I serve many legal needs, but devote most of
my practice to the following areas:
- Estate Planning
- Living Trusts
- Wills & Will Contests
- Probate & Administration of Trusts
- Protective Proceedings
- Guardianships and Conservatorships
- Elder Abuse
- Real Estate Disputes & Transactions
- Transfer of Assets
To comply with IRS regulations, I am required to inform you that the content of this page, if it contains advice relating to federal taxes, cannot be used for the purpose of avoiding penalties that may be imposed under federal tax law. Any tax advice that is expressed in this message is limited to the tax issues addressed in the message. If advice is required that satisfies applicable IRS regulations, for a tax opinion appropriate for avoidance of federal tax law penalties, please contact me to arrange a suitable engagement for the purpose.
Estate planning is a process of arranging all of your assets in such a way that you can continue to enjoy them for your life time and then pass them to others in a way that is cost effective.
A will is usually an important part of any estate plan. For tax and other purposes, a living trust might be desirable. Planning often includes a durable power of attorney in anticipation of the possibility of illness or incapacity. Where health care decisions need to be made, an advance directive is important.
Minimizing or avoiding inheritance taxes is an important objective of estate planning for many people. Estate planning may also anticipate the need for Medicaid or the purchase of long term insurance.
In order to prepare an estate plan, a comprehensive statement of your personal and family information and your assets is important. You may download a questionnaire and contact me to arrange an appointment.
The cost of an estate plan depends on the size and complexity of your estate, and on your objectives.
A trust is a mechanism where property is held by a trustee for the benefit of someone else. A testamentary trust is one created by a will. It is funded and comes into existence only upon the death of the person who signed the will. A trust created before death is called a “living trust,” and the person creating the trust is called a “settlor.” Many living trusts are revocable, and they often name the settlor as the initial trustee. A living trust is funded by the transfer of some or all of the settlor’s assets from the settlor personally to the person acting as a trustee.
Living trusts can be used as a means of avoiding a probate proceeding. Probate is avoided because the assets are owned in the name of the trustee, not in the name of the settlor. By naming a successor trustee and by including specific instructions about what is to happen to the assets held in trust, a settlor can avoid probate entirely.
Living trusts are useful for tax planning. By using living trusts, a married couple can assure that each person can take full advantage of available federal and state exemptions.
Living trusts can be useful for other purposes. For example, a living trust can be an effective way of planning for disability or incapacity.
Inheritance Tax Planning
In 2001, Congress passed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA). It provided for a gradual increase of the amount that could be excluded from federal inheritance taxes. At the end of 2009, the amount was $3,500,000. For persons who died in 2010, there was no inheritance tax at all.
In December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act (2010 Tax Relief Act). Among other things, the 2010 Tax Relief Act increases to $5,000,000 per person the amount that can be excluded from federal inheritance taxes. Potentially, this means that married people can pass $10,000,000 free of any federal tax. If married people have an estate that exceeds $5,000,000, further planning may be recommended to assure that husband and wife each take full advantage of the available $5,000,000 exclusion.
Oregon, in the meantime, has adopted an exclusion of $1,000,000 or $2,000,000 for a married couple. Again, if the estate of a married couple exceeds $1,000,000, further planning is recommended.
Tax planning sometimes involves the creation of living trusts funded with approximately half of the estate of a married couple. By dividing the estate and using trusts, each person can take full advantage of the available state and federal exclusion amounts.
Gifts and Lifetime Transfers
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act (2010 Tax Relief Act) provides that gifts made after January 1, 2011 are subject to a top tax rate of 35 percent but a lifetime exclusion of $5,000,000 also applies. The use of gifts can be a useful estate planning device if done carefully.
In Oregon, there is no gift tax. Because there is no gift tax it is possible in some cases to avoid or minimize Oregon inheritance taxes by making certain gifts before death.
An advance directive is an instrument that contains a health care instruction or is a power of attorney for health care. To be effective in Oregon, an advance directive must in a form required by statute and it must be signed and witnessed as required by law. An advance directive can only be signed by a capable adult. It can be revoked at any time by a capable adult.
An advance directive gives someone else the authority to make health care decisions for you in the event you are not able to make the decision yourself. You may authorize your health care representative to make life support and tube feeding decisions for you, and you may give explicit instructions. By signing an advance directive, you can control who may make health care choices for you and how those choices are to be made.
A will contest can occur where the validity of a will is challenged. There are many grounds for such a challenge. They include the lack of mental capacity of the person who signed the will, the exercise of undue influence over the person signing the will, coercion, duress, and fraud.
A will contest must be brought promptly.
A probate is required where a deceased person has left assets in his or her name. In order for these assets to be transferred, a personal representative must be appointed by the probate court. The personal representative is charged with the administration of the deceased person’s estate, including payment of all debts and distribution of assets to those who are entitles to them.
If the deceased person died with a will, the probate is called “testate.” The will is admitted to probate, and its terms are carried out by the personal representative. The estate is ultimately distributed to the deceased persons “devisees,” those named in the will as beneficiaries.
If the deceased person died without a will, the probate is called “intestate.” The estate is admitted to probate. In an intestate proceeding, the personal representative has all of the same responsibilities, but ultimately the estate is distributed to the deceased person’s “heirs,” those defined by statue as being entitled to the estate.
The probate process requires the payment of the estate obligations, the filing of all necessary tax returns, the sale or other liquidation of assets, and the distribution of the assets that remain to those who are entitled to them. A probate assures that the assets are distributed free of all claims.
While there are probate filing fees and certain probate costs, there are no taxes or other fees that become payable to the government simply because probate is required.
Administration of Trusts
If a deceased person has transferred all of his or her assets to a living trust, a probate can be avoided in most instances. But, the administration of the trust will involve many of the same steps required by a probate. All debts of the deceased person must be paid, all necessary tax returns filed, and all trust assets prepared for distribution to those who are named as beneficiaries in the trust instrument.
In some instances, the administration of a living trust can be less expensive than a probate proceeding. But, many of the tasks that a personal representative must do in a probate proceeding must also be done by a successor trustee, such as the filing of tax returns, payment of decedent’s debts, and the preparation of the trust estate for distribution.
In some instances, trust administration can be simpler and more streamlined than a probate proceeding. But, upon distribution of the trust assets, the successor trustee doesn’t have a court judgment that approves administration. This can be a disadvantage in some cases.
Protective proceeding are judicial proceedings where a petitioner seeks the appointment of guardian, conservator, or protective order. The appointment of a guardian can occur if there is clear and convincing evidence that a person lacks capacity to meet essential requirements for the person’s physical health or safety. The appointment of a conservator can occur of there is clear and convincing evidence that a person is unable to manage financial resources effectively.
Protective proceedings may be appropriate where a person suffers from Alzheimer’s disease or other form of dementia, or where a person suffers from a mental illness, mental retardation, physical illness or disability, or where a person suffers disability from a chronic abuse of alcohol or controlled substances.
In Oregon, elder abuse can occur in many different ways including physical injury to an elderly person other than by accidental means, neglect of an elderly person that leads to physical harm, willful infliction of physical pain upon an elderly person, psychological abuse of an elderly person, and the wrongful taking of money or property from an elderly person. There are certain public and private officials who are required by law to report elder abuse.
Any suspected financial abuse or physical abuse can be reported to the local offices of Department of Human resources or Area Agencies on Aging, by calling 1-800-232-3020, or by calling law enforcement using 911.
Oregon law provides a wide range of civil remedies in addition to possible criminal charges. Civil remedies include awards for money damages and attorney’s fees.