By Suzanne McVicker When accepting the position as Trustee of a trust, it is important to be familiar with the legal duties of a Trustee. A Trustee has a duty to administer a trust as a prudent person would, in good faith, in accordance with the terms, purpose, and circumstances of the trust, in the interests of the trust beneficiaries, in accordance with applicable laws, exercising reasonable care, skill and caution. A Trustee has a duty to keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and the material facts necessary for the beneficiaries to protect their interests. One of the first duties of a Trustee is providing notice to the trust beneficiaries regarding the trust administration. It is generally advisable for all such notices to be in writing, and the notice must contain specific details. The Trustee has a duty of recordkeeping, and should always keep detailed records of every transaction of trust activity. The Trustee generally must provide the beneficiaries with a report (sometimes referred to as an accounting) detailing all of the trust activity and may need to petition the court for approval of the report. The Trustee has a duty to take reasonable steps to collect, control, and protect trust property. Commonly, a Trustee will need to retitle bank accounts, secure a residence, file insurance claims, and maintain insurance on trust assets. The Trustee should never commingle trust assets with their own personal assets, or assets of another trust. There will be costs in administering the trust, and those costs must be reasonable in relation to the trust property, the purpose of the trust, and the skills of the trustee. The Trustee has a duty to enforce and defend claims. If the Trust is owed money, or if there is a pending lawsuit, the Trustee must takes steps to collect the money owed, and defend or pursue lawsuits, as the case may be. The Trustee has a duty to comply with the Prudent Investor Rule, which requires the Trustee to invest and manage trust assets as prudent person would, by considering the purposes, terms, distribution requirements and other circumstances of the trust, exercising reasonable care, skill, and caution. Occasionally, exceptions to the prudent investor rule are written into the trust document for assets such as stock in a family owned or closely-held business. Find out more at: https://ift.tt/3fh27rJ Via https://twosprucelaw.com/videos/duties-of-trust-administration-1
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By Patricia Louise Nelson As an estate planning attorney, I often hear similar questions again and again. This article is designed to ask and answer 5 of those questions. 1. What makes an Estate Plan? An estate plan is a series of documents designed to convey your wishes to provide for you during your lifetime, even if you are incapacitated, and to provide guidance about what life support you might like in different situations, and to provide how you would like to dispose of your body when you’re done with it. Ideally, it is complete and thorough. It is likely made up of a revocable living trust, a will, a power of attorney, an Advance Directive, and a document by which you appoint someone to be in charge of disposing of your remains and providing that person with your wishes. 2. Do I need a will if I have a revocable living trust? Yes, nearly always. A revocable living trust controls what happens to your assets owned by the trust when you die. It is possible that some assets could be left outside the trust, either inadvertently or on purpose. Regardless, if those assets cannot be accessed by your person in charge or one or more beneficiaries, a probate will be needed to process those assets. To ensure that your revocable living trust has control over these probate assets, you will need a “pour-over will.” A pour-over will is one that has your trust as the only beneficiary. It is the last way to get assets into your revocable living trust. It requires probate, which is expensive. So, while I recommend that you have a pour-over will, our plan is that you will never use it. 3. What is the most important part of my estate plan? It depends. If you are alive but incapacitated, it is likely that the most important part of your estate plan is your power of attorney and your revocable living trust. If you have died, the most important document in your estate plan may be your will and/or your revocable living trust. If you are near death, it is likely that the most important document could be your Advance Directive. Generally speaking, the most important document overall in an estate plan is often the revocable living trust, because it controls your assets while you are alive and after you have died. 4. What is my estate? This is a common question. Many people think of an “estate” as the assets of a rich person. Actually, an estate is whatever you own. It could be a car and some tangible personal property. Or a car, some tangible personal property, and a bank account. Perhaps your estate also includes a house. Maybe a retirement account or two. And a life insurance policy. Basically, your estate is everything you own. 5. Why hire an attorney to work on an estate plan? You don’t have to. I do, however, recommend that you use an attorney. You know that feeling “I don’t even know what questions to ask.” An attorney can help you not only ask the right questions, but also answer them. You maybe be able to save hundreds of dollars drafting your own estate plan. In my experience, self-made estate plans often cost hundreds or even thousands of dollars more to implement when the time comes simply because you do not know what you do not know. You therefore cannot prevent confusion and arguments caused by your documents. Confusion and arguments are expensive. Via https://twosprucelaw.com/videos/5-frequently-asked-questions-about-estate-planning What is Probate? By Patricia Louise Nelson of Two Spruce Law P.C. I am often asked “What is probate?” Probate is the court implementation of an estate when someone dies. I want to answer several common questions about probate. The most frequently asked question is “Just a second. The person who died had a will. Doesn’t that avoid probate?” Unfortunately, it does not. A will can specify who receives assets, but it has no ability to implement itself. A will needs probate to implement it. On the other hand, a revocable living trust – if it is properly managed – does work to avoid probate So why avoid probate? Well, there are three primary reasons to avoid probate in my mind. One, it is public, anyone can go to the courthouse and access the probate file. That file will include information about heirs and devisees, assets, and other private information. For many people, that alone is enough of a reason to avoid probate. Another drawback of probate is that it is time consuming. Even with a firm like Two Spruce Law that does a lot of work in probate, it takes 7-9 months to complete the process. Most of that time is caused by required notice periods in the Oregon Probate Code. The third drawback of probate is that it is expensive. It very frequently costs $6-8,000 in attorney fees plus another $1,350 in other costs such as court filing fees, publication costs, and recording fees, to complete the probate process. In certain limited circumstances, subjecting an estate to probate is worth doing despite the drawbacks of probate. Specifically, probate has the effect of “cutting of claims of unknown creditors.” Say what? Because part of the probate process is publishing notice of the probate in the tiny print in the back of the newspaper, all creditors about which we may not be aware of are limited to presenting their claims within 4 months of the date of first publication or they are limited to the insurance the deceased person had; they cannot expect payment from the deceased person’s assets after that timeline. Bear in mind that these are “unknown” creditors – we cannot ignore creditors we know about and hope they are limited in a similar way. There are other ways of dealing with known creditors and even suspected creditors. So, call us if you know about a creditor you want to avoid in a probate. Do you have to have an attorney to complete a probate? The technical answer is “no.” The practical answer in Oregon is “I think you should.” Oregon’s probate code is not simple or easy to comply with without an attorney. We do not charge for initial calls about probates, so give us a call to see if we might be a good fit for you and your situation. Via https://twosprucelaw.com/videos/what-is-probate-2 By Patricia Louise Nelson of Two Spruce Law There are a couple of times you when being divorced and being in the process of getting divorce justifies updating your estate plan. One situation is if you are getting divorced and you want to avoid your soon-to-be-ex-spouse from receiving any of your assets. The other situation is if you get divorced after putting in place an estate plan that benefits your former spouse. During the process of divorcing, you are allowed to prepare a new estate plan intentionally giving your spouse nothing, if you are no longer living together as a married couple. If you need to live together as a couple, your soon-to-be-former spouse is entitled to an “elective share” under Oregon law. The elective share is a portion of your assets. It is a sliding scale, which depends on the length of the marriage. The longer the marriage, the higher percent of your assets to which your spouse is entitled. Give us a call so we can help you figure out how the Oregon elective share impacts your situation. Of course, if you have a prenuptial agreement, you are likely allowed to leave nothing to your former spouse, depending on the terms of the prenuptial agreement. The second situation is if you get divorced after your estate plan is in place. In this situation, the provisions in the estate plan naming the now-former spouse as a fiduciary or giving the now-former spouse assets are revoked by the divorce process. The estate planning documents do not need to be changed unless you want some other terms changed – the spouse is removed by the divorce paperwork. Often, the estate plan needs to be updated for other reasons, so if you are not sure then call us to discuss the terms of your estate plan in light of your divorce. Via https://twosprucelaw.com/videos/how-to-deal-with-a-divorce-in-your-estate-plan-1 Why Is Naming Contingent Beneficiaries Important? By Patricia Louise Nelson
Many of my client express frustration when I ask “So, if your spouse, all of your children, all of their children, and everyone else below you on your family tree dies before you, whom or what would you like to benefit from any remaining assets?” The most common response is “Come on! That is so unlikely that it’s ridiculous!!” I agree.
And yet, it could happen . . . .
If it does, Oregon statutes say who gets your assets. The people specified in the statues may be family members whom you do not wish to benefit. Or they could simply be people you do not know, have never met, and are certainly not unhappy that you have died. We call these beneficiaries “laughing heirs.” Why leave your assets to strangers?
Or worse . . . .
If no one qualifies as your heir under the Oregon statutes, then your remaining assets go to the Oregon Department of State Lands. I have yet to have a client intentionally give their assets to the State of Oregon.
So, I encourage you to name more distant family members or friends to take in this unlikely situation. AND, name someone to stand in line behind them if they too are not then living. At the end of that line, I encourage you to name a charity or charities to take the assets. That way, your assets benefit someone or something you like rather than passing to strangers or the State of Oregon Via https://twosprucelaw.com/videos/why-is-naming-contingent-beneficiaries-important-1 By Suzanne McVicker of Two Spruce Law A home trust is a trust that holds the family home and provides a blueprint for the ongoing use of the property. We recommend home trusts for blended families and multi-generational families living on the same property. Property with more than one owner is often owned as tenants in common, which means that one-half of the property passes to the deceased owner’s intestate heirs or beneficiaries under their will. If the surviving co-owner cannot afford to buy out the deceased person’s heirs or beneficiaries, the property may have to be sold, even if the surviving co-owner (or anyone else living on the property) does not want to sell it. Alternatively, the property may be owned with rights of survivorship, which means that the property would automatically pass to the surviving owner, and then onto that surviving owner’s heirs or beneficiaries under their will, potentially forcing a sale of the property. Home trusts allow for significant others and family members to remain living on the property for life, and provide a plan for who will later inherit the property. A surviving partner may require assisted living of some kind, in which case the home trust may allow for the property to be sold and the proceeds used to purchase a replacement residence or pay monthly rent at an assisted living facility. Or, if the surviving partner no longer desires to live in the residence, and otherwise can provide for themselves financially, it may then pass to the deceased partner’s children. A home trust needs to address the ongoing costs associated with the real property. Ideally, the home trust will have the cash reserves to pay property taxes, maintenance, improvements, utilities, and insurance. However, often times the beneficiaries who have the right to live on the property for life will be responsible for those costs. It may be important for furnishings and equipment to remain with the property, in which case those items should also be assigned to the home trust. Serious consideration needs to be given as to who will serve as trustee to manage the property and to carry out the terms of the home trust. The home trust can provide further specific instructions as to how decisions are to be made, who has a say in decision-making, and who else would be allowed to reside on the property. #TwoSpruceLaw, #estateplanningattorney, #estateplanning101, #trust, #bendoregon, #sistersoregon, #oregonwomeninbusines, #womenownedbusiness, #probateattorney, #estateplan, #powerofattorney, #law, #willsandtrusts Via https://twosprucelaw.com/videos/home-trusts By Patricia Louise Nelson of Two Spruce Law Many, if not most, of my probate matters begin with a phone call to my office. The caller very often begins by saying, “My mom (dad, sister, brother, or friend) died. Her banker (investment advisor, or realtor) says I need ‘Letters Testamentary’ before I can access her bank account (investment account, or sell her real property). What is that? I definitely want to avoid probate. Can you help me?” I always feel a bit of sadness for the caller as I explain that Letters Testamentary is the document the court issues when it opens a full probate, so the two questions are mutually inconsistent. Probate is the court oversight of the administration of an estate when the owner of the asset dies, with or without a will. If you really need Letters Testamentary, that means you need to take the assets through probate. The professional advising the caller that they need Letters Testamentary may not be right. Because probate is a significant undertaking with substantial costs, it is important to explore all alternatives that may be available. Give us a call, let’s figure out whether you really need Letters Testamentary. Now that we’ve covered what probate is, here are some frequently asked questions about probate: 1. How can I pay for probate when I have no money and I can’t access my deceased loved one’s bank account? Excellent question! This is a common predicament. Obviously you’ve done some homework. If you really need help paying the upfront costs, we can advance those for you until you are appointed as the Personal Representative and can access the decedent’s bank account to repay us. The attorney fees in probate are not payable until the court approves them at the end of the process. Generally attorney fees are paid from the estate assets. 2. How long with probate take? The typical probate in Oregon takes 6-9 months. Sometimes they take longer, depending on the situation. 3. When do I get the stuff left to me in the will? The court must approve distributions from the estate. The general estate is usually distributed at the end of the probate. Sometimes we can get court approval for an earlier distribution, but often not until the probate has been open for 5 or 6 months. 4. How does probate work without a will? When there is no will, the probate process is the same except that the assets go to the heirs of the decedent rather than to named beneficiaries. The heirs are generally people related to the decedent by blood or marriage. We can help you figure out the heirs, give us a call. 5. Can I file probate without an attorney? Technically, yes. It is a very significant undertaking. We recommend you use an attorney right from the start to avoid heading down the wrong path. #TwoSpruceLaw, #estateplanningattorney, #estateplanning101, #probate, #trusts, #letterstestamentary, #willsandtrusts, #pnw, #bendoregon, #redmondoregon, #sistersoregon, #smallbusinessoregon, #oregonbusinesswomen, #womenownedbusiness Via https://twosprucelaw.com/videos/what-are-letters-testamentary-and-5-more-common-probate-questions By Patricia Louise Nelson of Two Spruce Law We often tell people that having a revocable living trust can result in avoiding probate on death. But is that really true? Technically, it is true. But it depends on whether the person creating the trust transferred all of his or her assets to the trust or otherwise named beneficiaries for all of their assets. It is important to bear in mind that when we create an estate plan that includes a revocable living trust, there are two phases to the estate planning process. The first phase is working together to craft documents that are unique to the client and meet the client’s needs. Phase one of the estate planning process is completed when we meet to sign documents. Phase two of the estate planning process begins at the meeting where we sign all the documents and continues for the life of the person creating the trust. Phase two consists of placing assets in the trust and/or naming beneficiaries for items such as retirement accounts and life insurance. There is a debate among estate planning attorneys about whether revocable trust can really be used to avoid probate. The gist of the argument, as I understand it, is that clients do not really read estate planning documents. In my experience, clients do read their estate planning documents. They often have very good questions about the minutia in documents. Another argument is that clients do not really understand their documents. Again, that is not consistent with my experience. While clients may not understand all of the legal nuances of their trust, they do understand how a trust works and when it is important to get help. The third argument against trusts is that clients will allow assets to slip out of their trust over time or will fail to “fund” the trust – that means transfer all their assets to the trust. This can definitely be a weak point. I work hard to coach my clients on making sure their assets get into the trust in the first place and stay there for the long run. We provide written instructions to clients at the signing meeting that tell them how to make sure different types of assets get into the trust or have beneficiaries designated. We also encourage them to set a reminder on their smart phone to check in once a year to see if anything has happened in the past year that could cause a probate. We encourage you to read the letter of instructions. If, after reading your instruction letter, you still have questions about an asset, please call us. The instruction letter has evolved over my 29 years of practicing law due to client questions and experiences. We are here to help you. Give us a call. Via https://twosprucelaw.com/videos/do-revocable-living-trusts-really-avoid-probate Guest Blog ExchangesHow To Talk to Your Kids About Their Inheritance Having a conversation with your children about their future inheritance can be a delicate topic, but it's important for ensuring their financial security in the future. Below are some suggestions on how to approach the topic with your kids: Start Early Don't wait until it's too late to discuss inheritance with your children. The earlier you start, the more time they’ll have to grasp and plan for their financial future. Start by teaching them the basic financial concepts such as saving, spending, and budgeting and gradually introduce more complex topics as they mature. Be Transparent When discussing inheritance, honesty is key. Explain to your kids why you have chosen to leave an inheritance for them and what it signifies. This can help them appreciate the value of their inheritance and the efforts you've made to provide for them. Use An Age-Appropriate Approach The way you communicate with your kids about inheritance should be based on their age and maturity level. For younger kids, use simple language and visual aids to explain the concept, while for older kids, more detailed discussions are appropriate. You’ll want to foster open communication by encouraging your children to ask questions and express their thoughts and feelings around their inheritance. This can build trust and mutual understanding, and make sure everyone is on the same page. Highlight Responsibility Make it clear to your kids that their inheritance is a privilege that comes with responsibility. Emphasize the importance of being responsible with their money and encourage them to learn about personal finance and investments to make informed decisions about their inheritance. Avoid Comparisons Comparing your children when discussing inheritance can cause resentment and division within the family. Instead, focus on each child's unique qualities and strengths and how their inheritance can support their goals. Get Professional Help If you're unsure about how to talk to your kids about inheritance, consider seeking the assistance of a financial advisor or attorney. They can help guide the conversation and make sure your intentions are clearly communicated to your children. Plan for the Future While discussing inheritance, it's also crucial to have a plan for the future. A personal injury lawyer knows that an unexpected event like the death of a parent or family member can shake a family to its core. You’ll want to consider what will happen to their inheritance in the event the unspeakable occurs, both to give your kids peace of mind and prepare them for the future. Our friends at Cohen & Cohen will tell you, talking to your children about their inheritance can be a challenging but critical step in securing their financial future. By starting early, being transparent, and highlighting responsibility, you’ll help your kids prepare for what will happen after you’re gone. Remember to seek professional advice if needed and foster open communication to ensure that your wishes are understood, respected, and followed. Via https://twosprucelaw.com/videos/how-to-talk-to-your-kids-about-their-inheritance By Suzanne McVicker of Two Spruce Law Tangible personal property is all the stuff you can touch in a house, yard, shop, or other location. It also includes automobiles, boats, and pets. Generally, a personal representative should assume possession and control over all tangible personal property items of a probate estate. Note that a personal representative is accountable for estate assets in his or her possession. The personal representative must determine the value the tangible personal property. For automobiles, Kelly Blue Book (KBB.com) or another website is often used to determine the value. Appraisals by experts may be required for valuation of certain items with a value of $3,000 or more or collections with a value of $10,000 or more. Be aware that, while tangible personal property usually represents a fairly small portion of the value of an estate financially, it can result in the most conflict. Some items have personal history within families and people can become very attached to certain items causing conflict. It is common and acceptable for a personal representative to sell or donate unwanted personal property items to avoid storage and insurance costs. For vehicles and boats, the personal representative may permit the person who will inherit the item to take possession using a custodial receipt if they believe the estate won’t need the vehicle or boat to satisfy claims or expenses. The custodial receipt says that the person receiving the boat or vehicle agrees to insure the vehicle or boat, naming the estate as an additional insured, and return it to the estate if needed. Alternatively, the property could be sold to the heir or devisee in exchange for a promissory note. The promissory note can be distributed to the heir at the end of the probate, cancelling it. Or the vehicle or boat could be disabled while in possession of the heir or devisee, so they cannot use it to potentially cause liability to the estate. Please note that if the personal representative knows that an heir or devisee has a bad driving record, that person should not be given custody of the vehicle during the probate. Typically, pets valued at $2,500 or less can be given to a friend or relative or shelter immediately upon the decedent’s death. The person with custody of the pet is entitled to payment from the estate for the cost of caring for the pet. On request, the pet is to be delivered to the personal representative or any heir or devisee entitled to its possession. Firearms require special licensing and registration, and all sales of firearms should be conducted through a licensed gun dealer. Extra care should be exercised in dealing with firearms in an estate as it is easy to accidently commit a federal felony. Potential consequences include losing your right to bear arms, your right to vote, and even your freedom. Recipients of firearms may be required to undergo a criminal background check, with possible exceptions for persons related to the decedent. For certain weapons, the Bureau of Alcohol, Tobacco, Firearms and Explosives must be notified. Via https://twosprucelaw.com/videos/tangible-personal-property-in-probate |
About UsIf you need gentle, supportive guidance to deal with planning for your death or the death of someone close to you, then you’ve come to the right place. At Two Spruce Law—a Bend, Oregon-based firm that specializes in probate law and estate planning—we practice law in a personal way that honors the integrity of all involved. ArchivesNo Archives Categories |