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Services provided by banks, insurance companies, and similar institutions are often helpful in making and carrying out an estate plan. The following section describes some of these services.

An annuity is an amount of money payable each year for a specified period. A life annuity usually refers to a sum of money to be paid yearly for the rest of the person’s life. Annuities, which can be used in a farm transfer plan, can be purchased from life insurance companies. The person buying the farm would pay the cost of the annuity to the insurance company; the company would then make payments to the seller of the farm. The person receiving the payments is called an annuitant. There are many variations of annuities, such as straight life, cash refund, joint, and deferred. Annuities can be purchased in a lump sum or in units over a period of time. An insurance company is in a much better position to assume the obligation of paying a lifetime annuity than is an individual.

The only type of will recommended for estate planning is a formally executed will drawn by a lawyer. The law recognizes other types of wills, but these other types are best used only in emergency situations. A nuncupative will is an oral will which can be made only by a person in military service and in fear of death connected therewith. The estate must not exceed $1,000 and cannot include real estate. The will must be proved by two witnesses. A holographic will is one that is entirely written, dated, and signed by the hand of the testator himself. It need not be witnessed. This type is not recommended for use under normal circumstances, because it is usually drawn without the counsel and assistance of a lawyer.
• Formally Executed Will. Every will, other than the two types described in the endnote, must be executed and attested as follows:
1. The will must be signed at the end by the testator himself, or he may direct someone in his presence to sign his name thereto. (Usually this would happen only if the testator is physically unable to sign).
2. The signing must be in the presence of at least two witnesses.
3. The testator must at the time of signing the will advise the witnesses that the instrument is his will.
4. The two witnesses at the testator’s request and in his presence must affix their signatures and should write their addresses in their own handwriting at the bottom of the will.
• Self-Proved Will9. Oklahoma law now permits testators to make their wills self-proving. Influenced by Texas procedure, Oklahoma has adopted the practice of allowing the execution by a testator and the attestations by the witnesses to be acknowledged. This will excuse testimony by the witnesses at the time the will is offered in probate unless the will is contested. In absence of contest, this feature will save time and costs in the probate proceeding.
• Mutual or Joint Will. A formally executed will that is executed jointly by two persons with reciprocal provisions is called a joint will. It may be revoked by either of the testators in like manner as any other will and may be executed as a self-proved will. If two separate wills are executed with reciprocal provisions, they are called mutual wills. In either case, wills that contain reciprocal provisions should generally state whether or not they were executed pursuant to any agreement. Wills executed pursuant to an agreement (contractual wills) should generally be avoided since the potential for litigation is high in such cases.

A partnership may be used to enable the transfer of farm property from one generation to the next. Usually the child obtains an interest in the farm operation by gift or purchase, or by an operating agreement under which he invests part of his income share in either real or personal property, or by both gift and purchase. Later, arrangements can be made to buy a larger part of the parent’s interest. Provision is then made for the child to purchase the remainder of the parent’s interest at the parent’s death when the partnership is dissolved and liquidated. Often this provision is made by a “buy and sell agreement” whereby the partners agree that the parent’s remaining share shall be sold to one child at the parent’s death. An agreed payment by the purchaser to other potential heirs is made a part of the arrangement. The payments could be made on an installment basis or by using proceeds from life insurance policies.

A deed creating a tenancy-in-common can be used to pass a portion of the farm to a member of the second generation, without passing ownership of the entire farm to the same individual. Thus a parent could, if so desired, transfer a fractional share of the farm to a child. This arrangement is sometimes used in gift/purchase agreements. In the beginning the parent might transfer a small interest. As the child grows older and becomes more financially able, he may purchase a larger share.
The portion remaining in the parent’s name at death could be divided among immediate members of the family, or left to the child who already owned part of the farm. The parent could include in the will a provision permitting the child owning part of the farm to buyout the other heirs if desired. Such a provision may allow the child to pay a reasonable amount each year over a fixed period of time.
Advantages
• The surviving owner does not take all, as in joint tenancy. The decedent’s interest passes to his legal heirs or ac- cording to his will.
• A small or large fractional share can be owned or conveyed without consent of co-tenants.
• Several persons can own land in unequal undivided shares.
Disadvantages
• A tenant-in-common may use a proceeding called partition to have the jointly owned property physically divided or sold so he can receive his share. This right may jeopardize long-range planning by co-owners.
• Common ownership and responsibility may demonstrate the old maxim, “Everybody’s business is nobody’s business,” thus discouraging proper attention and care to farm management and operation. Keeping account of labor and improvements invested in the farm by co-owners may prove to be inconvenient. Some co-owners may be unable to pay or may refuse to pay their share of farm maintenance and improvement costs.