Estate Resources

Wills & Powers Of Attorney

A will is an essential part of any estate plan. If you die without a will, state law controls the disposition of your property. Without a will, the process of settling an estate is much more troublesome, time consuming, and costly. In virtually all cases, to be administered, a will must go through probate.

A pour-over will is a simple will which leaves any assets in a decedent's personal name to the decedent's living trust. While the pour-over will is never intended to be used, it is in place as a "safety net" in case of emergencies, and should always be a part of a complete estate plan.

Why you need a will

  • You may name a guardian for your minor children.
  • You select the person you want to manage your estate.
  • You decide who gets what proportion of your estate.
  • You determine certain tax elections and options.

What happens when you don't have a will?

  • The court selects an administrator for the estate, who could be a creditor.
  • Every action of the administrator to sell or manage estate assets must be approved both before and after the action by the court.
  • State law controls the distribution of assets and property.
  • Any beneficiary of legal age (18 in Oklahoma) gets his or her inheritance immediately and without any supervision. Few young people are sufficiently prepared for this responsibility.

Example: DS dies without a will leaving an estate of $2,500,000. DS is survived by a spouse, SS, and two children, Roger, 16, and Shannon, 13. Court costs and attorney fees average 5%, or $125,000, and Oklahoma estate taxes run $18,750. The probate takes two years to be finalized. When the property is distributed, SS only gets $1,187,500. Roger, now 18, gets $584,375, which he uses to buy a new Ferrari, a Scarab boat, and a lake house. They are all destroyed in a fire during a party, and he had neglected to buy any insurance. Shannon, now 15, is entitled to $584,375, but because of her age, a court-supervised guardianship must be established to manage her money until she reaches 18, costing thousands of dollars in attorney and accountant fees. With a properly drafted will and estate planning, DS's estate could have avoided all of the attorney fees and estate taxes, and SS could have received control of the entire $2,500,000 estate, and reduced taxes and court costs.

A power of attorney is a document which allows the principal, or creator, to name an attorney-in-fact, or agent, to act on his or her behalf. At common law, these powers terminated upon the death of the principal, and were suspended during any period of time when the principal was incapacitated (could not manage his or her own legal/business affairs). A durable power of attorney operates even if the principal is disabled or incapacitated. If the correct language is not present, the power is not "durable." Also, Oklahoma law requires durable powers of attorney to be witnessed and notarized.

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