Estate Planning

Do I need a Will?

How do I make sure my children are taken care of when I pass away?

What is a Trust?

How do I make sure that I am taken care of in my old age?

Is there a way to plan my estate to reduce my estate’s tax burden?

These are all common questions that people have who are interested in estate planning. An experienced estate planning attorney can answer these questions and devise an estate plan that takes into account each of your assets and your desires for their disposition after your passing.

Estate planing has two main components. The first component deals with how property passes to others after your death. The second component deals with incapacity and end of life issues.

Passing property to others after death
There are three main ways to pass property after death. The first and most traditional is through a Will.

1) The Last Will and Testament

Last will and testament form

Last will and testament form

 

A Will nominates a person (Personal Representative) to administer your estate after your passing and designates what individuals or entities are to receive your property. Your estate consists of all property that is owned by you at the time of your death. You can choose to bequest (give) your property to family members, charities, close friends, or whomever you want.

A Will must be probated. Probate is a court-mediated process wherein the will is filed in circuit court. Oregon statutes require notification of the probate proceeding to interested persons such as your devisees (people who receive property under your will), your heirs (the people who would receive your property if you had died without a Will) and your creditors (people you owe money to). The probate process takes anywhere from four months up to several years depending on the complexity of your estate. Probate is designed to protect the rights of interested people and ensure the orderly transfer of property from the deceased to the living.

2) The Living Trust

The second method of passing property after your death is through a living trust. A living trust has provisions similar to a Will. It outlines who will handle your affairs after your death and who will receive your property. The main difference between a Will and a Trust is that the Trust will avoid probate as long as it is fully funded. Funding a Trust means that you transfer all of your property by different instruments from being owned by you personally to being owned by you as trustee of your trust. An experienced trust attorney can review all of your assets and inform you whether or not the asset can be transferred to a trust. Typically, creating a trust is more expensive than creating a Will, however your estate may save money in the long run by avoiding the legal fees and expenses of probate.

Married couples can also receive a special benefit from trust planning in Oregon if their combined estates are valued at over 1 million dollars. Oregon currently imposes an estate (inheritance) tax on estates that are over 1 million dollars. By setting-up two trusts for a married couple and splitting the property between each trust you can shelter up to an additional one million dollars from state taxation.

Beneficiary designations

The third way to transfer property after death is through beneficiary designations. For many assets such as retirement plans life insurance policies, real property, checking and savings accounts, and annuities, you can designate a named beneficiary who will receive this asset upon your passing.

Dealing with incapacity and end of life issues

The second component of estate planning is planning for one’s own disability and end of life care. I typically recommend to my clients that the following documents on these topics:

  • 1. Nomination of Guardian and Conservator – Elects the individual or individuals that you want to manage your affairs upon your financial incapacity. Financial incapacity can develop for many reasons, as examples the condition could arise from late-stage Alzheimers or dementia. A Guardian is a person nominated by a court to make decisions about your person such as where you live and what type of care you are to receive. A Conservator is a person nominated by a court to manage your financial affairs.
  • 2. Durable Power of Attorney – Elects a person to act as your agent and who can sign for you on any type of document where your signature would be required. This can be used upon financial incapacity or can be used if a person cannot physically sign a document perhaps because of physical infirmity or inability to attend a signing meeting. A Durable Power of Attorney is different than a Specific Power of Attorney because it is broader in scope and it remains effective for your entire life (unless revoked).
  • 3. Advance Directive and Nomination of Health Care Representative – In this form you make decisions concerning whether or not you want life prolonging treatment when you are in a fatal condition. A fatal condition is a condition where an individual is extremely unlikely to recover his or her health and where the administration of life prolonging treatment will only change the moment of death rather than lead to a cure. In this form you will also nominate a health care representative whose job it will be to communicate with your doctors if you are in a fatal condition or cannot otherwise communicate with your doctors yourself.
  • 4. Consent to Release of Protected Health Care Information – In this form you will consent to the release of protected healthcare information to your healthcare representative. Because of HIPAA doctors often cannot release information regarding your health to others without your prior approval.

Please call today to schedule a half hour to hour estate planning consultation. I often offer flat-rates to my estate planning clients based on the types of documents that you want drafted. I believe that flat-fees can help reduce the costs of legal services.

Please call today to discuss how I can help you complete a comprehensive estate plan today!