Estate Planning for Digital Assets

What's Going to Happen to My Account When I Die?

As more and more of our life has gone online, the become harder to access all of the information that has been created online during your lifetime.  Facebook accounts, Paperless Documents (Bank Statements, Brokerage accounts, Utility Bills, etc), GMAIL accounts and many other online services that make up our day-to-day modern life are all governed by the “Terms of Use” agreements that we all agree to --but rarely read-- when we signup for an account.  

More than money, these accounts often contain sentimental correspondence or the only copy of photos.  Maintaining and ensuring access to those materials can mean a lot to your loved ones after you’ve passed.

As part of your Estate Plan, you should consider drafting instructions for the Personal Representative appointed in your Will.   Things to consider when creating a plan for your Digital Assets.

1. Identify the online accounts you and each companies' Terms-of-Service handles the account when you die.
2. Compile a list of login and passwords for each account that you want your Personal Representative to have access.  Keep this list updated when passwords change and keep it in a secure location.
3. Provide instructions for the Personal Representative for each account.  Do you want the account deleted, downloaded to a hard disk or kept online as a memorial?
4. You may also want to update your Power of Attorney so that they may be able to access your accounts in the event that you become incapacitated.

It is also a good practice to backup photographs that are store online from time to time so that there will be a copy available just in case.

Below are links to the major online companies and how they handle the death of a customer.

What is going to happen to your Facebook account when you die?

Your Google account?

Microsoft account?

Yahoo! account?

Apple iCloud?

Much like our physical assets, our digital assets will have meaning to those we have left behind.  We should all take the time to plan how we want them maintained after we have passed.

2015 Budget Deal putting an end to "File-and-Suspend" Social Security strategy

The new budget deal is bringing an end to the "File-and-Suspend" strategy (or loophole) to maximize Social Security Benefits in retirement.  

"... file-and-suspends are disallowed, beginning 180 days after the bill is signed into law. That opens a window for six more months for people to file and suspend, if they choose that strategy."

End of Year Estate Planning

It’s approaching the end of the year and time to begin reflecting on the changes of the past year.  With the end of 2015 upon us and 2016 about to begin, it’s time to get organized.  Updating (or creating) your estate planning documents is the final step of the process.  First thing you need to do is Get Organized:

1. Talk to your family about your wishes
2. Review beneficiary designations and make sure they are up to date
3. Military and VA documents (get a copy of your DD214)
4. Government benefits
5. Employment documents
6. Pension and savings accounts

Once you have a good idea of what you have and what you want, think about what has changed for your family in the past year:

1. Marriages
2. Divorces
3. New Children/Grand Children/adoption
4. Guardians and Conservators for minor children
5. Children becoming Adults
6. Retirement plans
7. Family members with special needs
8. Major purchases (especially Real Estate)

Review what you have and make sure it’s up to date.

1. Advanced medical directives
2. Powers of attorney
3. Write a will or living trust
4. Make sure your living trust is funded and up to date

There is no reason to wait to the beginning or end of the year to start thinking about Estate Planning but that's when most people reflect on the past year and make the to do list for the next. 

Disinheriting Parents in Oregon

Disinheriting Deadbeat Parents

Typically, when a child dies without a will and does not have a spouse or children, his parents will inherit his property.  The Oregon Probate Code does make certain exceptions.  

Under the law, Parents were disinherited if they deserted their adult child for a period of ten years or neglected to care for their child for 10 years.  Parents of minor children were disinherited if they willfully abandoned their children of the life of the child or for 10 years. 

The New Oregon Probate Code that becomes effective January 1, 2016 adds another way to disinherit parents.  ORS 112.047 is amended to read:

112.047. (1) Property that would pass by intestate succession under ORS 112.045 from the estate of a decedent to a parent of the decedent shall pass and be vested as if the parent had predeceased the decedent if: (a) The parental rights of the parent with respect to the decedent were terminated and the parent-child relationship between the parent and the decedent was not judicially reestablished.

Like most of what the Probate law tries to do, this addition tries to accomplish what most people would have wanted if they had gotten around to writing a will.  Most people would not have wanted parents who abandoned them to inherit their property.  The Oregon legislature as added language so that those who had their parental rights terminated would also not inherit property from their children.

This is the latest post in our series on Oregon Probate Law Modernization.  A list of articles can be found here.

Inheriting Property when there is no Will.

See update at the bottom of the post.

As part of the updated Oregon Probate law, the Oregon legislature updated and clarified the definitions for inheriting property. 

For those who want to get technical, the amended language of the statute is:

ORS 112.065 is amended to read: 112.065. “Representation” means the method of determining the passing of the net intestate estate when the distributees are of  different generations in relation to the decedent. Representation is accomplished as follows: The estate shall be divided into as many shares as there are surviving heirs of the generation closest in relation to the decedent and deceased persons of the same generation who left issue who survive the decedent, each surviving heir of the nearest generation in relation to the decedent receiving one share and the share of each deceased person of the same generation being divided among the issue of the deceased person in the same manner.

The definition of Generation is:

ORS 111.005 (18) “Generation” means a group of human beings, living or deceased, that constitute a single step in the line of descent from an ancestor.

For example:  Grandma dies without a will.  She has three children (Child A, B, and C.)  Child C died but before dying had 3 grandchildren.  The shares of the estate will be divided as follows:  Child A receives 1/3; Child B receives 1/3; and the children of Child C receive 1/3 .  Each grandchild of Child C receives 1/9 each of the total estate.

Updated:  I reread the post after Paul Wick's comment below and realized what I had written wasn't clear.  There is no change to how the mechanics of Oregon inheritance law works, just that the definitions are simplified to more closely align with common usage.

Negative Wills in Oregon

or how to disinherit children

There are many reasons why someone might want disinherit a relative and not for the reasons you are probably thinking.  The most common reason is that one child is much better off financially than other children and doesn’t need the money.  In those cases, assets that have sentimental value to well-off child can be passed to her and the financial assets could be passed to the other children.

The Oregon legislature updated the Probate Law so that individuals can now expressly disinherit family members who would otherwise have inherited your property under the current law.   

ORS 112.015 is amended to read:

(2) A decedent by will may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If that individual or a member of that class survives the decedent, the share of the decedent’s intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed that individual’s or member’s intestate share.

This is the first of our series of discussing the modernization of Oregon Probate law.  To find a table to articles describing all of the updates here.

2016 Oregon Probate Law Modernization

Oregon Probate Modernization

The Oregon legislature passed SB 379-3 this year to update Oregon’s Probate statutes.  This was the outcome of several years of work by the Oregon Law Commission to modernize the Oregon’s probate laws.  Oregon enacted its current law in 1969 and changes in society and technology since then drove the changes.  The new laws go into effect on January 1, 2016 and I want to give you an overview of what is changing.  Over the coming weeks, I will post on each of the following changes:

1. Repealed Sections.   How what has been removed effects probate in Oregon.
2. Negative Wills.  Oregon will now allow you to disinherit someone without specifically giving the property to someone else.
3. Issue to Generation.  Clarifies how shares are created and distributed among different generations.
4. Disinheriting Parents.  Clarifies that parents who abandoned children will not inherit property from them if their children die.
5. Missing Heir Search.  Adds guidance on what is a reasonable level for a diligent search.
6. Same-sex Marriage provisions.  Cleans up and clarifies some language regarding same-sex marriage and domestic partnerships.
7. Who can write a will in Oregon.  Clarifies who can write a will in Oregon.
8. Will execution formalities.  Simplifies some of formalities around executing a will.
9. Incorporation of outside materials.  Allows for the incorporation of outside materials that are referenced in the will.
10. In terrorem clause.  Clarifies how in terrorem clauses effect will contests in Oregon.
11. Revocation of wills by physical Acts.  Changes how wills can be revoked.
12. Revocation by subsequent Marriage.  Adds language preventing wills from being revoked if domestic partners subsequently marry.
13. Later acquired property.  Adds language clarifying the disposition of property acquired after the execution of a will.
14. Pretermitted child.  Oregon adds language on how to handle the inheritance of posthumously conceived children.
15. Slayer/Abuser inheritance.  Changes how jointly held property by decedent and the person that abused or killed them is distributed.
16. Deduction of Lifetime Gifts.  Deals with how lifetime gifts may reduce inheritance.
17. Proving a will.  Changes how wills can be proven in Oregon and focuses on the intent of the decedent.
18. Disposition of Personal affects.  Allows for the reference to a list of personal items and how to distribute them.

I will add links to this list as I add posts.

The Probate Process in Oregon

Update: We've added some diagrams to make it easier to understand how property is inherited when there is no will in Oregon.

This is a general overview of the probate process in Oregon.  Your situation will undoubtedly vary but this will give you a good overview of what to expect.    

Although the below list seems simple, probate must take at least 5 months but is more typically a 9 to 12 month process in Oregon.  Without litigation or a will contest, an estate in Oregon can be administered in 9 steps.

1. Appointment of the Personal Representative.  The Executor of the will or any interested party may petition for the appointment of a Personal Representative and the probate of the will. 

2. Proving the Will.  This is the process of convincing the court that will is authentic.  ORS 113.055

3. Notification of Heirs and known parties.  As part of the process, the PR must file a list of names of potential heirs and other interested parties and mail notice to them.  The PR has 30 days after appointment to file proof with the court that these parties received notice or were mailed. ORS 113.145 and ORS 113.035 (8) and (9)

4. Inventory and Assessment of the Estate.  Within 60 days of appointment, the PR must file with the court an inventory and estimates of cash value for the property of the estate.  ORS 113.165

5. Notification of Unknown interested parties.  Legal Notice must be published in a local newspaper for 3 consecutive weeks.  ORS 113.155(1)

6. Filing of Claims against the Estate.  Creditors have 30 days after notice is mailed to them to file a claim against the estate.  Otherwise, other claims against the estate must be filed 4 months after the publication in the newspaper.  Those claims which were not filed on time could potentially be barred.  ORS 115

7. Filing of Tax Returns and payment of any taxes. 

8. File for approval of final accounts.  The PR must maintain and provide an accounting to the court before the distribution of assets of the estate. ORS 116.083(3)

9. Court Approval.  Assets are distributed to the heirs and interested parties.  ORS 116.113

Although the steps above might seem simple, probate can be a confusing and time sensitive process.  If you are probating an estate, I suggest that you contact us.  

2015 Oregon Estate Tax Rates

Portland Probate Attorney

The State of Oregon levies a tax on taxable estates that have a value of more than $1 Million.  Estates of less than $1 Million are exempt from the Oregon Estate Tax.  The Oregon rates can be determined on Part 6 of  Form OR706. This is a separate from the Federal Estate Tax.  In 2015, estates smaller than $5,430,000  are exempt from the Federal Estate tax.  The top Federal Estate tax rate is 40%.  More information on determining the Federal Estate Tax rates can be found at IRS.gov.

The 2015 Oregon Estate Tax Rates are:

Taxable Estate Equal to or more than:	Taxable Estate less than:	Tax rate on Taxable Estate amount more than column 1
$1,000,000	$1,500,000	$0 + 10%
1,500,000	2,500,000	50,000 + 10.25%
2,500,000	3,500,000	152,500 + 10.5%
3,500,000	4,500,000	267,500 + 11%
4,500,000	5,500,000	367,500 + 11.5%
5,500,000	6,500,000	482,500 + 12%
6,500,000	7,500,000	602,500 + 13%
7,500,000	8,500,000	732,500 + 14%
8,500,000	9,500,000	872,500 + 15%
9,500,000		1,022,500 + 16%