Estate Planning 101

What is “Estate Planning?”

Estate planning is the process of planning for the orderly administration and eventual disposition of assets after the owner(s) die(s), or suffers a disabling illness.

A comprehensive estate plan addresses the administration and protection of assets during your lifetime in the event of a disabling illness as well as upon your passing.

If an individual has no estate plan in place, and they suffer a disabling illness during their lifetime, it may be necessary to petition the court for a conservatorship over that individual. A comprehensive plan should avoid that necessity and allow your preferred representative to act on your behalf without court intervention.

Furthermore, if an individual should pass with no estate plan in place, their assets will eventually get distributed to their intestate heirs, which may run counter to the desires of that individual. We have found that having an effective, carefully tailored estate plan can help deal with aging and make the eventual transfer of your estate easier, accurate, and cost-effective for you and your loved ones.

“Our estate planning and will went very smoothly and the cost was well within what we expected to pay for his service. He was efficient, clear and no ‘frills’. Very pleasant to deal with and very helpful with ideas to solve some tricky issues. We recommend highly.”

Will or Trust?

When thinking about estate planning, the first question many people have is whether to have a will or a living trust.

A will is a document that states how you intend for assets to be distributed upon your death. Although it is considered a legal document, a will has no legal authority of its own and must be formally entered into and processed through the local Probate Court in order for it to gain full legal status for purpose of administering your estate. This is the court-supervised process people often depressingly associate with the word, “probate.Read Less

Unlike a will, a living trust is a legal entity that comes into existence the day you sign the trust document. From that day on, your living trust will own all the assets you would have previously owned as an individual or as a couple, jointly with right of survivorship. If you become incapacitated or die, the co-trustee or successor trustee of your living trust will be able to continue management of the trust assets either for your benefit or the benefit of the new beneficiaries without having to enter Probate Court.

In addition to avoiding probate, a living trust can accomplish substantial savings on estate taxes, can continue to be operate and provide you assistance should you become disabled or incapacitated, and can remain totally private so that no one knows your business except those persons that you want to have knowledge of your personal and financial affairs.

For the reasons mentioned above, a living trust is the optimal estate plan. Even if a living trust is too advanced or costly for your needs, each individual, at a minimum, should have a will, power of attorney, and advanced directive to physician as a basic level of estate planning.


Beneficiary Designations

When addressing any estate plan, we always want to address how assess are titled and if they possess a means of transfer after the owner/owners die, such as a Beneficiary designation or a Transfer on Death designation. Depending on the nature of the asset it may be required that ownership of a particular asset remain titled in an individual’s name, if that is the case, for a comprehensive estate plan to function properly we must address that beneficiary designation and make sure it is consistent with the overall wishes of the owner.


Intestate Succession

If a person dies without a Will that is referred to as dying “Intestate.”  If you die “Intestate” the court will determine how to distribute any probate asset in accordance with Intestate succession, which is essentially the “law of the land” as determined by each state. In the state of Oregon Intestate succession is handled as follows: Read Less


If you die with:

A surviving spouse only 100% to Spouse
Surviving spouse with children from only that spouse 100% to Spouse
Surviving spouse with children with persons other than the spouse 50% to Spouse; 50% to the children with persons other than the spouse in equal shares
No Surviving Spouse 100% to descendants (Children or Grandchildren) in equal shares by representation
No surviving spouse and no surviving descendants 100% to your surviving parents in equal shares
No surviving spouse, no surviving descendants, no surviving parents 100% to your surviving siblings in equal shares (or their children)
No surviving spouse descendants, parents, or siblings 100% to your surviving grandparents and if they are deceased to their surviving descendants in equal shares
No survivors Unclaimed property will “escheat” to the state. It will be placed in unclaimed property status with the state of Oregon



Oregon Estate Tax

The State of Oregon estate tax rate ranges from 10%-16% and applies to estates above $1,000,000.

The assets included in this calculation include all assets you have “an interest in ownership,” which includes (but is not limited to): real estate, bank accounts, life insurance (death benefits or equity), Retirement accounts, vehicles, etc.

If you think that you are likely to be subject to the estate tax you will want to consider the tax planning associated with a sophisticated estate plan. Here at the Oregon Legal Center our attorneys can help guide you around this complex and costly tax, to help secure your legacy with as little tax consequence as possible.


Federal Estate Tax

Most estates won’t trigger the federal estate tax, as it only applies in tax year 2023 to estates worth more than $12.92 million, or double that for a married couple.

The estate tax is levied by the federal government on an individual’s estate when they die and pass assets to heirs/beneficiaries.

What’s important to note is if your estate is below the current Estate tax threshold at the time of your passing (2023- $12.92 million) then your estate will not be subject to federal estate tax. However, if it is above the current threshold at the time of your death, any amount over the current threshold will be taxed at a base rate with a graduating percentage rate associated with any amount over the base rate, that graduating percentage rate begins at 18% and goes as high as 40%. It is also important to remember, that the current threshold could be significantly lowered by future legislation which is impossible to predict.