You can use either will or a trust to pass on property after you die. You also don’t have to have either document and can pass on your property without any estate planning. It is completely up to you. But you should at least know the differences so that you can make the right decision.
What is the difference between a will and a trust?
Both documents can be used to transfer property at death, but there are key differences. These differences relate to whether the document can be used while alive, whether the document requires a court process, and whether the document will be made public or remain private.
In Oklahoma, a Will takes effect when you die while a Trust takes effect now
A will is a testamentary document. That means that it only takes effect after you die. A trust on the other hand takes effect immediately and can be used throughout your life. That is why many people refer to their revocable trust as a “living trust.” It is an instrument that you use while you are alive.
You can place any type of asset into your trust, including real estate, bank accounts, investments, and even ownership of your small business or LLC. The benefit of doing so is that you create a plan for your trustee to take over and manage these assets if you become incapacitated.
You see, a living trust can delegate power to someone if you had a prolonged hospital stay. If you recover, you can resume managing the trusts assets. If you were to die, then the trust is set up to have successor managers to either continue managing the trust, or to give away your assets to your heirs.
A will requires your family to use the court’s process in Oklahoma
A will is a set of directions on how you want your property distributed. Your will also nominates a person to be the executor of your estate, which means the manager. However, that person will have to file a probate lawsuit in court in order to carry out your will. That’s because without a court order, your executor will not be able to retitle your assets into the name of your heirs.
Think about it: you will says you leave your home to one person, and your bank accounts to another. Your personal representative can’t just sign a deed. They must have a court order giving them authority to sign that deed. Same goes for the bank accounts. All of this requires going through the probate process in court.
There is good reason for wanting to avoid putting your family through probate. For one, it is inconvenient. It also is not fast. Like everything in the legal system, it drags on and on. The probate process is completely public, which means that your last will and testament will be published in the public record.
Notice of your estate will also be published in the newspaper. All of this is for the purpose of notifying creditors, but scammers and predators can also obtain this information. Eventually, your entire net worth will be available in the public record, as your executor will be required to file an inventory of your estate, itemizing everything you own and every dollar in every account. Of course, not before first hiring appraisers to come put valuations on everything. All of this costs time and money.
Trust administration is a private process in Oklahoma
Unlike probating a Will, administering a trust takes place behind closed doors, in private. When you die, your heirs will come to my office. They will sign a few documents. We will assist them in filing the correct deeds to transfer your home and real estate. They will be able to take an affidavit of trust to the bank to access your accounts.
Trusts avoid putting your family through the court system. Trusts are easier to administer and the legal expenses are much less than what you would incur with a court case. Trust administration is also much easier on your family than probate.
If you are interested in preparing a will or a trust for your estate, call our office to schedule a consultation.
What happens if you don’t have a Will or a Trust when you die in Oklahoma?
If you die without either a will or a trust, then you estate will be passed through what is called intestate intestacy. That simply means that the State will decide how to distribute your property. In Oklahoma, half of your estate would go to your spouse, and the other half would be split equally among your children. This would include all children, from previous marriages as well as current marriage.
This also means that if you have minor children, even infants, then half your estate would pass to them, with equal rights to your spouse. Most parents don’t want to have to share their deceased spouse’s property with a toddler. The court would then create a trust to hold those assets until those children reach 18. And of course, all of this requires a family member to start teh court process and then see it through to the end.
All of this can be avoided with an estate plan. Whether you choose an estate plan that utilizes the court system or an estate plan that avoids court, you are still taking control and making the decisions instead of letting a judge make them.
If you are interested in learning more, contact our office to get the information you need.