Medicaid applicants with monthly income exceeding this amount can still be eligible for services if they work with an experienced elder law attorney to create and fund an Income Cap Trust.
My loved one has died. Now What?
My loved one has died. Now What?
The easiest place to start when a loved one has passed is to try to determine whether the family member has any estate planning documents. Was there a trust? A will?
A little-known fact is that a trust is the only estate planning document that avoids probate. Unless your family member has a trust, regardless of whether he or she has a will – your next step should be meeting with an experienced estate planning and probate attorney.
Will there be a probate?
It depends.
If your loved one executed a trust, and appropriately funded it with his or her assets, there should be no need for a probate. If you are named as the successor trustee of the trust, you will want to meet with an experienced estate planning attorney at the outset so that you have a clear understanding of your duties as successor trustee. Though the process of trust distribution is cleaner than a probate, the Trustee does have required duties. An estate planning attorney will provide you with an overview of the duties and the two of you can discuss the allocation of these tasks between the two of you depending on your level of comfort.
If your loved one did not execute a trust, or executed a trust but did not transfer all assets to the trust, there will likely be a probate. An experienced probate attorney will be able to give you a definitive answer. The attorney will be able to do a thorough review of your family member’s assets and existing creditors. Then the attorney can evaluate whether to open a full probate or whether the estate is small enough in value to qualify for the condensed version of an Oregon probate, known as a Small Estate Affidavit (SEA). A SEA is a desirable route to go due to its compressed timeline, shortened list of requirements, and reduced court fees.
If the estate value is too large, the attorney will file a petition with the appropriate county probate court to begin administration of the estate. Probate is the court supervised process of transferring assets between the deceased party and his or her heirs. Either the person’s will or the state’s statutes (if there is no will) determine where the deceased party’s assets go. The court will supervise the actions of the personal representative (the executor), the payment of the estate’s creditors, and ultimately approve the distributions to heirs.
If your loved one has passed, please let Wy’East Law, LLC help answer questions and navigate the distribution process. Call (503) 354-6402.
Think Twice Before Transferring Mom or Dad's Money
If the following scenario sounds familiar, please keep reading:
Mom has been living alone for years since the passing of dad. As her health begins to decline, the decision is made for her to move in with you or a sibling. As her finances continue to dwindle, there is talk that it may make sense to transfer the funds remaining in her one bank account to an account in your name for the benefit of mom. You will be better able to manage the money on her behalf moving forward. If she needs care down the road, she can move to a facility. All family members are in agreement, so there is no concern about accusations of elder financial abuse (which is something to keep on your radar). Two years later, when mom needs more care than you or your sibling can provide, you may find that both (1) mom’s medicaid application is denied and (2) in the event it is accepted, you are unable to find placement for her in a facility with a Medicaid contract. Meeting with an experienced elder law attorney before navigating decisions like these on your own will save you time, grief, and greater expense down the line.
Long-term care planning has become both an art and a science. At Wy’East Law, we will ensure you avoid the easy to make stumbles that leave lasting financial bruises. You will be advised on the legal ways to handle mom’s finances over time in ways that will not result in ineligibility for long-term care. You will also benefit from the insider knowledge of the long-term care industry and the local facilities’ patterns and practices of admission. These days you will find there may be an art to placement of your loved one that is not openly advertised. Do yourself a favor and make a plan ahead of time. Call Wy’East Law at (503) 354-6402 and schedule a long-term care planning conference to discuss your concerns for the coming years.
Do I Need a Revocable Living Trust?
Does your estate plan include a revocable living trust? If not, you may want to consider it.
They Avoid Probate
Revocable living trusts are similar to wills, but they have one very significant difference -- they eliminate the need for the probate process. Contrary to popular belief a standard will does not avoid probate. (Read more about that here.) A will lets you choose your own heirs, even if those heirs are different than the ones provided for by the default state statutes. However, your loved ones will still have to complete the entire probate process before they legally gain ownership of your assets. This process can be costly and very time-consuming. A revocable living trust (also known as a living trust or revocable trust), on the other hand, eliminates the probate requirement for all property placed in the trust.
Assets held in trust are legally titled in the name of the Trustee of the trust. It can be confusing, but even though the assets are legally titled in the Trustee’s name, the Trustee has a legal obligation to maintain these assets for the benefit of the trust beneficiaries. It is not outright legal ownership of the assets but rather the holding of title in a fiduciary capacity. With a revocable trust, while you are alive and have legal capacity, you are typically the Trustee of your own trust as well as the beneficiary of your own trust. When you pass, the person you have designated as your successor Trustee assumes legal title to the assets in the trust. He or she then administers and distributes those trust assets for the benefit of those you have named to be your beneficiaries (heirs). This avoids the need for court involvement as the successor Trustee can transfer legal title from themself to the beneficiaries.
They Help Plan for Incapacity
Revocable living trusts are more versatile than wills and allow the successor Trustee to handle your finances at a point in time where you are still alive and either (a) incapacitated or (b) handling them yourself may simply be too overwhelming. In other words, a trust gives you insurance that, should the time come that you cannot care for your own financial well-being, your wishes would still be honored by someone you have designated ahead of time.
You may be thinking that a Power of Attorney (POA) can provide the same benefit, and technically, that’s correct. But a trust provides an added level of protection that a Power of Attorney does not. A trust transfers legal title of your assets and places them in the name of your successor Trustee. Barring an allegation of elder abuse or fraud, this makes it nearly impossible for a financial institution to prevent the person you have designated to handle your finances from fulfilling that role.
In contrast, a Power of Attorney simply provides your designated agent with the legal authority to transact on your accounts, sign on your behalf, etc. I personally find it alarming how frequently large financial institutions decline to accept a valid Power of Attorney citing either (a) the age of the document, (b) their opposition to the nomination of a professional fiduciary, or (c) their internal policy of honoring only their own institution’s version of the document. In Oregon, none of the preceding are valid legal reasons to decline to honor a validly executed Power of Attorney, and yet in the last two years I have been on the receiving end of each excuse at least once.
The danger here is that by the time the appointed agent attempts to use the POA, (in most cases) the principal already lacks the capacity to execute a new document that meets the institution’s requirements. At that point, the only remedy is to petition the court for a conservatorship. A revocable living trust completely avoids this problem, giving the successor Trustee immediate access to financial accounts.
They Minimize Estate Taxes
Oregon provides a $1 million estate tax exemption per person. With a very large estate and only a simple will in place, your loved ones will likely still end up paying some amount in estate taxes. Revocable trusts allow your beneficiaries to minimize estate tax. Talk to your attorney to find out more about your specific situation.
Are you interested in learning more about how a Revocable Living Trust can strengthen your estate plan? Call us today at (503) 354-6402.
Is A Financial Power of Attorney More Important Than A Will?
When creating an estate plan, we know your #1 concern is providing security and peace of mind to your loved ones. You want a plan that shields your family from as much liability as possible, offers flexibility and covers all of your final expenses. That’s why we want to make sure you understand why a Power of Attorney is an important addition to your estate plan - and may even be more important than a will in certain circumstances.
Will Vs. Power of Attorney
A will governs the distribution of your estate after you die. If you don’t have a will, each state has its own default statute that sets forth the order in which your relatives will inherit your assets; this is determined during probate. (See A Will Does Not Avoid Probate for more details on the probate process). However, if you become incapacitated in any way, whether from a physical accident, disease, ailment, or deteriorating mental capacity, your final wishes outlined in your will do not apply. Also, contrary to popular belief, there is no state statute that provides a spouse, child, etc. with the authority to manage your finances without obtaining the permission of a court to do so. A Financial Power of Attorney is critical. It gives your loved ones clear instructions and the legal authority to proceed with the management of your finances if you are no longer able to manage the decisions on your own.
A Power of Attorney for Finances is the document that allows you to nominate an agent to handle financial transactions for you in the event of your incapacity, from paying your bills and taxes to managing your daily activities and financial needs. If you don’t have a Power of Attorney, an “interested party” can petition the court to obtain a conservatorship over your assets. This is a time-consuming and costly process. It may also result in a scenario where a relative whom you do not wish to have access to your finances, but who is technically next of kin, is the one petitioning the court for conservatorship. A Power of Attorney will allow you to choose for yourself, while you’re fully present in body and mind, to whom you wish to give this access.
How A Power of Attorney Can Simplify the Estate Planning Process
Without a Power of Attorney, your loved one will be forced to start the process of petitioning for conservatorship. This process can take several months and usually costs thousands of dollars. Once granted, the conservator will have to provide annual accountings to the court, detailing how each dollar of the estate was spent in the previous year. These reports are often prepared by an attorney, adding costly and ongoing fees to your estate.
With an active Power of Attorney, your loved one will not have to create or provide these documents and the cost is minimal in comparison.
Want to learn more about how a Power of Attorney can simplify your estate plan? Contact Wy’East Law today.
A Will Does Not Avoid Probate
When a loved one dies, it’s difficult enough to cope without worrying about the division of assets, paying off the decedent’s debts, and dividing his or her property among the family. After you’ve said your final goodbyes, you’ll likely want to move through the process of dividing the assets between the family and paying off all outstanding debts immediately. You may think that because a will exists, you can accomplish this on your own. Unfortunately, this isn’t accurate. First, you must go through the probate process. Yes, even with a will.
What is Probate?
Probate is the process of transferring the assets of the decedent to his or her heirs upon the decedent’s death. The process is started by a personal representative (often referred to in other states as the executor). Once the representative is officially appointed by the probate court, some of the various tasks he or she is required to perform include:
Posting a public notice to all the decedent’s creditors for 3 weeks in a local newspaper
Preparing an exhaustive list of all of the decedent’s assets to be filed with the court
Paying off all creditors over a period of four (4) months
Paying all final property and income taxes
Preparing a final accounting record for the court (including a listing of all the assets of the estate, income received and expenses accrued throughout the probate process, all payments to creditors, and a projected accounting of distributions to beneficiaries)
Once the court approves the record, the representative may pay the beneficiaries and probate is closed.
What if the Decedent has a Will?
If the decedent has a will, the probate process is identical with two exceptions.
First, the decedent is able to choose their own personal representative instead of the person whom the court would choose from the statutory order of preference.
Second, the decedent can leave his or her estate to beneficiaries other than those outlined in the state’s intestate succession laws.
How Can A Probate Attorney Help?
When you or a loved one are faced with taking an estate through probate, a probate attorney can make the process much less stressful. Wy’East Law can help with filing documents with the probate court, maintaining a record of all expenses, assets, and income, and guaranteeing that all requirements of probate are met before an estate is divided among heirs. This can avoid later issues with taxes or lawsuits from creditors.
Want to learn more? Call us today at (503) 354-6402.