Last Will & Testament
What is a will?
A will or “Last Will and Testament” is a set of written instructions to the court that details how your estate will be handled, including who will step into your shoes to manage your affairs on your passing, and who will receive an inheritance from your estate. A will’s instructions are limited to those assets and matters under the jurisdiction of the probate court. In Oregon, your will must be in writing and must be signed by you and two witnesses. The will has to be signed in the presence of the two witnesses, and the witnesses’ signatures must be notarized. Failure to strictly adhere to Oregon’s legal formalities will invalidate your will.
What are the benefits of a will?
A will allows you to decide who will manage your property and finalize your affairs after you pass away. A will allows for your wishes and intentions to be heard regarding a variety of issues, including who your legal representative will be upon your passing, distribution of your assets, and selection of guardians for minor children. Without a will in place, the administration of your estate is governed by Oregon law. In Oregon, if you do not choose a personal representative in your will (called an Executor or Administrator in some states), state law and the court’s choice will decide who your representative will be.
Does a will avoid probate?
No. A will is simply a written set of instructions to the probate court that describes your wishes regarding the management and distribution of your estate.
Does a will control the distribution of all your assets?
No. A will only governs assets requiring administration through a probate or court process. Assets such as life insurance, retirement plans, and bank and investment accounts with beneficiary designations or transfer on death provisions pass by contract outside of the court process. Also, assets owned as “husband and wife,” or as “joint tenants with right of survivorship” transfer to the surviving owner by operation of law without the probate process. Your will does not override your beneficiary designation. It is important to regularly review all beneficiary designations to make sure they stay up-to-date.
Can joint accounts substitute for a will?
Joint accounts do not act as a complete will substitute. Many married couples own real estate, bank accounts, investments, and other types of property as “husband and wife” or as “joint tenants with right of survivorship.” When the first spouse dies, the property becomes the surviving spouse’s without the need for a probate process. However, a person using joint ownership as a probate-avoiding technique between a parent and child, or a person and their non-spouse beneficiary, can cause unintended consequences. Among those consequences are gift tax liability, loss of tax benefits, unequal distribution among beneficiaries, a lack of control in the distribution of the estate, disputes among beneficiaries, and even accidental disinheritance of loved ones. Furthermore, those assets may become subject to the debts, judgments, and poor decisions of a beneficiary. If minor children are named to receive assets, the court will become involved to manage the money until they turn 18. An attorney should be consulted to understand the advantages and disadvantages of this ownership technique.
What happens if I die without a will?
If you do not have a will and pass away with property requiring a probate or court process to transfer title, your property will be distributed according to Oregon law. For example, if you are married without children, or if you are married and all children are your spouse’s children, then all of your property will pass to your spouse. However, if you are married and have children from a prior relationship, half of your probate property will pass to your spouse and the other half will be divided equally between your children. If you have minor children, the court will decide who will serve as the Guardian and Conservator for your children. If you are not married, your property will be distributed equally among your children. If you have no children, your property will instead be distributed equally to your parents. Oregon also has provisions that address where assets go if a child or parent predeceased you, and whether that share will pass to that predeceased child or parent’s children. Lastly, if you pass away without any surviving family, your property will distributed to the State of Oregon.
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