Estate Matters Update: 4 Parts to Your Best Estate Plan

Most people know that estate planning is about making a Trust and/or Will to dispense with your earthly goods when you pass away. Three things people often forget about estate planning are:

• If you don’t own property all by yourself, your Will does not control it,
• If you don’t put property into your Trust, the Trust does not control it, and finally,
• The Will or Trust tools address your stuff, but they don’t take care of YOU.

When using a Will or Revocable (Living) Trust, here are the four components of an estate plan that address every aspect of your estate -- human and material.

1.    Your Will or Trust Document Addresses your Material Goods

For a Will, you need the Will document. In Oklahoma the Will, if typewritten, but must meet all statutory requirements. If the Will is handwritten, known as a Holographic Will, it must be entirely in your own hand and meet other legal requirements if you want to avoid having it thrown out in Probate Court. It is also best if you never have any Will that is partially typed and partially handwritten as these fill-in-the-blank type forms are generally problematic.

For a Revocable (Living) Trust, you need the Trust document. A Revocable Trust can be made for one person or it may be two separate trusts for two people. It could also be made as one Joint Revocable Trust for a married couple. Your revocable Trust also needs a Pour-Over Will(s) -- your “Oops! Will” -- in case you die without properly funding (putting something into) your Trust.

2.    Your Funding Plan Assures your Will or Trust Controls Your Stuff

For your property, titling, and Beneficiary Designations, the name on them is key to getting the things you own to the person(s) you want to have them after you pass. Property titles trump (override) the language of your Will or Trust. So, if property is titled incorrectly, no Will or Trust language controls it and these things below become crucial:

●     If you want your Will to dispose of your assets, that asset must be titled in your name only with no beneficiary designation. This includes your bank account, your brokerage account, your real estate, etc. Many people forget that they took property in joint names or have a beneficiary designation on the asset. It does not matter if your Will describes the property in full. If it is titled joint with rights of survivorship, it includes someone else. That other person gets it when you die and the Will language fails.

●     Likewise, a Trust only controls the property put into that Trust. It does not matter what language you detail in the Trust document to give away an asset. If a property is not physically titled to the Trust, the Trust does not control it.

●     Whether you pass your assets by Will or Trust, you must conduct a full asset analysis for correct titling to meet your goals.

●     For things a Will or Trust do not control, you must know what your Beneficiary Designations, Transfer on Death or Pay on Death contracts do and don’t control.

3.    Your “Powers” Documents Take Care of Your Person

The American Speech-Hearing Association (ASHA.org) says that, statistically, 5.3% of Americans have dementia. ASHA also says at age 65 the risk of developing the disease doubles every 5 years and 50% of people 85 and older will exhibit signs of some sort of dementia. For this reason, you may need a “stand in” person for decisions or signatures. Don’t forget the fact that you could get bonked on the head, go in for surgery, or become otherwise addlepated. You’ll require someone else to legally make decisions and sign paperwork to take care of things and choices while you are still living, but incapacitated. If you fail to complete this type of paperwork, you are at great risk of having to endure the cost, hassle, and anxiety of a guardianship.

A complete estate plan should include the documents that give legal authority for someone else to handle business and care choices when, for whatever reason, you cannot. Done properly, they also give your instruction for how you want those decisions made. Those documents include a:

●     Durable Power of Attorney for Financial Decisions

●     Durable Power of Attorney for Health Care

●     Oklahoma Advance Directive for Health Care (to instruct health care professionals what to do regarding your end-of-life choices such as whether to be kept alive by machines or if you want to donate organs)

4.    Your Attorney Assures Your Estate Plan Has the Outcomes You Want

Maybe you are a very bright person and fiercely independent. Maybe you are someone who wants advice for every decision. Either style can work – or somewhere in between. Whatever works for you works. Still, it is wise to have an estate planning lawyer in your corner during the stages of analyzing best options, developing, and executing your estate plan.

An experienced estate planning lawyer knows what you need to know to be sure your plan works the way you want it to work. People tend to make their estate plans with one scenario in mind. Then, life happens and changes the scenario. An inexperienced estate planning lawyer or one who does not practice regularly in the area of estate planning may take your order, give you a “simple Will” or other type of estate plan, and let you take the risk that it may not work in all the usual scenarios.

As an “estate doctor”, I have handled a multitude of cases where a decedent’s Will or Trust did not “work” because it was not set up correctly in the first place. Often, little or no effort was made to coordinate the titling of assets with the Will or Trust. More often, no effort was made to consider the inevitable and obvious variables that could occur in your life. This is very expensive and time-consuming to repair and often plays out through the courts as a lawsuit.

Everyone does part or all of their estate plan as a do-it-yourself project. Many do it with little understanding of what their actions mean at their death. However, a wise person gets the help of a knowledgeable, seasoned, estate planning lawyer. That lawyer can analyze your situation, offer the best options to accomplish your goals, and anticipate problems to take steps to prevent them.

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You can join the discussion about probating your estate, administering your trust, creating or updating your estate plan, filing gift, fiduciary or estate income taxes, and litigating or mediating estate disputes. Submit your issue to our Asked & Answered blog; Follow us on LinkedIn or Comment below.

Gale Allison, PLLC---we only do estate matters because your estate matters!