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Estate & Legacy
Planning appointment

appointment preparation

Legacy planning is a critical and empowering discussion we have with our clients to make sure that your wishes are clear, and that the transfer of your hard earned money efficiently get to your heirs.

In preparation for our appointment please consider who will be involved in the planning like the following positions:

  1. Executor

  2. Guardian for minors (if applicable)

  3. Financial Power of Attorney

  4. Health Care Representative

  5. Successor Trustee

  6. Beneficiaries

We will also record contact information for our records (phone number and mailing address), only to be used in the event we need to settle the estate or verify their information if they are acting on your behalf.


Our process

Our Process for estate planning is first to educate.  If we don't know there are different election options of beneficiary distributions or that Oregon & Washington have an aggressive estate tax we end up not getting an effective plan built.  During our appointment we will discuss your questions and goals and solidify the next steps.  Then we will send your estate plan summary to the attorney if you are working with one.  If you don't have one, the attorney in our office drafts all the needed documents for a simple estate plan for our clients for only $250 for a couple and $200 for single plans.  That does not include a revocable living trust or disclaimer trusts. Once the attorney has completed the documents we will each review them, and if all is well we schedule the signing.


Estate Taxes & Inheritance Taxes: Oregon used to tax the money as an inheritance tax, meaning beneficiaries who received money had to pay the taxes, but since January 1, 2012 anyone who is an Oregon resident at death will have the tax assessed to the estate directly.  Spouses have an unlimited exemption, which means that there is no tax due if everything is given to the surviving spouse.  However, once the surviving spouse then passes away the estate would only have the $1 million exemption.  As an example, if the estate is valued at $2 million and they are an Oregon resident, there is no taxes on the first $1 million and a 10% tax assessed on the next $1 million which is $100,000 that did not make it out to the beneficiaries.  If instead the couple put a provision in the Will or Revocable Living Trust putting assets into an A-B Bypass trust of $1 million, the exemption for both spouses would be allowed meaning they saved $100,000 in unneeded taxes.

Setting these trusts up can be expensive, and can unnecessarily complicate your life, so we are slow to make this recommendation if you are not already blowing past the estate tax exemptions in total value of your estate.  If it makes sense in your plan to look at A-B Bypass trusts, or review strategies such as life insurance trusts, charitable remainder trusts, Bypass trusts, gifting, charity, Qualified Residence Trusts, we will walk through it in your appointment.

Gift Taxes: If you ever decide that you want to give money to charity or other family there are unique structures to follow.  Right now, you can give $15,000 (fair market value) per year to someone as a gift without filing a gift tax return (Form 709).  If you want to give or donate assets there are several ways to do that tax efficiently so be sure to let us know if this is something you would like to be discussing in further detail.

Beneficiary Designations Per Stirpes vs Per Capita: If you want to name multiple beneficiaries the default is a per capita distribution.  Per capita means that any surviving descendants of the same generation distribute property equally.  However by electing per stirpes, if one of the beneficiaries predeceased you, their portion must go to their heirs.  This is important if your goal was for your estate to trickle from you to your kids and then your grandkids, as an example.

Probate: Probate is the court process of retitling those assets and following your instructions in your Will. Retirement accounts, bank accounts, life insurance, and other financial accounts have beneficiary designations that pass outside of probate and your Will. So, the only assets that typically require probate are your primary residence, investment real estate and miscellaneous assets like furniture etc.

Titling of Assets: With real estate there are several ways to title your primary house, second home, rentals etc.  Even some states have transfer on death deeds, however there can be issues like "clouded title" that occurs from these deeds which means if it took a year to actually retitle the property the heirs were unable to sell it and split proceeds.  We want to make sure that if you have (or should have) a trust that the proper assets or individuals are on title of bank accounts, brokerage accounts, beneficiary designations, real estate and so on.

Stepped Up Basis: Putting a child on your home or bank account will do more harm than good. For one, it causes them to have equal ownership while you are alive which means your/their creditors have access to the equity if hard times hit. Depending on the value of assets this could trigger a gift tax, they could take the money, make certain decisions as owners of the assets etc. Most significantly, if on title still on your passing they would not receive a tax exclusion called the stepped-up basis. For example if you bought your house for $60,000 and it was valued at $500,000 at your death, the basis to your heirs is stepped up to $500,000 and thus not taxable.  If you put them on title the year before you died and they sold it the year you passed they personally owe taxes on the $440,000 gain!  Our suggestion is to correctly designate the power of attorney documents and beneficiary designations to create the most favorable legal, tax and financial outcome.

Executor: This person will “wrap up the estate.” When you pass away, they will retitle the assets according to your Last Will & Testament. This is a short-term position (usually no more than one year) and they should have good personal skills and be organized so they can coordinate with any family members and professionals involved. They don’t need to be a financial wizard, they just need to be willing to work with a few professionals, like our firm. This role is not an honor, it is a lot of work, so choose someone that is going to be able to stick with it. You can always change this person in coming years, and that is completely normal.

Power of Attorney (Financial): A ‘General Durable Power of Attorney’ is the document we need if you are incapacitated and financial decisions need to be made. For example, if you are unable to care for yourself and need to sell your home to pay for care, but you had a stroke, your power of attorney would be signing off on your behalf to sell the house. This could be if you have dementia or been in a terrible accident and unable to act on your own. This document is good for almost anything financial (pension, Real Estate, and most financial institutions), but there are typically bank specific forms, so we will review all your financial institutions to make sure there are no additional forms needed.


Springing Powers: Do you want your power of attorney (also called your attorney-in-fact) to have power right at signing, or would you rather them only have power to act on your interest if a doctor or judge deems?  For many clients it feels safe to have a spouse have the power right away, and others to have power after you have been deemed legally incapacitated.  If you trusted your power of attorney to act in your best interest and not sell your house while you are on vacation you could give them power right at signing.  


Health Care Representative: This person’s role can be an emotionally hefty obligation and decide how to handle medical decisions. A health care advanced directive and Living Will are documents you fill out ahead of time so that they know your final wishes.  For example, if you are in a really bad car crash and on life sustaining treatment, who will you give the choice of what to do? Do you want to be an organ donor?  Do you want to be resuscitated?  You can also have a Health Care Power of Attorney, which is broader instructions about handling ongoing care, prescriptions etc. Choose someone that has the emotional stability to make a very hard decision for your behalf.

Last Will & Testament: This document goes through probate and is really the foundation of the estate plan's legal documents.  Only the Will can establish guardianship of minors, so if you have children under 18 this will be essential.  You will also name your executor to settle the estate.  Even if you have a living trust it is recommended that you have a "Pour-Over Will" which will make sure items not already in the trust will be put into the trust.  Typically it is recommended to have separate Wills for each spouse, if married, to establish the surviving spouse beneficiary of everything (called mirror image Wills), as opposed to a joint Will which can become set in stone, or irrevocable, making changes of guardianship or beneficiaries difficult.  Another feature in a Will is to establish a trust that only becomes activated at your passing, called a testamentary trust.

Testamentary Trust: If you have minor children, a testamentary trust could be a good solution since minors can't directly inherit property.  If you don't set up this trust in your Will custodial accounts will be established and the courts may appoint a representative to manage the assets, called a conservator, or fiduciary.  Once the child is 18, they will be given full control of the assets.  That windfall of assets could be dangerous in the hands of an 18 year old all at once. If a testamentary trust is established and listed as the beneficiary, you proactively get to choose who would be the trustee to manage the money and set up stipulations for when they can access the money.  Typical stipulations are to give 25% of the money at 18, 50% at 25, and remaining at age 30, or give the trustee discretion to use the money for higher education, a wedding, or even protect the assets if the child has shown signs of extreme misuse of the money.

These trusts are typically set up for minors, but the same principals are for any age if you wanted.  It may still be a good solution at any age beneficiary if you felt that they could not properly manage the total value of your estate.  Trusts are complex documents, but these types of trusts are a good solution if you don't want to deal with the hassles of having a trust while you are alive.  These trusts are inside of the Will and become active, and irrevocable upon your passing.

Revocable Living Trust: One of the most frequent questions we get is "do I a trust?" Typically they are referring to a revocable living trust and typically the answer is no.  Most of your assets will pass outside of probate including bank accounts, retirement accounts, life insurance.  A revocable living trust (RLT) is a document that outlines how to handle the estate and avoids probate, but only if you retitle all your assets to "fund the trust" and you become your own trustee.  That means you need to retitle your bank account, brokerage account, home etc.  That can create a tremendous administrative headache for some.  It can also get very expensive to keep updating the trust and meet with the attorney every couple of years to update things.

So who would be a good candidate for this type of trust?  We typically recommend this if you have a children from different marriages, a prenup, own real estate in several different states, children with special needs, or a business owner who needs a succession plan.  There are certainly other reasons, but these are the big ones we run into.

Successor Trustee: If you decide to establish a trust for your assets, a successor trustee will be chosen. This role is a very long-lasting position, so I recommend it be a person younger than you so that they can carry out the trust for a long time. If the executor and successor trustee are the same person that is completely fine. But sometimes folks want to help divvy up the efforts. I will walk through my thoughts in our next appointment, but hopefully these give you the thoughts needed to think through a couple folks to help.

Are you the power of attorney, executor, representative, or trustee for a family member?  We find discussing your role of that estate is crucial so that you don't walk into the hornets nest of the family so we will be sure to discuss that during our appointment as well.

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