Estate planning is often associated with middle age or even the retirement years. Millennials, who range in age from 18 to 36, are often too busy managing student loan debt, building careers, and buying homes to give much thought to their mortality. Like other young adults, they may still feel invincible.
On the contrary, these years are the best time to start estate planning. As less traditional family arrangements take over and options expand, you must be prepared in case the worst occurs. If you are younger than 40, here is what you need to do at a minimum for your estate plan and why you should think beyond that.
The Bare Minimum
If you have more debt than assets, never had children, and do not own real estate, it may be difficult to comprehend the importance of a will. There is some truth to this: If you are 24, single, and childless, you likely do not need a large complex estate plan unless you are blessed with early success.
At the very least, start with the bare minimum of estate planning; an advance directive and a power of attorney. Both of these documents are vital for continuing your affairs should you face incapacitation.
An advance directive outlines your preferences for health care should you be rendered incapable of communicating your treatment preferences. This document appoints a healthcare representative to make these decisions on your behalf and indicates your preferences regarding life-sustaining treatment.
Your health care representative can be anyone you trust with that decision including a parent, sibling, best friend or live-in partner. They will act as your voice when you cannot speak. Before you appoint them, let them know what you plan to do, and perhaps have a conversation regarding your medical preferences.
The advance directive also allows you to limit life-sustaining treatment. Many people prefer not to be kept alive by artificial means if they are rendered permanently incapacitated after an accident or terminal illness. These situations often cause substantial heartbreak not only because of the tragedy involved but also when friends, family, and partners have no idea of your preferences.
You can make this a little easier by making your wishes known through an advance directive. This is a complimentary service when you meet with Diane L. Gruber of Gruber & Associates for estate planning.
Power of Attorney
It is often assumed that if you are incapacitated your spouse, parents or cohabitating partner will handle your affairs for you. Unfortunately, if your accounts and business interests are held only in your name, your helpful loved ones will not be able to access them. This can make it impossible for them to make your student loan payments or even take a pet to the vet.
A power of attorney makes this possible. While you recover from what limits you, the agent you appoint in the power of attorney document can have access to your assets. This allows them to pay your bills and even apply for disability benefits on your behalf. If you do not execute a power of attorney, these tasks become difficult. Depending on the extent of your incapacitation, your loved ones may even have to go to court to appoint a conservator to act on your behalf!
These two documents will help in moments of unexpected developments. However, you should consider a will in case the worst occurs.
Why a Will?
Many young adults fail to execute a will because they focus on what they do not have. They do not own real estate or make a substantial income. Some of you may not have children or even a partner. So, why draft a will?
You draft a will because of what you gained so far in life. Even without a large stock portfolio or a mortgage, there are still items that require care should you meet an untimely demise.
You consider your pets family but the law still considers them property. Oregon law has slightly backed off from this with court precedent finding that animals have awareness and allowing animal control officers to act on an animal abuse situation with the same urgency as harm to a person. But that does not help your animal from being vulnerable should something happen to you.
Just as you can name a guardian for children in your will, you can also do the same for a pet. You can name your cohabitating partner or a friend who loves your animals. A will also allows you to name a backup guardian in case your primary appointee cannot care for your pets.
Some people even establish pet trusts to assure good care. You can do this even if you lack assets. Purchase a life insurance policy and make the pet trust your beneficiary. Or if you trust your pet guardian, name them as the beneficiary with the understanding the funds are meant to help them care for your animals.
Basically, establishing a caretaker for your pets in a will assures they are safe if anything happens to you. It also makes the process of rehoming your animals much easier on your family.
There is a movement away from tradition as more young adults decide to cohabitate before marriage. This can have unfortunate consequences if you pass away.
Unless you marry your partner, they have no rights to your assets after death. The intestate statutes, which dictate the distribution of property when someone dies without a will, do not make allowances for non-married partners. You could be engaged but if you die in a horrible accident the day before the wedding, your partner will still be treated as a non-entity by the intestate proceedings.
This can lead to distressful consequences. For example, let’s say you own a home with a mortgage. If you die, the mortgage holder will liquidate the house to pay off the debt.
If you have a will, you can dictate that the equity from that sale passes to your partner. Even if that is only $3,000, that is still enough for them to find a new place to live. However, without a will, that $3,000 will not pass to your partner. It will first go to any children you have, and if you do not have children, your parents and then to your siblings.
This goes for any property you own, including cars, furniture, and other assets. There is no way you can pass property to an unmarried partner without a will.
If you are a single parent, a will helps you designate guardians for your children. Unless you do so, the court will make this determination.
This is not ideal if you are estranged from your family. Your children may be closer to a friend or your live-in partner. However, the court is more likely to grant custody to family members. Even if you come from a close family, it is likely a particular sibling is better suited to take custody of your children.
Guardianship is another preference that is enforceable only through a will. Even if you do not feel you have any other reason to sign a will, if you have children, this reason alone is sufficient.
Many millennials appoint “digital executors.” These are people with access to your social media and other online accounts. Their job is to manage your digital assets should something happen to you.
Sites like Twitter and Facebook are notoriously bad at dealing with death. Pages often remain accessible with reminders going out to friends and family about your birthday and other milestone events. Unfortunately, without someone knowing your passwords, it is often impossible to shut down these accounts.
There are other digital assets that could also prove troublesome. If you rent out a room on Airbnb, the platform will continue making that room available for rent until someone shuts down the account. Your family could be at your home grieving and sorting your possessions only for an Airbnb patron to suddenly show up wanting access to the rented room.
Besides these accounts, you likely own Kindle books, iTune music libraries, and maintain subscriptions on Audible or Netflix. Unless you appoint someone to deal with these online accounts, they will likely continue charging bank accounts or accruing balances after you pass away, causing more issues that will delay the closure of your estate.
There are other estate planning options that could be relevant to your situation. If your children have special needs or you are a trust beneficiary, you likely need to review your situation and create a more customized estate plan.
Planning now is a good precaution. At the very least, it starts a habit that will make wealth management easier as you become older. To start the estate planning process, contact Diane at Gruber & Associates to schedule a consultation.
No one is immune to dying without a will. Some people believe it is unnecessary and others never find the time to sit down with an estate planning attorney and make plans. The chances of you discovering that one of your loved ones fell into the same trap is fairly high, considering only 40 percent of Americans have a will or living trust.
The result of this discovery is extra work to top off your period of grief. Here is what to know when your loved one dies intestate in Oregon.
There are Big Differences
Estates are classified as testate or intestate. An intestate estate belongs to an individual who died without a will. The opposite is testate, which means there is an enforceable will in place at the time of death. The estate can also become intestate if there was a will but it failed to meet legal requirements.
Property distribution in intestate estates is determined by statutes, not the decedent’s preference. Even if family members proclaim to know what their loved one truly desired, that is not enforceable unless those wishes are documented in a will.
Property distribution procedure is the primary difference between an intestate and testate estate. Other differences involve administration.
With all probate proceedings, the Court appoints a personal representative (PR) to handle the estate. If there is a will, the court virtually always appoints either the primary PR or the alternative PR who is named in the will. Since the deceased chose the PR and the will does not require a bond, the court will not require that the PR buy a probate bond.
In an intestate proceeding, the court chooses the personal representative. Normally, this duty is granted to a surviving spouse or child. If the decedent was not married and does not have children, the search will continue to find a suitable relative, even if that person has not seen the deceased for years. While there is more leniency to appoint a live-in partner or friend to this position, it is still done with resistance.
Intestate proceedings also require the PR to buy probate bond. Basically, this is an insurance policy, that protects creditors and heirs if the estate is mishandled. The amount of the bond is determined by the value of the estate, as well as the credit-worthiness of the PR.
When you start an intestate probate proceeding, be prepared to list potential personal representatives and pay for a bond. The first will be easier if you can get all relatives to agree to one person. If not, a court hearing may be necessary before the judge chooses a PR.
To streamline the probate process, you need comprehensive lists of the following:
- Possible heirs
- Real estate holdings
- Financial accounts, including checking, stock brokerage, and long-term savings
- Personal property of note, including jewelry and art
- Income tax records
- Life insurance policies
Once probate proceedings have begun, you must alert possible heirs within 30 days and provide an inventory of property within 60 days. All creditors must also receive notice of the probate so they can file claims against the estate to pay off the decedent’s debts.
Intestate proceedings often take longer due to this step. People who do not draft wills also fail to communicate on what they actually own. If they were estranged from their family, they may never have communicated with their friends the identity of any family members or even where they live.
This often means hunting down information. If family is unknown, finding heirs is often dependent on published newspaper notices. Since few people share their financial information openly, you often have to request credit reports, search paper files, and review mail to collect a list of property and debts.
If the decedent was working at the time, you need to contact their workplace to see if there were any employer-provided retirement accounts or life insurance policies. Those assets may list beneficiaries who can receive the funds immediately and give you one less item to manage during the probate.
Looking around the decedent’s home, you may need to call in an appraiser to value any art, jewelry or other assets. It is better to assume something has value and discover it does not, than be accused of devaluing the estate later.
Many of these tasks cannot be performed until a personal representative is appointed. But if you can start making a list of what you do find before you start proceedings, it will make it that much easier to compile the required documents.
Depending on your discoveries, you may be able to avoid a full probate process.
This includes using a small estate affidavit. This is a streamlined probate process that addresses estates containing less than $200,000 of real estate and less than $75,000 of personal property or less that $275,000 of the two combined. If the estate meets these qualifications, you can probate the estate and transfer property with an affidavit rather than filing multiple documents with the court.
This often becomes possible because a decedent purchases mainly non-probate assets. If an account or real estate deed contains a joint owner with right of survivorship, those assets are transferred to the survivor immediately. No probate is necessary. In fact, you do not even have to report them in a small estate affidavit.
If you believe the decedent does not own much in the way of assets, value the estate and talk with a probate attorney before filing anything with the court. That way, you can file the small estate affidavit rather than risking a full probate process for no reason.
Grief already makes the loss of a loved one difficult but when they die without a will, your work has unfortunately just started. In these instances, an Oregon probate attorney can make a big difference in assuring that the probate process goes as smoothly as possible.
Gruber & Associates, P.C. handles Oregon testate and intestate probates with confidence so you can worry less. Contact us today to schedule a consultation.
In 2005, Oregon passed a statute that allows the creation of pet trusts. This estate planning tool provides for the care of any animals living with you at the time of your death.
Homeless animals are vulnerable to adverse circumstances. It is not a good idea to assume that a family member will take in your pets should something happen to you. The best course of action is to designate a caretaker for your animals and provide resources to ease the financial burden of good care. That is how pet trusts are effective. Here are answers to common questions about this estate planning tool.
What is a pet trust?
Oregon law defines a pet trust as a trust created to provide care for one or more animals alive during the decedent’s lifetime. Like all trusts, it designates a trustee to manage the resources and make decisions regarding an animal’s care.
Like other trusts, this can be a verbal or written agreement. It does not require court filings unless the trust makes reporting a requirement.
Pet trusts last for the life of your animal or if it covers multiple animals, the death of the last surviving animals. Oregon is unique in this rule as other states allowing pet trusts often cap them at 21 years.
Why would I need a pet trust?
It is difficult to know for certain what will happen to your pets if you die. People who fuss over your animals when they visit may be reluctant to take on full-time care. Also, there are some animals, like reptiles, birds or horses, that require specialized care and knowledge that could be expensive.
The pet trust provides more control. You can appoint knowledgeable people as trustees and caretakers once you confirm they are willing to take on the task. Assets may be diverted to a trust through lifetime gifts or a life insurance designation. Since the trust only authorizes payments related to animal care, you know that your assets will be used for the correct purpose.
Also, consider that your animals are more likely to outlive you now than even 20 years ago. Veterinary medicine improvements and better living conditions help dogs and cats live to be nearly 20. Horses can easily live to 30.
Birds are especially long-lived. A well-kept pet parrot can live past 70 years of age. If you are 55 now and currently have a 12-year-old parrot, that bird may end up meeting your great grandchildren!
How do I choose my animals’ trustee?
First, you want to choose someone who loves your animals. Many people love animals generally but do not necessarily want to live with them. Just because someone fawns over your dog when they visit does not mean they would adopt your dog should you die suddenly.
A friend or family member who already owns animals is a good option. You can see how they care for their pets and rest assured your animals will receive good treatment. If your animals gravitate towards any of these individuals, ask them if they are willing to take the role of trustee in your pet trust.
Second, you want your trustee to have good judgment and knowledge. While caring for dogs and cats is fairly easy, it becomes more complicated with horses, birds, and reptiles. A friend who visits the barn to stroke your horses’ nose and feeds them carrots is likely not a good caretaker for your equine. However, that best friend at your boarding barn with decades of horse experience is likely very willing to care for your horse, especially if your pet trust provides financial resources.
If you do not know any people willing to take on this responsibility, local rescues and private shelters may be willing to help. The organization can act as a temporary guardian for your animal until they find a new home. During that time, the trust provides resources to assure care during that guardianship.
Can pet trusts provide for my animals if I am temporarily incapacitated?
The best way to provide for animals in temporary emergencies is through a Power of Attorney. This document can be expanded to include animal care along with other financial and household duties.
How do I start designing a pet trust?
Your first step is to collect identifying information about your pets. That includes photographs and descriptions of unique markings. Also, any breed registry certificates and DNA information should be accessible. If your pet is microchipped, include that information too.
Second, describe in detail any unique care requirements including medication or needed routines. Cats and dogs with diabetes require timely insulin shots. Besides medical information, also include a description of favorite activities. Some cats do not enjoy catnip and dogs have their favorite games too. Horses especially have preferences; if your horse likes trail rides but hates horse shows, that is a good thing for a caretaker to know.
Third, choose a trustee and caregiver. In most trusts, this is the same person. But if you have one friend who is better at managing resources while another is great at animal care, this can be two separate individuals. Choose alternates for these roles in case your first choices are unable to serve.
You will want to consider the ages of your trustees and caregivers when you choose them. If you are currently 55 and your parrot is 12, choosing a friend who is 50 is not a good long-term plan. However, if you have a 22-year-old niece who loves your parrot already, appointing her as a caregiver guarantees decades of care. Another option is to give trustees and caregivers the power to appoint successors.
Finally, choose who receives the trust assets once your last surviving animal passes on and the trust ends. Just as with any designation, this can include individuals or charitable organizations.
A pet trust provides peace of mind and good care for your beloved animals in the state of Oregon. For an estate plan consultation that includes considering your animals, contact Gruber and Associates, P.C. today.
If you completed your estate plan in 2017, congratulations! You are ahead of the 55 percent of Americans who do not have a will or other estate plan.
But estate plans are not a love-it-and-leave-it proposition. They require periodic review and maintenance as your circumstances change. You should have a scheduled time near the beginning or end of the year to complete this review. Even if you only take 15 minutes to confirm beneficiaries and account for current real estate, that is time well-spent to assure your plans still reflect your wishes.
A simple checklist is a good place to start. These items do not take long to consider and they can make a big difference in how your estate is managed.
Where is your will or trust document?
Know the location of the original will. If it is in a safety deposit box, give an extra key to your executor. Trust documents should be in a secure place. But confirm that location so that you are not hiding them from yourself.
Keep all the documents together. Wills, powers of attorney, and advance health directives need to be in one place with copies provided to your appointed agents.
Are beneficiaries, executors, guardians, and trustees correct?
Changes in family circumstances may require adjustments in beneficiaries and appointments. You may designate your oldest child as executor only to have them move across the country. A relative or friend who lives closer and understands your situation may be a better choice. Similar developments may make other individuals better candidates for guardians and trustees.
The same is true for beneficiaries. You may find a child who was once self-sufficient is now unable to work due to a disability. A new child or grandchild also affects beneficiaries. Adjusting your non-probate assets to reflect these needs may create a more desirable estate plan.
Death also changes the nature of these appointments. If your spouse passed away and is still designated as the agent in your Power of Attorney, you may want to consider redrafting that document with a new agent.
What has changed?
Assess life changes over the last year. If you quit your job to run a small business, your estate plan is no longer relevant. While beneficiaries, executors, and agents may remain the same, you now have to plan for business succession. Also, a Power of Attorney may need to be expanded to include business functions.
The same is true if you divorce, remarry or welcome an additional child. Major events should warrant an immediate review of your estate plan although that may not have occurred to you at the time. So, accomplish this now. You do not want to leave a former spouse as a life insurance beneficiary when your current spouse could use those immediate funds upon your death.
Changes in income and major property acquisitions will also affect estate plans. Becoming a homeowner, purchasing business property or receiving a large inheritance can affect the value of your estate. Depending on the type of income and property growth, you may need to consider a trust or lifetime gifts.
Are all affected people notified?
Estate plans do not help if they remain secret. Even if you let people know that you completed an estate plan, you may have overlooked a few details.
For example, you may keep your original documents in a safety deposit box and allow your executor access. But if only your executor knows of this fact, it could cause hysteria if that individual is not immediately available to answer questions. Identify your executor but also provide location information for the documents whether that is a safety deposit box or a locked file drawer.
Share information about beneficiaries on life insurance policies and 401Ks, too. Beneficiaries will have an easier time taking possession of proceeds if you provide account and policy details.
Even if you believe you shared this information before, it does not hurt to share it again. While you could receive an eye-roll or two, at least you can rest assured that everyone is current on your estate plan.
If you find it is time to revise your estate plan, make an appointment with a dedicated and knowledgeable estate planning attorney. Contact Diane L. Gruber at Gruber & Associates, P.C. to schedule a consultation.
Granted, there are cheerier topics for the holiday dinner table than mortality and property distribution, but it is important that you discuss your estate plan with loved ones. This is the best time of year to bring up this topic since everyone is already together. You can avoid repeating discussions and assure everyone is on the same page.
Here are five tips on how to approach this discussion in a productive manner.
Prepare Documents First
It is much easier to be clear about your intentions and avoid dispute if you already drafted a will, trust or other estate planning documents. Start by explaining that you finished a will or trust and you have copies of the documents if anyone wishes to review them.
Not only should wills and trusts be complete, but also any advance directives and health care powers of attorney. Keep copies of those handy as well and let family know that your wishes concerning future health care in writing. This shows firm decision making and leaves little room for argument.
Do not hide the fact that you limited someone’s inheritance or excluded them all together. If your family is fraught with conflict, consider bringing in a third uninvolved party as a mediator when you share this information.
If the excluded loved one discovers this after you die, it allows them better grounds for a will contest. They may claim that was not your intention and even indicate that another relative exercised undue influence over you. However, if you communicate to them that this was your intention and have a witness there to confirm that, there is no doubt and few grounds to contest the will. This can make the probate process easier for everyone involved and maintain the value of your estate by reducing the chances of high attorney fees.
Consider Appointments Carefully
If your youngest child is extremely detail-oriented and has good math skills, it makes complete sense that you would choose him or her as your executor (personal representative) rather than the frequently forgetful older child. Never let birth order or false obligations choose executors, guardians or health care representatives. You want to choose the best person for the job. Keep in mind that may not always be a family member.
Inform those who will be appointed for various roles. Unlike disinherited parties, this often does not cause hurt feelings. Your sibling who already has children will likely embrace the role as guardian of your children more than the childless sibling who lives in a one-bedroom condominium. Also, your children will likely recognize which one of them is better skilled at managing your estate as an executor. The adult child who prefers making metal sculptures to filling out paperwork will actually be incredibly relieved that you did not choose him or her!
Even if there is a dispute over these roles, you control arguments by having these appointments made before you start discussions. That is why finishing your estate plan first is so crucial.
Conflict may be unavoidable but confrontation is not necessarily unavoidable. Treat this as an intimate discussion, not an argument. Explain your reasons for your decisions from the heart and avoid statements of judgment.
For example, if you reduce a family member’s share in a life insurance policy or business interest, explain it as, “The other beneficiary needs the cash to send a child to college,” not “You filed bankruptcy four times already and I know you will squander this money.” Keeping this positive reduces defense mechanisms and keeps this discussion positive.
Of course, you may have an adult child or other relative who will take offense no matter how you frame your reasons. The trick is to avoid the bait. If they look for a fight, simply state, “I expressed my intentions and they are not up for discussion.” Sometimes, the best you can do is make your plans known and understand that there will be hurt feelings no matter how you handle this.
Expect an Ongoing Discussion
You may not wish to bring this up at the first discussion but it is likely there will be updates in the future. Right now, you may have four adult children who are still single or in school. However, when you bring this up again in two years, there may be grandchildren or adult children who are doing much better financially than before–or one may face greater financial needs.
Just as you want to inform family of your first estate plan, also keep them in the loop when you update it. Avoiding surprises when you pass away is a good way to assure a better probate process and a reduced chance of a relative contesting a will or trust.
Prepare for this important discussion by completing the first step–the complete and appropriate Oregon estate plan FOR YOU. Call Gruber & Associates, P.C. today to schedule a consultation.