August 2017 Senior Living Truth Series

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We are excited to help sponsor the August 2017 Senior Living Trust Series.

Senior Living Truth Series, Cortes Law Firm, Estate Planning, Power of Attorney, Estate Planning Attorney Cortes Law Firm

Thursday, August 10, 2017 – 10 am & 2 pm
MAPS3 Senior Health & Wellness Center
11501 N. Rockwell

We Moved – Cortes Law Firm

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We moved, Cortes Law Firm, estate planning, Oklahoma city estate planning attorney, revocable trust, probate, power of attorney, Steve Cortes, Stephen Cortes

The Cortes Law Firm has moved to the Paragon Building (Kirkpatrick Bank).  We are located at the corner of I-44 and Broadway Extension.

Easy access with plenty of front row visitor parking.

Cortes Law Firm
5801 Broadway Extension, Suite 110
Oklahoma City, OK 73118

405-213-0856

 

 

 

3 Ways to Minimize Estate Planning Fees

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3 Ways to Minimize Estate Planning Fees

Today, it is impossible to put together even a simple estate plan without the assistance of an experienced estate planning attorney. Why? Because estate planning laws vary greatly from state to state and these laws are extremely convoluted and constantly changing.

One wrong word, one missing signature, or one procedure not followed to the letter of the law can partially or completely invalidate a Last Will and Testament, Revocable Living Trust, Advance Medical Directive, Living Will, or Durable Power of Attorney.

Though attorney fees may feel expensive, they’re actually not when viewed in light of the service and protections provided.  In fact, estate planning fees are best viewed as an investment, not an expense.

All that being said, here are 3 simple things you can do to keep the legal costs of setting up and maintaining your estate plan down:

  1. Be Prepared – Before you meet with your estate planning attorney, do your homework. Understand what you own, what you owe, who you would like to inherit what, and who should be in charge of managing your estate if you become mentally incapacitated or after you die. Then, after your estate plan is up and running, to make changes to your estate plan, make a detailed list of what the possible changes should be and forward it to your attorney for comments and questions.
  1. Keep it Simple – While a simple estate plan will be easy and straightforward for your attorney to draft and maintain, a complicated estate plan will be difficult and time consuming. This usually means that a complicated estate plan will cost more.  Keeping it simple will not only help minimize the legal fees while you are alive, but also the costs of settling your estate after you die.
  1. Join Your Attorney’s Estate Plan Maintenance Program – Some estate planning attorneys offer a regular estate plan tune-up for their clients at a reasonable fee. This program will force you to think about your estate plan once a year or every few years depending on the terms of the attorney’s maintenance program.  Maintenance programs help you keep your estate plan current with changes in the law, your attorney’s experiences, and your life, family, goals, and assets.  Estate plans only work if they’re up to date.Our experienced estate planning attorneys at Cortes Law Firm can help you identify a strategy to get the peace of mind you need. Please call 405-561-2737 or email us to schedule a private consultation.

3 Celebrity Probate Disasters and Lessons to Learn from Them

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With all the wealth accumulated by the rich and famous, one would assume that celebrities would take steps to protect their estates once they pass on. But think again: Some of the world’s richest and most famous people have passed away without a will or a trust, while others have made mistakes that tied their fortunes and heirs up for years in court. Let’s take a look at three high-profile celebrity probate disasters and discover what lessons we can learn from them.

  1. Tom Carvel

As the man who invented soft-serve ice cream and established the first franchise business in America, Tom Carvel had a net worth of up to $200 million when he passed away in 1990. He did have a will and accompanying trust that provided for his widow, family members and donations for several charities, but he also named seven executors, all of whom had a financial stake in the game. The executors began a round of infighting that lasted for years and cost millions. In the end, Carvel’s widow passed away before the disputes could be settled, essentially seeing none of the money.

 Lesson learned: “Too many cooks spoil the broth.” Your trustee and executor may have to make tough decisions. Consider naming executors and trustees who have no financial interest in your estate to reduce the risk of favoritism. Also, consider have only a single trustee and executor rather than a committee.

  1. Jimi Hendrix

Passing away tragically at age 27, rock guitarist Jimi Hendrix left no will when he died. What he did leave behind was a long line of relatives, music industry bigwigs, and business associates who had an interest in what would become of his estate – both what he left behind, and what his intellectual property would continue to earn. An attorney managed the estate for the first two decades after Jimi’s death, after which Jimi’s father Al Hendrix successfully sued for control of the estate. But when Al attempted to leave the entire estate to his adopted daughter upon his passing, Jimi’s brother, Leon Hendrix, sued, launching a messy probate battle that left no clear winners.

 Lesson learned: When you don’t leave a will or trust, the effects can last for generations. An experienced estate planning attorney can help put your wishes in writing so they are carried out after your death rather than opening a door to costly conflict.

  1. Prince

The court battle currently in preparation over Prince’s estate is a celebrity probate disaster in action. When the 80’s pop icon died in early 2016, he left no will, reportedly due to some previous legal battles that left him with a distrust of legal professionals in general. The lines are already being drawn for what will likely be a costly and lengthy court battle among Prince’s heirs. Sadly, there’s even a battle looming about determining, for certain, who his heirs actually are.

 Lesson learned: Correct legal documentation protects your legacy. Don’t let a general distrust or a bad experience cause your heirs to fight and potentially lose their inheritance.

These celebrity probate disasters serve as stark reminders that no one’s wealth is exempt from the legal trouble that can occur without proper estate planning. As always, we here at Cortes Law Firm are here to help you protect your family and legacy. Give us a call today at 405-561-2737.

‘Till Death Do Us Part, Too: Estate Planning Tips for Commitment Without Marriage

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Advice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage.

In fact, our cultural norms are shifting, and quickly. Consider the following:

  • Per the U.S. Census Bureau, approximately 112 million people in the U.S. are unmarried;
  • 45 percent of our country’s households are “unmarried households.”
  • In 2013, the CDC found that “cohabitation [without marriage] is now a regular part of family life in the U.S.”

Unfortunately, the law has not kept up with these societal trends. If you and your significant other love each other but don’t want to tie the knot, you need an estate plan that takes into account your specific situation while protecting you both, along with any other family members or loved ones you wish to include.

Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan.

  1. Living Trusts

Living trusts allow you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. A trust can also keep your business out of the public record, and it can empower someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

  1. Wills

A pour-over will can be an effective “backup” and compliment to a revocable trust. When you die, your assets get funneled into (or “poured-over” into) your trust and then distributed to your beneficiaries per the terms and instructions of that trust. The pour-over will keeps things simple, making the process less stressful (and prone to error) for your executor and trustee. It also helps wrap up loose ends, in case you didn’t transfer every last asset to your trust before you die.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term unmarried partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you.

  1. Beneficiary Designations

Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

  1. Power of Attorney, Designation of Health Care Surrogate, and Similar Documents

These documents allow you to designate your significant other as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called a guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options; or you’re just beginning a family with a person who has not formally and legally been recognized as your wife or husband, you probably have questions. How should you protect yourself and family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance — what contingency plans can be put in place?

Our experienced estate planning attorneys  at the Cortes Law Firm can help you identify a strategy to get the peace of mind you need. Please call us at 405-561-2737or email us to schedule a private consultation.

Got Stuff? George Carlin Says You Need An Estate Plan!

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estate plan, cortes law firm, revocable trust, probate, oklahoma estate planning attorney cortes law firm, oklahoma city probate attorney cortes law firmGeorge Carlin would have been a great pitchman for estate planning. You may remember his stand-up routine on “stuff.” We all have stuff, and we’re pretty particular about our stuff. We move it around with us, it’s hard for some of us to get rid of it, and some of us don’t like our stuff mixed up with other people’s stuff. If you have stuff, then you need an estate plan.

During your lifetime, you collect a lot of stuff, some of it valuable and some of it not. But because it’s your stuff, it means something to you. You already know you can’t take it with you when you die, so there has to be some way of distributing your stuff to other people.

Normally, you want your stuff to go to people you care about… your family and special friends,

sometimes a worthwhile cause. And you may want certain people to have certain things to remember you by.

Document Instructions for Your Stuff

When you die, all your stuff, no matter how valuable or invaluable it is, is called your “estate.” In the simplest terms, an “estate plan” is your instructions for getting your stuff to the people you want to have it after you die.

Important Legal Mumbo Jumbo

An estate plan must meet certain legal requirements, including that it must be written down, it must be signed by you, and it must be witnessed by other people who see you sign it. Your estate plan may be very simple, or it may be more complex, depending on how much stuff you have, how long you want your stuff to provide for the people you care about, and when you want them to actually get your stuff. For example, you’d probably want to wait a few years before that cute two-year-old receives grandpa’s antique pocket watch.

How Do You Get an Estate Plan?

You decide who you want to get your stuff and when you want them to get it. Your attorney then puts your instructions into a legal document called a will or trust. (There are distinct advantages to using a trust, but we’ll save that discussion for another time.) Also, while you can legally write your own, you have a much better chance of your estate plan working if you have an experienced attorney do it for you. To be frank, laypersons mess it up all of the time.

What Happens if I Just Don’t Get Around to It?

What if you die and you don’t have an estate plan? Well, there still has to be a way to get your stuff to other people, so the state in which you live has a plan waiting if you don’t have one. The only problem is that you won’t have any say in who gets your stuff, and someone might get left out – and – your stuff may go to a stranger – some “heir at law” that you don’t even know.

Example 1: If more than one of your relatives want the same part of your stuff, that can get

messy and expensive… and a lot of your stuff will be used to pay the courts and attorneys to

sort it all out. (Happens all the time.)

Example 2: If you’re not married and you want your significant other to get some of your stuff when you die, you’d better get your plan in place, or it just won’t happen. Under the state’s plan, your stuff will go to your blood relatives. Period.

Example 3: If you’re married and you’ve got kids, don’t be too sure that your spouse is going to get all your stuff. Your kids will probably get their share of your stuff, which means your spouse may not get enough of your stuff to live on.

By the way, if your stuff includes kids, then you’ve really got to get a plan. Otherwise, the court will decide who will raise them if something happens to both parents.

Scary thoughts? You bet!

The Bottom Line

If you’re responsible enough to have your own stuff, you need to be responsible for making sure what will happen to it after you’re gone. Let’s make sure you do it right; call the Cortes Law Firm now and we’ll help you translate your plans for your stuff into a legally binding document.

5 Mistakes People Make When Leaving Assets to Their Pets

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Leaving Assets to Their Pets, Cortes law firm oklahoma city estate planning attorney, Cortes Law Firm Oklahoma City Probate attorney, Revocable Living Trust, Estate PLanningA pet trust is an excellent way to make sure your beloved pet will receive proper care after you pass on. The problem, of course, is that you won’t actually be there to see that your wishes are carried out. It’s critical to set up a pet trust correctly to ensure there are no loopholes or unforeseen situations that could make your plans go awry. Here are 5 tragic mistakes people often make when leaving assets to their pets.

  1. Appropriating more than the pet could ever need.

The gossip stories about such-and-such celebrity who left his or her entire fortune to a pet are the exception rather than the rule. Leaving millions of dollars, houses, and cars to your pet is not only unreasonable, but it’s more likely to be contested in court by family members who might feel neglected. To avoid this pitfall, leave a reasonable sum of money that will give your pet the same quality of life that she enjoys now.

  1. Providing vague or unenforceable instructions.

Too many pets don’t receive the care their owners intended because they weren’t specific enough in their instructions or because they did not use a trust to make the instructions legally binding. Luckily, a pet trust can clarify your instructions and make them legally valid.

If you leave money to a caretaker without a pet trust in place, hoping it will be used for the pet’s care for example, nothing stops the caretaker from living very well on the pet’s money. But when you use a pet trust to designate how much the caretaker receives and how much goes for the pet’s care, you’ve provided a legal structure to protect your furry family member. You can be as specific about your wishes as you’d like, from how much is to be spent on food, veterinary care, and grooming. You can even include detailed care instructions, such as how often the dog should be walked.

  1. Failing to keep information updated.

Bill sets up a pet trust for his dog Sadie, but what happens if Sadie passes away? If Bill gets a new dog and names her Gypsy, but he doesn’t update this information before he dies, Gypsy could easily wind up in a shelter or euthanized because she’s not mentioned in the trust. This is a common yet tragic mistake that can be easily avoided by performing regular reviews with your estate planning attorney to ensure that your estate plan works for your entire family.

  1. Not having a contingency plan.

You might have a trusted friend or loved one designated as a caretaker in your pet trust, but what happens if that person is unable or unwilling to take that role when the time comes? If you haven’t named a contingent caretaker, your pet might not receive the care you intended. Always have a “Plan B” in place, and spell it out in the trust.

  1. Not engaging a professional to help.

Too many people make the mistake of trying to set up a pet trust themselves, assuming that a form downloaded from a do-it-yourself legal website will automatically work in their circumstances. Only an experienced estate planning attorney should help you set it up to help ensure that everything works exactly the way you want.

When attempting to leave assets to your pet, the good news is that with professional help, all these mistakes are preventable. Talk with the Cortes Law Firm today about your options for setting up a new pet trust or adding a pet trust to your current estate plan. We’re here to help.  Call us at 405-561-2737

3 Reasons You Want to Avoid Probate

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avoid probate cortes law firm, estate planning, revocable trust, cortes law firm oklahoma city estate planning attorney, cortes law firm oklahoma city probate attorneyWhen you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other asset) in only your name. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes – your family still has to go through the probate process to make those wishes legal.

Now that you have an idea of why probate might be necessary, here are 3 key reasons why you want to avoid probate if at all possible.

  1. It’s all public record.

Almost everything that goes through the courts, including probate, becomes a matter of public record. This means when your estate goes through probate, all associated family and financial information becomes accessible to anyone who wants to see it. This doesn’t necessarily mean account numbers and social security numbers, since the courts have at least taken some steps to reduce the risk of identity theft. But, what it does mean is that the value of your assets, creditor claims, the identities of your beneficiaries, and even any family disagreements that affect the distribution of your estate will be available, often only a click away because many courts have moved to online systems. Most people prefer to keep this type of information private, and the best way to ensure discreteness is to keep your estate out of probate.

  1. It can be expensive.

Thanks to court costs, attorney fees, executor fees, and other related expenses, the price tag for probate can easily reach into the thousands of dollars, even for small or “simple” estates. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. This money from your estate should be going to your beneficiaries, but if it goes through probate, a significant portion could go to the courts, creditors, and legal fees, instead.

Of course, setting up an estate plan that avoids probate does have its own costs. Benjamin Franklin wrote, “an ounce of prevention is worth a pound of cure.” Like the “ounce of prevention,” costs you incur now to put a plan in place are more easily controlled than uncertain costs in the future, especially when you consider your family may be making decisions while grieving. With proper planning, you can minimize the risk of costly conflict and also reduce or eliminate some costs, like court costs and executor fees; if there’s no probate case there won’t be any probate costs.

  1. It can take awhile.

While the time frame for probating an estate can vary widely from state to state and by the size of the estate itself, probate is not generally a quick process. It’s not unusual for estates, even seemingly simple or small ones, to be held up in probate for 6 months to a year or more, during which time your beneficiaries may not have easy access to funds or assets. This delay can be especially difficult on family members going through a hardship who might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can significantly speed the disbursement of assets, so beneficiaries can benefit sooner from their inheritance.

If your assets are located in multiple states, the probate process must be repeated in each state in which you hold property. This repetition can cost your family even more time and money. The good news is that with proper trust-centered estate planning, you can avoid probate for your estate, simplify the transfer of your financial legacy, and provide lifelong asset and tax protection to your family.

To learn more, call the Cortes Law Firm at 405-561-2737 for an appointment.  Or, self-schedule a free consultation on our website (www.corteslawfirm.com) Stephen Cortes will be happy to strategize with you.

‘Till Death Do Us Part, Too: Estate Planning Tips for Commitment Without Marriage

Cortes Law FirmCortes Law Firm Oklahoma City Estate Planning Attorney, Cortes Law Firm Oklahoma City Probate Attorney

Estate Planning Tips for Commitment Without Marriage, cortes law firm oklahoma city estate planning attorney, cortes law firm oklahoma city probate attorneyAdvice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage. Read more for Estate Planning Tips for Commitment Without Marriage.

In fact, our cultural norms are shifting, and quickly. Consider the following:

  • Per the U.S. Census Bureau, approximately 112 million people in the U.S. are unmarried;
  • 45 percent of our country’s households are “unmarried households.”
  • In 2013, the CDC found that “cohabitation [without marriage] is now a regular part of family life in the U.S.”

Unfortunately, the law has not kept up with these societal trends. If you and your significant other love each other but don’t want to tie the knot, you need an estate plan that takes into account your specific situation while protecting you both, along with any other family members or loved ones you wish to include.

Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan.

  1. Living Trusts

Living trusts allow you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. A trust can also keep your business out of the public record, and it can empower someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

  1. Wills

A pour-over will can be an effective “backup” and compliment to a revocable trust. When you die, your assets get funneled into (or “poured-over” into) your trust and then distributed to your beneficiaries per the terms and instructions of that trust. The pour-over will keeps things simple, making the process less stressful (and prone to error) for your executor and trustee. It also helps wrap up loose ends, in case you didn’t transfer every last asset to your trust before you die.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term unmarried partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you.

  1. Beneficiary Designations

Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

  1. Power of Attorney, Designation of Health Care Surrogate, and Similar Documents

These documents allow you to designate your significant other as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called a guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options; or you’re just beginning a family with a person who has not formally and legally been recognized as your wife or husband, you probably have questions. How should you protect yourself and family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance — what contingency plans can be put in place?

The Cortes Law Firm can help you identify a strategy to get the peace of mind you need. Please call at 405-561-2737 or go to our website (www.corteslawfirm.com) us to schedule a private consultation.

To self-schedule an estate planning or probate consultation on our website click on Free Consultation under “Becoming a Client”.

5 Mistakes Made by Successor Trustee (and How to Prevent Them)

Cortes Law FirmCortes Law Firm Oklahoma City Estate Planning Attorney, Cortes Law Firm Oklahoma City Probate Attorney

successor trustee, cortes law firm Oklahoma estate planning attorney, cortes law firm oklahoma probate attorney, revocable living trust, power of attorney, estate planningWhen establishing a trust, you need to give serious thought to choosing your successor trustee—the person who will administer your trust once you’re no longer able to do so. This individual ideally should be:

  • Someone you trust implicitly.
  • Someone who is organized, responsible and meticulous.
  • Someone who can remain steadfast to your wishes in the face of family disagreements and other disputes regarding the trust.

That said, even the most capable, well-intentioned successor trustees can make mistakes when managing affairs. Here are five surprisingly common mistakes along with steps to take to prevent them from happening.

  1. Faulty Record-keeping

To ensure that a trust fulfills its purpose without being contested, the trustee must keep accurate, detailed records of income and distributions. Your trustee must also be prepared to report these figures regularly to the beneficiaries and heirs. If these records are incomplete or inaccurate, the door is opened for someone to challenge the trust, potentially leading to lengthy and costly court battles.

To prevent this mistake: Hire an accountant to assist the successor trustee in record-keeping, and make sure the trustee and the accountant make a connection before the trustee takes over.

  1. Misunderstanding the Fiduciary Role

Many trustees mistakenly assume their job involves acting in the best interests of the person setting up the trust. In reality, their job is to act in the interests of the beneficiaries of the trust. Furthermore, the trustee may be legally liable for any failure to protect the beneficiaries against bad investment advice concerning the trust.

To prevent this mistake: Detail the fiduciary role of the successor trustee in the trust documentation itself, and be certain that the trustee understands his/her role.

  1. Not Collaborating Effectively with Your Established Financial Team

The successor trustee’s failure to communicate with key members of your team while administering your trust can lead to inaccuracies, misunderstandings and significant, preventable financial losses. 

To prevent this mistake: Make sure your trustee is properly introduced to, and connected with, your attorney, CPA, financial planner and anyone else involved with your estate planning. 

  1. Failing to Discuss Compensation

If your appointed trustee is a close friend or family member, the topic of compensating the trustee may be glossed over or forgotten. This oversight can result in a lack of morale or even resentment if managing the trust becomes difficult or time consuming.

To prevent this mistake: Bring up the topic of compensation yourself when you establish the arrangement; be as generous as you deem necessary; and put the compensation terms in writing.

  1. Failing to Remain Objective

Many people choose a close family member as a trustee. This strategy can be appropriate, especially when privacy matters. However, disputes about money can happen even in the tightest-knit families, and it can be difficult to near-impossible for a relative to remain neutral when resolving those fights. The end result could be decisions that family members perceive to be unfair or that wind up being inconsistent with your intentions.

To prevent this mistake: Make certain the person you choose can remain neutral and faithful to the terms of the trust, even under duress. If there is any doubt, consider hiring a corporate trustee with no emotional connection to the family or estate.

Selecting a successor trustee is one of the most important decisions you will make during your estate planning process.

For insightful counsel on this issue, contact the Cortes Law Firm today at 405-561-2737 to schedule a private appointment.  Also, consider attending one of our Successor Trustee seminars and purchasing our Successor Trustee Manuel.

How to Choose the Right Agent for Your Incapacity Plan

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Incapacity plan, cortes law firm Oklahoma estate planning attorney, cortes law firm oklahoma probate attorney, revocable living trust, power of attorney, estate planningA common misconception is that estate planning equates to death planning.  But planning for what happens after you die is only one piece of the estate planning puzzle.  It is just as important to make a plan for what happens if you become mentally incapacitated.  You need an Incapacity Plan.

What Happens Without an Incapacity Plan?                                                                                                                            

Without a comprehensive incapacity plan, a judge can appoint an agent (known as a guardian or a conservator) to take control of your assets and make all personal and medical decisions for you under a court-supervised guardianship or conservatorship.   The guardian or conservator must report all financial transactions to the court either on an annual basis or at least every few years.  The guardian or conservator is also typically required to obtain court permission before entering into certain types of financial transactions (such as mortgaging or selling your real estate) or making life-sustaining or life-ending medical decisions.  The court-supervised guardianship or conservatorship will then continue until you either regain capacity or die.

Who Should You Choose as Your Financial Agent and Health Care Agent?

As you can see from the above discussion, a guardian or conservator has an important and involved role if you become incapacitated.

Creating an incapacity plan can help you order to avoid a court-supervised guardianship or conservatorship.

Rather than having a judge decide, your incapacity plan will have you appoint one or more agents to carry out your wishes. There are two very important decisions you must make when putting together your plan:

  1. Who will be in charge of managing your finances if you become incapacitated (your financial agent); and
  2. Who will be in charge of making medical decisions on your behalf if you become incapacitated (your health care agent).

Factors to consider when deciding who to name as your financial agent and health care agent (who do not have to be the same people) include:

  • Where does the agent live? With modern technology, the distance between you and your agent should not matter.  Nonetheless, someone who lives nearby may be a better choice than someone who lives in another state or country.
  • How organized is the agent? The agent will need to be well organized to manage your health care needs, keep track of your assets, pay your bills, and balance your checkbook, in addition to being able to manage their own finances and family obligations.
  • How busy is the agent? If the agent has a demanding job or travels frequently for work, then the agent may not have the time required to take care of your finances and medical needs.
  • Does the agent have expertise in managing finances or the health care field? An agent with work experience in finances or medicine may be a better choice than an agent without it.

What Should You Do?

If you choose the wrong person to serve as your financial agent or health care agent, your incapacity plan is likely to fail and land you and your assets in a court-supervised guardianship or conservatorship.

In order to create an incapacity plan that will work the way you expect it to work, you need to carefully consider who to choose as your agent and then discuss your decision with that person to confirm that they will in fact be willing and able to serve.

The Cortes Law Firm is ready to answer your questions about incapacity planning and assist you with choosing the right agents for your plan.  Call us today at 405-561-2737

Why Factoring Long-Term Care In Estate Plan Pays Off

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Long-term in estate plan, cortes law firm estate planning, cortes law firm probate attorney, revocable living trust, probate, estate planningFor most people, thinking about estate planning means focusing on what will happen to their money after they pass away. But that misses one pretty significant consideration: the need to plan for long-term care. Factoring Long-Term Care in Estate Plan Pays Off.

The last thing any of us want to contend with when a health issue arises later in life is having to throw together a hasty estate planning solution in the face of mounting medical costs. Your best defense is careful planning with the help of a trusted expert.

Why it’s so important to plan for long-term care

While only about 19 percent of current U.S. residents will need to reside under long-term care for a period of over three years, that number sharply increases when factoring in nursing home stays of a shorter duration — which will still have a substantial impact on your estate.

Whether the care you need takes place in a nursing home, assisted living facility, or with an in-home provider, the costs can mount with alarming speed. For example, national average rates for assisted living hover around $3,500 per month. As those costs add up, you could see your assets dwindle much sooner than you’d hoped. Luckily, estate planning attorneys can help in a number of ways.

What to go over with your estate attorney

If long-term care isn’t factored into your estate plan, you are probably not looking at a truly realistic and accurate representation of your assets. Talk to your estate planning attorney about the following factors in order to get on the right track:

  1. Set reasonable expectations for long-term care

It’s impossible to know what life will bring, but we can certainly make educated guesses. For example, are there any major diseases that run in your family? There is a chance you will have the good fortune of staying healthy well into your golden years, but estate planning is an aspect of your financial life in which it’s helpful to protect yourself against worst-case scenarios.

In the estimated likelihood that you will require such care, at what age could you reasonably predict you’ll need it? Do you have any current health conditions to take into account? Exploring these possibilities may not be the most enjoyable exercise, but it’s far better than facing the reality of long-term care with no plans in place.

  1. Consider a long-term care insurance policy

As Medicare or standard health insurance may not cover your costs, a long-term care insurance policy is one way to protect yourself against draining your financial assets. Ask for resources for finding an affordable premium that isn’t likely to increase prohibitively over time. Begin this process as soon as possible, as your premium will be lower the younger you are when you apply.

Another potential oversight is assuming your long-term care will be covered by Medicaid. Discuss it as an option to determine your qualifications and get authoritative insights about the specificities of your unique financial situation in terms of Medicaid benefits.

  1. Get smart about living wills and trusts

In order to best prepare your loved ones for complex medical decisions, go over advance directives. In addition, discuss options for setting a revocable living trust, and possibly one or more irrevocable trusts, like a life insurance trust or a charitable remainder trust, as part of your long-term care planning.

It’s also important to create a plan that allows someone you trust to access and utilize your financial resources for your benefit in the event of unforeseen medical circumstances. One common mistake is tying up assets in investments that aren’t liquidatable when you might need them most. For example, money locked into annuities can result in a fee for early withdrawal. Working with a team of that includes an estate planning attorney, financial advisor, and insurance professional can provide you and your family with the best overall solution.

Take the time now to talk to an estate planning attorney about the best ways to maintain financial security in tandem with the demands of long-term care. Even if you don’t end up needing long-term care in your lifetime, you can enjoy the peace of mind knowing you’ll be covered.

The process of completing a long-term care plan may sound daunting, but we’re here to help you by making it a streamlined experience — simply get in touch with us today at 405-561-2737 and let us put you in a more secure position for the future.

Impacts of Trump on Estate Planning: Your Quick Guide

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Trump on Estate Planning, Revocable Living Trust, Cortes Law Firm Oklahoma Estate Planning, Cortes Law Firm Oklahoma Probate AttorneyWith a fresh year starting out, here’s what you need to know about Trump on Estate Planning.

President Trump’s tax plan

A new president usually means major shakeups in fiscal and tax policy, and Trump’s tax plan is no exception. Here are several of the proposed changes we will potentially see rolling out during his administration:

  • The repeal of the estate tax
  • Lower income tax rates
  • The introduction of a tax deduction for childcare costs
  • Dependent care savings accounts (DCSAs) with conditional matching
  • The switch from seven to three tax brackets
  • Increased standard joint deduction from $12,600 to $30,000
  • Increased itemized deductions cap from $100,000 to $200,000
  • Decrease in business tax from 35 percent to 15 percent

Of these proposed changes, the repeal of the estate tax, also known as the “death tax,” means your assets would not be taxed by the government upon your death and would transfer in full to your beneficiaries. It is also predicted that the gift and generation-skipping taxes may be repealed as well. All of these actions could result in a greater ability to keep wealth within your family, but we will have to wait until we see the final legislation to know the exact mechanics. Additionally, the proposed changes would also negatively impact taxation on charitable gifts and other philanthropic gestures contained in your estate plan.

Estate taxes differ from state to state, so the wisest move in your playbook is to go over your estate plan with an experienced estate planning attorney to discover how these changes may impact its other components.

That being said, proposed policy changes must go through Congress, which has its own agendas and ideas about fiscal and tax policy. So, staying on top of new developments and in close contact with your team means you’ll be prepared for whatever unfolds over the coming years.

More benefits to trust-based planning

There are also many non-tax-related benefits to trust-based planning that you can take advantage of regardless of which proposed changes take place under the new administration and Congress. Just a few key benefits of trust-based planning include:

  • Greater privacy for your family and avoidance of probate
  • Incapacity protection and avoidance of conservatorship or guardianship
  • The creation of lifetime beneficiary directed trusts providing long-term asset protection benefits to your heirs

Give us a call today at 405-561-2737

Not even the nation’s top financial experts know exactly how Trump’s presidency and the Republican-run Congress will impact estate planning best practices for every citizen, but a skilled estate planning attorney can guide your estate planning in a smart, careful, and decisive manner.

We’re here to help you navigate policy changes to ensure your estate is managed as beneficially as possible for you and your family for generations to come. Give us a call today to get the ball rolling.

Why Your Estate Planning Must Morph into a Process

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Estate planning must morph, Cortes law firm oklahoma city estate planning attorney, cortes law firm oklahoma probate attorney, revocable living trust, last will, power of attorneyMany people put their estate plan on their to-do list as a one-time project: “Create estate plan” or “Meeting with lawyer 10:30 a.m. Thursday for estate plan.”  However, your estate planning must morph into a process.

Thinking of your estate plan as a single project or task to complete and move off your list is a common approach – but it’s also an approach that can land you in considerable hot water. Here’s why it’s essential to view your estate plan as a process, rather than a project.

Process vs. Project: What’s the Difference?

A project that takes several steps to complete – like an estate plan – can seem like it’s a “process” already. First, I need to call the lawyer. Then, I need to make time to attend the appointment. Before that, I need to get together these documents….

In fact, a project doesn’t become a process simply because it takes time and effort to complete. Here are some of the key differences between a project and a process.

A Project:

  • Seeks to create something new or implement a single, concrete change.
  • Requires leadership to plan and execute.
  • Can have its plans or goals changed on short notice.

A Process:

  • Creates value by returning to the same task many times.
  • Requires management to ensure the process is consistent and produces expected results.
  • Can be changed only by launching a project with a goal to change the process.

Estate Planning as Process

When you’re creating a new estate plan, it’s natural to see that plan as a project. You’re creating something new when you work with a team to implement your plan. You create a positive change in your life by having an estate plan from not having one. And, you’re right. Setting up a trust or implementing your first estate plan certainly qualifies as a project.

But, the goal of the estate plan “project,” however, should transition into an estate planning process by which you check, evaluate, and update your will, trust, and other legal documents regularly – perhaps once a year, but certainly every time you hit a major life milestone, like the birth of child or grandchild, death of family member, divorce, marriage, significant change in assets or income, and the like. When your estate planning is viewed as a lifelong process, your plan is much more likely to serve your family’s needs, whatever they may be, when the time comes simply because you’ve been managing it proactively with each change in your circumstances.

The Cortes Law Firm can help you get started with estate planning and are here to guide you along the entire process. Let us become your ally in managing the process and in ensuring that you and your family gain maximum value from returning to it on a proper schedule.  Call us today at 405-561-2737

Happy Holidays 2016 – Cortes Law Firm

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Happy Holidays, Cortes Law Firm, Revocable Trust, Probate, Cortes Law Firm Oklahoma City Estate Planning Attorney

Happy Holidays from the Cortes Law Firm!

Wishing you Love, Peace, Hope and Joy in the New Year.

 

If You Die Without a Will, Does Your Spouse Inherit Your Entire Estate?

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Die without a will, cortes law firm, revocable living trust, probate, cortes law firm oklahoma estate planning attorney, Steve CortesIf you are married and you die without a Will and Testament, you may mistakenly believe that your spouse will still inherit your entire estate.  Not so fast.  Who will inherit your estate depends on several different factors:

  1. How is your property titled? Is your property titled in your name alone, in joint names with your spouse, in joint names with a child or other relative, or does it have a beneficiary designated?  Knowing how all of your property is titled is the real key to understanding who will inherit it after you die.  For example, if your home is titled in joint names with rights of survivorship with your spouse, then your spouse will inherit the home.  However, if it is titled in your name alone, then your spouse may or may not inherit the home as determined by applicable state laws.  These laws are referred to in Oklahoma as “intestacy laws”.
  1. Did you and your spouse sign a prenuptial or post-nuptial agreement? The right to inherit property from your spouse can be legally waived in a valid agreement signed before you get married (a prenuptial or premarital agreement), or after you get married (a post-nuptial agreement).  If you and your spouse entered into such an agreement, then the legal effect of a full waiver of inheritance rights is to treat your spouse as having predeceased you.  You and your spouse may also agree to only waive certain inheritance rights, such as the right to inherit your IRA or 401(k).
  1. What does your state’s intestacy laws say? You may be surprised to learn that the intestacy laws of many U.S. states do not require the entire estate of a deceased married person to be distributed to their surviving spouse.  In some states the surviving spouse must divide the estate with the deceased spouse’s children, if any, otherwise with the deceased spouse’s parents or siblings.  When real estate is involved, this may lead to a family feud.  For example, the surviving spouse may want to sell the real estate and the children or parents may want to keep the real estate.  Also, if you own real estate located outside of your home state, then the intestacy laws of the other state will govern who will inherit your real estate located there, while the laws of your home state will govern who will inherit everything else.  This could result in different beneficiaries of your out-of-state real estate and the rest of your estate, leaving your family with quite a mess.

What Should You Do?

If you are married and you want your spouse to inherit all of your property, then the only way to be assured that this will happen is to consult with an attorney who is familiar with the inheritance laws in your state and any other state where you own real estate (yes, you may need to consult with two different attorneys).  The attorney will be able to review how all of your assets are titled and then help you determine the options for making sure that your spouse will be the only beneficiary of your estate. Call the Cortes Law Firm today at 405-561-2737.

Good and Bad of Oklahoma Probate

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oklahoma probate, cortes law firm, revobable living trust, cortes law firm oklahoma estate plannign attorney, probate, Steve CortesIn estate planning circles, the word “probate” often comes with a starkly negative connotation. Indeed, for many people — especially those with larger estates — financial planners recommend trying to keep property out of probate whenever possible. That being said, the Oklahoma probate system was ultimately established to protect the property of the deceased and his/her heirs, and in a few cases it may even work to an advantage. Let’s look briefly at the pros and cons of going through probate.

The Pros

For some estates, especially those in which no will was left, the system works to make sure all assets are distributed according to state law. Here are some potential advantages of probating an estate:

  • It provides a trustworthy procedure for redistributing the property of the deceased if no will was left.
  • It validates and enforces the intentions of the deceased if a will exists.
  • It ensures taxes and claimed debts are paid on the estate, so there’s a finality to the deceased person’s affairs, rather than an uncertain, lingering feeling for the beneficiaries.
  • If the deceased was in debt, probate gives only a brief window for creditors to file a claim, which can result in more debt forgiveness.
  • Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable.

The Cons

While probate is intended to work fairly to facilitate the transfer of property after someone dies, consider bypassing the process for these reasons:

  • Oklahoma Probate is a matter of public record, which means personal family and financial information become public knowledge.
  • There may be considerable costs, including court, attorney, and executor fees, all of which get deducted from the value of the estate.
  • Probate can be time-consuming, holding up distribution of the assets for months, and sometimes, years.
  • Probate can be complicated and stressful for your executor and your beneficiaries.

Bottom line: While Oklahoma probate is a default mechanism that ultimately works to enforce fair distribution of even small estates, it can create undue cost and delays. For that reason, many people prefer to use strategies to keep their property out of probate when they die.

The Cortes Law Firm can help you develop a strategy to help you avoid probate and make life easier for the next generation. For more information about your options, contact us today to schedule a consultation at 405-561-2737.

Is a Financial Plan Enough? Why Experts Say You Need an Estate Plan, Too

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estate plan, cortes law firm, steve cortes, revocable living trust, probate, cortes law firm oklahoma estate planning attorneyIf you want to leave a robust financial legacy for your family, a financial plan alone is like trying to guide a boat with just one oar. It’s only part of the big picture for your overall monetary health.  You also need an estate plan. A well-informed financial plan is worth your time for several reasons, but let’s look at how financial and estate planning can work in tandem to create the best possible future for you and your family in the years to come:

What’s included in a financial plan

Financial planners take stock of an individual’s fiscal landscape and come up with approaches to maximize his or her overall financial well-being. Take Jessica for instance, an energetic project manager in her late-twenties. She’s found a successful career track after graduating with her bachelor’s and now has the steady income necessary to start daydreaming about buying a house with bay windows like the one she passes on her morning commute.

But before she can take such a big leap, Jessica tracks down a skilled financial planner who will take an honest look at her foreseeable cash flow and her spending and saving habits. People from all walks of life use the help of financial planners to make sure they’re in good shape for making big purchases, saving for their children’s education, and ensuring a comfortable retirement. This also includes developing an investment portfolio, which the financial planner monitors and manages.

But financial planning only goes so far. To have a comprehensive approach, Jessica also must also consider her estate and the wills and trusts she should put in place so her assets go where she wants them to in the long run. That’s where a trusts and estates attorney comes in.

What’s included in an estate plan

Estate planning attorneys are lawyers who give sound advice about what will happen to a person’s assets if he or she becomes mentally incapacitated or when he or she dies. While this may not sound like the sunniest of topics, knowing that what you pass on to your family will be legally protected lets you focus on enjoying the best things in life without worrying about your loved ones’ futures. Estate planning includes defining how you want your loved ones to benefit from the financial legacy you leave behind, implementing tactics to protect your assets from creditors down the road, providing a framework so your loved ones can make medical decisions on your behalf when you can’t, developing strategies to help you reduce estate taxes, and more.

And at the end of the day, your attorney is a teacher. He or she should be equipped to clearly explain your legal options. Even though estate planning can be highly technical, your professional bond with your attorney can and should feel like a friendly partnership since it involves taking an honest look at many personal wishes and priorities. There is no one-size-fits-all estate plan, so choose an attorney whom you trust and enjoy working with and who is responsive to questions and needs.

Remember Jessica? While financial planning helped her get from point A to point B with some pretty big money milestones, she now knows she needs an Oklahoma estate planning attorney to make sure her wishes are carried out and her money stays in the right hands—her family’s.

How these two efforts work together

There are several ways these two components of your financial wellness work in harmony. Asking your financial planner and estate planning attorney to collaborate is common practice, so don’t be concerned that what you’re asking is outside their regular scope of work. Knowing who else advises you will help both parties get the information they need do their jobs at peak effectiveness. For example, your estate planning attorney may prepare a living trust for you, but your financial planner may help you transfer certain assets into that trust.

What are you waiting for?

If you already have a financial planner and are thinking about working with a trusts and estates attorney, you’re in an excellent position. We can often collaborate with your advisor to begin working on your estate plan. This might save you time and money, as we’ll get up to speed with the help of your financial planner.

The right time to plan your estate is right now. The sooner you put yourself and your family in a position to rest easy knowing a solid plan is in place, the better. And now that you know your financial plan is a wonderful start—but not a complete solution—you’re ready to take the first step on the path to total financial security. Call the Cortes Law Firm today at 405-561-2737

Why a Trust Is the Best Option for Avoiding Probate

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avoiding probate, probate court, cortes law firm, estate planning, revocable trust, cortes law firm oklahoma city estate planning attorney, Steve CortesA trust could be your best option for avoiding probate.  As Ambrose Bierce once darkly observed, “Death is not the end. There remains the litigation over the estate.”

Ideally, when someone passes away, the paperwork and material concerns associated with the estate are so flawlessly handled (thanks to excellent preparation) that they fade into the background, allowing the family to grieve and remember in peace.

In fact, the whole business of estate planning – or at least a significant piece of it – is concerned with ease. How can assets and legacies be transferred to the next generation in a harmonious, stress-free process?

To that end, one primary goal of many people is to avoid the complications and costs involved with probate.

There are many “tools of the trade” that a qualified attorney can use to keep your assets out of probate – for example, establishing joint ownership on bank accounts and real estate titles, designating beneficiaries for life insurance policies and certain accounts, and so on. However, setting up a revocable living trust is quite often the best, most comprehensive option for avoiding probate. Let’s discuss why this is true.

What is a trust?

Often touted as an alternative to a will, a trust is a legal structure that permits management of your assets by a trustee on behalf of your beneficiaries. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or pass away, at which point the responsibility for managing the trust passes to someone you designate as a successor trustee.

How does a trust help you avoid probate?

The purpose of probate is to transfer property ownership for all assets that were listed in your name when you passed away. A trust can bypass this process completely because your assets are transferred to the trust while you are still alive. Therefore, when you die, there’s nothing that needs to be transferred by the probate court (everything is already in your trust). Furthermore, a trust can cover virtually any type of asset, from real estate to vehicles to stock to bank accounts. When a trust is structured correctly with the help of an experienced estate planning attorney, your entire estate can stay out of probate court entirely. This process not only limits court costs, but it also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.

Establishing a trust can be a bit complicated, and the process can cost a bit more upfront than a will; however, if you’re willing to invest a little more up front, a trust can be your best option for avoiding probate later.

The key to planning effectively to minimize the likelihood of a drawn out, contentious, expensive process is to work with highly qualified, trusted people. Find a lawyer who genuinely cares about you and your family and who knows how to forge the right strategy for you and your family. Call the Cortes Law Firm today to learn more about your next steps to get the peace of mind you deserve.

The Shocking Truth About Asset Protection Planning

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asset-protection-corteslawfirm, Cortes law firm, revocable trust, revocable living trust, cortes law firm Oklahoma city estate planning attorney, probate, Oklahoma city probate, cortes law firm Oklahoma probate, asset protectionSome view asset protection planning with a skeptical eye.  They believe there is a moral obligation to pay one’s debts.  They think that asset protection planning is immoral because it prevents a creditor from collecting on a judgment entered by a court.

The truth is the U.S. justice system is unpredictable.  Defendants are faced with ever-expanding theories of liability, being sued just because they appear to have “deep pockets,” and judgments entered against them based on desired outcomes instead of the law.

What, then, can you do that will ethically and legally protect your hard-earned assets from creditors, predators, and lawsuits?

What Asset Protection Planning Is, and What it Is Not
The first step in protecting your assets is to understand that planning to preserve and secure your property in advance of a claim, or the threat of a claim, is a legitimate form of wealth planning.  The goals of asset protection planning are to:

  • Provide your creditor with an incentive for settling a claim;
  • Improve your bargaining position;
  • Offer you options when a claim is asserted; and
  • Ultimately, deter your creditor from filing that lawsuit.

On the other hand, asset protection planning is not about avoiding taxes, keeping secrets, hiding assets, or defrauding creditors.  In addition, it will not be effective to shield your property from an existing claim, and it must be done long before there is even the hint of a claim.

When Done Right, Asset Protection Planning is Completely Legal and Ethical
Using all legal tools available to help clients protect their hard-earned assets from future claims is consistent with the rules of professional conduct that govern the actions of attorneys.  In fact, these rules require attorneys to pursue representation of their clients with diligence and advocacy.  What these rules do not allow, however, is assisting or counseling a client in fraudulent or criminal conduct.  Therefore, you must be wary of an attorney who offers to assist you in protecting your property after a lawsuit has already been threatened or filed.  This type of conduct is not ethical or legal.

The Final Truth About Asset Protection Planning

While you may drive carefully and steer clear of barroom brawls, unfortunately you cannot avoid all activities that create liability.  Putting together a plan to preserve and protect your assets in advance of a claim is a completely acceptable and, more importantly, legal form of wealth planning.

Please call the Cortes Law Firm at 405-561-2737 if you have any questions about this type of planning and to get started on protecting your assets from future creditors, predators, and lawsuits.

AB Trust – Do You Need to Get Rid of Yours?

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ab-trust-corteslawfirm, ab trust, Cortes law firm, revocable trust, revocable living trust, cortes law firm Oklahoma city estate planning attorney, probate, Oklahoma city probate, cortes law firm Oklahoma probateAre you married and is the last time you and your spouse updated your estate plan more than a few years ago? Then chances are your estate plan contains good old AB Trust planning (also called “Marital and Family Trusts” or “QTIP” and “Bypass Trusts”) which, up until 2011, was the only way for married couples to double the value of their federal estate tax exemptions. All of this changed in 2011 when “portability” of the estate tax exemption between spouses was introduced for the first time.

In simple terms, “portability” means that when the first spouse dies, the surviving spouse can claim the deceased spouse’s unused federal estate tax exemption and add it to his or her own exemption. The good news is that portability has been made a permanent part of the federal estate tax laws. The bad news is that the AB Trust planning in your old estate plan may now do more harm than good.

Take, for example, Fred and June were married for 40 years. Fred died in 2014 and none of his $5.34 million estate tax exemption was used, so June can add Fred’s $5.34 million exemption to her own $5.34 million exemption so that June now has an exemption equal to $10.68 million. Better yet, all property passing outright to June from Fred’s estate, revocable trust, or by right of survivorship will receive a full step up in income tax basis to the fair market values as of Fred’s date of death. Subsequently, when June dies her beneficiaries will receive a full, second step up in income tax basis to the fair market value as of June’s date of death.

What if instead Fred and June have a typical 1990’s estate plan, which uses those good old AB Trusts to ensure full use of both spouses’ federal estate tax exemptions? If Fred and June were lax and neglected to update their 1990’s estate plan and Fred dies in 2014, then not only will June be stuck with AB Trusts that were drafted using decades-old planning priorities, but their heirs won’t receive any step up in income tax basis for the assets remaining in the B Trust when June dies. Instead, the heirs will inherit the B Trust assets with the income tax basis calculated as of Fred’s 2014 date of death. If June lives for a long time, then this could very well result in a large income tax bill when the heirs decide to sell the inherited assets many years down the road.

Fred and June’s story is only one scenario in Oklahoma and other states. It shows the down side of an old estate plan that uses AB Trust planning. On the other hand, there are still many good reasons for married couples to keep AB Trust planning in their updated estate plans. If you’re married and your estate plan is more than a few years old, then give us a call so that together we can determine if an AB Trust plan still makes sense for you and your family. It is quite possible that your existing estate plan can be revised so that it takes advantage of the good features of AB Trust planning while gaining the benefits of an additional step up in basis. Call the Cortes Law Firm today at 405-561-2737

Is a Payable on Death Account Right for You and Your Family?

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Payable on death accounts, or “POD accounts” for short, have become popular in Oklahoma for avoiding probate in the last decade or so.

payble-on-death-corteslawfirm, payable on death, cortes law firm, revocable trust, revocable living trust, cortes law firm oklahoma city estate planning attorney, probate, oklahoma city probateWhat is a POD Account?

A POD account is a type of bank account which allows the account owner to designate one or more beneficiaries to receive the funds left in the account when the owner dies.

A POD account allows the owner to do what he or she pleases with the funds held in the account during the owner’s lifetime, including spending it all and changing the beneficiaries of the account.  After the owner dies, if anything is left in the POD account, the beneficiaries chosen by the owner will be able to withdraw the remaining funds without the need for probating the account by presenting an original death certificate of the owner.

What Can Go Wrong With a POD Account?

POD accounts sound great, don’t they?  In general, POD accounts are easy to set up and make sense for many people.  A handful of states now even recognize POD deeds for real estate and POD designations for automobiles.

Nonetheless, POD accounts may lead those who create them to believe that they have an “estate plan” and no additional steps will need to be taken.  This may or may not be true.  Below are a few examples of what can, and often does, go wrong with POD accounts:

  1. POD accounts can be set up as joint accounts that become payable on death after all of the owners die.  This means that if a husband and wife in a second marriage set up a POD account that will go to their six children from their first marriages after both die and the husband dies first, then the wife can simply change the POD beneficiaries to her own three children and disinherit the husband’s three children.
  2. Same facts as above
    , except that the wife remarries for a third time.  She could change the beneficiary of the POD account to her new husband, thereby disinheriting her children and her deceased husband’s children.
  3. If there is only one POD account owner and he or she becomes mentally incapacitated, then a valid power of attorney or court-supervised guardianship or conservatorship might be needed to access the POD account to help pay for care for a sick loved one.
  4. If a POD beneficiary is a minor under the age of 18 or 21 (this depends on state law), then a court-supervised guardianship or conservatorship may need to be established to manage the minor’s inheritance.
  5. If all of the named POD beneficiaries predecease the account owner, then the account may have to be probated.

These are just a few examples of why POD accounts should not be a primary asset transfer mechanism in your estate plan. You need to have a will, a revocable living trust, a power of attorney, and a health care directive in place to insure that you and your property are protected in case you become mentally incapacitated and to make sure that your property goes where you want it to go after you die. Call Steve Cortes today at the Cortes Law Firm 405-561-2737.

 

Essential Legal Documents You Need for Incapacity Planning

Cortes Law FirmCortes Law Firm Oklahoma City Estate Planning Attorney, Cortes Law Firm Oklahoma City Probate Attorney

incapacity planning, corteslawfirm, revocable trust, estate planning, probate, Cortes law firm oklahoma estate planning attorney, oklahoma city estate planning attorneyMy clients are usually surprised with the amount of time spent discussing incapacity planning. Comprehensive estate planning is about more than your legacy after death, avoiding probate, and saving on taxes. It must also be about having a plan in place to manage your affairs if you become mentally incapacitated during your life.

What Happens Without an Incapacity Plan?

Without comprehensive incapacity planning, a judge can appoint a guardian or conservator to take control of your assets and health care decisions.  This guardian or conservator will make all personal and medical decisions on your behalf as part of a court-supervised guardianship or conservatorship.  Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship or conservatorship proceeding.

What Happens to Your Finances During Incapacity?

If you are legally incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Of course, bills still need to be paid, tax returns still need to be filed, and an investment strategy still needs to be managed.

So, you must have these two essential legal documents for managing finances in place prior to becoming incapacitated:

  1. Financial Power of Attorney.  This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters that are described in the document.

Financial Powers of Attorney come in two forms:  “Durable” and “Springing.”  A Durable Power of Attorney goes into effect as soon as it is signed, while a Springing Power of Attorney only goes into effect after you have been declared mentally incapacitated.

  1. Revocable Living Trust.  This legal document has three parties to it:  The person who creates the trust (you might see this written as “Trustmaker” or “Grantor” or “Settlor” – they all mean the same thing); the person who manages the assets transferred into the trust (the “Trustee”); and the person who benefits from the assets transferred into the trust (the “Beneficiary”).  In the typical situation you will be the Trustmaker, the Trustee, and the Beneficiary of your own revocable living trust, but if you ever become incapacitated, then your designated Successor Trustee will step in to manage the trust assets for your benefit.

Health Care Decisions Must Be Made Too

If you become legally incapacitated, you won’t be able to make health care decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis situation and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

So, you should have these three essential legal documents for making health care decisions in place prior to becoming incapacitated:

  1. Medical Power of Attorney.  This legal document, also called an Advance Directive or Medical or Health Care Proxy, gives your agent the authority to make health care decisions if you become incapacitated.
  1. Living Will.  This legal document gives your agent the authority to make life sustaining or life ending decisions if you become incapacitated.
  1. HIPAA Authorization.  Federal and state laws dictate who can receive medical information without the written consent of the patient.  This legal document gives your doctor authority to disclose medical information to an agent selected by you.

Is Your Incapacity Plan Up to Date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them.  Incapacity planning is ongoing.  Instead, your incapacity plan must be reviewed and updated periodically and if certain life events occur – such as moving to a new state or going through a divorce. If you keep your incapacity plan up to date, it should work the way you expect it to if it’s ever needed.

Everyone Needs a Estate Plan

Cortes Law FirmCortes Law Firm Oklahoma City Estate Planning Attorney, Cortes Law Firm Oklahoma City Probate Attorney

estate_plan_corteslawfirmIf you’re reading this, you need an estate plan.  Because everyone, age 18 and older needs an estate plan.

It doesn’t matter if you are old or young. It doesn’t matter if you have built up considerable wealth. It doesn’t matter if you are just entering adulthood. You need a written plan to keep you in control and to protect yourself and those you love.

  • Every adult, regardless of age or wealth, needs both a lifetime plan and an after-death estate plan.
  • Planning for incapacity will keep you in control and let your trusted loved ones care for you without court interference – and without the loss of control and expense of a guardianship or conservatorship proceeding.
  • Every adult needs up-to-date health care directives.
  • You need to leave written instructions to make sure you are the one who selects who’s in charge of when and how your assets will be distributed.
  • We all need the counseling and assistance of an experienced estate planning attorney.

What is an Estate Plan?

Your estate is comprised of the assets you own, your car, home, bank accounts, investments, life insurance, furniture and personal belongings. No matter how large or how small your estate, you can’t take it with you when you die, and you probably want certain people to have certain things you own.

To make sure that happens, you need to provide written instructions stating who you want to receive your assets and belongings, what you want them to receive, and when they are to receive it – that is the essence of an estate plan. If you have young children, you will need to name someone to raise them in your place and to manage their inheritance.

A properly prepared estate plan also will have instructions for your care (and the management of your assets) if you become incapacitated, even for a short time, due to illness or injury. Without the proper documents in place, your family will have to ask the court for permission to use your assets to take care of you and to oversee your care. That process is out of your control and it takes time and costs money, making an already difficult situation even more difficult for your family.

It might surprise you, but having a plan in place often means more to families with modest means because 1) they can least afford to pay unnecessary court costs and legal fees and 2) state laws, which take over in the absence of planning, often distribute assets in an undesirable way. Here’s an example:

Sam and Meg had two young children. Sam died in a car accident on his way to work. Because he had no estate plan, the laws in his state divided his estate into thirds: one third went to Meg and one third to each of his children. Meg, a stay-at-home mom, was forced to go back to work. The court set up guardianships for each child, which required ongoing court costs, including accounting, guardianship and attorney fees. By the time the children reached 18 and received their inheritances, there was not enough left for them to go to college. 

What You Need to Know

Don’t try to do this yourself. You need the counseling and assistance of an experienced estate planning attorney who knows the laws in your state and has the expertise to guide you in making difficult decisions such as who will raise your children and who will look after your care at incapacity.  That attorney will also know how to carefully craft the appropriate estate planning documents, so that what you think will happen when you become incapacitated or die actually happens.

Consider

  • Call the Cortes Law Firm now at 405-561-2737, to set up an estate planning consultation appointment.  We make tough topics manageable to discuss and talk about.
  • Don’t worry about how life will unfold; the best practice is to have your plan prepared now based on your current situation

4 Tips for Avoiding a Will or Trust Contest

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trust contest, corteslawfirm, Cortes law firm oklahoma estate planning attorney, probate, revocable trust, estate planning, estate planning attorneyAn Oklahoma will or trust contest can derail your final wishes, rapidly deplete your estate, and tear your loved ones apart.  But with proper planning, you can help your family avoid a potentially disastrous will or trust contest.

If you are concerned about challenges to your estate plan, consider the following:

  1. Do not attempt “do it yourself” solutions.  If you are concerned about an heir contesting your estate plan, the last thing you want to do is attempt to write or update your will or trust on your own.  Only an experienced estate planning attorney can help you put together and maintain an estate plan that will discourage lawsuits.
  2. Let family members know about your estate plan.  When it comes to estate planning, secrecy breeds contempt.  While it is not necessary to let your family members know all of the intimate details of your estate plan, you should let them know that you have taken the time to create a plan that spells out your final wishes and who they should contact if you become incapacitated or die.
  3. Attend our Successor Trustee Seminars. These seminars will give your family members and successor trustees vital information. In addition our Successor Trustee Manuals are available for purchase at these seminars.
  4. Use discretionary trusts for problem beneficiaries.  You may feel that you have to completely disinherit a beneficiary because of concerns that a potential beneficiary will squander their inheritance or use it in a manner that is against your beliefs.  However, there are other options than completely disinheriting someone. For example, you can require that the problem beneficiary’s share be held in a lifetime discretionary trust and name a third party, such as a bank or trust company, as trustee.  This will insure that the beneficiary will only be entitled to receive trust distributions under terms and conditions you have dictated.  You will also be able to control who will inherit the balance of the trust if the beneficiary dies before the funds are completely distributed.
  5. Keep your estate plan up to date.  Estate planning is not a one-time transaction – it is an ongoing process.  Therefore, as your circumstances change, you should update your estate plan.  An up to date estate plan shows that you have taken the time to review and revise your plan as your family and financial situations change.  This, in turn, will discourage challenges since your plan will encompass your current estate planning goals.

By following these four tips, your heirs will be less likely to challenge your estate planning decisions and will be more inclined to fulfill your final wishes. If you are concerned about heirs contesting your will or trust, you should seek the professional advice now. Call the Cortes Law Firm today