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 L. Gruber, Attorney at Law to schedule a consultation.
No one is immune to dying intestate (no will). Some people believe it is unnecessary and others never find the time to sit down with an estate planning attorney and make plans. That can unfortunately occur with your loved ones and it is an unpleasant surprise when they die. The chances of this is occuring s 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.
Diane L. Gruber, Attorney at Law, handles Oregon testate and intestate probates with confidence so you can worry less. Contact us today to schedule a consultation.
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.
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.
Diane L. Gruber, Attorney at Law, 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.
Fall is starting soon and with it, Halloween celebrations. However, horror is not limited to one holiday. It can infiltrate your life and the lives of your loved ones anytime you die intestate (without a will). Impacts go well beyond the fun party-horror of Halloween. There are real consequences if you avoid estate planning.
The usual impacts of dying without a will have been discussed in detail in other articles. But real-life situations illustrate the point better. Here are three intestate horror stories of people who died before they signed a will.
Prince Rogers Nelson
Few people made it through the 1980’s without hearing about Prince. A talented musician known for his flamboyant fashion sense, he won seven Grammy Awards, one American Music Award, a Golden Globe, and an Academy Award for his work in Purple Rain in the course of his career. He was inducted into the Rock and Roll Hall of Fame in 2004, the first year he became eligible.
Prince was a fanatical organizer when it came to his numerous intellectual property rights and financial investments. When he died on April 21, 2016, the discovery that he never performed any estate planning was rather astounding considering the attention paid to other portions of his life.
The result was an estate estimated at $200 million and approximately 45 people coming forward claiming to be heirs. There were fraudulent claims, like an inmate in Colorado insisting that he was Prince’s son. (A DNA test invalidated the claim.) A niece and grandniece were also eliminated from the possibilities. In the end, a Carver County, Minnesota probate judge ruled six siblings and half-siblings as his official heirs. Although Prince had tense relationships with most of his siblings, that was never considered in the intestate proceeding. The judge had no choice but to strictly follow Minnesota’s statutes.
After one year, this is the only issue sorted out. There are still questions of who will eventually own his intellectual property rights, including the singer’s post-1995 catalog and unreleased material. Contracts remain in dispute and with that, there is no certain date of when heirs will take possession of his assets.
One of the most famous intestate deaths was Howard Hughes who passed away in 1976. A reclusive billionaire known for eccentric tendencies, he created a 34-year mess by passing away without any signs he made an effort towards estate planning.
Hughes did not have any direct descendants or immediate family to make this easier. Court authorities started with an extensive search for a will in a desperate attempt to wrap up his estate in an orderly fashion. Interviews with attorneys, banks, employees, and even the owners of hotels he frequently patronized revealed nothing. Newspaper classified ads basically begged for someone to come forward with a will and in a last-ditch effort, even a psychic was involved. It became abundantly clear that this estate was about to become an intestate nightmare.
Despite claims that Hughes hated his family and did not want them to benefit from his estate, the court still considered potential heirs. Distant cousins came out of the woodwork and before long, Nevada, California, and Texas authorities came forward to insist that Hughes owed state taxes and that his estate needed to be managed in those jurisdictions. Women claiming to be former spouses also filed claims although there were no marriage records on file.
In the end, 200 distant relatives benefited from the estate, collectively receiving $1.5 billion. Liquidation of assets continued until 2010 when the whole matter finally concluded.
Simon the Client
While there are numerous examples of famous people dying without wills (intestate), it is not just the talented and wealthy who need to draft estate plans. Regular working class, middle class and even “poor” people can leave nightmares for their loved ones if they do not have an Oregon draft a will for them to sign. One example was an estate this office handled years ago: It belonged to a client we will call “Simon.”
Simon was single with no children or grandchildren. He was an only child. His parents were gone, leaving him with no immediate relatives. Despite living an active life, he died unexpectedly at home at age 53.
Yes, Simon had assets. His modest home and one four-year-old car were owned free-and-clear. He had a live-in girlfriend for the last 10 years named Mary. A search of Simon’s safety deposit box after his death revealed what he BELIEVED TO BE a will, leaving everything to Mary. But it was not correctly witnessed and notarized. The probate court could not honor it.
That left the distribution of Simon’s estate to Oregon statutes. Since there is no room for intestate inheritance to unmarried partners, the house and car were liquidated with money passed on to distant relatives. The second cousins who benefited from the estate never had a relationship with him. Indeed, the executor (AKA personal representative) chosen by the court to manage the probate process, was a second cousin who had not seen him for 40 years.
Even though the unenforceable will made it clear that Simon wanted everything to go to Mary, the court could not honor it. Mary filed a dispute and held up the estate for eight months. In the end, she did not prevail and was evicted from Simon’s house.
Single adults who are estranged from living family have the most to lose by not having a will. However, there are no disadvantages to a will even if your situation is stable. If you are married, there is always the possibility that you and your spouse will die in the same incident. You cannot assume your spouse takes care of everything when you die–you must make allowances in case you are both gone. That is how a will can save your loved ones a lot of stress.
Avoid creating your own intestate horror story and make an appointment to draft a will that is enforceable in Oregon. Gruber & Associates, P.C. serves Washington, Multnomah, Marion, and Clackamas counties and can get you started. Contact us to schedule a consultation.
Oregon residents frequently search for free legal forms and that includes wills. There is no approved State of Oregon Last Will and Testament form which allows legal document companies to take advantage of this market and tempt hapless consumers into saving legal fees.
Estate planning should not be a do-it-yourself activity and free Oregon will forms are the worst way to make this attempt. Here are four reasons why you need to stop wasting time finding a free form online and instead, call an Oregon estate planning attorney.
They are unlikely to be helpful
It takes effort to find a free will form online. Legal document services like LegalZoom charge for the service as they guide you through a series of questions. This is standard in this industry and in most cases, you will pay $30 to $100 for the service.
If you come across a free form, it is either extremely basic or without guarantees of legal validity. Most have not been evaluated by an attorney and are often thrown together by lay people hoping to attract website hits.
AllLaw offers a paid service to customize a will but also includes this free will form. You have to cut and paste the text from the window to start drafting and there is little guidance. The form contains a warning that it is not reviewed by legal counsel and exists only for educational purposes:
Even if your search reveals a form that appears legitimate and may even been drafted by an attorney, you still do not know for certain if it is appropriate FOR YOU. A free form is often not the solution to your estate planning issues but the beginning of new ones.
They don’t make you think
Most will forms are fill-in-the-blank projects that make the task appear easier than it is in reality. Completing will forms feels more like filling out information for a Costco membership than making serious long term plans. This underestimation of your will’s importance does not help you design a good estate plan.
Mainly, you may avoid giving your circumstances the consideration they require. When you visit an attorney’s office for estate planning, you have an opportunity to discuss your concerns, ask questions and talk about “what ifs.” This discussion arms you with the information you need to make the decisions THAT ARE RIGHT FOR YOU AND YOUR LOVED ONES. With fill-in-the-blanks forms, your focus is on filling in the blanks–not understanding the consequences of those decisions.
For example, specific property requests may seem benign. Here is where you can bequeath everything from your collection of glass miniatures to your car:
This can have three possible effects. You can make property awards that are not enforceable, like to your minor children. This adds time to the probate process as the court attempts to create a trust or appoint a conservator to manage your children’s assets until they reach adulthood.
Also, if you award too much property to a family member on government benefits, that bequest could render them ineligible and cause hardship. There are other ways to protect vulnerable dependents that will not kill their access to vital benefit programs.
Finally, some people will feel the need to list every item of property in this section which is time-consuming and usually unnecessary. It can become confusing if any of the property is no longer in your possession when you pass away.
Even if your estate is simple, reviewing circumstances with an attorney assures you cover important aspects and create an effective estate plan with no doubt as to your intentions. You also avoid the impacts of well-intentioned but poor decisions.
They are generic
Will forms of all types are an attempt to make one size fit all. This never works with estate planning and even if your situation is typical, the form may still not be appropriate. People and their estates are diverse and an estate plan perfect for one client rarely works for anyone else.
For example, these two paragraphs will not help you if you are single and simply fill in the blanks. You may have to change spouse to “friend” or “live in partner”:
Additionally, will forms frequently contain provisions that may not be necessary for your situation. If you are single, have charitable aspirations, and never had children, there is no need to designate a trust for minor children (which occupies two pages of this particular will form). That is an unnecessary distraction that prevents you from addressing other matters and may lead you to overlook important aspects of your estate.
There’s no accounting for special circumstances
As indicated above, there are estate planning decisions that can lead to dire consequences. If you care for an older relative or an adult child with special needs, you must handle bequests to them VERY carefully.
For many clients, it may be their first instinct to grant a special-needs child or older relative a large amount of money. If these individuals receive disability payments, Medicare or Medicaid, that decision can cancel out their eligibility. This introduces new complications as your adult dependents attempt to secure health insurance or stretch out the payment to cover all their daily needs.
However, if you see an Oregon estate planning attorney, you can learn about your options. A trust preserves your assets for these family members and allows them to receive payouts from your estate without sacrificing benefits. When you take the do-it-yourself route with a free will form, you may not execute this plan correctly and place your family at risk.
Correct execution becomes more challenging
Your will is not complete until it is executed. This includes your initial on every page, your signature at the end, and the notarized signatures of two witnesses. That end step could be the most challenging aspect of finalizing your will.
On your own, it can take effort to assure your witnesses and notary are available at the same time. Finding witnesses can be a challenge too. It is possible to use relatives as witnesses, even if they are beneficiaries. But attorneys often do not recommend it because that leaves wills VERY vulnerable to court challenges.
Your safest witnesses are disinterested parties with no connection to your will or estate. When you go through an estate attorney, those ready-witnesses include law office staff. Also, every law office contains notaries which make it easy to finalize your will in one appointment.
These logistics are often challenging enough that probate attorneys sometimes see do-it-yourself wills without witnesses or a notary block. That renders the will invalid and you end up with an intestate estate.
Free advice is worth what you pay for and Oregon will forms are the same way! If you want to draft a will without paying excessive legal fees, contact Diane L. Gruber, Attorney at Law to schedule a consultation.