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How to Discuss Estate Planning With Family This Holiday Season

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.

Be Honest

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.

Avoid Confrontation

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.

Make Probate Easier For Your Loved Ones

Most people do not need to avoid probate. They need the right tools to make it easier. The first step to that is drafting a will and informing loved ones of its location and contents.

Even then, the challenges are only beginning. In addition to managing the paperwork and legal formalities that follow a death, your loved ones are also facing their grief. This is an overwhelming time where even a simple telephone call to a life insurance company feels like a monumental task.

Efforts made now can make this easier for your friends and family in the future. Once you finish your will, complete these five tasks to assure a more efficient probate process for your loved ones.

Keep It All Together

Once you draft a will, keep the original in a safety deposit box, a copy with your attorney, and another copy with your executor, the person named in your will to manage your estate. Let other family members or close friends know you have a will and who has copies of it.

Wills do no favors if they are kept secret. If no one knows you have a will and/or cannot find it, then your loved ones will be forced to file an intestate probate in order to transfer your assets.  An intestate probate is a probate without a will.  It is more time-consuming and more expensive than a probate with a will.  Moreover, this leaves your loved ones wondering what to do.  A will expresses your wishes and directs your loved ones what you want to become of your assets after your death.

Keep other important documents near your will as well. These may include real estate papers, car titles, stock certificates, and life insurance policies. If all these documents are together in one place, life for your grieving executor just became easier.

Make Lists Now

One of the largest tasks in probate proceedings is the inventory. This is a list of all your assets and their values. The court uses it to determine the value of your estate and the distribution of your property.

Start keeping updated lists now to make this job easier for your grieving relatives. If you have a special collection of art, jewelry or other high-value items, keep track of these items in a spreadsheet or even a notebook. List values if you have them. Your executor may have to get some items appraised, but even just a list will make the inventory step easier for your executor.

Inform Beneficiaries

If a loved one is a joint owner on a real estate deed or car title, tell them. This makes it easier for them to take possession of these items after you die and keeps the asset out of probate. The same is true for any life insurance policies. If beneficiaries know they are entitled to these funds, they may be able to collect them without the involvement of the court or your executor.

Likewise, if there are family members who are not receiving any of your property, be direct about this situation and who is affected. You may want to tell a trusted family member. Being clear about all your wishes, even those that work against family members, prevents problems after your death.

Organize Your Finances

Just as you own assets, you may also carry debt. Keep mortgage documents, credit card statements, and medical bills in an accessible place and maintain a current list. Then when you executor must send out notices to creditors, they do not have to engage in an exhaustive search to find them all.

Provide Attorney Contact Information

When you pass away and your family and friends grieve, your estate planning attorney can be a guiding voice of reason during a difficult time. It is much easier to complete a probate filing with the attorney who knows you and drafted your will then to start from scratch with a new attorney.

Your attorney’s name, address, telephone number, and email address should be in the margins of your will.  Inform your family members who you hired to handle your estate planning. Even if your attorney moves from the area or retires, having that information can still help your loved ones find someone else to represent them in the probate proceeding.

Gruber & Associates, P.C. offers estate planning and probate guidance for Oregon residents. Not only can we design an estate plan that best reflects your wishes but we can make the probate process more efficient and effective for your family. Contact our office today to schedule an estate planning or probate consultation.

Do You Have a Good Reason to Avoid Probate in Oregon?

Avoiding probate should not be your primary goal when estate planning in Oregon. For most people, probate is a quick process that allows you an appropriate vehicle for distributing assets, protecting loved ones, and honoring your charitable wishes. Trust companies convince you otherwise so you will buy their product–not because it necessarily works to your advantage.

But there are exceptions. Gruber & Associates meets a few clients who may benefit from avoiding probate and should create a trust as their main estate planning vehicle. Here are four possible reasons why clients may need to establish a trust in order to avoid probate.

Need for Continuous Asset Management

During the probate process, your assets are essentially placed on hold until the court approves their distribution. This can be troublesome if your assets generate income that may be vital to supporting your family.

If you own a business, rental properties or even investment accounts, these assets continue to generate income but that cannot be distributed unless a special motion is filed with the court or probate concludes with assets being liquidated or passed on to their new owners. In cases of incapacity, a power of attorney allows an agent to pay bills or distribute income. But once you die, that agent no longer has the authority to accomplish those tasks.

When you own multiple income-producing assets, a living trust may be your best option. It continues distributing income until it is dissolved which reduces interruption of support and hardship.

Privacy

Probate is a public process. Technically, anyone can access your court files and see your asset inventory and the value of your estate.

This creates anxiety for some people. A contentious divorce or family estrangement leads some clients to want to keep the assets of their estate private. Sometimes, the motivation is less conflict-driven. Clients may not wish to compromise their family members’ safety by making the ownership of high-value property public. There is always a risk that if it is known a family member owns an expensive car or rare work of art, they may become a target for crime.

In most cases, you do not need to keep the distribution of your assets after death private. If you are worried about social security or credit card account numbers, those are kept private anyway. However, if you believe a public probate will compromise safety or heighten tensions within your family, a trust could be a better option for you.

Taxes

When assets are placed in a trust, they technically no longer belong to you. They belong to the trust which is why they are not subject to probate proceedings.

This works well for clients whose estate is valued over $1 million. You can move assets into a trust and reduce the estate’s overall taxable value. Income and property are then distributed to your loved ones rather than used to pay a tax burden.

Cost

The cost of probate in Oregon is modest compared to some other states. Unless your estate exceeds $1 million, you are unlikely to lose a significant amount of it in administration fees or taxes.

However, if you live in Oregon and own property in other states, it is likely that you will need an ancillary probate in each of those states, as well. An Oregon probate proceeding cannot address property outside the state. If you own a hunting cabin in Alaska, for example, you must file a separate probate proceeding there.

People who own a number of out-of-state property and investments will see their costs rise with each separate probate proceeding. Placing out-of-state assets in trust or owning them jointly with a spouse or other family members may prevent this dilemma. 

Before you choose a trust company and decide to transfer all your assets into a trust, see if that is necessary for you. At Gruber & Associates, we advise on your Oregon estate planning options including those that help you avoid probate. Contact us today to schedule a consultation and see what is necessary for you.

Wills vs. Trust III: What Do You Need in Oregon? A Will or a Trust?

This is the final installment of the Wills vs. Trusts series and it is clear that Oregon probate law can be ruthless to those who do not create a written estate plan. It also imposes serious impacts if clients do not create an estate plan that is right for them.

The right estate plan for you may involve a will, trust or a combination of both. This overview generally addresses who needs a will and those who require a trust.

Wills vs. Trusts II: Do You Need a Trust?

Trusts are subject to misinformation in Oregon. Entire industries exist to scare people out of probate and create these large estate vehicles that are not always necessary. Most clients who fall for these sales pitches would save money by drafting a will and never creating the trust.

When used for the right reasons, a trust protects your family’s interests. If it is created solely to avoid probate, you will lose more money and time than you will save. Here is an overview of what a trust can and cannot do in Washington, Multnomah, Marion and Clackamas counties.