Why You Need An Estate Plan

                    Why You Probably Need A Will (or Trust) & Why You Should Hire Legal Counsel - About Trusts and Estates.

        I hear it often, “Why do I need a will or trust?”  Since about only one in four persons have done any formal estate planning by the time they die, it has seemed to me that many people don’t understand why estate planning is important.  If you don’t have a will or other adequate estate planning, you may only create unnecessary expenses for your children or surviving spouse.  Every situation differs, but here are some common examples of unintended consequences that hiring an estate planning lawyer could have avoided:

        1.  Harry and Susan Smith married later in life, and each brought children from previous marriages.  Harry dies without a will or trust.  Under Oregon law, despite his wishes, one-half of his property will go to Susan, and the other half to his children.  He may have intended Susan have it all, or his children have it all, or that Susan get to use it during her lifetime, then to his children and her children.  But he didn’t get to choose because he did no estate planning.  

        2.  Gwen is not married, but has adult children.  She puts her oldest child, Mark, as an owner on her bank account and house.  Mark unexpectedly incurs a large debt because of an automobile accident he caused.  The other parties sue him, and after they won in court, they come after Gwen’s bank account and house to pay what Mark owes because it looks like he is a co-owner.  While in Oregon, Gwen might be able preserve her bank account and house, it may also require a costly legal argument in court.  Even if Mark does not have creditors chasing down anything with his name on it, he will legally own the house and the bank account when Gwen dies, with no guarantee that he will share at any time with his siblings.  Gwen probably intended all of her children to have a share in her estate but because of an inadequate plan, her wishes won't be fulfilled.

    3.     Don and Sam are are domestic partners.  Unless they have entered into Oregon's Domestic Partnership, their rights to inheritance, health care issues and general property rights are not guaranteed.  Such life partners need at least a will, a durable power of attorney, and an advance directive.  How they own their real property may also be an important consideration.  

        These are common situations which can be handled with estate planning commonly used by lawyers in Oregon.

        Now why would you need an Oregon lawyer to do your estate planning when you have the Internet.  After all, there are forms and services on the web that probably cost less initially than hiring an attorney.  Consider that a major consumer group tested the leading internet will providers and found they had problems, especially in situations of blended families like the Smiths above.   Frankly, an internet-based will may cost your heirs much more than you saved by leaving unintended consequences for them to sort out.   Consider also that an inadequate plan can lead to your children fighting or having hurt feelings just at a time they are also grieving the loss of their loved one.  Of course, inadequate planning may also lead to expensive tax consequences you could have avoided too.
        Estate planning should include more than a will.  It may include a trust, and it should almost always include a durable power of attorney and the Oregon Advance Directive. More importantly, estate planning is oftentimes a good example of not knowing what you don’t know, where a lawyer can fully inform you of your options and potential pitfalls in your plan.  One common pitfall arises when a parent puts one of their children on the title to their home and bank accounts.  Not only does that one child legally own all the property when the parent dies, that child's creditors may try to claim that child's interest in their parent's home.

        As and estate planning professional, I encourage clients to bring in any information, including a draft or old will, which I may find helpful as an advanced starting point in our discussions.  If you have a will or other estate plan that you have used from the web, I am happy to review it with you to make sure it meets Oregon law and your personal situation. 

        To discuss your estate planning needs, contact Holbrook & Associates by phone or e-mail.