Archives For estate planning

Oklahoma Estate Planning is something that every Oklahoma family and person needs to consider. Estate planning is about looking at what you have, who your family and how you want to take care of your family.

Every US citizen has what is known as the annual exclusion which allows the person to gift away up to whatever the current year amount is without either having to file an IRS Gift Tax Return or being subject to any tax.
The annual exclusion amount for 2015 is $14,000.00. That means an individual could make as many $14,000 gifts as he desires to different people and not be subject to any tax or have to file a gift tax return.
One of the key points with the annual exclusion is any property gifted under the exclusion does not count against the unified credit. Let me provide an example that may be helpful:
  • A parent gifts the full annual exclusion amount in 2015 to each of their five children. That means the parent gifted $70,000 when all five gifts are added together. Since all of the gifts were within the annual exclusion amount the parent is not required to file a gift tax return.
  • Additionally, the $70,000 does not count against the unified credit, which in 2015 is approximately $5.4 million.

Connected Hands

Do you know why the federal estate tax and the federal gift tax are often addressed in the same discussion?

Although the federal estate tax and federal gift tax are separate statutes, they are connected by what is known as the unified credit.
The unified credit is automatically provided by the IRS Code to every US citizen at their birth. This credit is the amount of property that a person can gift away before they owe any tax to the IRS.
That means that all the gifts you make during your life are added to all the gifts you make at your death (through an Oklahoma Trust, Oklahoma Will or otherwise) and that is the basic amount that the IRS considers for taxation.
However, before any tax is assessed, you get to subtract (use your “coupon” so to speak) to reduce the amount.  The coupon can be applied to all gifts during life and at death.
So, while a person could use their whole coupon during their life, there is no requirement that they do so.  If there is an amount left on the coupon at death, the amount can be applied.
Tender Leaf Tea Coupon from Flickr User AVI

Tender Leaf Tea Coupon from Flickr User AVI

Do you know what the Internal Revenue Service and your local grocery store have in common?

They both provide you with coupons you can apply to reduce the amount you required to pay!

Well, the IRS’s “coupon” is not exactly like scoring big with a $2.00 off coupon for Tide Detergent.  The IRS administers the unified credit.

The unified credit is automatically provided by the IRS Code to every US citizen at their birth. This credit is the amount of property that a person can gift away, either during life or at death, before they owe any tax to the IRS.

The coupon analogy is helpful because when a person passes, the person’s heirs can apply the IRS Unified Credit against against tax that might be owed by the deceased person.

For more specifics about the IRS unified credit, check this post, How does the IRS Unified Credit work?

Since the word “gift” is at the heart of federal estate taxation, it makes sense to understand how the IRS views the term IRS Gift.  The IRS states that a gift is:

The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

You need to know when you have made a gift because that act could trigger obligations.

Do you know what the Oklahoma summary probate process is?



Summary probate is a shorter, quicker version of a full-blown probate. Rather than there being two hearings in front of the Judge, there is only one hearing, at the end of the process. To give you an idea of what to expect, below is a diagram how the Oklahoma summary probate process usually flows through the court:.


Summary Probate

Does your estate qualify?

To qualify for summary probate (technically referred to as “summary administration”), the estate must meet one of the following criteria:

1. The value of the estate is less than or equal to $200,000.00;
2. The decedent has been deceased for more than five (5) years; or
3. The decedent resided In another jurisdiction at the time of death.

Living Trust vs. Simple Will

This table compares the benefits of the revocable living trust and a simple last will and testament. A revocable living trust is an agreement that determines how a person’s assets are handled during their lifetime and how it is distributed after death. A simple Will distributes a person’s assets after death.



It is huge accomplishment to have your Last Will and Testament done. You can rest easier knowing you have provided for your family and created an orderly plan to transfer what you have to who you want it to go to. Once you have this done, there are several times in your life when you may need to consider updating the Will or Trust to match current your circumstances. Let me mention a few:

1. You have another child.

2. Someone named in your Will to act as your personal representative (executor) either is no longer around or no longer wants to serve.

3. Someone in your Will who you left a large part of your estate to has passed away.

4. Children named in your Will or Trust have grown up and are ready to receive their inheritance with fewer strings attached to it or no strings at all.

5. You have divorced, suffered the death of a spouse or remarried. (It is particularly important in a second marriage that involves children from previous relationships to carefully plan your estate).

6. You have simply changed your mind about what you want to give, who want to help administer your estate or who to whom you want to give your property.

You update your Will or Trust becauase you want it to reflect your current thoughts and circumstances. If circumstances have changed, feel free to contact me to discuss updating your Will or Trust at

Oklahoma Estate Planning

While it is not the most exciting part of the estate planning process, nominating the people you want to be the guardian of your children obviously has a huge impact.  When parents pass away, the guardianship of minor children is established by a court.  The court either follows a statute which lists relatives who are entitled to be named guardians or, looks to your nomination.  If the court is required to name a person listed in the statute, there is more potential for conflict over who is named the guardian.

Conversely, the nomination is important because unless there are specific facts that make the people you nominate unfit, the Court usually appoints the people who are nominated.  You “nominate” people by simply naming them in a Will or Trust.  In the process of addressing many other estate planning issues, people can cover the issue of guardianship.

Tomorrow, I will discuss the factors to consider in determining who your guardian(s) should be.

Vic from Flickr License:


I have talked quite a bit both on this blog and in my Oklahoma estate planning podcast about how the living trust in last will and testament work together. However, I realize there are still some questions about why someone would have a will if they already have a living trust. Also, the question comes up “why would I need a trust if I already have a last will and testament”?

Usually when you have a living trust you will also have a last will and testament which is often known as a pour-over will. The purpose of this will is to send any property that has not been transferred to your trust at the time you pass away to the trust. The living trust is still the primary document that controls your estate and disposes of your property. The pour-over will is a safety net that simply provides that all of your property goes to your living trust.

If you have a fully functional last will and testament, you probably will not have a living trust. In this case, the last will and testament will actually determine where your property goes, nominate guardians for your minor children and address other issues related to death in the transfer of property.

If you want to find out more about these topics please consider listening to my podcast series which is 8 brief episodes providing more detail on estate planning. You can subscribe to the podcast, Estate Planning Demystified, in iTunes or listen to it right here.

Oklahoma Estate Planning

I’m not sure why someone would want to do this, but in Oklahoma there are laws that prohibit it.

One is the statutory prohibition on the right of a spouse to will away from the surviving spouse so much of the estate that the surviving spouse would receive less in value than an undivided one-half interest in the property acquired by joint industry of the husband and wife during coverture.   A person cannot disinherit a spouse without some type of prior agreement.

If a spouse tries to do this, the surviving spouse has the right of “election”: the obligation imposed upon a party to choose between two inconsistent or alternative rights or claims in cases where there is a clear intention of the person from whom he derives the right that he should not enjoy both.

One exception to this rule is if there is value pre-nuptial agreement.

If you have any questions about this post, Oklahoma estate planning, Wills, Trust or Oklahoma probate, feel free to contact me anytime at