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Estate Planning After Remarriage

There are triggering events which make estate planning, or editing an estate plan, necessary in Oregon. Remarriage is one of these triggers. This is especially true if your new marriage includes children from previous marriages, stepchildren, and additional children from your current marriage.

Even in the most well-adjusted blended families, death challenges relationships. This makes a clear estate plan vital if you want to provide for family members while also reducing conflict. You must also avoid making the same estate planning assumptions that are appropriate in first marriages but are likely to backfire in subsequent ones. Here are four unique considerations when creating an estate plan after remarriage.

Conflicts of Interest

The natural inclination is to leave everything to your spouse and for your spouse to do the same. This is a safe avenue in first marriages when children only come from that marriage.

Remarriage changes that dynamic. If you pass all your property and money to your current spouse, understand that they have no obligation to consider your children from a previous marriage. Your death may create distance between them and if your current spouse outlives you considerably, he or she will be more likely to account for his or her own children and any new spouse. They are not likely to pass property to your children, especially if they have not spoken to each other for years.

One solution is to place your property in trust to provide income to your current spouse. Once your spouse passes away, remaining property is distributed to your children. You may include children from both your previous and current marriages and any stepchildren in that distribution.

If you decide to take this approach, appoint an uninterested third party to serve as trustee. Otherwise, there is a strong possibility of a conflict of interest based on self-interest.

If you appoint your spouse as the trustee, they may choose to invest your assets in low-yield options that leave nothing for your children once your spouse passes away. Likewise, your children may choose more long-term approaches that leave your current spouse inadequate income. An independent trustee is more likely to manage assets to everyone’s advantage.

Beneficiary Designations

Sometimes, the best approach to provide for children is with non-probate assets. Making them beneficiaries on your life insurance, retirement, and investment accounts is an excellent way of ensuring they receive something after your death. You are then safe to pass property and money to your spouse through your will.

This strategy is easier and less expensive than a trust but it requires attention to detail. Check the beneficiary designations on these assets and change them now. Most importantly, let your family know you made these changes and why. You do not want your spouse to expect a life insurance payout only to find out after your death that they are no longer entitled to those funds.

Agent Appointments

Your estate plan will likely include an advance directive and a durable power of attorney. These cover decision-making should you become incapacitated. The advance directive appoints a health care representative who makes health care decisions on your behalf. A power of attorney appoints an agent who manages your financial and business affairs if you are unable to do so.  A power of attorney dies when you do.

Spouses are often the first choice for these appointments. In blended families, this may not be the best idea. Hurt feelings and conflict can arise if your children from a previous marriage do not feel your spouse is acting in your best interest or puts his or her self-interest above your needs.

You are better off choosing family members who are suited to these tasks rather than focus on relationship status. For example, you may discuss end-of-life decisions more frequently with an adult child rather than your spouse. Your child may listen better while your spouse shuts down when you bring up the topic. Or you may run a small business with a daughter, who is likely a better candidate to be your power of attorney.

The important part is, you want to appoint individuals to get along well with all family members, including your spouse. If there is so much tension that this is impossible, consider appointing someone outside your immediate blended family, like a close friend or sibling.

Dangers of Intestacy (when you don’t have a Will)

It may be tempting to do nothing and let intestate statutes take control. This may seem to prevent difficult discussions but it will only lead to many, many problems for your loved ones after you pass away.

Intestate succession only considers blood relatives. It will ensure support for spouses, children, parents, and even siblings. But if you are close to your stepchildren and want them to inherit assets or take over a small business, intestate succession will not allow that. Your stepchildren may also have special needs that you want to be provided for if you pass away. Again, intestate succession will not even take them in account, even if you had a close relationship. This only changes if you adopted them, which often does not occur if you remarry their parent when they are adults.

Blended families offer distinct estate planning challenges, but they are not surmountable. Find solutions by discussing them with an Oregon estate planning attorney. Call Diane L. Gruber today to schedule a consultation.

Help! My Dead Relative Never Executed a Will!

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.

Start Searching

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
  • Debts
  • 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.

Consider Options

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.

Your 2018 Oregon Estate Planning Checklist

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 to schedule a consultation.

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 Diane L. Gruber, Attorney at Law 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.

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.