Basics of an Oregon Estate Plan (Part 3)

Part 3.  Advance Care Planning

This is the Third Article in our Basics of Estate Planning series.  In this article, we will explain options for health care decision making.  We will talk about two documents that allow you to express your wishes when you are not able to.  The first are legal documents call advance directives.  The second are medical orders call Physicians Orders for Life Sustaining Treatment (POLST.)

Advance Directives

The Oregon Health Care Decisions Act (ORS Chapter 127) allows Oregonians to create Advance Directives for Health Care, Powers of Attorney, Declarations for Mental Health Treatment and other documents.  Advance Directives are legal documents.

Healthcare Representatives

Advanced directives allow a person to decide their treatment wishes while they are still able.  They also allow you to appoint a healthcare representative to direct your health care when you are unable to do so.  You can also place limits on the decisions that your Healthcare Representative can make for you. For example, you may have certain religious or ethical beliefs that you want taken into account when life-sustaining decisions are being made and that your Healthcare Representative should honor your wishes.

Healthcare instructions

Advanced directives also allow you to make decisions about specific medical conditions and treatments.  Below is an excerpt from an Advanced Directive:

In this example, you have an Advanced Progressive illness and are very unlikely to substantially improve.  Importantly, you are unable to communicate and someone else will have to make medical decisions for you.  With the Advance Directive you can choose the care you desire in this situation by initialing the form. 

The State of Oregon has information regarding Advance Directives and an Advance Directive form available online (http://www.oregon.gov/DCBS/insurance/shiba/topics/Pages/advancedirectives.aspx)

Physician Order for Life Sustaining Treatment (POLST)

A POLST is an optional form that you create with your health care provider.  A POLST is a medical order that must be signed by a health care professional in order to be valid.  A POLST is typically used by those that are seriously ill or are near the end of life.  

A POLST will tell medical professionals whether you want CPR, tube feeding or any other medical interventions that may sustain life.  

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Basics of estate planning series

You can review the other articles in this series.

• Part 1. What is a Will.
• Part 2. What is a Trust.

Basics of an Oregon Estate Plan (Part 2)

Part 2. What is a Trust.

This is the second article in our basics of estate planning series.  In this article, we will explain what a Revocable Trust is, what it can be used for and what it can’t do.

The first article in the series is Part 1. What is a Will.

What is a Living Trust?

A living trust is simply a contract with yourself.   You establish a trust by written agreement and by “funding” the trust by transferring your property into it.  The trust will appoint a “trustee” to administer the assets of the trust.  The trust agreement will also provide instructions for how the trust is to be administered.  A living trust can be a used to avoid Probate or Conservatorship.  

How does a Living Trust Work?

By retitling all of your property from yourself to the living trust while you are living and providing instructions for the “successor trustee” to distribute your property after your pass, very little of your property will pass through probate.

A diagram explaining the mechanics of a living trust.

A “Pour Over Will” is often used alongside a living trust to move property into the trust that was missed or was acquired after the trust was formed.  A downside of this method is that “Pour Over Will” may have to be settled through a probate proceeding before the assets of the living trust can be distributed.  Another option is to transfer the property not included in the living trust directly to the heirs by a small estate proceeding.  

How does a Living Trust avoid Conservatorship?

Conservatorship is when the court determines that you are unable to manage your financial affairs and appoints a conservator to do so.  By transferring your property to a revocable living trust and providing detailed instructions for the successor trustee in the event you become incapacitated, you can avoid the court oversight and costs involved in a conservatorship.

Drawbacks of a Living Trust.

The main drawbacks of a Revocable Living Trust are:

1.    Complexity.  Trusts are often left unfunded and property acquired after the formation of the trust is not moved into the trust.  Living Trusts require more maintenance and ongoing administration than a will.
2.    Costs.  Living Trusts are more expensive than creating a will.  For young and healthy individuals, the costs of probate and conservatorship are likely many years down the road.  For these individuals, they are often times better off investing the money they would have spent setting up a Living Trust.  Older individuals will more quickly see the benefits of probate and conservatorship avoidance and may want to consider a living trust.
3.    Unforeseen Consequences.  Family’s change and the law changes.   Companies may want to review the trust documents if you purchase or insure property.  Stock in certain corporations may not be held in some trusts without serious tax implications.  You may also have difficulty acquiring assets in other Countries.

If would like to learn more about how to plan your estate, visit our practice page or search the blog on the right.  You can also sign up for our newsletter and have estate planning tips delivered to your email.

Basics of an Oregon Estate Plan (Part 1)

Part 1.  What is a Will.

This is the first article in our basics of estate planning series.  In this article, we will explain what a Will is, what it can be used for and what it can’t do. 

Part two of our series is Part 2. What is a Living Trust.

What is a Will? 

A Will allows someone to decide how they want their assets divided after they have passed away.  Any person who is 18 years or older or who has been lawfully married or who has been emancipated, and who is of sound mind, may make a Will.

What happens if I die without a Will in Oregon?

If you die without a Will your assets are distributed according to the laws of Oregon.  Inheriting without a Will is called intestate succession and we have an article that diagrams some of the common ways your assets may be distributed. (Intestate Succession in Oregon)

Benefits of a Will.

There are many benefits to creating a Will.  At the minimum, a Will should appoint a personal representative and waive bond.  A Will can allow you to make a charitable gift, create a testamentary trust for your children, or even provide for your pets.

Formalities of making a Will.

There are several formalities that you need to follow in order to have a valid Will in Oregon.  The most important are that they are in writing and that two witnesses watch you sign your Will.

Does a Will avoid probate in Oregon?

A Will does not avoid probate but it can make the administration of probate cheaper and easier.  Your Will allows you to appoint a Personal Representative  to manage your estate and you will be able to waive bond for the personal representative.  Just doing those two things will save your estate money and move your estate through the probate court more quickly.

Elective Share.

While your Will ordinarily controls how you distribute your assets, your spouse has a right to claim part of your estate.  You are not required to provide for anyone in your Will and Oregon doesn’t allow anyone to claim a portion of your estate except for your spouse.

I have no money.  Should I make a Will?

How you distribute your assets is only part of what your Will does.  Your Will also allows you to make arrangements for your minor children. 

How do I change my Will?

You can make changes to your Will be adding something called a codicil.  A codicil requires the same legal formalities as a creating a Will. 

How do I revoke my Will?

Your Will may be revoked by creating another Will or by the physical act of destroying the Will with the intent to revoke it.  Certain acts automatically revoke your will.  If you get married or divorced, you should consult with an attorney to see how it affects you.  Getting married may revoke a previously written Will.  Getting divorced in Oregon revokes portions of your Will that benefit your former spouse.  If you have or adopt children after executing your Will, your Will may be modified by state law to provide for those children.

If would like to learn more about how to plan your estate, visit our practice page or search the blog on the right.  You can also sign up for our newsletter and have estate planning tips delivered to your email.