Following is a brief list of issues which may exist for you, even if you have already completed the initial estate planning process with another professional. If any of these issues are present for you, you may really need to have your existing estate plan reviewed at this time:

  1. Was Your Estate Plan Created Before 2003? If you signed your estate planing documents prior to calendar year 2003, then you very much need to have an estate planning attorney review your existing documents. This is because Oregon enacted its first ever inheritance tax in 2003, giving rise to a significant death tax event for many decedent’s estates. With relatively simple tax avoidance planning mechanisms drafted into your documents, you can effectively eliminate the imposition of any form of inheritance tax on the event of your death.

  2. Do Your Current Estate Planning Documents Conform to Current Income, Estate, and Inheritance Tax Laws? In many cases, people sign wills early in their careers, when they have small children and limited asset values. In most cases, these wills provide that all assets pass to the surviving spouse upon the event of the death of the first spouse to become deceased. However, under current tax law, each spouse can transfer $1,000,000 (for Oregon inheritance taxation purposes) and $5,000,000 (for federal estate taxation purposes; called an “exemption amount”) tax-free to their children and grandchildren if their wills are set up correctly and their assets are owned properly. Continuing to use the outdated wills may mean that the first spouse to become deceased will forfeit his or her exemption amounts, which may cause the family to pay tens of thousands or even millions of dollars in unnecessary death taxes.

  3. Are Your Appointed Fiduciaries Still the Appropriate Choices for You and Your Family? Over time, the individuals you have chosen to perform important duties for you (e.g., to serve as your attorney-in-fact (under a power of attorney), to serve as your health care representative, as guardian for your minor children, or as the personal representative of your will or successor trustee under your living trust) may need to be changed. Those people you originally named may no longer be the best individuals to serve in those capacities, due to advancing age, infirmity, declining mental capacity, or changes in physical location or financial circumstances. If so, you will need to change your estate planning documents to appoint one or more suitable and qualified replacements.

  4. Is It Time to Create a Revocable Living Trust to Replace Your Existing Will? Increasingly, people are learning that the creation of a “revocable living trust” is an estate planning alternative which is far more suitable to meet their personal desires than a traditional “Last Will and Testament.” While more detailed explanations defining what a revocable living trust is and how it compares to a traditional will appear on this website, suffice it to say that a revocable living trust may be a more efficient means of transferring your assets following the event of your death, in terms of cost, time, privacy, and comfort for your selected executor, family members, and other beneficiaries.

  5. Is it Time to Consider Leaving a Portion of Your Estate to One or More Charitable Beneficiaries? It is only by and through the use of donations that many charitable and other not for profit organizations are able to continue to provide services to and support of the local community. In addition to enabling your favorite organizations to continue their good works, charitable giving can be an important part of your overall income tax and estate planning strategy. Further, many of our clients report that through their charitable giving, they are passing a legacy to their children which goes well beyond the transfer of assets to them; they are sharing a tradition of compassion and generosity. Through testamentary gifts to philanthropic organizations, many of your goals and objectives can be met, while still conveying most of your assets to your family members.

  6. Have You Become Divorced or Remarried?

    • ➣ If you have become divorced since you signed your estate planning documents, Oregon state law may automatically revoke certain bequests you’ve made under your will. Any gift you made to your former spouse will stand revoked under Oregon laws. If you have support obligations which survive your unanticipated early death, then your estate planning document should reflect the discharge of this obligation. Importantly, if you actually intend to make a gift upon your death to your former spouse, you may not assume that the will you signed before your divorce will serve to satisfy your desires in this respect. Otherwise, you will need to restate those provisions of your existing will containing gifts to your former spouse to ensure that your assets are transferred in accordance with your current desires. In addition, you will surely need to address the beneficiary designations under your retirement plan assets, IRAs, annuities, and life insurance policies. A qualified estate planning professional can assist you in making all of the appropriate modifications to your existing plan.

    • ➣ If you have remarried since you created your estate plan, you will need to give careful consideration to necessary modifications to your existing estate plan, especially if you have children of your former marriage. Individuals with children of a prior relationship may want to consider establishing a QTIP (qualified terminal interest property) trust. Under a QTIP trust, the income from the property held in the trust is distributed to the new spouse for his or her lifetime (and trust principal, if you so desire). However, at the death of your current spouse, all of your children will benefit from the remaining principal balance held in trust at the time of his or her death. You and your new spouse may also desire to plan your estate jointly. In this case, it will be important for both of you to enter a simple agreement in which you agree to honor the gifts to the children of each of your prior relationships, regardless of your death order.

  7. Have You Moved to Another State or Acquired Real Property in Another State?

    • ➣ In the event you have relocated to or away from the state of Oregon since you signed your estate planning documentation, you need to have your existing documents reviewed by a professional estate planner. The laws of your new state of residence can serve to distort and even invalidate some of the provisions of your current documents and can serve to adversely affect your tax avoidance plan as well. State inheritance taxation has become an especially important consideration since the federal death tax credit was eliminated. Since that time, many states have created new inheritance tax laws and they all differ from one another. Further, if you have moved to Oregon from a state which had no state inheritance taxation, then your documents will likely be entirely devoid of state tax avoidance provisions, which may easily be incorporated to your existing documents.

    • ➣ If you have moved from a “separate property” law state to a “community property” state, there are important estate tax planning steps which you must take. Oregon, a “separate property” state, is uniquely situated among 11 “community property” states. Depending on your personal situation, it may be advantageous to make an election to preserve the status of the laws which existed in the location of your former residence.

    • ➣ If you live in one state and own real property in any other state, your assets will become subject to the probate laws of every jurisdiction in which you own real property. For your family members, this may lead to the extremely expensive and time consuming necessity of having to conduct a probate procedure in each and every location in which you held a real property interest. In this situation, you should seriously consider either: (i) creating a revocable living trust to govern the ultimate transfer of your real property assets; or (ii) conveying your real property interests to a limited liability company. By taking one of these actions, your real property interests property will pass to your intended beneficiaries without the necessity of probate in a second state and possibly, without the need of any probate procedure whatsoever.

  8. Has Your Family Increased or Decreased in Number?

    • ➣ If you have adopted or given birth to additional children or enjoyed the birth of grandchildren since the time you signed your estate planning documents, then you need to have your documents reviewed to ensure that your new family members have been appropriately provided for in your existing documentation. While the estate planning documents our firms provides typically provide for expanding families, many do not achieve this end and should be revised to avoid unintentionally disinheriting a beloved family member.

    • ➣ When someone close to you becomes deceased, especially if that person is a spouse or a child, it may be difficult to remember that this may have an impact on your estate planning documentation. However, it remains important that you ensure that the deceased beneficiary’s share of your estate is directed to an alternate beneficiary in keeping with your then current desires.

  9. Have Your Desires Changed? Over time, your family and financial situation will surely change and your testamentary desires may well change together with those circumstances. For example, a change in the various financial circumstances facing your children may cause you to desire leave one child a smaller or greater share of your ultimate estate than your previously desired. You may at some point determine that a child who has taken the great responsibility of providing for your personal well being during your latter years deserves some form of compensation for his or her efforts following the event of your death. A child who has been actively engaged in the family business may deserve the option to fund his or her share of your estate with the family business itself. And in more troubling circumstances, a child may have developed troubling habits (e.g., drug abuse or alcoholism) or financial issues (e.g., creditor issues or sincere lack of financial acumen) which may cause you to desire to decrease that child’s portion of your ultimate estate or to cause another individual to manage the child’s inheritance to ensure the assets are utilized for productive purposes which will serve to enhance your child’s productivity and welfare in life.

  10. Has a Member of Your Family Become Disabled or Experienced a Divorce or Other Financial Set Back? In these uncertain times, it is commonplace for a member of the family to suffer a financial hardship, such as a divorce, bankruptcy, serious creditor issue, or a financial Court monetary judgment. In such an event, or in the event a family member suffers a disability for which public benefits are available, there exist readily available means of protecting the inheritance you would like to give to the individual, which would otherwise be taken by creditors or a divorcing spouse, or may otherwise be made subject to a disability “spend down” (which causes a family member’s inheritance to be hastily spent, leaving no further assets to protect a disabled individual for the balance of his or her lifetime). If any of these situations is present for a family member, then you should surely meet with an estate planning professional to review your existing documents.

Conclusion. Many people presume that once the initial estate planning process is accomplished, it need not be revisited. However, given the recently frequent federal estate and state inheritance tax law changes, changes family dynamics, and changes in financial circumstances which may result in hundreds of thousands of dollars in unnecessary taxes and which may also distort your intended distribution of assets following the event of your death, your estate plan must be reviewed periodically. In an effort to prevent these unintended consequences, our firm provides our clients with a no charge review every five years or even more frequently, if the tax laws change or in the event a client’s family or financial situation indicates that a review has become necessary. We invite you to join our larger family of clients who actively manage their affairs and estate and business planning objectives.