Archives For Oklahoma Probate

What happens after someone passes away and they leave real property that doesn’t transfer automatically? That is where Oklahoma probate comes in to provide a way to transfer the title to person’s heirs. Oklahoma probate is about getting property into the hands of the people who are supposed to have it, as efficiently as possible.

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Gifting into a tax return

While it is not a subject that most people consider often, there are circumstances where a person can make a gift and be required to file a tax return covering the gift and potentially paying tax on the gift. Most people are aware that if you die owning a large enough estate you may have to pay the IRS tax. Many people are also aware that there is an exemption, this year in the amount of $5.3 million, under which you are not required to file a return or pay taxes to the IRS.  What a lot of people don’t think about is that the exemption can be whittled down based on gifts a person makes during their lifetime.

The Annual Exclusion

One way to avoid reducing the lifetime exemption is to take advantage of the annual exclusion.  Each person is entitled to make an unlimited number of gifts each year without any tax consequences provided that the gifts do not exceed the annual exclusion, which in 2014 is $14,000.00. Gifts above the $14,000 number require that the person making the gift file a gift tax return.

What the IRS say about gifts

As the IRS states:

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.

 The key points

So, here is a summary of how it breaks down:

  • You can gift up to $14,000.00 to just about any person without  return required or tax being owed;
  • You can gift more than $14,000.00 each year to your spouse without a return required or tax being owed;
  • If you gift over $14,000.00 to a person this year, you will need to file a federal gift tax return, IRS Form 709.  The IRS Form 709 is due on or before April 15 of the year following the year that you have made taxable gifts.

 

Remember however that the rules on gift taxes like many other taxes are complicated. You should consult a tax professional before making any final decisions including the decision whether you need to file a return or not

 

The difference between joint tenants and tenants in common is often perplexing but critically important for understanding property ownership rights particularly when there are Oklahoma probate issues. Let me try to explain how it works under Oklahoma real property law.

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The definitions – Joint Tenants – Tenants in Common

Joint Tenancy with a right of survivorship is where two or more individuals own real estate together and each has exactly the same rights in the property as the other owners or co-tenants. Upon the death of a joint tenant, the survivor has legal title and, unless fraud or a trust is established, the survivor will also acquire equitable title.

Tenancy in common is where all the owners have legal right of possession of the real estate but each owner has a separate and distinct title. Subject to the rights of the co-tenant(s), each tenant in common is equally entitled to the use, benefit, and possession of common property. A tenant in common may convey her interest in the real without the other tenants in common joining in the conveyance (unless it is homestead property, in which event her spouse must join). Tenancy in common is the default manner of taking title – if there is no evidence that the real estate was supposed to be conveyed as a joint tenancy, then title is held as a tenancy in common.

The similarities

  • Both Joint Tenancy and Tenancy in Common are ways of holding title to real estate.
  • Someone would use one of these methods when they own real estate with at least one other person.
  • Under both types, you purchase only a portion of the property, cooperating with other owners who purchase the remaining amount.

 

The differences

Major differences between holding title as a joint tenant and holding title as a tenant in common:

  • Upon the death of one joint tenant, his or her interest automatically passes to the surviving joint tenant, who becomes sole owner. This does not happen with a tenancy in common.
  • A tenant in common can freely sell her interest while a joint tenant can convey her interest in the real during her lifetime, but the joint tenancy interest cannot be devised and will not descend except possibly in the event of the simultaneous death of all the joint tenants.
  • Tenants in common may have different ownership interests. For instance, Tenant A and Tenant B may each own 40 percent of the real estate, while Tenant C owns 20 percent. However, joint tenants obtain equal shares of the property with the same deed, at the same time.

 

Example

An example of where joint tenancy with right of survivorship is commonly use is for homestead property owned by a married couple. The title will typically be held as “joint tenants with right of survivorship.”

Do you know what the Oklahoma summary probate process is?

 

Definition

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:.

Visualized

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.

Can you explain the difference in duties required by the person who is the Personal Representative and the person who has the Power of Attorney?  

The primary difference between the Personal Representative (“PR”) and the person appointed under a power of attorney the attorney in fact (the “POA”) is that the PR is administering the estate after the person has passed away and the POA is caring for the person while they are incapacitated, but still living.  POA powers terminate upon death.

Personal Representative

  •  The PR is responsible for securing the Last Will and Testament of the decedent (if there is one) and distributing the decedent’s property according to the terms of the Will. There are usually bills to pay, a tax return to file, personal belongings to gather and other items that need to be addressed. In some cases, a probate proceeding may be necessary.  The PR would be responsible for getting this proceeding filed and completed (with the assistance of an attorney).

Attorney in Fact

  •  The POA receives power to act on behalf of the incapacitated person when the person is determined to be incapacitated under the terms of the power of attorney document.  Typically, this is when a determination is made by at least one medical professional that person can no longer care for themselves.
  • The POA is charged with taking care of the incapacitated person’s financial needs, health and welfare needs and other day-to-day to issues.  For example, a POA may pay bills, communicate with the doctors and make decisions about the incapacitated person is going to be cared for.
  •  Legally, it probably makes no difference whether it is the same person who is POA and PR.  However, practically, many times the other spouse is the person chosen to be both the POA and then the PR.  A person who has acted as the POA and then acts as the PR has a bit of an advantage because they already have experience with the decedent’s estate.

 Is it best that whoever is appointed to act following the death of both spouses be the same person?

Whether it is best to have the same person as POA and PR for both spouses if you are both either incapacitated or pass way simultaneously depends on several things.

  • Is the person you appoint to act as POA capable of caring for two incapacitated people at the same time?
  • Will or could that person also have duties to care for minor children as well as the new guardian? Again, if the same person is PR and there is a simultaneous death of both spouses, the person must be capable of administering both estates.  It can be done, it is simply a question of the competency of the person who is appointed.
  • Practically, where there is one person who both husband and wife are comfortable with, that person is often appointed successor PR of both estates.

 

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Have you ever wondered when an Oklahoma probate is actually necessary?

Although a lot of effort is put in to avoiding probate, there are times when it is simply the only option to change the title to a piece of property or free up funds held in a bank account.

The result of a probate proceeding is usually a Judge signing an order that transfers title to property. Below are some scenarios in which you might need Oklahoma probate:

1. Real Property.  An unmarried person dies owning a house and title to the house is solely in the deceased person’s name;

2. Life insurance.  A person dies leaving a life insurance policy with beneficiaries who are no longer living;

3. Not transferred to Trust.  A person who has a living trust dies, but has property that was never transferred to the trust such as real property or investment accounts; and

4. Mineral Interests.  A person dies owning an Oklahoma mineral interest but the interest is not held in a trust and the title is solely in the name of person who dies.  Many times the operator of the Well will not continue to pay royalties without an order from the Oklahoma probate court specifying who the heirs are.

These are general examples but there may be ways in the specific situation to secure the funds without probate.

Another resource for figuring out when an Oklahoma probate may be required is the Oklahoma Bar Association’s article Is a Probate needed?

Have you ever wondered what happens if someone dies and you are the person who is keeping their Last Will and Testament for them?

If not, consider this material.

An Oklahoma law that many people may not be aware can have a big impact on a person who holds an Oklahoma Last Will and Testament after the person who made it dies.

Title 58 of the Oklahoma Statutes, Section 21 provides that within 30 days of the date the holder of a Last Will and Testament finds out the person who made the Will has died, the holder has to either (a) deliver the Will to the District Court in the county in which the person who died lived or (b) deliver the Will to the person named as executor in the Will.

If you are the holder of the Will and you do not do this, it makes you “responsible for all damages sustained by any one injured thereby.”

This law applies whether or not you believe there needs to be an Oklahoma probate.

Don’t forget to deliver!

What is Oklahoma probate?

March 18, 2013

Do you hear the phrase Oklahoma probate and wonder what it actually is?  And wonder what happens in an Oklahoma probate proceeding?  Read on to find out. Continue Reading…

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It is kinda like Apple’s iPad Mini: Smaller, but every inch a probate.

Oklahoma’s summary probate process eliminates a couple of the steps that a full probate requires but it gets you to same point in the end.

The Differences
For one, there is only one hearing in front of Judge. That is the final hearing at which the judge signs off on the order give you the relief you requested, if you have done what you are supposed to have done. Instead of a hearing in which the Last Will and Testament is admitted to probate, that happens at the end. The first step after the case is filed, is the judge appointing a person to act as the executor.

The other major difference is that the require waiting periods and deadlines are shorter in Oklahoma’s summary probate process.

What qualifies for summary probate
To qualify for the Oklahoma summary probate process, your estate must fall into one of three categories:

(1) estates with a value of $175,000 or less,
(2) any ancillary proceeding whether or not a will has been admitted to probate in another
jurisdiction, or
(3) any estate in which the decedent has been deceased for more than five years.

What is Oklahoma probate?
Oklahoma probate is the process of a court administering the estate of someone who dies to determine:

1. What property the person owned.
2. What debts the person had.
3. Who is entitled to receive the property.

Probate can happen even if you have a Last Will and Testament or a Living Trust. One of the most important elements in determining whether an estate will need to be probated is property: is there property that can’t be transferred without an order from a court? Typically, this is real property, although it may also be mineral interests, bank accounts or investment accounts as well. There are some ways to avoid probate even after a person dies, I listed some of them in this post.

 

When would you need to use Oklahoma probate?
It most often happens when a person dies as the sole owner of real property or with an insurance policy with the beneficiary designated as the “estate”.  There is no way to transfer title to property without a court order.  When the heirs try to sell the property, they will discover that a probate is necessary.  BUT you might also consider my series “Six Ways to Avoid Probate after Someone Passes Away“.

 

How long does Oklahoma probate take?
It varies by how complicated it is and what you are trying to accomplish, but generally anywhere from five months to one year.

 

What is Oklahoma summary probate? Summary Probate
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 visualization of the Oklahoma summary probate process.  You can read a more detailed article about Oklahoma summary probate here.

 

How much does Oklahoma probate cost?
It varies based on the attorney and level of complication of the case but typically you can expect $3,000.00 to $4,000.00 in attorney fees and costs.

If you are looking for an attorney to handle your Oklahoma probate, consider this post about finding a probate attorney.

If you can find a way to avoid doing an Oklahoma probate after someone passes away, do it. I provided some tips on this in my blog series “6 ways to avoid Oklahoma probate after death

If you must do an Oklahoma probate, then finding a good attorney is a essential. Often, finding a good attorney to do anything is a challenge, including doing an Oklahoma probate.

Click to find out about probate

I provided some general guidance on finding an attorney in this post. The other things to look for are:

Experience. You need an attorney who has done at least a few probates. There is no reason to pay someone with no experience to learn the process on your time. For example, you can figure out how much experience I have by searching the Oklahoma State Courts Network records for probate cases in which I have been involved. This type of search (using my name, Oklahoma County only) yields about 15 results.

Oklahoma Probate Cases for Shawn J. Roberts

Oklahoma Probate Cases for Shawn J. Roberts

The Oklahoma State Courts Network is available to anyone and you can search cases and attorneys by following this link.

Fees. While shopping for a probate attorney is not like shopping for a toaster, it is nice to know about how much it is going to cost. For example, an attorney should be able to give you a range of costs, say $2000.00-$2500.00 for a standard probate and what any additional expenses will be (such as filing fees).

Availabilty. The point of this factor isn’t so you can rush through the process. Rather, most people in the position of needing to probate something need to get to certain assets, sooner rather than later. Be certain that the attorney you choose can start work on your Oklahoma probate project in a reasonable period of time.

If you have been involved in an Oklahoma probate, how long did it take from start to finish?