Estates and Trusts
Clients are assisted in estate planning activities including drafting and execution wills, trusts and living wills. Issues involving charitable transfers to tax exempt entities, such as foundations and charitable trusts are also handled.
Q: What is estate planning?
A: An estate plan ensures that your family and financial goals are met after you die. It is a way of plainly declaring in a written document what property you have, how you want it to be distributed and to whom. It is also a way of ensuring that taxes take away as little as possible from the value of your total estate. You have the satisfaction of knowing that your financial affairs are in order and you are not leaving a costly administrative nightmare to your family as well as avoiding the possibility that your family members may become antagonistic with each other and argue about what you would have wanted. An estate plan may have several elements including a will, a trust, a living will, a durable power of attorney, and health care proxies.
Q: Do I need a will?
A: Everyone needs a will. A will contains your wishes about your property, how you want it to be distributed and to whom when you die. It’s also the best place to name guardians for your children. If you don’t have a will, you die “intestate”, meaning that your heirs will have to probate your estate and the distribution and division of your estate will be controlled by Oklahoma statute. In general, if you die and leave a spouse and children, then your assets will be split between your surviving spouse and children. If you are single with no children, then your assets will be divided among your blood relatives. A probate action can consume 5 – 10% or more of the value of your estate.
Q: Does a trust make sense?
Yes, especially if a sizable amount of your assets is in real estate, a business or other titled interests. The chief advantages of a trust are that it lets you put conditions on how and when your assets are to be distributed after you die; reduces estate and gift taxes; distributes assets to your heirs without the cost, delay and publicity of a probate action; better protects your assets from creditors and lawsuits; and enables you to name a successor trustee to manage and distribute the trust assets after your die.
Q: Who controls the trust?
A: During your lifetime, you do. After you die, a successor trustee that you have selected will manage and distribute the trust assets. In this manner, you can ensure that your assets are handled as you wish them to be.
Q: What is the federal estate tax exemption?
A: This is the amount you may leave to your heirs free of federal tax and has been rising gradually and will hit $3.5 million in 2009. Meanwhile, the top estate tax rate is decreasing. The estate tax exemption is scheduled to phase out completely by 2010, but only for one year. Unless Congress acts and passes a new law, the tax will be reinstated in 2011 and you will only be allowed to leave your heirs $1 million dollars tax free. You may leave all of your assets tax free to your spouse; however, this means that you don’t use your estate tax exemption and instead increase your spouse’s taxable estate. That means your children are likely to have to pay more in estate taxes when your spouse dies.
Q: How much does estate planning cost?
A: A basic trust plan may cost anywhere from $1,600 to $3,000, or possible more depending on the complexity of the trust. Generally speaking, for single individuals, the cost will be in the $1,600 to $2,300 range and for couples, in the $1,800 to $3,000 range.
If you decide to change your trust in the future, you will also have to pay additional fees.