What is Estate Planning?
Estate Planning allows individuals and families to feel secure in their financial future and to prevent the government from taking what you have worked so hard to earn. Let our attorneys help you provide for your family's security. At Jarvis, Bridge, Halttunen, & Weyer, LLC, we can help you create the estate planning documents you need to protect your intent and insure security for people you love. Our attorneys spend time with you personally so they can understand your estate planning goals and craft documents in line with your wishes.
Your estate plan in Oregon can include several documents, many of which may require beneficiaries, like any trusts you may have set up or intend to set up and non-probate assets like 401(k), IRA accounts, life insurance policies, and pensions. Assets from these accounts will go to the beneficiaries upon your death. It is important, therefore, to make sure you choose your beneficiaries carefully.
You may think it's a simple thing to do: choose those closest to you whom you want to benefit from your estate and your life's work. Sometimes, however, it is not as easy as that. There are many different factors to consider and different types of beneficiaries to identify. At Jarvis Bridge Halttunen & Weyer, our estate planning attorney based in Dallas and Albany, Oregon handles all types of estate plans and can explain the importance of beneficiary designations so that you are confident in your choices. Contact us today in Dallas at 503-623-6676 or Albany at 541-926-5504 to schedule a consultation and to make sure your estate plan includes the beneficiaries you want to protect if anything should happen to you.
Most people think of wills when they think about estate planning. A will is a simple concept that allows an individual to put their wishes to paper. More specifically, a will is a document that an individual executes where they determine who they want to handle their property when they pass away and how they want that property to be distributed. In Oregon, wills should have two disinterested individuals, or "witnesses," witness the execution of the document. This process ensures that the individual executing the will is of sound mind and not under any influence from anyone else. Jarvis, Bridge, Halttunen, & Weyer, LLC is equipped to handle any requirement necessary so that the will execution process is as easy and stress-free as possible.
Trusts are another estate planning tool used to ensure that an individual's property is distributed the way they would like. A common misconception about Trusts is that you have to be “rich” or extremely wealthy to have one; that is not true at all. Trusts are an excellent tool that anyone can implement to dispose of their property in a manner that is more cost effective and less burdensome on surviving family members. Like a Will, Trusts are created by executing a document that outlines all of an individual's wishes and desires regarding the distribution of their property. However, unlike Wills, a standard Trust does not wait until the individual dies before it goes into effect; it goes into effect immediately once it is properly funded.
A huge positive for most people is that Trusts avoid probate. Going through probate can be a very costly and time-consuming process. When an individual executes a Trust, the property held in the Trust avoids probate. Therefore, it can then be passed to the designated beneficiaries without much hassle.
Contact the attorneys at Jarvis, Bridge, Halttunen, & Weyer, LLC to find out which is better for your situation.
A beneficiary designation involves naming the person who will directly receive an asset in the event of the death of its owner. Assets that allow for beneficiary designations include insurance policies, retirement accounts such as 401(k) plans, annuities, and other financial accounts. Trusts also require beneficiary designations. You can also choose beneficiaries in your Last Will and Testament.
To note, beneficiaries are slightly different from heirs. Beneficiaries are chosen while heirs (though they can be chosen) are those who inherit the property of a person who dies intestate, or without a will.
The designation process ensures the named beneficiary directly receives the asset, rather than it passing to the estate and going through probate, which can cost significant time and money.
Common Types of Beneficiaries in Oregon
Common categories of beneficiaries include eligible designated beneficiaries, designated beneficiaries, not designated beneficiaries, and contingent beneficiaries. Different eligibility rules may apply to different types of beneficiaries.
Eligible Designated Beneficiaries
Eligible designated beneficiaries include:
- Children under 18 years of age
- Individuals with a disability
- Chronically ill individuals
- Individuals within 10 years of age of the deceased
Eligible designated beneficiaries have additional rights to designated beneficiaries.
A designated beneficiary is any living person who does not fall into the above categories. This may include a friend or extended family members, such as elderly parents or a sibling.
Not Designated Beneficiaries
A not designated beneficiary is a non-living beneficiary, such as a charity, trust, or estate.
A contingent beneficiary is a “backup” beneficiary who receives the asset in the event the primary beneficiary is unable to.
What Documents in an Estate Plan Need Beneficiaries Listed?
Most non-probate assets and documents require at least one beneficiary to be listed. This includes:
- 401(k) accounts
- Life insurance policies
- Revocable trusts
- Irrevocable trusts
Typically, non-probate assets are not placed in a Will because a Will goes through probate. Beneficiaries will override anything else, too, like other heirs in a Will.
Factors to Consider When Choosing a Beneficiary in Oregon
When choosing a beneficiary, here are some points to keep in mind.
A beneficiary typically must be over 18 years of age. If you want to gift an asset to a minor upon your death, you may need to set up a trust and designate the trust as the beneficiary.
Your financial dependents are a good starting point when considering who to designate as a beneficiary. This may include your spouse, children, or other extended family members.
A beneficiary generally must have an insurable interest in the insured person. This means there must be a legitimate financial interest between the two, such as in the case of dependent children or a spouse.
Policy Specific Rules
Some life insurance policies or pension funds set rules for designating a beneficiary. Make sure you are aware of these before making your decision and seek legal and financial advice about your options.
Revocability vs. Irrevocability
Depending on the document and the terms of the contract, some beneficiaries may be irrevocable. This means you cannot revoke their rights unless they agree to it. At first glance, you may wonder why you would want to designate beneficiaries as irrevocable, but there are benefits. An estate planning attorney can illuminate the reasons and situations where irrevocable beneficiary designations may be most appropriate (or not).
Challenges that can Arise in Oregon with Beneficiary Designations
The best way to avoid most potential issues when it comes to beneficiary designation is to speak with a lawyer to ensure your designation is valid.
Here are some common challenges that may arise when designating a beneficiary.
Fixed Dollar Amounts
When designating a beneficiary, it is possible to set either a fixed dollar amount or percentage they will receive. However, a fixed dollar amount can cause issues if the value of the asset is insufficient (or if it increases in value, leaving a portion of the asset to probate). To avoid this, assign a percentage value instead.
No Contingent Beneficiary
Failing to name a contingent beneficiary may result in your asset going through probate. To avoid this, identify a contingent beneficiary who will receive the asset in the event the primary beneficiary cannot accept it––for example, where they have passed away.
Naming the Wrong Beneficiary
The identity of a named beneficiary may not be clear––for example, if several people in the family share the same or similar name. Names may also change as a result of marriage or divorce. Always confirm the correct legal name of your intended designated beneficiary and ensure you update the document to reflect any name changes.
“All My Children”
Designating “all my children” can create challenges. For example, if a child beneficiary dies before their parent, it may be unclear as to how their portion should be distributed. It may be divided between the surviving children, or instead, pass to their offspring. To avoid this issue, be specific when naming a beneficiary.
Contact an Estate Planning Lawyer in Dallas or Albany Today
You have worked hard and have planned well and want to make sure your loved ones are secure in the event something happens to you. At Jarvis Bridge Halttunen & Weyer, our estate planning attorney in Oregon helps families create comprehensive, inclusive estate plans that address all possible situations and challenges. We will make every effort to help you and your beneficiaries get what you intend to achieve through your estate planning. Contact us either by filling out the online form or calling us today in Dallas at 503-623-6676 or Albany at 541-926-5504