It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.
What is a will?
A will is a set of instructions that explains how you want your property
distributed after your death. In Oregon, you must be at least 18
years old and of sound mind to make a will. If you are married, you
can make a will before you turn 18. Your will must be in writing
and must be signed by you and two witnesses. The witnesses must also
have seen each other witness your will. Some people cannot serve
as witnesses to your will. It is important to make sure that all
of Oregon’s legal formalities are carefully observed.
What are the benefits of a will?
A will allows you to decide who will manage your money and other property
after you die, and how it will be distributed. It lets your wishes
be heard regarding the care of minor and disabled children. It often
prevents disputes among your relatives. In a large estate, a will can
also reduce the amount of taxes that may be due at your death.
Who should draft a will?
A will is an important legal document that can have a significant impact
on your family. A lawyer can give you good advice on how the will should
be prepared and executed. Having a lawyer draft your will gives you
the assurance that your voice will be heard regarding how you want
your children to be cared for and how you want your property to be
distributed.
Does a will avoid probate?
No, but a having a will can reduce the cost of probate and the burden
to your friends and family. Whether your property needs to go through
probate is determined by how that property is titled, not whether you
have a will.
Can joint accounts substitute for a will?
Joint accounts, life insurance and retirement accounts usually do not
have to go through the probate process, but they do not act as a complete
will substitute. Many spouses own real estate, bank accounts, stocks
and bonds, and other types of property as husband and wife with the
right of survivorship. This means that if you die, your jointly owned
property passes automatically to your surviving spouse, regardless
of what your will says. Life insurance and retirement accounts are
contractual documents. You should fill out the beneficiary designation
form for each company you contract with to tell that company who is
to receive your death benefit. Your beneficiary designation will determine
who gets the benefit regardless of what your will says. Beneficiary
designations and jointly owned accounts can be good probate avoidance
techniques but should only be considered as part of a complete plan
that includes a will.
What happens if I do not have a will?
If you do not have a will, and if you have probate property, your property
will be distributed according to instructions made by the Oregon legislature.
For example, if you are married and don’t have children, all
property that is in your name alone will go to your spouse. This is
also true if you are married and have children that are born of your
current marriage. If you are married and have children from a prior
marriage, half of your property will go to your spouse and the other
half will go to all of your children. If you have a child under the
age of 18, the court may choose someone to take care of the property
for that child. If you do not have a will or any family that would
be entitled to your property, your property (that is in your name only)
may go to the state of Oregon. Your family (heirs) includes a large
category of relatives: spouse, children, grandchildren, parents, siblings,
grandparents, nieces, nephews and cousins.
Whom may I choose to inherit my property if I write a will?
The only rule is that if you are married, your spouse has a right to claim
25 percent of your estate. Generally, unless you entered a pre-marital agreement
in which you validly waived your right to claim 25 percent of your spouse’s
estate, spouses cannot disinherit each other. You are not required, however,
to leave anything to your children or other family members. You may instead
choose a friend or charity to inherit your property. If you plan to disinherit
a family member it is very important that you consult with an attorney experienced
in estate planning to make sure that your plan will be followed.
What is a personal representative?
If your estate needs management, a personal representative (executor)
will be appointed by the court. Having a will lets you decide who that
person will be. You may choose someone familiar with your property
and affairs or a professional who can serve as a personal representative.
If you think there may be hard feelings in your family or your estate
has complications such as children from a previous marriage, you may
want to name a professional. Many banks and trust companies have experienced
people to handle the difficult task of being a personal representative
and — since the fee paid to a personal representative is determined
by the size of the estate, not by who serves as personal representative — banks
and trust companies are generally paid the same fee to serve as personal
representative as an individual is paid.
What is a trust?
A trust is another tool used in estate planning that can be created
as part of a will or as a separate document. A trust is a legal document
that appoints someone (a “trustee”) to manage your property
and gives detailed instructions on how the property will be managed
and distributed. A trust is one way to take care of a minor child,
an elderly person or someone who needs help handling money. A trust
may be established during your lifetime, and you may act as your own
trustee, or it may be established by your will after your death. Trusts
are generally more complicated to create than a will, and you may want
to consider having an estate planning lawyer assist you.
Can a revocable living trust substitute for a will?
A properly drafted revocable living trust can work well as a substitute
for a will and sometimes may reduce the costs of handling your estate.
However, even if you have a trust, most advisors would recommend you
also have a will to cover the possibility that some of your assets
may not be covered by the trust at the time of your death. Whether
a trust is proper for your estate is a decision to be made after receiving
competent legal advice.
Is a will expensive?
No, a simple will is not expensive. However, the cost of any will depends
on how much work your lawyer does for you. As a will becomes more complicated,
the cost rises. Ask your lawyer for an estimate of the cost. In general,
the trouble and expense of not having a will far outweigh the cost
of the will.
Do I need a will if I don’t have much money?
The amount of property you own does not determine whether you need
a will. Your personal and financial circumstances determine when and
how a will should be drafted. For example, it is important for new
parents to have a will to provide for their children even if they own
little personal or real property.
What are estate and inheritance taxes?
Estate taxes are the taxes that need to be paid out of your estate
after you die. For the year 2008, estates worth over $1,000,000 are
taxable by the state of Oregon, and estates worth over $2,000,000 are
also taxable by the federal government. These amounts are scheduled
to change in 2009. Please see your advisor before making any changes
based on them. An estate planning lawyer may be able to draft a will,
trust or other document, as well as give you advice, to help reduce
the amount of taxes your estate may owe upon your death.
Is a will from another state valid?
Yes. Generally, if you made a will in another state according to the laws
of that state, it is valid in Oregon also. This is also true if you created
a trust in another state.
Can a will be changed?
You can change your will at any time as long as you are of sound mind.
Major life events such as marriage, divorce, death of a family member,
or a new baby are good reasons to consider changing your will. In fact,
in Oregon, marriage generally revokes any will you made before your
marriage. You may revoke your old will by destroying it or by writing
a new will. If you only want to make minor changes, you may create
a “codicil,” a document that is attached to your will.
The same legal formalities are required for creating a codicil as a
will, and therefore it is wise to consult an attorney about the changes
you would like to make. In the meanwhile, do not write on your old
will, because you may end up invalidating the entire document.
Should I consider having a medical advance directive and a financial power
of attorney?
Yes. A will only takes effect after you die. An advance directive and power
of attorney are documents that may be used to manage your health care and finances
while you are still living. A power of attorney may be created for any purpose,
but most commonly an elderly person will nominate a close friend or family
member to be their “agent” to help manage their money. Because
this power can be abused, it is wise to seek the advice of a lawyer before
signing a power of attorney. An advance directive is a document in which a
person appoints a “health care representative” to make medical
decisions such as living arrangements and treatment options when they become
incapacitated and unable to make their own decisions. An advance directive
can be used to indicate whether you wish to have life support, tube feeding
or other heroic measures when you are close to death. A power of attorney and
advance directive can be excellent end-of-life planning tools. Both documents
expire at death, or can be revoked at any time.
Legal Editor: Jessica Cousineau, April 2008