Negative Wills in Oregon

or how to disinherit children

There are many reasons why someone might want disinherit a relative and not for the reasons you are probably thinking.  The most common reason is that one child is much better off financially than other children and doesn’t need the money.  In those cases, assets that have sentimental value to well-off child can be passed to her and the financial assets could be passed to the other children.

The Oregon legislature updated the Probate Law so that individuals can now expressly disinherit family members who would otherwise have inherited your property under the current law.   

ORS 112.015 is amended to read:

(2) A decedent by will may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If that individual or a member of that class survives the decedent, the share of the decedent’s intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed that individual’s or member’s intestate share.

This is the first of our series of discussing the modernization of Oregon Probate law.  To find a table to articles describing all of the updates here.

2016 Oregon Probate Law Modernization

Oregon Probate Modernization

The Oregon legislature passed SB 379-3 this year to update Oregon’s Probate statutes.  This was the outcome of several years of work by the Oregon Law Commission to modernize the Oregon’s probate laws.  Oregon enacted its current law in 1969 and changes in society and technology since then drove the changes.  The new laws go into effect on January 1, 2016 and I want to give you an overview of what is changing.  Over the coming weeks, I will post on each of the following changes:

1. Repealed Sections.   How what has been removed effects probate in Oregon.
2. Negative Wills.  Oregon will now allow you to disinherit someone without specifically giving the property to someone else.
3. Issue to Generation.  Clarifies how shares are created and distributed among different generations.
4. Disinheriting Parents.  Clarifies that parents who abandoned children will not inherit property from them if their children die.
5. Missing Heir Search.  Adds guidance on what is a reasonable level for a diligent search.
6. Same-sex Marriage provisions.  Cleans up and clarifies some language regarding same-sex marriage and domestic partnerships.
7. Who can write a will in Oregon.  Clarifies who can write a will in Oregon.
8. Will execution formalities.  Simplifies some of formalities around executing a will.
9. Incorporation of outside materials.  Allows for the incorporation of outside materials that are referenced in the will.
10. In terrorem clause.  Clarifies how in terrorem clauses effect will contests in Oregon.
11. Revocation of wills by physical Acts.  Changes how wills can be revoked.
12. Revocation by subsequent Marriage.  Adds language preventing wills from being revoked if domestic partners subsequently marry.
13. Later acquired property.  Adds language clarifying the disposition of property acquired after the execution of a will.
14. Pretermitted child.  Oregon adds language on how to handle the inheritance of posthumously conceived children.
15. Slayer/Abuser inheritance.  Changes how jointly held property by decedent and the person that abused or killed them is distributed.
16. Deduction of Lifetime Gifts.  Deals with how lifetime gifts may reduce inheritance.
17. Proving a will.  Changes how wills can be proven in Oregon and focuses on the intent of the decedent.
18. Disposition of Personal affects.  Allows for the reference to a list of personal items and how to distribute them.

I will add links to this list as I add posts.

The Probate Process in Oregon

Update: We've added some diagrams to make it easier to understand how property is inherited when there is no will in Oregon.

This is a general overview of the probate process in Oregon.  Your situation will undoubtedly vary but this will give you a good overview of what to expect.    

Although the below list seems simple, probate must take at least 5 months but is more typically a 9 to 12 month process in Oregon.  Without litigation or a will contest, an estate in Oregon can be administered in 9 steps.

1. Appointment of the Personal Representative.  The Executor of the will or any interested party may petition for the appointment of a Personal Representative and the probate of the will. 

2. Proving the Will.  This is the process of convincing the court that will is authentic.  ORS 113.055

3. Notification of Heirs and known parties.  As part of the process, the PR must file a list of names of potential heirs and other interested parties and mail notice to them.  The PR has 30 days after appointment to file proof with the court that these parties received notice or were mailed. ORS 113.145 and ORS 113.035 (8) and (9)

4. Inventory and Assessment of the Estate.  Within 60 days of appointment, the PR must file with the court an inventory and estimates of cash value for the property of the estate.  ORS 113.165

5. Notification of Unknown interested parties.  Legal Notice must be published in a local newspaper for 3 consecutive weeks.  ORS 113.155(1)

6. Filing of Claims against the Estate.  Creditors have 30 days after notice is mailed to them to file a claim against the estate.  Otherwise, other claims against the estate must be filed 4 months after the publication in the newspaper.  Those claims which were not filed on time could potentially be barred.  ORS 115

7. Filing of Tax Returns and payment of any taxes. 

8. File for approval of final accounts.  The PR must maintain and provide an accounting to the court before the distribution of assets of the estate. ORS 116.083(3)

9. Court Approval.  Assets are distributed to the heirs and interested parties.  ORS 116.113

Although the steps above might seem simple, probate can be a confusing and time sensitive process.  If you are probating an estate, I suggest that you contact us.  

2015 Oregon Estate Tax Rates

Portland Probate Attorney

The State of Oregon levies a tax on taxable estates that have a value of more than $1 Million.  Estates of less than $1 Million are exempt from the Oregon Estate Tax.  The Oregon rates can be determined on Part 6 of  Form OR706. This is a separate from the Federal Estate Tax.  In 2015, estates smaller than $5,430,000  are exempt from the Federal Estate tax.  The top Federal Estate tax rate is 40%.  More information on determining the Federal Estate Tax rates can be found at IRS.gov.

The 2015 Oregon Estate Tax Rates are:

Taxable Estate Equal to or more than:	Taxable Estate less than:	Tax rate on Taxable Estate amount more than column 1
$1,000,000	$1,500,000	$0 + 10%
1,500,000	2,500,000	50,000 + 10.25%
2,500,000	3,500,000	152,500 + 10.5%
3,500,000	4,500,000	267,500 + 11%
4,500,000	5,500,000	367,500 + 11.5%
5,500,000	6,500,000	482,500 + 12%
6,500,000	7,500,000	602,500 + 13%
7,500,000	8,500,000	732,500 + 14%
8,500,000	9,500,000	872,500 + 15%
9,500,000		1,022,500 + 16%