Q:What happens if you die without a will?
A:In the state of Oregon, our legislature has created a system of intestate succession, which means that your property will be passed down to your heirs in a way that is deemed fair and appropriate by our legislators. Usually, the heirs are the children of the decedent. If there are no children, the estate would go to the children’s children. If there are no lineal descendants, then the estate would go back up the family tree to the closest living relative, and so on and so forth. Thus, if you die without a will, but you have children, the legislator has established a system to ensure that your children will inherit your property after your death.
Q:What is a probate?
A:Probate is the legal process through which the court oversees the implementation and administration of a decedent’s will. The process includes appointment of a personal representative to be the point of contact, and appointment of the main person responsible for the implementation of the will. That person has a lot of duties, such as notifying government agencies, taking possession of the decedent’s property, and submitting filings, (including an inventory of the assets that the decedent owned at their time of death), to the court. The personal representative is responsible for ensuring that all of the tasks are completed during the probate period.
The representative’s primary job, from the court’s perspective, is to ensure that all creditors of the estate are notified of the decedent’s death. Once the court is satisfied that they know who the decedent owed money to, the court can issue authorizations and start making distributions. Eventually the court will close out the estate and discharge the personal representative.
Q:What is a power of attorney in Oregon?
A:Power of attorney is the act of delegating authority to another party in order to transact business on your behalf in some way, shape, or form. For example, if you’ve purchased a vehicle and had your plates shipped to you, you’ve signed a power of attorney by allowing that dealership to negotiate with the DMV and retrieve the plates and send them to you.
Generally, you see a power of attorney in the form of durable power of attorney. That allows someone to take control of your finances when you’re incapacitated. You could also have a power of attorney for real estate transactions, or any manner of authority that you want to delegate to a party to transact business on your behalf.
Durable power of attorney is a very important estate planning document because, as someone is in their final days, an appointed personnel will still need to make mortgage payments, file tax returns, pay their utilities, etc. Generally, durable power of attorney comes up when we’re drafting wills or estate plans due to the fact that it is an important tool to have if you want to protect your financial wellbeing if you become incapacitated.
Q:What is a prenup and when should you consider it?
A:A prenuptial agreement is a tool that we use in order to try to mitigate damages and/or control the outcome of a possible dissolution. One aspect of prenuptial agreements, or prenups, that people often forget about is what happens if a spouse dies—an event that a prenuptial agreement can provide bounds and guidelines for should this occur.
Prenuptial agreements in Oregon are upheld on a regular basis, but they can be confusing. Nearly 50% of the clients who come into our office seeking a prenuptial agreement actually need some other manner of service in order to protect their rights, or they’re interested in what would be an equitable distribution.
It’s important to know that if you execute a prenup, it may be in effect for much longer than you anticipated. If you so choose, we can put a sunset provision in the prenup, which states that after a certain amount of time (say 10 or 15 years), it will expire. One of the things that we hate to see happen is when a prenup is drafted and parties sign it, yet 40 years later it may not be something that they wish to have in effect.
Overall, a prenup can protect your rights if you get a divorce or if yourspouse dies or becomes incapacitated. In any case, it’s very important that you’re strategic about what goes into a prenuptial agreement, and be very specific on if it should terminate at some point in the future.
Q:What is a revocable living trust?
A:A revocable living trust is a legal device that you can use to manage your assets while you are alive, as well as outline a procedure for the distribution of your assets upon the event of your death.
Q:Do you always need to initiate a probate after someone passes away?
A:The answer to that question is no. There are three common reasons why you would not need to initiate a probate of someone’s estate after their death. One of the most common reasons that we see more and more of these days is that the decedent died with a fully funded revocable trust. In that instance, the trust itself owns all of the property that the decedent died owning, and the trust itself can implement the distribution of those assets without the court needing to be involved. The court can become involved if there are disagreements among the beneficiaries, but generally speaking the goal of a revocable trust is to avoid a probate. So. that is not commonly seen through the court system.
The second example would be if the decedent died with only non-probate property. This would mean that all of the property the decedent owns would automatically be passed down to a recipient upon their death. Examples of this include life insurance policies, pan-death beneficiaries of retirement plans, or if somebody owns property jointly with a survivor, and that was held as a right of survivorship.
A third reason why you would not need to probate an estate is if the decedent died without sufficient assets that would require a probate of that estate, or if they did not need to transfer a title, thus utilizing the court system to effectuate the transfer of said title.
Q:What is the difference between a will and a trust?
A:A will is the common document that most people are familiar with where a person, at some point during their lifetime, writes down what they want to happen to all of their assets when they die. This person is directing to third parties how they want their property to be distributed.
With a trust, the decedent would fund the trust during their lifetime, and this trust, (which is a separate legal entity), would, at the time of its creation, be the owner of all of their assets. Thus, when they die, the court does not need to transfer titles of said assets. That is because the trust, which still lives on after their death, is able to effectuate the transfer through the successor or trustee who has been appointed.
Q:Why do you need an estate plan?
A:The simplest answer is that it is for the well-being of your loved ones. An estate plan can be as simple as a will, or can entail what we call a comprehensive estate plan, which includes a will, a health care power of attorney, a financial power of attorney, an advanced directive, and a disposition of remains. The reason we include all of these documents is because they all work together to help make things easier as you approach the end of your life. You have documents that will help your loved ones be able to work with you in the hospital, to acquire information on your behalf, and to help appoint someone who can handle your financial affairs when things become difficult.
Having an advanced directive is perhaps one of the most considerate things you can do for your loved ones. Because you have already made important decisions for future yourself, (such as when you want a doctor to stop administering care), taking the burden of that decision away someone that you love can be extremely relieving.
Creating a will or a trust will help avoid conflicts or disputes among your beneficiaries or heirs after your death, and they make things simple and straightforward. In the context of a will, having a named representative can also eliminate tension or conflict that can arise between remaining family members, and can also make things more cost-effective for the personal representative who is administering the estate.
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