What happens to a bank account when someone dies without a beneficiary?

If a person dies without a beneficiary designated for their bank account, the funds in the account will generally become part of their estate and will be subject to the probate process. We discuss the Probate Process in detail in other articles. Briefly, probate is the legal process of administering the estate of a deceased person, which includes identifying and collecting the person's assets, paying any outstanding debts and taxes, and distributing the remaining assets to the heirs or beneficiaries according to the terms of the person's will or the laws of intestate succession.

If the deceased person had a will, the will may specify how the funds in the bank account should be distributed. If the deceased person did not have a will, the funds will be distributed according to the laws of intestate succession, which dictate the order of priority for heirs.

What is a Payable on Death bank account?

A payable-on-death (POD) bank account is a type of bank account that allows the account owner to designate one or more beneficiaries who will inherit the account balance upon the owner's death. POD accounts are sometimes also referred to as a "transfer-on-death" (TOD) accounts.

To set up a POD account, the account owner must provide the bank with a payable-on-death designation form that names one or more beneficiaries and specifies the ownership interests of each beneficiary. The owner can name any person or entity as a beneficiary, including family members, friends, charities, or trusts. The owner can also change or revoke the POD designation at any time as long as they are competent and capable of doing so.

POD accounts can be a useful tool for estate planning, as they allow the account owner to transfer ownership of the account to the designated beneficiary(ies) upon their death without the need for probate. This can save time and money, and it can also provide greater privacy and control over the transfer of the account. It's important to note, however, that POD accounts are not available for all types of financial accounts.

What happens if I don’t go through probate?

If probate is not done in Oregon, it can have a number of consequences for the estate and the heirs or beneficiaries of the deceased person. Probate is the legal process of administering the estate of a deceased person, which includes identifying and collecting the person's assets, paying any outstanding debts and taxes, and distributing the remaining assets to the beneficiaries according to the terms of the person's will or the laws of intestate succession.

If probate is not done, it can be difficult to determine who is entitled to the assets of the estate and how they should be distributed. This can lead to disputes among the heirs or beneficiaries, which can be time-consuming and costly to resolve. In addition, it may be difficult to sell or transfer ownership of assets that are owned by the estate, such as real estate or financial accounts.

Furthermore, the assets of the estate may not be properly protected and may be vulnerable to theft or mismanagement. For example, if the estate includes a bank account that is not properly closed or transferred to the beneficiaries, the funds in the account may be at risk.

In summary, if probate is not done, it can lead to a number of complications for the estate and the heirs or beneficiaries, and it can also put the assets of the estate at risk. It's generally advisable to complete the probate process in a timely manner in order to ensure that the deceased person's affairs are properly taken care of and that their assets are protected.

Does Oregon have a Transfer on Death deed?

Yes, Oregon does have a transfer-on-death deed (also known as a TOD deed or a beneficiary deed) option that allows property owners to transfer ownership of their real property to one or more designated beneficiaries upon their death. A transfer-on-death deed is a legal document that is recorded with the county where the property is located, and it becomes effective upon the owner's death.

 To create a transfer-on-death deed in Oregon, the property owner must execute and record a TOD deed that names one or more beneficiaries who will inherit the property upon the owner's death. The TOD deed must also describe the property and specify the ownership interest that is being transferred. The property owner can revoke or modify the TOD deed at any time as long as they are competent and capable of doing so.

 A transfer-on-death deed can be a useful tool for estate planning, as it allows property owners to transfer ownership of their property outside of the probate process. This can save time and money, and it can also provide greater privacy and control over the transfer of the property. It's important to note, however, that a TOD deed does not take effect until the owner's death, so the property owner will need to continue to manage and maintain the property during their lifetime.

 If you are considering using a transfer-on-death deed in Oregon, it's a good idea to consult with an attorney to ensure that the deed is properly executed and recorded, and to discuss any other estate planning options that may be available to you.

Please contact us if you have any questions.

What Triggers Probate in Oregon?

Without someone filing a petition with the court, nothing will trigger probate in Oregon.  The better question to ask is: When is Probate Required in Oregon?

Probate is a legal process that occurs after a person's death and involves the distribution of their assets according to their will or state laws. In the state of Oregon, probate can be required in several situations.

The most common reason for probate in Oregon is the death of a person who owned property in their own name, without any joint owners or beneficiaries designated. In this case, the probate court will oversee the distribution of the deceased person's assets to their heirs or beneficiaries.

Another common reason for probate in Oregon is the need for someone to pursue a legal action in the decedent’s name.  In this situation, the Court will appoint a personal representative. 

It's important to note that not all assets are subject to probate in Oregon. For example, assets that are held in a trust or that have a designated beneficiary, such as a life insurance policy or retirement account, may not go through probate.

If you have any questions, please feel free to contact us.

What is the 65 day rule for estates and trusts?

The 65-day rule for estates and trusts is a provision in the United States tax code that allows trustees or executors of estates to make certain tax decisions after the close of the tax year, but before the due date of the tax return.

Specifically, the rule allows trustees or executors to make certain elections related to the distribution of income and deductions to beneficiaries of an estate or trust for the prior tax year. This can have significant tax implications for both the estate or trust and the beneficiaries.

To take advantage of the 65-day rule, the trustee or executor must file an election with the IRS on or before the 65th day after the close of the prior tax year (which is usually March 6th). This election allows the trustee or executor to treat certain distributions as having been made in the prior tax year, even if they are actually made in the current tax year.

It's important to note that the 65-day rule only applies to certain types of distributions, and there are specific requirements that must be met in order to qualify. Therefore, if you are a trustee or executor of an estate or trust, it's recommended to consult with a tax professional to ensure you are following all the necessary rules and regulations.