Understand What Happens to Your Estate If You Die Intestate, Or Without A Plan In Place

DYING INTESTATE IN OREGON WHAT HAPPENS

TO YOUR ESTATE?

RICHARD B. SCHNEIDER
OREGON ESTATE PLANNING ATTORNEY

Despite knowing the importance of having an estate plan in place surveys indicate than over half of all Americans do not have one. Although an estate plan can accomplish much more, the primary goal of most estate plan is to create a roadmap for the distribution of estate property after the death of the decedent. If you are one of the millions of Americans who has yet to create an estate plan it may prompt you to finally create one after you understand what happens to your estate if you die intestate, or without a plan in place.

TESTATE VS. INTESTATE ESTATES

In legal terminology a decedent who died with a valid Last Will and Testament in place is said to have died testate. A decedent who failed to leave behind at least a valid Will is said to have died intestate. How your estate assets are handled after your death depends, to a great extent, on whether you died testate or intestate.

OREGON PROBATE
In Oregon, as is the case in all states, most estates are required to go through probate upon the death of the estate owner. Probate is a legal process that has two primary objectives. The first is to ensure that your estate assets are accounted for, valued, and ultimately transferred to the intended beneficiaries after your death. The second objective is to allow creditors of the estate to file claims and secure payment from your estate. Most of your assets will be included in the probate of your estate; however, there are assets that pass outside of probate, including:

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 Proceeds from a life insurance policy Assets held in a living trust Assets held in a retirement account such as a 401(k) account Funds held in an account that is designated as a payable on death account Securities, vehicles, or other property held by an account or with a title/deed designated as a transfer on death account Real property that you co-own with someone if it is titled as a joint tenancy or tenancy by the entirety Oregon does offer an alternative to formal probate for small estates. If the estates personal property is valued at no more than $75,000 and real property is valued at no more than $200,000, for a total aggregate estate value of no more than $275,000 (as of 2013) the estate may qualify to be probated using an affidavit of claiming successor. All other estates must go through formal probate. If you left behind a valid Will the probate of your estate can be accomplished more efficiently because the heirs of the estate do not have to be determined by the court. When a Will is entered into probate the court is bound by the terms of the Will with regard to how the estate assets are to be distributed. In the absence of a Will the court must first make a legal determination regarding the heirs as well as locate the heirs

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of the estate. This can add a significant amount of time and expense to the probate process.

OREGON INTESTATE SUCCESSION DISTRIBUTION

If you die intestate the Oregon intestate succession laws will determine who receives your probate estate property. How your estate property is distributed under intestate succession laws depends on who survives you. The Oregon intestate succession laws require your estate to be distributed as follows: Children but no spouse Children inherit everything Spouse but no descendants or parents Spouse inherits all Spouse and descendants from you and that spouse Spouse inherits everything Spouse and descendants from someone other than that spouse Spouse inherits half and descendants inherit the other half Parents but no spouse or descendants Parents inherit all Siblings but no descendants, parents, or spouse Siblings inherit everything

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CONSEQUENCES OF DYING INTESTATE

People frequently make the mistake of not taking the time to contemplate the many unwanted consequences of dying intestate. Most of the unwanted consequences impact your family members and loved ones after you are gone. Because it is clearly too late to doing anything then, now is the time to contemplate what can happen if you die intestate. Consider some of the unwanted consequences: Loss of control without a doubt the biggest advantage to creating an estate plan before you die is that it allows you to control how your estate assets are handled when you die. In the absence of at least a Last Will and Testament you lose complete control over the distribution of your estate assets after your death. Probate time and expense dying intestate almost always means it will take longer to probate your estate. The longer it takes the higher the costs associated with the probate process as a general rule. Costs associated with the probate of your estate are paid out of your estate assets, meaning that every dollar spent on the probate of your estate is one dollar less that will be available for your survivors. On the other hand, a comprehensive estate plan can dramatically reduce both the time and the cost incurred in probating your estate, meaning your loved ones will receive their gifts faster and will receive more of the intended gift.

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Sale of assets when you die intestate the court is required to distribute your assets exactly as called for in the intestate succession statutes. If assets are to be divided among heirs the court may be required to sell assets in order to create an equal division. This could mean your family home or special heirlooms must be sold to accomplish the equal division as required by law. Beneficiaries left out As you can see, only immediate family members are likely to inherit from your estate. This means that a childhood friend, a beloved niece, or a special charity will receive nothing from your estate, even if you intended them to benefit from your estate. By dying intestate you give up the right to gift assets to the beneficiaries of your choice.

Hopefully it is now clear why creating at least a basic estate plan is so important. Of course, the more elaborate your plan the more goals you can include in the plan; however, even executing a Last Will and Testament alone will prevent the unwanted consequences that often stem from an intestate estate.

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http://www.nolo.com/legal-encyclopedia/intestate-succession-oregon.html OregonLaws.org, Intestate Succession Oregon State Bar, What Is Probate?

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About the Author

Richard B Schneider
Before devoting his professional efforts primarily to estate planning, Mr. Schneider spent over fifteen years working on Wall Street for major law firms and investment banks. After graduating from law school, he practiced general civil law in New York City for five years, specializing in business transactions, financings and corporate matters. He also represented major investment banking firms in mortgage trading and real estate-related matters. Among his clients were international shipping companies, commercial and investment banks and institutional lenders, including General Electric Capital Corporation, Salomon Brothers and Merrill Lynch. For the next ten years Mr. Schneider served as Senior Vice President at the investment banking firm of Kidder, Peabody, where he managed outside legal counsel for a variety of large financial transactions between major institutions. He played a central role in the creation of Kidder, Peabodys mortgage trading subsidiary and advised and executed transactions with insurance companies, pension funds and government agencies, including the Resolution Trust Company. In 1996 Mr. Schneider established a residence in Portland, Oregon and began his law practice there in 1997. He has made a long-term commitment to providing first-class estate planning legal services to families and individuals within the Portland metropolitan area and the surrounding SW Washington region. His motivations for moving to the Northwest were several: the natural scenic beauty of the Northwest landscape, the clean air and streets, the healthy, diversified economy and the overall high quality of life. Mr. Schneider is very grateful for the warm reception he has received from Portland/Vancouver and is pleased to have become a respected member of the Portland/Vancouver legal and business community. Mr. Schneider is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys, the Estate Planning Council of Portland and is on the board of directors of the the Rental Housing Association of Greater Portland. He is admitted to practice in Oregon, Washington and New York. Law Offices of Richard B Schneider, LLC www.rbsllc.com 2455 NW Marshall St, Suite 11 Portland, OR 97210 Phone: (503) 241-1215

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