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What is Estate Planning?

Everyone has an estate – it’s everything you own (your home, other real estate, car, checking and savings accounts, investments, life insurance, furniture, personal possessions).  Estate planning is making sure your wishes are carried out – making a plan in advance and ensuring the least amount is paid in legal fees, court costs, and taxes.  To learn more about Estate Planning please click here or go to www.estateplanning.com

Estate planning includes:

  • Values. Instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
  • Care. Instructions for your care if you become disabled or incapacitated before you pass away.
  • Guardian and Conservator. Naming a guardian and an asset manager (conservator) for minor children, special needs individuals, or elderly persons who require third parties to make decisions regarding their life events and asset management.
  • Special Needs. Providing for family members with special needs without disrupting government benefits.
  • Protection. Future protection from creditors or divorce.
  • Loved Ones. Providing for loved ones who might be irresponsible with money or who have been dependent on your for assistance.
  • Insurance. Securing life, disability, and long-term care insurance.
  • Business Transfer. Structuring the transfer of your business at your retirement, disability, or death.

Estate planning is for everyone – and it’s not a one-time event

You should update your plan as your family/financial situations and laws change.

 

What happens if you pass away without an Estate Plan?

Intestate Succession. If you don’t have a plan, the State of Oregon has one for you – it’s called “Intestate Succession”. What that means is that the Oregon Estate Laws will control who receives your property, and how much of it upon your death if you pass away without a properly written Estate Plan, regardless whether you want those persons to receive your property.

Disability.   Without a proper Estate Plan that designates your choice for a guardian and conservator, should you need one, the courts may end up supervising how your assets are used to care for you.  This can be expensive, time consuming, and may not end when you want it to, even you if you recover.

Probate. If you pass away without a proper Estate Plan, your assets will not only be distributed according to the intestate succession laws, but they will go through probate as well. Who gets what from your estate, and how much of your estate will you depend on what relatives survive you at your death (spouse, kids, parents, siblings, etc.), regardless whether you agree with that plan of distribution. If you have minor children, the court will control their inheritance and who manages their inheritance. If both parents die, the court will appoint a guardian and conservator for your minor children to control their care and inheritance. And to do all of this, your estate will have to an expensive and lengthy court proceeding (probate).

Probate is a public court proceeding that will take at least six months, but sometimes it goes on for years. Through the Probate process, everyone can know exactly how you have in your estate and who it’s going to. It requires payment of court filing fees, newspaper notices to the public, and attorney fees.   Probate usually costs much more than it costs to have a Will or Trust prepared. If you pass away without a Will, your Estate will go through Probate.

How does an Estate Plan begin?

An Estate Plan begins with an attorney sitting down with the client, determining the unique circumstances of each client’s, and designing a plan around their needs and desires. The foundation of an Estate Plan could be a Will or a Trust, with additional documents (Durable Power of Attorney, Advanced Directive, HIPAA Waivers, and transfer documents for Trusts) to complete the initial Estate Planning.

Will

A Will provides your instructions for the administration and distribution of your estate, but it does not avoid Oregon State Probate. If you have a Will only and not a Trust, your assets will most likely go through Probate before they can be distributed to your heirs. If you own property in other states, your Estate may face another Probate in those other states.

Revocable Living Trust (RLT). An RLT is a separate entity that holds your property. It is similar to a Limited Liability Corporation (LLC) or a corporation in the sense that it does not have a lifespan that ends when you pass away. While you are living, you completely control all of the assets that are in your RLT and you can do whatever you wish with them.

For an RLT to be effective, you have to place ALL of your property into your RLT. If you leave any property out, that property may have to go through Probate.

When you pass away, your RLT continues to own your property, so there is no property personally owned by you that has to go through Probate. Instead, your property can be distributed immediately as you directed in your RLT. If you have planned properly and maintained your assets inside of your RLT, your Estate will never go through Probate.

For an RLT to be effective, you have to place ALL of your property into your RLT. If you leave any property out, that property may have to go through Probate.

When you pass away, your RLT continues to own your property, so there is no property personally owned by you that has to go through Probate. Instead, your property can be distributed immediately as you directed in your RLT. If you have planned properly and maintained your assets inside of your RLT, your Estate will never go through Probate.

RLTs are also completely private and are not required to be made public.