If your estate is worth more than $200,000, you should consider creating an Oklahoma living trust. This estate planning tool allows your heirs to receive your assets without waiting for probate, which takes longer in your state than states that have adopted the Uniform Probate Code. In this article, we cover all the basics about living trusts in Oklahoma. For help with complex estates, consult a financial advisor. This matching tool will connect you with up to three advisors who serve your area.
How to Create a Living Trust in Oklahoma
Most people prefer revocable living trusts (as opposed to irrevocable ones), because they can maintain control of their estate, remove any assets and cancel the entire trust if they wish. Take these steps to establish a revocable living trust in Oklahoma:
- Start by determining which assets you want to put in the revocable living trust. For many people, it’s mainly property and business interests they want to protect from probate. Things such as bank accounts and life insurance policies can also go into trusts, but they don’t have to in order to avoid probate. Designating your beneficiaries on the accounts makes them transferable on death.
- Name a trustee, who will manage the assets in the trust. You can appoint yourself as the trustee (and your spouse as a co-trustee for joint trusts). If you do, you’ll also have to name a successor trustee to manage the trust should you become incapacitated or pass away.
- Create the trust document with trust-building software or with the help of an attorney.
- Sign the document before a public notary.
- Transfer assets and property into the trust by changing titles from your name (and the name of your spouse for joint trusts) to the name of the trust.
What Is a Living Trust?
Like a will, a living trust is a legal arrangement in which you – the trust creator or grantor – set out how you want your estate to be distributed when you die. Unlike a will, a living trust is also an entity that holds your assets while you are alive.
The primary purpose of a living trust is to avoid probate, the court process that approves and enacts your will. With a revocable living trust, you can name yourself as the trustee (you must name someone else with irrevocable trusts) – and maintain control of the estate. When you die, the successor trustee will have a fiduciary responsibility to manage your trust as you directed and in the best interests of your beneficiaries.
A trust can hold nearly anything of value, including:
How Much Does It Cost to Create a Living Trust in Oklahoma?
There is no set price tag on setting up a living trust. It can range from just under $100 to more than $1,000. It all depends on how you create it and how complex your estate is. These days, you can shop around and find plenty of living trust software options. Some hover around $80. (Fees for retitling your property and assets will add to your costs.)
Many people, though, prefer to hire an attorney, whose legal fees can easily jump to $1,000 and beyond. This because there are plenty of dangers to DIY estate planning. After all, a living trust is a legal document that requires technical knowledge about the law. For that reason, consulting an attorney is highly advisable, as is using a financial advisor, especially if you have a sizable estate.
Why Get a Living Trust in Oklahoma?
Setting up a living trust in Oklahoma makes sense if you are worried about whether your heirs will have to wait for probate to end before receiving their inheritance. As stated earlier, probate is the process through which a court verifies and administers your will – and until it concludes, all of your assets will be frozen. Some states use the Uniform Probate Code, which simplifies the process. Unfortunately, however, Oklahoma is not one of these states.
A living trust will also enable you to provide for a disabled heir or set the terms for when property is distributed. For example, if you have children from a previous marriage but want your current spouse to live in your house for the rest of her life, you could leave instructions so that your children receive the house only after her death.
Additionally, if privacy is a concern, a living trust will not make your estate public record. It will also help you avoid conservatorship should you become incapacitated.
Who Should Get a Living Trust in Oklahoma?
While living trusts aren’t only for the wealthy, they are not necessary for Oklahomans whose estates are worth less than $200,000. At that level or below, your estate can skip the probate process and take a more streamlined path.
Other people who should consider a living trust are those who want to provide for a disabled heir, own property in other states that also have lengthy probate periods or have complicated directions for their estate (such as delaying distribution of a property until a second spouse dies). Additionally, because living trusts are harder to contest than wills, they are often recommended for people who have somewhat controversial wishes, such as leaving nothing to a child or more to one than another.
Living Trusts vs. Wills
Even if you set up a living trust, you should also write a will. Both are key parts of a solid estate plan. With a will, you can cover what happens to property you didn’t or couldn’t transfer into your trust. Additionally, a will lets you designate an executor and establish guardianship of your children. You can also say in your will how taxes and debts are to be paid.
This chart highlights the differences between living trusts and wills:
Living Trusts vs. Wills
|Names a property beneficiary||Yes||Yes|
|Allows revisions to be made||Depends on type||Yes|
|Avoids probate court||Yes||No|
|Requires a notary||Yes||No|
|Names guardians for children||No||Yes|
|Names an executor||No||Yes|
Living Trusts and Taxes in Oklahoma
Oklahoma doesn’t levy an estate tax – or an inheritance tax, for that matter. Your estate will likely not be affected by the federal estate tax, which has an exemption of $12.92 million ($25.84 million for married couples filing jointly). But if your estate is larger than that, a simple or revocable living trust won’t protect it from Uncle Sam.
However, you can minimize the estate tax by establishing an irrevocable living trust, or if you’re married, a bypass trust (also called an AB trust).
The Bottom Line
Oklahoma is one of the states in this country that does not use the Uniform Probate Code. As a result, probate can take some time there. If you want to make sure you’re loved ones receive part or all of your estate without delay, an Oklahoma living trust can help them avoid probate. If you name yourself as the trustee, you can continue to manage your assets during your lifetime.
Estate Planning Tips
- Leaving your wealth to younger generations can be a complex and emotionally straining task. So don’t do it alone. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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