Frequently Asked Questions about Estate Planning in Oregon

For your convenience we have provided answers to frequently asked questions regarding estate planning, guardianships, conservatorships, probate, wills, trusts, and trust administration.

What is an Advance Directive for Health Care?

Oregon adopted an Advance Directive for Health Care (ADHC). The statute provides a form document that allows a client to make decisions regarding both end-of-life care and life support issues, and to create a basic power of attorney for health care issues. Under the ADHC, an appointed health care representative holds authority over all the principal’s health care that the principal would have if incapacitated.

What is required for a valid Advance Directive for Health Care?

The ADHC requires two witnesses. The health care representative, alternate representative, and the attending physician cannot serve as witnesses. The health care and alternate representatives sign the form agreeing to accept the appointment. The principal can revoke either the ADHC or a specific health care decision, in writing or otherwise.

What are the limitations of an Advance Directive for Health Care?

The health care representative has authority to make health care decisions when the principal’s attending physician (or a court) determines that the principal lacks the ability to make and communicate health care decisions. The ADHC provides no authority relating to mental health treatment, convulsive treatment, psychosurgery, sterilization, and abortion. The health care representative also does not have authority over life-sustaining procedures unless specifically granted authority in the form. The authority also likely excludes issues related to organ donation, autopsy, and experimental treatments. Additional documents may be required for these situations. The ADHC provides a useful tool to discuss end-of-life care. It encourages the person and their trusted decision-makers to discuss issues that are often difficult, such as death and dying.

What is a Durable Power of Attorney?

Durable Power of Attorney (DPA) is a legal document that grants authority to an agent to act on your behalf on a variety of issues, including financial matters, property management, and government benefits. A DPA is a valuable tool for assisting a person during disability, but can be dangerous in the wrong hands. On one hand, a DPA allows a person to delegate to another the power to manage his or her affairs regardless of the principal’s disability or incapacity. This power is very personal and individual. Knowing that daily operations can be handled if disability or incapacity occurs can be a great source of comfort and relief for a client. On the other hand, giving someone complete control over your daily life creates a significant risk of abuse. It is important to use care when granting a power of attorney to an agent.

What are some important aspects of a Durable Power of Attorney?

When preparing a DPA, a client should take into account the abilities of the proposed agent, the level of trust between the principal and agent, and the circumstances that trigger the use of the DPA. The client must make decisions on whether the DPA takes effect immediately or upon disability, whether to grant authority to make gifts, and whether the DPA limits the agent’s authority by time or scope. Answers to these questions will depend on the circumstances of each client.

In addition to considering the effective date, gift powers, and scope of the DPA, the client should consider two statutes that affect its use. First, a DPA is not revoked at the moment of death, but at the time when the principal’s death becomes known to the agent or third party. If you are acting under a DPA, once you become aware that a person has died you can no longer act under the DPA. Any third party who has not received actual notice of revocation of a power of attorney or death of the principal is not liable for actions taken in reliance on the power of attorney.

Second, a person may not refuse to honor a power of attorney based on the passage of time since the power of attorney was executed. In our practice, we occasionally deal with financial institutions that refuse to honor an otherwise valid DPA that is more than two years old. A reference to the statute generally resolves the matter.

What is a Guardianship?

Guardianships are a method of obtaining legal custody of, or decision-making authority over, another person. People use guardianships for different reasons. Military parents who are deployed may have a need for a guardianship as well. Some of the most common guardianships are minor guardianships on the passing of parents and adult guardianships in the event of incapacity.

How do I establish a legal Guardianship?

When no Advance Directive for Health Care or Durable Power of Attorney exists, or unanticipated circumstances arise, our firm is experienced in all aspects of guardianship proceedings, including:

  • Representing people seeking guardianships of persons who can no longer manage their own affairs.
  • Representing guardians after appointment by the court and assist them with fulfilling their legal obligations.
  • Representing the alleged incapacitated person when they object to the choice of guardian or to the appointment of one at all.

What is a Guardianship or Conservatorship?

A court can grant authority to a designated individual to make decisions such as where a person will live, what medical care that person will receive, and other personal and medical decisions. A guardian generally does not have authority to make legal or financial decisions.

That authority is handled under a conservatorship proceeding. Often both guardianship and conservatorship authority will be requested at the same time.

Any concerned person can initiate a guardianship or conservatorship proceeding. Evidence must establish that an adult is unable to manage his or her own affairs. All family members are then notified. A Court Visitor is appointed to interview and evaluate the protected person and other family members or interested persons and provide a report back to the court.

A hearing may be held to determine if the person is incapacitated as defined by Oregon law. A trial is held if (a) the person disputes his or her own incapacity or the choice of decision-maker, or (b) a family member disputes whether a person is incapacitated, or the choice of decision-maker. Once designated, the appointed person must submit annual reports regarding the handling of that person’s affairs. Our office routinely advises guardians and conservators on their duties and reporting obligations.

How do I avoid a Guardianship or Conservatorship?

Guardianship and Conservatorship proceedings can be time-consuming, expensive, and can create hard feelings among family members with differing opinions about a loved one’s care. The likelihood of going through this process can be substantially reduced by anticipating these concerns through properly drafted and executed tools, including a Power of Attorney, Advance Directive for Health Care, and a Revocable Living Trust.

What is probate?

Probate is a legal process whereby a court oversees the distribution of assets left by a deceased person. Assets are anything a person owns with value, such as real and personal property, and cash.

When is probate needed?

Probate is not always necessary. If the deceased person owned bank accounts or property with another person, the surviving co-owner often will then own that property automatically. If a person dies leaving very few assets, such as personal belongings or household goods, these items can sometimes be distributed among the rightful beneficiaries without the supervision of the court.

Probate may be needed to:

  • Clear title to land, stocks and bonds, or large bank or savings and loan accounts that were held in the name of the deceased person only, and put the title to these assets in the names of the rightful beneficiaries.
  • Collect debts owed to the deceased person, or resolve the outstanding creditors of the deceased person.
  • Settle a dispute between people who claim they are entitled to assets of the deceased person.
  • Resolve any disputes about the validity of the deceased person’s will.

What happens during the probate process?

The will is “proved” and delivered to the court. The deceased person’s will can be proved by an affidavit made under oath by the witnesses to the will. If such an affidavit is unavailable, the personal presence of the witnesses will be required in court to testify about the signing of the will.

A personal representative is selected by the court. A personal representative is someone who handles the deceased person’s affairs. A will generally nominates a personal representative who, if willing to serve and otherwise qualified, will be approved by the court. If a person dies without a will, the court will select the personal representative, usually the spouse, an adult child, or another close relative. If none of those people are available or willing to be the personal representative, the court may choose a bank, trust company, or lawyer.

A notice to creditors is published in a local newspaper. This public notice to creditors tells the creditors that they have four months to bring any claim against the estate for debts the deceased person owes them. The personal representative also gives written notice to all known and possible creditors.

The heirs and people named in the will are notified of the probate proceeding.

Assets are identified and an inventory is prepared and filed with the court. The personal representative works to identify and value the deceased person’s assets. Depending upon the type of assets and the kind of records left by the deceased person, this step can be quite straightforward – or more difficult and time-consuming.

Debts are paid. The personal representative ensures that only the appropriate creditors are paid. Creditors must be repaid from the estate before the remaining estate assets can be distributed to the rightful beneficiaries.

The personal representative works with a tax professional to prepare state and federal tax returns, as well as any inheritance, gift and estate tax returns, and pays any taxes due.

The personal representative coordinates with an attorney to prepare and submit an account to the people named in the will, the heirs of the deceased person, and the court.

The account shows all money paid out from the estate and all money collected by the estate. It also contains a narrative explaining the important actions taken in connection with the probate of the estate.

After court approval of the account, payment of all unpaid expenses, and payment of creditors, the deceased person’s assets are distributed to the people and entities (such as charities or trusts) named in the will or, if the person died without a will, to the heirs of the deceased person.

How long does probate take?

Probate can be started immediately after death and often takes nine to 18 months. If the estate includes property that takes a while to sell, or if there are complicated taxes or other matters, probate can last much longer. Smaller estates often take six to nine months to complete.

What are the costs involved in a probate?

Under Oregon law, a personal representative is entitled to a fixed percentage of the value of the total estate. Extra costs may be approved by the court for the personal representative if the estate is complicated. Other costs include court filing fees, attorney fees, legal notices published in the local newspaper, and any other necessary expenses. Lawyers generally charge an hourly rate for their services.

Do I need a lawyer for probate?

Probate in Oregon involves a good deal of paperwork that must be filed in a timely manner. To achieve the results you want, probate should be handled with an understanding of the legal principles involved. A probate lawyer can help you avoid the many possible tax traps and other problems that could arise. Also, a lawyer can help you prepare and file the legal documents and prepare you for hearings in court. Some courts may require an attorney to assist you through the complex probate process. It is a good idea to start by consulting an attorney to get a solid understanding of what assistance an attorney would provide in your particular situation.