Creating a trust in Oklahoma isn’t as hard as many people think. When developing your estate plan, you have the option to incorporate trusts as part of your strategy. Trusts can serve as valuable tools to ensure your assets are distributed according to your wishes, while potentially avoiding the probate process. Understanding the process of creating a trust and the types of trusts available and their advantages is essential to making an informed decision about your estate plan.
Types of Trusts in Oklahoma
Revocable Trusts
One of the most commonly used tools in estate planning allows you the option of creating a revocable trust. A revocable trust allows you to place assets into the trust while retaining the flexibility to change, amend, or terminate the trust at any time during your lifetime. This flexibility is beneficial if your circumstances or wishes change after the trust is created.
Upon death, a revocable trust becomes irrevocable, meaning its terms can no longer be altered. This feature allows your beneficiaries to avoid probate, which can save time and money.
Advantages of a Revocable Trust:
- Flexibility to modify the trust
- Allows you to manage your assets during your lifetime
- Helps avoid probate upon your death
Irrevocable Trusts
Irrevocable trusts are less commonly used because they offer little to no flexibility once established. Once you transfer assets into an irrevocable trust, you relinquish control over them. The assets are no longer considered part of your estate, which can have significant tax and legal implications.
While irrevocable trusts are more restrictive, they can be useful in specific situations, such as asset protection or reducing estate taxes.
Advantages of an Irrevocable Trust:
- Protects assets from creditors
- May reduce estate taxes
- Can provide long-term financial security for beneficiaries
Testamentary Trusts
A testamentary trust is created through your will and only becomes effective upon your death. These trusts are often used to provide for grandchildren or other heirs, ensuring that the assets are distributed according to your specific instructions.
Because testamentary trusts are established after your death, they are subject to probate. However, they are typically less expensive to set up than living trusts.
Advantages of a Testamentary Trust:
- Provides control over how assets are distributed after death
- Can include specific conditions for beneficiaries
- More cost-effective than certain living trusts
Living Trusts
A living trust, is created while you are alive. These trusts can be either revocable or irrevocable, but most are revocable.
Living trusts offer several advantages, including allowing you to serve as the trustee, meaning you retain control over the trust assets during your lifetime. These trusts can help avoid probate and ensure your assets are managed according to your wishes.
Advantages of a Living Trust:
- Provides control over assets during your lifetime
- Helps avoid probate
- Can be tailored to meet specific goals and needs
Steps Setting Up Your Oklahoma Trust
Creating a trust in Oklahoma can be a straightforward process with the right guidance. Here are the general steps to establish a trust:
- Draft a Trust Document: This document outlines the terms of the trust, including the names of the beneficiaries and trustee. You can use a template or work with an attorney to draft a customized trust document.
- Sign the Trust Document: The trust must be signed in front of a notary to be legally valid.
- Transfer Assets into the Trust: Once the trust is established, you must transfer ownership of the assets you wish to include into the trust. This step is crucial to ensure the trust is effective.
Check Out Our Oklahoma Estate Planning and Probate Blog For More Information
A Wills and Trusts Attorney Near You
While creating a trust on your own is possible, working with an experienced estate planning attorney is highly recommended. An attorney can ensure that your trust complies with Oklahoma laws and that your estate plan meets your specific needs. Get a Free Consultation with a Tulsa Wills and Trusts attorney at Kania Law Office 918.743.2233 or click this link to ask a free online legal question.
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Are you looking for Tulsa attorneys who will fight aggressively for you? Our team of attorneys have the experience needed in Oklahoma law to secure the outcome you deserve.
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