These are questions from the public answered by John D. Sorlie in the monthly article of "Ask an Attorney" in the Bend Bulletin Newspaper. Please note publishing dates, as tax rates and limits are only applicable to the year that is in discussion.
Ask an Attorney
Question: (October 2006)
What is the Oregon Inheritance Tax, when does it apply, and is there an exemption for out of state property?
Answer: The Oregon Inheritance Tax is a tax that applies to the estates of people that die owning property in Oregon or who at the time of their death were residents of Oregon. Estates worth less than one million dollars are not subject to the tax. The tax rates are generally between 5% and 14% depending on the size of the estate. If a person dies owning real property in Oregon and other states, only the value of the Oregon property will be subject to the Oregon Inheritance Tax. Whether the value of personal property will be part of the estate subject to the Oregon Inheritance Tax will depend upon whether the person is a resident of Oregon.
Question: (December 2006)
My wife and I created a family trust, wills, advance directives and powers of attorney. What legal changes are necessary when one of us dies? Do we have to notify any government agency?
Answer: Upon the death of one of you, it may be necessary to divide your trust into two or more subtrusts. This is done to avoid estate taxes when the second of you dies. This would require the services of an attorney to retitle assets into the correct subtrusts. An estate tax return may also need to be filed. Your other documents should also be reviewed to insure that an alternate is named in the documents to take over the responsibilities of the deceased spouse. The Social Security Administration and all companies that are paying pension or retirement benefits to the deceased spouse will need to be notified of the death.
Question: (January 2007)
Is there a monetary amount below which an estate (including real property) does not have to go through probate?
Answer: Probate is the legal process by which title to certain assets are transferred from the name of a deceased person to the person’s heirs. Some assets will pass to a person’s heirs without the need for a probate. For example, assets held with another with right of survivorship; assets held in a revocable living trust; certain bank and brokerage accounts with a “payable on death” designation; and life insurance and retirement accounts that name a beneficiary. If an asset does not pass by one of these methods, then it will likely need to go through probate regardless of the amount. There is a short form of a probate called a “small estate affidavit” for estates with personal property of less than $50,000 and real property of less than $150,000.
Question: (March 2007)
I live in Oregon and will likely die here. The executor of my estate lives in North Carolina. Must my executor be a resident of Oregon?
Answer: The executor of your estate, also known as a “personal representative,” is the person who is responsible for administering your affairs after your death. The executor is appointed by the probate court when your will is admitted to probate. Courts routinely appoint executors that live outside the state of Oregon. For practical reasons it is sometimes easier to have someone local because the executor must make sure all of your bills are paid and also must supervise the distribution of your estate, but an executor that is willing to travel to Oregon to take care of those matters can be appointed.
Question: (April 2007)
My wife and I created a family trust, wills, advance directives and powers of attorney. What legal changes are necessary when one of us dies? Do we have to notify any government agency?
Answer: Upon the death of one of you, it may be necessary to divide your trust into two or more subtrusts. This is done to avoid estate taxes when the second of you dies. This would require the services of an attorney to retitle assets into the correct subtrusts. An estate tax return may also need to be filed. Your other documents should also be reviewed to insure that an alternate is named in the documents to take over the responsibilities of the deceased spouse. The Social Security Administration and all companies that are paying pension or retirement benefits to the deceased spouse will need to be notified of the death.
Question: (May 2007)
How is an estate distributed here in Oregon if there is no Will?
Answer: If you die as an Oregon resident owning assets in your individual name, your estate will be distributed to your intestate heirs. These are the people designated by the laws of intestate succession to receive your estate if you have no will. These laws generally provide that your estate will go to your spouse. However, if you have children from a prior marriage, then your spouse is entitled to one-half of the estate and your children receive the other half. If you are not survived by a spouse, your children are entitled to receive your estate. A deceased child’s share will be distributed to the deceased child’s descendants. If you have no descendants, your estate will go to your parents, and if your parents are not alive, then to your brothers and sisters.
If you would like to make an appointment with John D. Sorlie for your estate planning needs, please call 382-4331 and ask for his assistant.
