Oregon Estate + Business Planning Blog

FAQ: What will happen to our house if we are married, but I am not on title?

A very common scenario that married people face is when they own a house, but one spouse is not on title. What will happen with the property when the owner-spouse dies? The answer to this question assumes that there is not an estate plan in place yet.

Generally, in Oregon, without an estate plan in place, the surviving spouse inherits all of the deceased spouse's property, but not necessarily without the probate court's approval. This is not always the case, but is the general rule. (If you have a blended family, things are different.)

However, the house and any other assets owned solely by the deceased spouse would have to go through the probate process in order for the surviving spouse to become the owner. Probate is a court process that happens after a person dies. The personal representative (called "executor" in other states), with the supervision of the court, takes inventory of assets, valuates the estate, pays off creditors, and distributes what is left to whomever the heirs are. If that sounds complicated, it's because it is. The probate process can cost a lot of money and take a lot of time, and probate is all a matter of public record. The way this usually plays out is that the surviving spouse continues to pay the mortgage for several years and doesn't find out that the house needs to be probated until he or she tries to sell it. At that point, they discover that the house can't be sold until it goes through probate, so a sale is held up for several months and in some cases, years.

How Do I Fix This!?

Well, you can always just create a new deed that names both spouses. The mortgage can stay in one spouse's name. That's the easiest way to do it. When a spouse dies, the surviving spouse simply records the death certificate with the county and becomes the sole owner. But many people don't want to do that because they wish to keep their separate property separate. The only other easy way to avoid probate in this scenario would be through trust planning. Plus, the joint property scenario won't help your kids to avoid probate if both spouses die. A will is not enough. A will basically tells a probate judge what to do with your property. A trust tells the trustee what to do with the property, and the trustee can handle transferring the assets without ever opening a probate. You can even make your surviving spouse the trustee. 

But guess what. You should consult with an attorney before making any of these decisions. I just want to make you aware that these issues exist, and that there are various ways to solve them. Oh, and by the way, this scenario creates other problems if you and your spouse are not legally married. Consult with a lawyer.

To your family's health & prosperity,

 

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

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Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area. She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance. If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

*Image courtesy of fantasista at FreeDigitalPhotos.net

How Should Your Clients Take Title To Their Home in Oregon? A Guide for Real Estate Professionals

Have you ever wondered if you are doing right by your clients in how you have them take title to their new home or rental property?  It’s a situation I encounter all the time as an estate planning attorney.  You have the opportunity to make sure that your clients have all the benefits of correctly titled property and they will definitely thank you for it.

Why is titling property correctly so important to  property owners?

First, if titled incorrectly, the property owner cannot control what happens to the property after he dies; second, if titled incorrectly, the owners and their heirs can lose the property to creditors, the government, or even an ex-spouse. 

Three Common Ways to Hold Title:

Tenancy by the Entirety:  Tenancy by the Entirety is the most common way for married couples in Oregon to hold property, but it ensures that there will be a probate upon the death of the second spouse. 

Joint Tenancy with Rights of Survivorship:  Joint Tenancy with Rights of Survivorship is a common way for UNmarried couples in Oregon to hold property, but it ensures that there will be a probate upon the death of the second joint tenant.

Tenants in Common:  Tenants in Common is where each owner wants to maintain their interest in the property even upon death, but this can cause a lot of problems for the surviving owner.

The Best Way to Own Your Home – A Revocable Living Trust: 

The best way for homeowners to own their property is in a revocable living trust. 

• A properly drafted and funded trust will avoid time consuming, expensive and public probate upon the first death and the second death.
• A revocable living trust will make sure that the right people receive the property after the death of both owners and that it doesn’t go to creditors, predators, or future spouses.

The Best Way to Own Your Rental Property – An Asset Protection Trust or LLC: 

The best way for your homeowners to own their property is in an asset protection trust or LLC. 

• A properly drafted and funded trust or LLC will avoid time consuming, expensive and public probate upon the first death and the second death.
• A properly drafted and funded trust or LLC will make sure that the right people receive the property after the death of both owners and that it doesn’t go to creditors, predators, or future spouses.
• A properly drafted and funded trust or LLC will ensure that if renters or guests have a cause of action against the owner, the owner’s other assets are not vulnerable to being collected against.
• A properly drafted and funded trust or LLC will protect the assets inside of that entity from being vulnerable to lawsuits arising from other causes of action.

BOTTOM LINE: Your clients are going to need to talk to an estate planning attorney to determine the best way to title their property. Stand out from the competition by bringing these concerns to your clients' attention.

To your family's health & prosperity,

Candice N. Aiston

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

___

Want to use this article in your newsletter or on your blog or website?

 

You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

LAW CHANGE ALERT: Oregon Transfer-on-Death Deeds (save time and money, but beware!)

Oregon recently enacted Senate Bill 815, the Uniform Real Property Transfer on Death Act, which is effective January 1, 2012. The Act allows people to transfer real property (a.k.a. real estate) to beneficiaries using a Transfer on Death Deed, which is recorded while the transferror is still living, but does not take effect until after the transferror's death. The Act is a great opportunity for many people, but comes with many dangers as well.  As always, the key to the effective use of any estate planning tool is to get competent legal advice as to its effectiveness!  Here is a (non-exhaustive) list of some of the possible benefits and issues that these new deeds come with:

Possible benefits:

• Great way to leave a piece of property to an adult child who lives in the home already;
• Avoids probate if done effectively;
• Avoids the numerous problems that arise from granting joint ownership during your lifetime;
• Offers a way for grantors of a revocable living trust to keep title in their names during their lifetime, but transfer the property to their trustee only after their death (usually for ease of refinance and sale of the property).

Possible issues:

• People may have a false sense of security, even though they have not received competent legal advice on the benefits and drawbacks to executing this type of deed;
• The statute of limitations for claims against the property by creditors under the Act is 18 months, instead of the 4 months allowed in probate proceedings;
• Property may not be able to be sold until 18 months after the death of the grantor because of title insurance problems;
• If title insurance is available, the premiums may be much more expensive;
• The deeds may end up costing more in legal fees because of attorney time spent answering questions that multiple benficiaries and their attorneys may have;
• Since the deeds lack the formalities required by wills, there is a potential for fraud;
• If there are multiple grantees, huge problems can arise if they do not get along and have the same goals for the property, or if any grantees have creditor or divorce problems;
• The grantor may not specify any personal goals for the future of the property;
• The grantor must validly execute a new instrument to revoke the Transfer on Death Deed;
• If there are joint grantors, a surviving grantor may revoke the deed after the other has died, which may be inconsistent with the deceased grantor's wishes and intentions.

Again, the key to the effective use of any estate planning tool is to get competent legal advice as to its effectiveness!  

To your family's health & prosperity,

 

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

___

Want to use this article in your newsletter or on your blog or website?

 

You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

5 Surprisingly Safe Investments during the Recession

Many of my clients are not sure where to put money right now! Normally, they'd put money into their retirement account or brokerage accounts, but when they keep seeing the numbers go down, it seems pointless to keep throwing money at those accounts. I won't speak to the legitimacy of these fears. There is plenty of commentary out there about how it's good for you and it's good for everybody if you keep investing. I'm not going to debate that here, but what I will do is show you 5 Surprisingly Safe Investments during the Recession.

1.  Term Life & Disability Insurance

As long as you are working with a company that is conservative in their investments and has not been terribly affected by the recession, you lose nothing by buying new policies now. Every parent needs life insurance. You must make sure your loved ones are going to be taken care of, even if you're not here. Every financial expert from the frugal-minded (Dave Ramsey & Suze Orman) to the entrepreneurial (Alexis Martin Neely) agrees on this one point. While everyone agrees that we need life insurance, the odds that you'll be disabled prematurely are about 4 times higher than the odds that you'll die prematurely. You should be looking into disability insurance at the same time you're looking into life insurance.

2.  Financial Planning

As everyone realizes the need for unbiased financial advice, the fees for financial planners are only going to go up! The value of getting your financial act together and getting a clear direction of where your family is headed financially is never going to be lost. And acting now could save you thousands in the long run and get you headed to financial wealth a lot sooner than if you meander through life without a plan to guide you. A financial planner will tell you what your retirement situation will look like and whether you are paying for any financial products that are unnecessary. They can also develop clear plans to help you see what you need to do to get to where you want to be.

3.  Estate Planning

A lot of smart people are investing in a relationship with an attorney for their family who will be there for their families when they can't be. At the same time, they are having their attorney develop plans that will protect their families if something happens to them. An estate plan that is done right and properly updated by the family's attorney is never going to lose its value. It is an extremely popular time to do estate planning right now, since low real estate and investment values bring certain planning advantages, and so you can expect that attorneys' rates will only increase. Don't wait!

4.  Your Physical Well-Being

Now is a great time to invest in your physical well-being. Take advantage of special offers by gyms and weight-loss centers. Getting healthy now could mean saving money later, by avoiding the health crises that often come as a result of not taking care of one's self. It's also a great time to make that dentist appointment and get that check-up. People don't often think about their health as something to invest in, but you'll be doing your family a huge favor by seeing it that way.

5.  Your Emotional and Mental Well-Being

It's also a great time to invest in your emotional and mental well-being! You could be a busy and overwhelmed Mom who needs a sitter once a week to make it to a much-needed meditation class or knitting circle. You could be an overworked business owner who needs to invest in a coach to help bring the business to the next level. Maybe you need to take a parenting class. Maybe you need to see a therapist to finally rid yourself of baggage from childhood. Now is the time to invest your emotional and mental well-being.

I think the idea behind each of these 5 investments is that they are not traditionally seen as investments, when that's exactly what they are. You put a little bit of time and money into these areas today, and you save a whole lot later on in life.

To your family's health & prosperity,

Candice

Attorneys are "deal killers," according to some Real Estate Agents

Last week, I went to an all-day real estate expo. I had a booth there, and I was offering real estate agents and brokers (and basically any professional who may be an advisor to families) a chance to join our exclusive Family Advisor's Club.  I started the group because my clients often ask me for referrals for certain types of professionals, and I really want to be able to say for sure that anyone I refer clients to knows what families want and need, and understands how to effectively and ethically reach them.

I'm happy to say that I had quite a few professionals eagerly sign up!  These professionals understand the value of the family market.  Some of them have families of their own, and so they prefer to work with people like themselves, who just want some honest professional assistance.  Several of the professionals who signed up had their kids with them.  I'm sure they take any chance to be able to bring their kids along on the job.  They probably don't get to do that too much when they're showing houses or working in the office, but the day of the expo was a perfect opportunity!  And the kids got to eat a lot of candy, since so many booths were offering it.

I'm really excited to start working with these professionals.  I'm basically going to be teaching them all of the things that I've learned as an Advisor to Families, and that I know just because of being a Mom.

But, not everyone wanted to talk to me!  I would estimate that 30-40 people walked by my booth and said, "An attorney!?  You have a lot of nerve being here!" or, "Wow, we've never had an attorney here before!"  One man actually stood back about eight feet from my table and yelled, "I would never let my clients talk to you!"

I was utterly confused, until I finally asked a man who was signing up for the Club why people were saying that.  He said, "A lot of real estate agents see attorneys as deal-killers, but I figure, if you're doing things right, it only helps to have an attorney look things over."

I was shocked.  Deal killers?  (But kudos to the man for his attitude that if you have nothing to hide, you don't need to see attorneys as deal-killers.)

I wonder if this is a huge reason for the real estate mess we're in right now.  I'm betting that close to 100% of buyers who are being foreclosed on right now or who are doing loan modifications did not seek the advice of an attorney when purchasing their property.  (Let's hope they are using attorneys to modify their loans.)

It's also sad when professionals are so short-sighted.  Trying to make a sale that is not sustainable in the long-term is not helpful for anyone!  I bet if a lot of those agents could see the big picture, they'd go back in time, and maybe they'd have made less money in the short-term, but there would still be a market for them right now, and they would have the trust of their happy clients, which is more important than anything.

I don't want you to think that all real estate agents have the attitude that attorneys are deal killers, so I'll leave you with a quote from another new member of the Family Advisor's Club: "I don't understand why anyone would buy property without the advice of an attorney and an accountant!  I advise all of my clients to get a good attorney and accountant working for them!"

To your family's health & prosperity,

Candice