What is a Will?
A Will is a legal document that is a set of instructions that explains who will be in charge of administering your estate, the order of how your final expenses will be paid, and who will receive your property after your death.
What are the benefits of a Will?
A Will can provide you peace of mind. A Will can avoid disputes among your family and friends by making clear how you want your belongings and assets distributed when you’re gone.
Does a Will avoid probate?
No. Probate is a formal court process to notify potential creditors and heirs of your death, confirm that all debts and expenses are paid, and transfer title or ownership of your assets. Some assets, like household items and furniture, can simply be physically given to beneficiaries. Some assets, like real estate and bank accounts, have formal title or ownership papers associated with them. Unless you take specific action will you are alive to direct that those assets transfer automatically after you die, going through probate will likely be necessary to transfer ownership to your beneficiaries. There is a shortened process which can be used for smaller estates but still requires paperwork to be filed with the court. Because the probate process can be complicated it is usually necessary to hire an attorney to help your beneficiaries and estate administrator through the process.
Who is in charge of your Will?
During your life, you can change your Will as much as you want. In your Will you will name a Personal Representative, also commonly known as an Executor or Administrator. The Personal Representative is responsible to carry out your last wishes that your final affairs are taken care of. The Personal Representative makes sure any final taxes and other bills are paid, distributes your property to your beneficiaries, and, if necessary, shepherds your estate through probate.
How is a trust different than a Will?
A trust is a similar legal document to the Will. A trust is helpful when beneficiaries are minors or at risk of misusing funds, such as to support an addiction. A trust is like a bucket that you put all of your assets into during your lifetime. The trust (or bucket) becomes the “owner” of those assets. You remain in control of the assets during your lifetime, but when you become disabled or pass away a third party, known as the successor trustee automatically takes over managing the trust and making distributions based on the terms of the trust. Probate is typically not required, so long as all assets are properly titled as owned by the trust.
What about estate and inheritance taxes?
In Oregon, if all your assets total more than $1 million at the time of your death, then Oregon estate taxes may have to be paid out of your estate after you die. There is also a federal estate tax. For the year 2020, the federal estate tax kicks in if your assets total more than $11.58 million. Some examples of assets included in calculating estate taxes include your personal property, equity in real estate, bank or investment accounts, retirement benefits, and life insurance proceeds.
Do you need a Will or trust?
Call The Commons Law Center at 503-850-0811 to set up an intake consultation with one of our attorneys. Please let our intake specialist know that you are interested in estate planning services. Your legal services options will then be discussed during your intake consultation with an attorney.