Probate

Anthony Bourdain and Estate Plans for Separated Spouses

Anthony Bourdain and Estate Plans for Separated Spouses

In the wake of celebrity chef and TV personality Anthony Bourdain's tragic death last week, many articles have been written about his complicated family situation, specifically that Bourdain and wife were permanently separated (but not divorced) at the time of his death.

Like death, divorce and separation are topics nobody likes to talk about. However, they have very different effects on an estate plan. In Anthony Bourdain's case, that leaves a host of estate planning issues unresolved — and millions of dollars up for grabs.

This blog post will discuss the impact of divorce and separation on estate planning, focusing on the following topics:

What is the difference between divorce and legal separation?

Why choose legal separation over divorce?

Can a spouse still inherit after a legal separation?

How can I protect my estate from a separation?

Do I Need Probate to Get My Inheritance?

Do I Need Probate to Get My Inheritance?

Hardly a day goes by that someone doesn't ask us whether they need to probate a deceased loved one's estate. So when is probate necessary?

When you hold title to (i.e., own) an asset, you can generally only lose title in two ways: by inter vivos (literally, "between the living) gift or by court order. By definition, you can only make an inter vivos gift while you are alive. Therefore, once you die, the only way to transfer title is by court order. That (among other things) is the basic role of the probate process.

5 Ways to Avoid Probate

5 Ways to Avoid Probate

Probate is a dirty word to most people. It's time-consuming, expensive, public, and brings with it the possibility of infighting and costly litigation. So how can you avoid it? The short answer: estate planning. But as we have written before, estate planning is a very broad topic. So here are five ways you can use estate planning to avoid probate:

1. Give away your entire estate.

This might seem like the most logical solution and, sadly, many people do it without thinking of the consequences. If you give away your assets, you also give away control over them. If, for example, you give your home to your child, you cannot control who lives there or if it is sold or mortgaged or seized by your child's creditors — even if you're living there. Giving away your estate may also trigger a federal gift tax. What's more, if you give your child your home as a gift during your lifetime, they cannot take advantage of a concept known as stepped-up basis and could instead be forced to pay large capital gains taxes in the future.

Legal Briefs: What is a transfer-on-death deed?

Legal Briefs: What is a transfer-on-death deed?

Most people are familiar with deeds. Though they come in many different varieties, deeds convey (transfer) interests in real estate. Generally speaking, a conveyance is effective as soon as a deed is signed. With a transfer-on-death deed, however, the conveyance is effective only after the grantor (the person conveying the real estate) dies.

What are the benefits of a transfer-on-death deed?

The main benefit of a transfer-on-death deed is that the conveyance can avoid probate. Let's say Joe wants to leave his house to his son, Dan. If Joe provides in his Will that the house should go to Dan, the Will must still go through probate before Dan can get the house. But if Joe signs a transfer-on-death deed, all Dan will need to do is file an affidavit (and a death certificate) with the county clerk to obtain title to the house.

One Weird Estate Planning Concept You Need to Know

One Weird Estate Planning Concept You Need to Know

So your parents have a Last will and Testament or a Living Trust. Great. It was signed by all the proper parties, contains the proper language, and appoints the proper people. Wonderful. And to top it all off, the attorney's gave you an unbelievable deal. Excellent (unlikely, but excellent). The problem? Those documents can still be thrown out by the court if your parents lacked one key thing: testamentary capacity.

What is Testamentary Capacity?

We lawyers sure do like our big words. Fortunately for everyone, testamentary capacity boils down to a pretty simple idea: Does the person signing a Will or Trust understand what they're signing? To have testamentary capacity in Oklahoma, the testator (the person signing the Will or Trust) must understand, in a general way, (1) the quality and quantity of his or her property (sometimes called their "bounty"), (2) the natural objects of his or her bounty (i.e., who should logically inherit their property), and (3) the legal effect of signing the document.

How to Recognize Fraud in Estate Planning

How to Recognize Fraud in Estate Planning

Suppose your mother has dementia. Her nurse convinces her that he is her only child and has her sign estate planning documents leaving all of her assets to him and expressly disinheriting you and any of her other children. Are those documents valid? Likely not, as your mother has been the victim of fraud.

What is fraud?

There are several ways fraud can be committed in the estate planning process, but the type of fraud we will discuss in this article is referred to as fraudulent inducement. Let's say your mother executed a Last Will and Testament. You could challenge that Will if your mother was fraudulently induced into leaving her property to a person she would not normally have left it (in the example above, the nurse).

4 Tips to Identify Undue Influence

4 Tips to Identify Undue Influence

Imagine your father is elderly, handicapped, and requires in-home care. He develops a close relationship with his caretaker, who is much younger than he is. When your father passes away, you assume that all his assets will be left to you and your siblings. However, the caretaker comes forward with a Will signed by your dad a week before his death — and it leaves everything to her! Seems fishy, right? This is a classic case of undue influence.

What is Undue Influence?

In Oklahoma, undue influence consists of taking an unfair advantage of another's weakness of mind or body or the use of authority to procure an unfair advantage over someone. Put another way, undue influence occurs when someone exerts pressure on an individual, causing him or her to act contrary to his or her wishes and to the benefit of the influencer.

The #1 Argument Against DIY Estate Planning

The #1 Argument Against DIY Estate Planning

Can I make a "Do It Yourself" estate plan?

The phrase "Do It Yourself" calls to mind weekend trips to Home Depot and saving money. And while some aspects of home improvement may be proper to do yourself (e.g., painting walls or building a patio), things get trickier when you try to act as a plumber, excavator, or electrician. Performing those tasks incorrectly — resulting in broken gas mains or electrical shocks — could have disastrous consequences.

(Forbes has published several famous do-it-yourself estate planning horror stories)

The same is true of "Do It Yourself" (or "DIY") estate planning. Although do-it-yourself estate planning services may seem like a bargain, just remember: you get what you pay for. In many cases, these services merely provide generic forms that do not take into account your financial situation, family relationships, tax consequences, and other important factors. More than all of those things, however, the number one argument against using a do-it-yourself estate planning service is this: the documents may not comply with the legal requirements in your state.

4 Ways to Challenge an Estate Plan

4 Ways to Challenge an Estate Plan

Estate planning is meant to provide certainty and security to your loved ones. So how would you feel if, after your death, your estate plan were ignored? How would you feel if a probate court tossed it out and decided to do things differently? (Trick question: You're dead, so you can't feel at all.) Unfortunately, these are very real possibilities if your estate plan is successfully contested.

How Can My Estate Plan Be Challenged?

Understanding how your estate plan can be contested is the first step to making sure it won't be contested. That is why we are dedicating our next few blog posts to discussing the different ways an estate plan can be challenged in Oklahoma. Links to each new article in this series will be posted below as they are published:

What is stepped-up basis?

What is stepped-up basis?

"Stepped-up basis" refers to a tax rule that minimizes or eliminates capital gains tax liability. Say, for example, your Uncle Buck owns Apple stock. He purchased 100 shares of the stock when it was worth $1/share. In tax lingo, his cost to buy the stock is known as his "basis." Apple stock is now worth about $170/share. If Uncle Buck sold his shares today, he would have to pay a capital gains tax on the $169/share appreciation in the value of his stock. Similarly, if Uncle Buck gifted you the stocks today, you would "inherit" his basis, meaning you would have to pay capital gains tax on the $169/share appreciation if you sold the stock tomorrow.

But let's say Uncle Buck decided to hold onto his shares. He placed them in a trust that names you as the sole beneficiary. If Uncle Buck died today, leaving you the stocks, the Internal Revenue Code provides that the value of the stock today (Uncle Buck's date of death) is your new basis in the stock. In other words, your basis is "stepped-up" from $1/share to $170/share. So if you turned around and sold the Apple stock for $170/share, you would pay no capital gains tax.