Cheri Elson Sperber and Allen G. Drescher, Retired
SERVING ASHLAND AND SOUTHERN OREGON SINCE 1973
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Heirs, Beneficiaries, Personal Representatives, Trustees, Oh My!

Heir.  Beneficiary.  Personal Representative.  Trustee.  Often used interchangeably, they can cause confusion at best, real issues, at worst.  Understanding the difference is important, both in the creation of the estate plan and in its administration.  In this two-part series, I will define them and then apply them in specific examples.  At the end, I hope my readers have a better understanding of these terms and how they fit into the grand scheme of an estate plan.

Heirs are those who receive the estate of someone dies intestate (with no testamentary document, like a Will or a Trust). Oregon statutes define an heir as “any person who is or would be entitled under intestate succession to property of a person upon that person’s death.” Our actual heirs are determined by those alive at our death and the statutes tell us how to figure it out.  First in line are our spouse, children, grandchildren, etc.  If there are none, the statute looks to parents, siblings, nieces and nephews.  After that, grandparents, aunts and uncles, and then cousins.

When a person creates a Will or a Trust, the document names Beneficiaries, those who are to receive the person’s property at their death.  Often, heirs and beneficiaries are the same people.  However, it is important to understand the distinction between the two terms, because we choose our beneficiaries, not our heirs.  In a Will, the beneficiaries are those who receive the estate at the end of the administration (often a probate).  In a Trust, the primary beneficiary is typically the Settlor of the Trust (the person who created the Trust); those named to receive the estate at the Settlor’s death are the remainder beneficiaries.

When a person dies (the “decedent”), if their estate is over a certain value, that estate goes through probate, the court-overseen process for administering a decedent’s estate.  Personal Representatives are appointed by the courts to manage that process. We can name our personal representatives in our Wills; if we don’t, the Oregon statutes, once again, give us a priority list of who is appointed.

When we create a living Trust (and properly fund it), we bypass the need for probate.  The person in charge of the Trust is the Trustee. Unlike a Personal Representative, a Trustee comes into play before death and, initially, the Settlor is the Trustee.  The Settlor names a Successor Trustee to manage the Trust when the Settlor no longer does. The circumstances under which the Successor Trustee takes over determines the Successor Trustee’s job.  If the Successor Trustee takes over because of the Settlor’s inability to manage their own finances, their main job is to manage the Trust for the benefit of the Settlor.  If the Successor Trustee steps in at the Settlor’s death, their main job is to distribute the Trust to the remainder the beneficiaries.

Clear as mud?  Let it sit and percolate.  In part two, I’ll give some examples and it should all come together!

Nora’s Case

As and estate planning and elder law specialist, I am often involved in unusual or unfortunate cases in which a person’s expressed wishes involving end-of-life decisions are not always met, even with an Advance Directive for Health Care in place.  One such case occurred about a year ago, in which I was an expert witness. I have attached an article that presents the details of the case and I urge you to read it through to the end.

While her court-appointed attorney correctly states that Nora did not specifically mention food and drink presented by hand, I feel it’s safe to say that no matter how many specific things we list in our Advance Directives, we will not be able to account for every possible scenario that could arise.  Nora did the best she could to ensure her wishes were known to Bill and then gave Bill the power to make those choices for her.

My guess is many of my readers are asking “How on earth do I keep this from happening to me?”  The answer is neither simple nor foolproof.  Nora and Bill clearly believed her Advance Directive was sufficient for Bill to make the choices he knew Nora would have made once the dementia was too far progressed for her to express them herself. 

In his book, Being Mortal, Dr. Atul Gawande discusses what he sees as medicine’s failing by simply trying to keep us alive as long as possible, without looking at the quality of that life.  He feels (and I agree) the better question to ask is what we each feel is a life worth living.  It may be that a shorter life that can be spent in comfort and with one’s family is preferable to a longer one that is ridden with pain, or in which we are sedated to the point we are unable to be with our loved ones.  Each of us will have a different answer to the question; in Nora’s case, a life in which she was not able to feed herself, was not one worth living.

What we can do is add as much information as possible to our Advance Directives so that anyone reading it is able to gain a clear understanding of what we want and when we want it.  In order for us to provide this information to our agents, we must first be clear in our minds about our end-of-life decisions.  This can be a very difficult exercise, to be sure, and one that is vitally important.

There are several resources to help us answer Dr. Gawande’s question, both locally and on the internet.  www.GoWish.org is a great place to start.  Their “game” can be quite helpful in prioritizing some of the issues that arise at one’s end-of-life.  Once the “game” is finished, take a screen shot of the cards laid out and include them as an attachment to your Advance Directive.  The State of Washington has developed an Advance Directive designed for those diagnosed with dementia and, although we cannot use their Directive in Oregon, we can certainly take the language from it and incorporate it into our form, again as an attachment.  If you want an even deeper exploration into these questions, there are highly qualified people right here in the Rogue Valley who will work with individuals and help them put together an Advance Directive.

My final word on the subject is this: if you are a care-giver for someone (paid or not), if you work in a facility where people needing care depend on others to speak for them, learn about those you are charged with protecting and truly advocate for them.  Look at their Advance Directives, speak with their family, speak with them, learn everything you can about their wants, needs, and desires so that when you advocate for them, you can be certain that choices you make reflect the true desires of your loved ones.  As caregivers, it is our job to be the voice of those for whom we are providing care.  While, as in Nora’s case, we aren’t going to be able to identify every possible variable that may affect end-of-life decisions, we can thoughtfully consider and discuss what factors and situations would merit being covered in our Advanced Health Care Directives.

USAToday

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