Revocable Trust vs Last Will Reason No 2

REVOCABLE TRUST VS LAST WILL REASON NO 2

– Hi guys, today we’re gonna talk about the actual probate process in Oklahoma, and why it takes so long.

Welcome to Two Minute Tuesday where I tend to discuss an estate planning topic in two minutes or less.

Now, last week, we discussed reason number three, why a revocable living trust, a centered estate plan, is a better option than a last will. By the way, every year or so, someone does a study about how many people have an estate plan, and the number always changes depending on who they surveyed or who conducted the survey, but it is always around 60 to 80% of Americans do not have any kind of an estate plan, think about that for a second.

That number is always so surprising to me, because it’s so important for young families to protect their children and for older couples to protect themselves. So that is why we are doing this little mini series, or why a revocable living trust, centered estate plan is a better option than a last will.

This week we’re discussing reason number two, and you know whether you have a last will or nothing at all, the probate process takes several months, if you are lucky, and can last years if your family starts fighting.

I’m going to go over each of these individually, but this is the probate process in Oklahoma in a nutshell.

  • First, filing a petition to begin the Oklahoma probate.
  • Second, notice of hearing must be given to all interested parties.
  • Third, a hearing on petition, naming a personal representative.
  • Fourth, the court will issue letters of administration appointing a personal representative.
  • Fifth, notice to creditors must be given.
  • Six, if creditors come forward, then an order allowing payment of every claim must be issued by a judge.
  • Seventh, obtaining a release of claim by any creditor that made a claim.
  • Eighth, inventory of all assets in the estate,
  • inth, an order approving the inventory, and finally,
  • number 10, file an application, an order for final hearing and distribution to heirs.

Each of these will require notice to heirs and all interested parties by either mailing publication in the newspaper, or both. And because notice, publication and statutory dates must be observed, you can see how the Oklahoma probate process can take six to nine months at a minimum.

So let’s go over each of these steps individually. The probate process really starts with us meeting in my office to discuss who are the heirs and what assets your loved one actually had. Once we have enough information to start, we will file a petition for probate asking the court to name a personal representative. And I think the filing fee right now is like $204 that must be paid to the court clerk.

Then we set the petition for probate at least 30 days into the future, we have to publish notice of the hearing on the petition in a local newspaper. After at least 30 days we have a hearing where anyone can attend and argue against why you should or should not be the personal representative. If someone does appear to contest the appointment of personal representative, then there has to be a hearing and sometimes a judge will hear it right then, but sometimes he will schedule that hearing for another day, further prolonging the probate process. Now if no one appears to contest or does not have a valid claim, then the judge will usually appoint a personal representative.

This personal representative will with the help of their attorney will be responsible for administering the estate, paying creditors, selling property, gathering assets and then distributing assets. All of these responsibilities require court approval. So now that we have a personal representative, we have to give notice to all known and unknown creditors. Creditors have 60 days to come forward and make a claim against the estate.

That means we have to wait 60 days before the probate can proceed to the next step. Notice to creditors is given by filing a notice to creditors with a court, physically mailing a copy to known creditors, and publishing a copy of the notice in a local newspaper. If we are lucky, then the creditors will come forward right away, and we can deal with them, but remember, they have 60 days and sometimes they wait until the very last day.

So once we have a creditor claim, then you as a personal representative have to determine if it’s a valid claim. If it is, then you have to make an application with the court to approve the claim. If the judge agrees with you, then you pay the claim, but wait, we’re not done with that creditor yet.

Obviously, we have to send them a cheque, right? But then we have to just sit and wait until they file a release of claim with the court. As you can imagine, big credit card companies are on their own schedule. So it can take several weeks before we have that release of claim, and until we have that release of claim from each creditor, we cannot close out the probate.

So the next step is kind of happening all along, but at this point, we need to conduct a formal inventory and appraisal of certain assets. This can be both time consuming and costly. In other videos I’ve mentioned that it wants took us over three months just to get into a safe deposit box, which is why I made this video up here on where you should store your estate planning documents.

Now once the inventory is completed, then you need to make an application to the court to approve that inventory. Again, this is an open hearing so disgruntled heirs can attend and complicate matters.

Finally, after all of this, we can make an application for a final hearing and distribution to all the heirs. Again, you must give notice of this hearing by both snail mail and publication in the newspaper. This hearing is usually at least 30 days after the application is filed with the court.

So wow, that’s a lot, and even after all of that the personal representative will still have duties to close out the estate such as paying taxes and distributing all the assets.

Now in last week’s video, we talked about the difference in the process for a last will, versus a revocable living trust. So watch that video, but basically, if you have a revocable living trust, centered estate plan, then everything is controlled by your trust.

Your successor trustee follows the directions you’ve given in your customized revocable living trust, centered estate plan. He pays creditors, makes distributions and closes out your estate, all without court intervention. So as you can imagine, if your revocable trust is fully funded, then your successor trustee can move pretty quickly.

Plus, you have the added benefit of having a successor trustee to take care of you, your family and your assets during incapacity while you are still living. If you do not have a revocable trust centered estate plan, then your family might have to apply for guardianship just to take care of you, and that can also be a long and stressful process.

Well, that’s all for today. Thanks for watching, and we’ll see you next time. I hope you have a great day, and an awesome week.