An Oklahoma living trust is a popular estate planning tool that allows you to maintain control of your property even while it is in trust. A revocable living trust (also called an inter vivos trust) can provide many advantages that may appeal to you.
Living Trusts in Oklahoma
When you set up a living trust in Oklahoma you are called the grantor. You set up the trust so that it can manage your assets during your life and distribute them after your death. The more assets you transfer into the trust, the more complete the benefits of the trust will be. There are some assets that cannot be transferred, including life insurance and retirement accounts.
When you set up the trust, you appoint a trustee who manages the assets in the trust. While you can select anyone you want, it is most common to name yourself so you can maintain complete control. You will then also select a successor trustee who will step in once you die. This trustee will continue to protect and manage the assets in the trust until they are distributed to your beneficiaries at the dates you have directed. The revocable trust can be altered by you during your lifetime. In contrast, an irrevocable trust cannot be changed once it is signed.
Your living trust Oklahoma avoids the need for probate for any asset in the trust. When you leave assets via a will, the will must be verified and approved by a court in a probate procedure before any assets can be distributed (whereas assets in a trust can be distributed immediately). This leads to months of waiting as well expenses such as an attorney, executor’s fees, and court fees. Oklahoma has not adopted the Uniform Probate Code, so its processes are not streamlined. The exception to this is if you leave an estate worth less than $200,000 it qualifies for a simplified small estate proceeding which is faster and less costly. A trust allows you to avoid probate in any state where you own property if you include that property in your trust.
Do I Need a Living Trust in Oklahoma?
Choosing to create a living trust in Oklahoma is a matter of personal choice, but many people find its benefits to be very attractive. A trust creates privacy for your family because the trust is never public record. When you leave a will, that will is probated and becomes public record. The trust is never revealed and the assets, beneficiaries, and terms of the trust are not disclosed. A trust is also harder to contest than a will, adding another layer of protection.
Control is another important reason to establish a trust. You place assets into the trust during your life, but you continue to use and manage them as you normally would. You can live in your house, give gifts, and spend money. After you die, the assets are controlled by the terms you have set up in the trust. The assets can remain in the trust and be distributed at future dates that you select if you wish. Assets passed by will are distributed immediately once probate concludes.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in Oklahoma
A living trust does not reduce your estate taxes, but be aware that few people owe estate tax anymore. Oklahoma has no estate tax and the federal estate tax only applies to estates worth more than $5 million. You can set up a specially designated trust called a marital trust (also called an AB or QTIP trust) that passes assets from a deceased spouse to a surviving spouse with no estate tax. Living trusts do not protect assets from Medicaid or creditors, but they can make it more challenging for a creditor to track down your assets.
How to Create a Living Trust in Oklahoma
Creating a living trust in Oklahoma occurs when you sign the written trust document before a notary public. You must then take the final step of funding the trust by transferring your assets into it. A living trust can provide a variety of benefits. Weigh the advantages and decide if it is right for you.
LegalZoom can help you create an Oklahoma living trust. Get started by completing a simple questionnaire. LegalZoom will review your answers and send your complete living trust package by mail.