When considering your estate planning, you may want to know how some of your assets will be handled when it comes to probate. What is probate? Why is it necessary? Should you really look for ways to avoid probate? What are some options that you may have to avoid probate? These are a few of the questions that this article will answer.
If you have questions about how to avoid probate in Oklahoma, probate assets, probate court, or estate planning, the Ball Morse Lowe law firm provides a free consultation.
What Is Probate? Why Is It Necessary?
Probate is the process through which a will is legitimized. According to Oklahoma law, the probate procedure can include valuing estates, selling property, paying debts, and distributing probate assets that are left over after the debts and estate taxes are paid. The probate court also uses your will to appoint a legal guardian that you named to take care of your minor children.
If you die without a will, you do not avoid probate. Probate becomes longer and more costly for your loved ones. Additionally, state laws determine how probate assets are distributed. The probate court would also name a legal guardian for your children. None of the decisions made by the probate court may be the decisions that you would have wanted; all of it could have been avoided if you would have created a will.
Should You Really Try to Avoid Probate?
The purpose of the probate court is important. The probate court validates will, oversees probate litigation, monitors intestate estate matters, and also hears other matters that fall under probate law. However, there is a reason that people tend to dread the experience of probate. It can be stressful, time-consuming, and expensive. This is why most people want to find a way to avoid probate.
Should you try to avoid probate? If you want to save money, time, and stress for your loved ones as well as maximize the favorable treatment of your estate assets, then you should consider taking the necessary steps to avoid probate.
Common Estate Planning Tools Used to Avoid Probate in Oklahoma
As we stated above, seeking to try and avoid probate because it can take a significant amount of time and can be a burden for family members. There are several ways that assets can circumvent the process, including the following:
- Assets that are jointly owned: If you own something jointly with a spouse or other party, you and that party are each a joint owner. The asset would include the right of survivorship. As such, it would not need to go through probate. For example, a marital home owned by a married couple would simply transfer to your spouse. A jointly owned bank account would work in the same manner. While we highlighted a marital home and owning another piece of property with a spouse, the joint owner does not need to be a spouse. It can be anyone with whom you co-own some type of property, including real estate, cars, or other valuables. However, it is important to check your titles to determine how an account or title is held. For real estate, check the deed. For bank accounts, you can check the file at your bank. For vehicles and boats, the title or registration should tell you. Individual stocks and bonds will show ownership on the certificates.
- Items in a living trust: If you create a living trust, you can place just about any asset in it, such as bank accounts, other financial accounts, and real estate. Name yourself as the trustee and name a successor trustee, who will take over after your passing. A living trust is different from other types of trusts because you have the ability to modify them. Another benefit you can experience if you create a living trust is minimizing estate taxes. Of course, the threshold for estate taxes is quite high. However, estate taxes are still a concern for many. It is important to remember that the assets that you do not place within the living trust will remain subject to probate.
- Transfer or payable on death accounts, vehicles, or real estate: Items such as certain bank accounts, financial accounts, stocks and bonds, vehicles, and real estate can be designated to go to someone else after your death. You must list a beneficiary on these accounts for them to bypass probate. With bank accounts, financial accounts, certain retirement accounts, and stocks and bonds, the process is known as payable on death. Your bank or financial institution can guide you in completing the proper form that they need on file to list a beneficiary for a payable on death. Transfer on death is used for property that involves a title, such as a home or a vehicle. While some states do not allow for transfer on death for real estate, Oklahoma does allow it. Remember that married couples won't necessarily need a transfer on death for the marital home. It may be helpful in other instances where one spouse owns assets that they would like to pass onto their spouse while also avoiding probate in accordance with state laws.
Small estates in Oklahoma may also avoid the probate process or qualify for a simplified probate process. In Oklahoma, a small estate qualifies as probate assets totaling $50,000 or less in worth. This amount is determined by the fair market value of the property that was owned by the deceased person. By owned, it means the property in the person's name. A small estate affidavit must be filled out as well. There are specific steps that must be taken, if there is no will, for heirs to collect belongings or for transfers of titles to be made. For estates worth less than $200,000, the estate may qualify for what is known as summary administration. However, that does not guarantee that everything will go smoothly. It is generally much easier if you take the necessary steps to plan your estate to avoid probate.
As mentioned earlier and as the Oklahoma Bar Association points out, if you pass away without a will in place, the state will allocate property based on the law of descent and distribution. Through this law, your spouse and children would share any property left behind. If you wish for another arrangement, it would be wise to create a will and use any of the above measures to ensure your assets go to whomever you wish.
Schedule Your Free Consultation to Learn More About Avoiding Probate
If you're ready to learn more about how to avoid probate in Oklahoma, schedule your free consultation with the estate planning attorneys of Ball Morse Lowe. Our law firm creates individualized estate plans to help our clients avoid probate.