- What is an Estate Plan
- Who needs an Estate Plan?
- Why do I need a Will?
- Why can’t I just use one of those online forms?
- What is a living Trust?
- Should Estate Plans be Reviewed and Updated?
- How do I know if I need a Trust?
- What is a Durable Power of Attorney?
- What is an Advance Directive for health care?
- What is Probate and can it be avoided?
- What legal considerations do I need to be aware of for my family?
An Estate Plan addresses not only the transfer of wealth at death, but also important end-of-life decisions. A well-written Estate Plan can also avoid Probate and provide tax planning. There are four main documents that make up an Estate Plan: the Will, Trust (for those who need it), Durable Power of Attorney for Finances, and Advance Directive for health care. Having a customized and current Estate Plan in place today means important decisions can be made before stressful events take place, offering peace of mind and confidence in knowing your legal affairs are in order.
Everyone needs some type of an Estate Plan. Often, a Trust-centered plan is most appropriate. However, in certain situations, a Will-centered Estate Plan may be sufficient. It is important to have a well-thought-out Estate Plan regardless of your worth, as Estate Plans address so much more than the distribution of assets. A well-crafted Estate Plan ensures not only the distribution of your assets at death, but also the care you will receive in the event you become unable to care for yourself, financially or personally.
A Will is a legal instrument that permits a person to make decisions on how one’s estate is managed and distributed after death. If there is no Will, state laws dictate how the estate is distributed. It is important to note that having a Will does not avoid Probate; however, it does ensure that assets are distributed to those you choose at the end of the Probate process.
Estate planning documents have a legally binding effect, similar to the way contracts work. Generic forms available online are unlikely to meet your specific needs, are often not completed properly, and almost always end in lengthy and expensive court proceedings to determine how to distribute your estate. An estate planning attorney can save your loved ones unnecessary stress and expense by ensuring that your documents are properly drafted.
There are many different types of Trusts, some revocable (can be changed over time) and some irrevocable (no changes can be made once executed). One of the simplest ways to avoid Probate is through a revocable Trust (also called a living Trust or an intervivos Trust). A Trust is a legal arrangement in which a Trustee holds legal title to property for a beneficiary. There are three main “players” in a Trust: Settlor, Trustee, and Beneficiary. The Settlor is typically the only person who can make changes to the Trust document. In a conventional living Trust, the Settlor, Beneficiary, and Trustee are initially the same person. It is only when the Settlor becomes unable to handle their own financial affairs that a successor Trustee (chosen by the Settlor) takes over management of the Trust. The Trust assets are to be used first and foremost for the benefit of the Settlor, with the remainder beneficiaries receiving an interest in the Trust only after the Settlor’s death (the same way that a person’s estate passes to their beneficiaries under a Will).
Just as with your investments, your Estate Plan should be reviewed annually. Family structures and finances change and adjustments to your Estate Plan may be needed to reflect these life changes. Your Estate Plan will only perform as intended if it is kept up to date.
Trusts are helpful estate planning instruments for many reasons. First and foremost, they can avoid Probate, a court-overseen procedure for administering and distributing a deceased person’s estate. Trusts can also help avoid estate taxes, which in Oregon, are triggered by an estate over $1,000,000. One of the more important features of a Trust is its flexibility in how your assets can be distributed at your death. Bequests are typically given outright; however, there are times when that is not the best way to leave someone money. Trusts provide maximum flexibility in the distribution of assets, much more so than a basic Will. Parents of blended families can also benefit from the distribution flexibility that Trusts offer. The best way to determine if you need a Trust is to meet with us. We know what questions to ask to help you determine the type of Estate Plan ideally suited to meet your needs.
Durable Power of Attorney for finances (DPA) names the person responsible for managing your finances in the event you are unable to manage them yourself. Even in a Trust-centered Estate Plan, the DPA plays an important role, governing the assets held outside the Trust. In the event of your incapacitation, your successor Trustee will take over and manage your Trust assets while your agent under the DPA will manage all non-Trust assets.
This important document combines a Power of Attorney for healthcare and a living Will, or directive to physicians, into one document. This process allows you to name an agent to make healthcare decisions for you in the event you are unable to make them on your own. When choosing your agent, be sure it is someone who will be able to make the decisions you want made. For instance, if you feel strongly that in the event you are in an irreversible coma or persistent vegetative state, you would not want to be kept alive, make sure your agent will be able (morally and emotionally) to direct your healthcare provider to withdraw life-sustaining treatment and let you go.
Probate is the legal process by which a decedent’s assets are distributed under court supervision. Probates are triggered by the decedent’s worth at the time of their death. If the decedent has a valid Will, the assets are distributed according to the terms of that document at the end of Probate. If there is no Will (died intestate), state statutes dictate how the assets are distributed. Probates are overseen by the court and can take as much as 8-12 months or even more to complete. No assets may be distributed before the end of Probate, when the judge signs an order authorizing distribution of the estate’s assets.
One of the simplest ways to avoid Probate is through the creation of a Trust. When a Trust is drafted, the Trust becomes the legal owner of the decedent’s assets. When the decedent passes away, he or she does so holding title to little or no assets in their name. Because the decedent’s estate is worth less than the amount required to trigger a Probate, assets are transferred through the Trust without the need for court hearings
Every family is different and has unique needs. Working with a qualified attorney for estate planning, real estate, and business transactions can mean the difference between a legal document that effectively carries out its intended action and a time-consuming situation that costs more to remedy than it would have to set up properly from the beginning. As your attorneys, it is our job to get to know you and ask the right questions so we can draft documents that fit your needs and perform as desired.