An estate plan typically involves the execution of Will or Trust, General Power of Attorney and an Advance Directive for Health Care.

A Will is a legal document in which an individual sets forth his wishes for disposition of his property at his death. The Will nominates a Personal Representative (also known as an executor) who is responsible for administering the estate and distributing to the property to those named in the Will to receive it.

When someone dies without a Will or with a Will that is incorrectly done, the rules in state statutes will determine how the deceased person’s assets are distributed – whether or not this is what the deceased person wanted! This is why is so important to have an attorney draft your will – and not to rely on do-it-yourself Wills from the Internet or other sources.

For some people, it may be a good idea to establish a Revocable Living Trust in place of a Will. One advantage of a trust is that avoids the necessity of probate at death. Because probate can be expensive and time-consuming, a trust, while initially more expensive to set up than a will, can save thousands of dollars and headaches for your family in the long-run. Another advantage of trusts is that they are private, unlike probate files, which become public records.  Also, when you set up your trust, you can manage it yourself and may appoint a successor trustee to take over when you are unable to manage it yourself.

A trust plan consists of forming the trust, which is an entity to hold your property.  Your trust is “funded” when you transfer your assets to the trust.  The creators of a trust are called “settlors.” When a settlor transfers assets to a trust, it is often done for that person’s benefit while they are alive and then for their beneficiaries at their death. The Settlor can act as trustee during his lifetime and then name someone to take over as successor trustee at his death or when he are unable to manage the trust himself.

A trust plan includes what it known as a “pourover will” to pick up any assets inadvertently left out of the trust and “pour” them into the trust at death.

While a correctly set up trust will avoid the need for probate, there are still some tasks a successor trustee must undertake at the death of the settlor, including collecting the assets of trust, paying creditors and distributing assets to beneficiaries.

A General Power of Attorney is a document in which you authorize someone else to manage your finances and conduct your affairs for you in the event you are unable to do so.  This person is known as your “Attorney in Fact.” Most of the time, people choose to execute a Durable General Power of Attorney, which allows your Attorney in Fact to conduct your affairs even if you fall into incapacity.  Your General Power of Attorney lasts until your death, at which time, the person you name as your Personal Representative must petition the court to be appointed to take control of your estate.

In Oregon, A General Power of Attorney can be used to do many things on your behalf, but it does not work for medical decisions. For that, you must sign an Advance Directive for Health Care.

Advance Directive for Health Care

An Advance Directive for Health Care allows you to name a person who you authorize to make medical decisions for you in the event that you are unable to because of illness or incapacity. The Advance Directive also includes a section to give your doctors or other health care providers instructions about the types of end-of-life care that you do want and do not want – including life support and tube feeding. Your health care representative is then required to follow your wishes.

Probate is the court-supervised process of settling the affairs of a deceased person. The court will appoint a personal representative, who has often been named by the deceased person in her Will. The personal representative’s job is gather up the deceased person’s assets, pay taxes and creditors, and then distribute the property the people named in the Will.

An attorney is generally necessary for assisting the personal representative in administering the probate estate. The court has required procedures and deadlines. Publication of a notice in the public notices section of a newspaper is often required, and there is a waiting period of four months to allow potential creditors and beneficiaries to come forward.

When estates are smaller (estates with real property with a fair market value of less than $200,000 and other property with a fair market value of less than $75,000), an alternative procedure called the Small Estate Affidavit may be used, which results in a shorter, less expensive process.

 

A guardian is a person appointed by the court to make decisions about health care and personal decisions for a person who lacks capacity to do so on their own. A guardian can also be appointed for a child under 18. A guardian does not have financial responsibility, but only looks out for your person.

A conservator is a person appointed by the court to manage the finances and assets of a person who cannot manage them on their own. It is not uncommon for a court to appoint both a guardian and conservator as part of the same court proceeding, and it is often the same person who is appointed to fill both roles.

Joel E. Fowlks is experienced in helping you establish a Guardianship and/or Conservatorship for a loved one who needs to have someone appointed to protect their person and their affairs. Call 503-653-1294 for a consultation today.