Cheri L. Elson and Allen G. Drescher, Retired
21 S. 2nd St. ● Ashland ● Oregon ● 97520

Heirs, Beneficiaries, and Trustees (Part 1)

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 (and worthy of reviewing from time to time).  In this two-part series, I will define them and then apply them in specific examples. My hope is to provide my readers 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 who dies intestate (with no document spelling out how one’s estate is distributed after death). 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 are our spouse, children, grandchildren, etc.  If there are none at this level, the statute looks to parents, siblings, nieces and nephews.  After that, grandparents, aunts and uncles, and then cousins.

A Will or Trust 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 chooseour beneficiaries, but we do not choose 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.

If a person dies (the “decedent”) with an estate is over a certain value, a probate is triggered.  This is the court-overseen process for administering a decedent’s estate.  Personal Representativesare 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 a living Trust exists and is properly funded, the need for probate is bypassed. The person in charge of the Trust is the Trustee (initially the Settlor), and unlike a Personal Representative, the Trustee comes into play before death.  The Settlor names a Successor Trustee to manage the Trust when the Settlor is no longer able. 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!

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What is Dementia?

I often hear people refer to all types of dementia as Alzheimer’s.  While Alzheimer’s is the most common of dementias, it is by no means the only type.  Dementia describes a group of symptoms affecting memory, thinking, and social abilities severely enough to interfere with daily functioning, such as paying bills or becoming lost while driving.

Dementia is caused by damage to brain cells, which interferes with their ability to communicate with each other.  When brain cells are not communicating normally, thinking, behavior, and feelings can all be affected.  Different types of dementia affect different areas of the brain. 

Most types of dementia are progressive, Alzheimer’s being the most common; however, there are dementias which are reversible, such as side effects to medication, excessive use of alcohol, and (surprisingly) urinary tract infections.  Treat the underlying issue, and the dementia goes away!

There is no one test for dementia, and doctors typically diagnose it based on medical history, physical examination, tests, and changes in the patient’s “base line” functionality. For example, picture a person who is normally neat to a fault, always dressed and coiffed nicely, and has an orderly home.  If they start to let things pile up, let the house get dusty, forget to bathe, or wear the same clothes for days at a time, these may be signs that some kind of dementia is occurring.  However, a person who was never overly concerned with cleanliness and personal hygiene would not raise any flags because their house was unkempt or they wore the same clothes more than one day in a row. 

If you are concerned that a loved one may be suffering from dementia, the best place to start is with their primary care physician.  They are most likely to know the person’s “norm” and be able to determine if dementia is a concern.  Diagnosing the type of dementia is more difficult and may require the assistance of a specialist such as a neurologist or gero-psychologist. 

As scary as a diagnosis of dementia may seem, the longer the condition remains undiagnosed, the fewer options are available to slow down the progression of the disease; the medications available today are most effective on patients with mild to moderate impairment. It is also important to remember that, even with a diagnosis, it is very possible to continue to lead active, healthy lives, to continue enjoying one’s hobbies, to maintain loving and meaningful friendships and relationships.  Of course, dementia does make it more difficult to do certain things, but with the right knowledge and support, it is possible for someone with dementia to live a full and wonderful life.

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