New Resolutions

On Behalf of | Jan 23, 2025 | Firm News |

If one of your New Year’s resolutions this year is to update or finally do your estate planning, below are four more reasons to check this item off of your 2025 “To Do” list.

 

1: Avoiding Probate.

Probate is the legal process that oversees the distribution of a deceased person’s assets or “estate.”  While probate is not always necessary, most estates without an estate plan with over $275,000 in assets usually require some court involvement.  Probate requires appointing a personal representative or executor to identify and notify beneficiaries and creditors, compiling an inventory of assets, paying taxes and creditors, and finally distributing the estate to beneficiaries.  Probate is a legal process overseen by a judge.  While an attorney is not legally required, most probates of any complexity need the skill and guidance of an attorney as a practical matter.  Oregon law requires a minimum probate period of 4 months [1], but it typically takes 6 to 9 months to complete for a straightforward estate and 12 to 18 months for a more complex estate.  All of this amounts to a lot of legal fees.  Money spent on probate is money that otherwise would go to your family and loved ones.  In addition, probate demands time and energy while your family is grieving a loved one.  Moreover, probate is a public process, and anyone can review the court file to see how much you left to whom.  Hiring an estate planning attorney and investing in a comprehensive estate plan will help you and your family avoid the need for such an onerous and expensive process during an already stressful time.

[1] https://www.osbar.org/public/legalinfo/1117_probate.htm

 

2: Power of Attorney.

Every good estate plan includes a power of attorney.  This powerful document allows you to assign an “agent” or “attorney-in-fact” who will step into your financial shoes in the event that you are unable to manage your financial affairs due to incapacity, illness, or unavailability.  Your agent can be a family member or a paid professional.  Your agent will be able to pay your bills, manage insurance coverage, handle real estate transactions, and make legal decisions on your behalf.  This is a critical document because in the event of incapacity or illness, it will be difficult for anyone, even your spouse in many cases, to gain access to and manage such tasks on your behalf.  A power of attorney is usually drafted to be effective upon signature and is valid until your death.  You can also revoke the document in your lifetime should you choose.  A power of attorney is an essential tool in your estate plan.

 

3: Tax planning.

Oregon is one of twelve states and the District of Columbia that imposes an estate tax or “exemption.”  Oregon imposes an estate tax on estates valued at $1 million or more.  In comparison to the 2024 federal estate tax exemption of $13.99 million, Oregon’s estate tax one of the lowest estate tax exemption thresholds in the United States.[2]  Because Oregon’s estate tax is not indexed for inflation, due to the rise of inflation, more and more Oregonians are becoming subject to it.  An estate planning attorney can design a comprehensive estate plan to help you minimize or potentially avoid Oregon’s estate tax and pass on more of your estate to your family and loved ones.

[2] https://www.orcpa.org/news/5f01de82-5cc5-4781-b8ec-4ccfd2fff6b3:navigating-the-oregon-estate-tax-estate-planning-strategies-for-2024

 

4: Peace of mind.

You have worked hard during your lifetime to build the assets that make up your estate, therefore perhaps one of the best reasons to invest in an estate plan this year is peace of mind.  There is a Czech saying that roughly translates to: don’t boast about how well your family gets along until you have inherited property together.  Having a clear estate plan is the best way to avoid family confusion and discord and ensure your assets will go to whom you choose.  If you do not make an estate plan, the state of Oregon has an expensive one already made for you, and it rarely is the one you want.  An estate plan is the best way to preserve your assets, take control of how your estate will be divided, avoid family disputes, and save your family from additional unnecessary stress while they are grieving.

 

It’s January, so don’t procrastinate on what should be your New Year’s goal to create your estate plan or at least update it.  Consider it an investment in your peace of mind and your family’s future for 2025.
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