer on Death Deed? 

Attorney prepared form begins at $149 

Click to start online.

County filing fees extra and are usually $13.

Options available.

Answer:  If you use the Transfer on Death Deed package from Winblad Law, you will receive:Here are questions commonly asked about Transfer on Death Deeds:

If there is a mortgage or lien on the property, will the person inheriting it become personally liable for the debt?

Answer:  No.  The person inheriting the property is not personally responsible to repay the debt.  The creditor may have the right to foreclose  against the property only.  If the value of the property is greater than the amount owed on it; the property could be sold and your beneficiary would be entitled to the difference between the amount owed and the purchase price.  Your beneficiary could also pay off the lien and own the property free and clear. They could also sell the property but the lien holder would be entitled to the outstanding balance.

How does my beneficiary claim the property?

Your beneficiary must complete a form within 9 months of the last grantor’s death.  The Transfer on Death Acceptance form preparation.

What happens if the Transfer on Death Deed  beneficiary I name dies before me?

Answer:  If a beneficiary dies before you, his or her gift lapses (disappears).  His or her children, wife cannot accept the property.  If you name two beneficiaries and one dies, then the surviving beneficiary is able to claim the entire property.

What happens if the Transfer on Death Deed beneficiary does not claim the property by filing the paperwork within 9 months of my death?

Answer:  In that case the property becomes part of your estate for probate if title is in your name.

Can I change my mind about the Transfer on Death Deed ?  If so what do I do?

Answer:  Yes.  You can revoke the Transfer on Death Deed; create a different Transfer on Death Deed; or transfer the property by gift or sale.  You do not need permission or even notice to the beneficiary.  (Caution:  A Will does not override Transfer on Death Deed even if the Will was made after the TODD.)

Does the beneficiary I name have an ownership interest?  If he has tax, judgment, divorce or credit problems am I affected?

Answer:  No, the beneficiary has absolutely not ownership interest until you die and they file the paperwork.  Therefore, none of their financial problems will affect your property while you are alive.

I own the property with somebody else; can I still use the Transfer on Death Deed?

Answer:   Yes.  1) Both can sign the same TODD.  2) If only one signs and the property is owned as “Joint Tenants” with right of survivorship (usually held by a husband and wife) and you die first; then the rights of the beneficiary lapse.  If you die last, your beneficiary can claim the property. 3)  If you own the property as “tenants in common” (often this is property that two or more children have inherited), then your beneficiary can accept the property and will have your share.  This is a little complicated and a short visit with an attorney is a good idea.

Can I use the Transfer on Death Deed as a prenuptial tool?

Answer:  Yes, sort of.  If a Transfer on Death Deed is signed and filed before you get married and you die, your new spouse cannot demand the property be part of his or her “forced share”.  This means that your spouse cannot become the owner of that property.  However, if the property is where you live (homestead) it is unclear whether the widow might be able claim a spousal homestead that allows him or her to continue to reside there.  The TODD is not useful for planning for a potential divorce.

Do I need to change my Last Will if I create a Transfer on Death Deed?

Answer:  No, but you might want to.  If your Will gives the property to one person but the Transfer on Death Deed gives it to another, only the person named in the Deed can claim it.  If the person named in the Transfer on Death Deed fails to claim it within 9 months, the property is administered according to your Will.

How is a Transfer on Death Deed different from a Trust?

Answer:  Although it avoids probate a TODD  does not have the same advantages as a Trust.  Most Trusts will have contingencies built in.  For example, if a beneficiary dies before you, the Trust can provide that his or her children are to receive the inheritance.  Currently, Oklahoma’s the TODD does not provide for such contingencies.  If a beneficiary does not accept the property within 9 months the gift lapses, however a Trust does not have beneficiary to act.  A Trust can provide asset protection for a beneficiary. Therefore, a Trust can provide many more safeguards than a TODD.

Will the gift be subject to taxes?

Answer:  There is no gift tax because the transfer does not complete when the TODD is signed.  Oklahoma has no Estate Tax or Inheritance Tax.  As of 2017 estates under $5.49 million ($5,490,000) are not subject to Federal Estate Tax.  If your estate is over $5.49 million, then the gift would be include-able in your estate tax.  An inheritance is not income for state or federal income tax purposes.

If there is a mortgage or lien on the property, will the person inheriting it become personally liable for the debt?

Answer:  No.  The person inheriting the property is not personally responsible to repay the debt.  The creditor may have the right to foreclose the lien against the property only.  If the value of the property is greater than the amount owed on it; the property could be sold and your beneficiary would be entitled to the difference between the amount owed and the purchase price.  Your beneficiary could also pay off the lien and own the property free and clear.

How do I set up a Transfer on Death Deed?

Answer:  You just need to know who you want to receive the property, have the forms completed and filed. Packages available, Click Here

What are the disadvantages of using a Transfer on Death Deed?

Answer:  There are several reasons a person may want to use a Trust instead of a TODD, Uncertainty, the TODD plan fails if:

The Beneficiary:

1. dies first and you would have wanted his or her children to inherit; or

2. does not or is physically or mentally unable to accept the property; or

3. is on a needs based program such as SSI disability, Medicaid or Food Stamps receipt of the property could affect eligibility to these programs; or

4. has financial issues such as bankruptcy, credit issues, a divorcing spouse, tax or judgment liens, receiving the property may subject it to liens or liquidation.

Contingencies, a Trust provides the probate avoidance but can also provide more comprehensive planning.

How is a Transfer on Death Deed different from a joint tenancy?

Answer:  A joint tenancy avoids probate.  Unlike a TODD, there is no time limit for the survivor to claim total ownership of the property.  However, adding others to your property with a joint tenancy gives them an immediate ownership interest that can be subject to bankruptcy, creditor, tax and divorcing spouse claims.  If you want to sell, mortgage or gift the property, the other joint tenants must agree and sign the paperwork.

What does it cost to set up a Transfer on Death Deed?

Three comprehensive “Beneficiary Ready” packages are available.

See Nontestamentary Transfer of Property Act

 

 

 

Several myths surround trusts that discourage people from learning about them.  Lets look at some of them.

 

Trusts are for the very wealthy:

Untrue:  Trusts can be for anyone with assets or beneficiaries that need to be protected. There is no minimum estate value that is needed to create a Trust.  Robert Massi, an attorney and the legal consumer analyst for Fox News Channel.  Recommends that everyone that owns a home should consider having a Trust.  In the past Trusts have been associated with the super wealthy.  Today law schools teach the creation of Trusts along with other estate planning tools such as Last Wills.  In fact it may be considered malpractice to fail to consider whether a Trust needed in an estate plan for any income or asset bracket.

Trusts are complex and difficult to understand:

False:  The truth is that Trusts are relatively simple in their basic form.  In a family revocable Trust the client executes a document, changes title on property then acts like nothing has changed.  The client continues to use the property just as before.  Bills are paid from the same checking account.  The only difference is the client becomes a Trustee.  The Trust document spells out provisions that take affect upon the passing of the client.  In fact it acts like a Will in many respects.

Trusts require complex tax returns:

Incorrect: While the client is living a family Trust does not require any separate tax return or reporting.  The client continues to file his or her own tax returns.  Once the client passes there may be a requirement for a tax return for the Trust, but not before.

A Trust is unnecessary if there is a Will:

Not Exactly:  A Trust can do many things a Will cannot:

  • A properly funded Trust avoids probate
  • A Trust can delay distributions to beneficiaries until certain ages, milestones or indefinitely (a simple Will cannot)
  • A Trust can prevent vulnerable or foolish beneficiaries from wasting money with Spendthrift provisions

Trusts can be done without an attorney

True:  However, many attorneys hire other attorneys to prepare their Trusts and Estate Plans.  This is because attorneys recognize that many devastating mistakes can be made and value the experience of a colleague.

 

Learn more about Estate Planning, Family Trusts Here.


Winblad Law PLLC
Attorney
405.340.6554

 

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Ancillary Probates in Oklahoma

Ancillary Probates in OklahomaInheritance property

The spouses children, heirs, devisees or legatees of an individual who dies owning property in several states may be faced with having to have probate actions in each of those states.  An ancillary probate may be the solution

Royalty Payments in Suspense?

Often an oil and gas company will not pay an owner because a probate order has not been issued by an Oklahoma Court.  Payments are suspended until the the owner can show that the court validated the ownership.

Flat Fee Representation

Often ancillary probate actions can be handled on a flat fee basis.

 

Isn’t showing the Will enough?

While that makes sense, in Oklahoma a Will is actually powerless to convey or transfer ownership of property until it has been accepted by a probate court and that court issues a final order.

More about ancillary

A domiciliary probate (home state probate) is conducted in the state where the decadent resided at the time of death. Typically, a probate action is started in that state. The court appoints personal representative or executor. However, the home state probate court is generally powerless to convey property that is in Oklahoma. This may involve a second home, oil and gas interests or property titled (such as vehicle and boats) in the non-residential home.

Procedures vary by state. In Oklahoma, the process begins with filing a certified copy of the last will and testament, an order admitting the will to probate and an order distributing the estate from the domiciliary probate proceeding, or if the decadent died intestate, by attaching a duly certified copy of the order appointing the personal representative and an order distributing estate from the domiciliary estate.

There are requirements that any Oklahoma creditors be notified of the ancillary proceeding unless they were previously notified in the home state probate. Heirs (those who may be entitled to inherit) and persons or organizations named in the will must be given notice. Publication in a newspaper is also required in the event somebody else claims an interest in the estate.

The statute presumes that this will be an expedited proceeding and a final hearing may be set no less than 20 days from the date of filing. Assuming there are no objections or irregularities, the Oklahoma property can be distributed pursuant to the order of distribution of the home state probate.
Obviously, this is an overview in the event that there are no creditor claims or challenges by heirs and legatees. If there are challenges the regular Oklahoma probate procedure applies.

 

No Home State Probate?  Use Summary Probate

Occasionally, the decedent may have resided in another state and a probate was not necessary there. For example, the decedent may have owned property in another state in joint tenancy, had a beneficiary designation or held property in a trust, etc. Oklahoma also statutes also provide for a summary probate. A summary probate does not require a home state probate.
Estate planning such as a the creation of a Family Trust is essential for individual owning property in multiple states to avoid the delays and complexities of multiple probates.

 

 

 

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