FAQ’s

  • Power of Attorney is one way of receiving legal authority to make decisions for another person. There are several different types of Powers of Attorney, including Limited (Special), General, and those dealing with healthcare issues. A General Power of Attorney is a very broad authorization to some other person to do any act the Signer or Principal of the power could do, usually having to do with financial affairs.

    A Limited or Special Power of Attorney is a restricted Power of Attorney which allows another to perform a specific act, or control over specific aspects, but not over others.

    Powers of Attorney are extremely useful and powerful legal documents that can be utilized to assist a person who has become unable to manage his or her own financial affairs. It is important to have discussions about these issues before a document like the Power of Attorney is needed.

  • On November 3, 1993, Oregon adopted the Advanced Directive to become the standard by which Healthcare Proxies are administered. We suggest you execute an Oregon, Statutory Form Advanced Directive if your current healthcare directive predates 1993 or if you have moved from another state and do not have an Oregon Advance Directive form.

    The Oregon Advanced Directive is a simple way to put your wishes about healthcare decisions in writing. The Advanced Directive helps guide families and medical personnel in deciding the course of medical treatment to delay death. It usually spells out how aggressively medical treatment should be administered. Since the Advanced Directive is drafted while the person is capable and competent, it remains a primary roadmap for a person’s wishes regarding the extent and limits of treatment, especially if they are no longer able to communicate. The Advanced Directive also appoints a healthcare representative to direct healthcare wishes if the Principal is no longer able to make their own wishes known.

  • Wills enable an individual to decide who gets certain personal possessions and any real property they may own when they die. Dying without a Will, or intestate, can cause legal problems and potential conflicts for family members. Without a Will, assets could be distributed according to the applicable state law. Trusts are also sometimes created for estate planning. One primary advantage to a Trust is that it may avoid Probate (a court proceeding).

    There are several types of Trusts available, including a Living Trust. A Living Trust can be revocable or irrevocable. Trusts can be an important tool, especially in the case of a dependent or disabled child or adult.

  • DEFINITIONS

    • Conservator: A person appointed to be responsible for the financial affairs of a PP. In order for the court to appoint a Conservator, the PP must be “financially incapable”.
    • Fiduciary: A person appointed to assume duties for a PP under Chapter 125. Generally, this includes a Guardian or Conservator or Temporary Guardian or Conservator.
    • Financially Incapable: A condition in which a person is unable to manage his or her financial resources for various reasons including mental and physical illness or disability, chronic drug or alcohol use, confinement, disappearance, and others. “Manage financial resources” means those actions needed to hold, administer, and dispose of all property, benefits and income.
    • Guardian: A person appointed to be responsible for the “person” of a PP. In order for the court to appoint a Guardian, the PP must be “incapacitated” and in need of a Guardian.
    • Protective Order: A court order to protect the person or the estate of a Respondent or Protected Person.
    • Protected Person (“PP”): A person for whom a Protective Order has been issued.
    • Protective Proceeding: Any proceeding governed by ORS Chapter 125. Generally this includes Guardianships, Conservatorships, Temporary Guardianships and Conservatorships, but can also include other actions, including direct court action in the person’s affairs.
    • Respondent: A person for whom a Protective Order is sought.

    DUTIES OF A CONSERVATOR

    A Conservator undertakes serious duties and responsibilities that are required by the laws of Oregon. Chapter 125 of the Oregon Revised Statutes governs Conservatorships and outlines those responsibilities.
    A Conservator must:

    • Promptly report to the court any change of the Conservator’s name, residence, or mailing address.
    • Take immediate control of and safeguard the Protective Person’s assets and income. The property of the estate is the Conservator’s responsibility.
    • Keep all money, bank accounts, and other property of the estate separate from the Conservator’s own and all other person’s property.
    • File with the court an Inventory of all of the property of the Protected Person that the Conservator knows about with estimates of the value of the items listed as of the date the Conservator,s appointed by the court. The Inventory must be filed within 90 days after the date of appointment, unless the court grants an extension of time.
    • If the estate includes real property, record a certified copy of the Inventory or an abstract in the deed records of each county in which the estate owns property. File with the court proof of this recording.
    • File an account with the court each year. The accounting must be filed within 60 days of the anniversary of appointment as Conservator, unless the court grants an extension of time. For us to assist a Conservator with an accounting we will need an accounting information form completed. A copy of this form is in our Forms section of this website. The accounting must include:

    The time period of the accounting of value as of the date of appointment as Conservator;

    • For the first accounting, the total value of the property of the Protected Person as shown on the Inventory;
    • For the second or later accountings, the ending balance of the prior accounting through the current balance as of the ending date of the accounting period;
    • A list of all money and property received during the accounting period;
    • A list of all disbursements made during the accounting period, including date, check number, payee, amount, and purpose; and
    • The amount of bond posted by the Conservator during the accounting period.

    With the accounting the Conservator must send vouchers or canceled checks unless the court waives this requirement.

    • Send copies of each accounting to the following people:
    • The Protected Person (if age 14 or older), unless service would not help the Protected Person understand the Proceedings; and
    • Any person who has filed with the court a request for notice of the Proceedings.
    • Prepare and file all federal and state income tax returns when due and pay the taxes due.
    • File a final accounting when the Conservatorship ends because the Protected Person reaches age 18, dies, or the Conservatorship is no longer necessary.
    • Keep any bond required by the court in effect during the entire term of the Conservatorship, unless the court orders otherwise.
    • Get court approval before paying fees to the Conservator, the Protected Person’s Guardian, or to the attorney for the Guardian or Conservator.
    • Get court approval before paying for room and board to the Protected Person’s Guardian or the Guardian’s family members.
    • Get court approval before paying the fees of a court visitor or a doctor if the fees are for services done because of an objection to a petition or motion to the court.
    • Get court approval before selling an adult Protected Person’s primary residence.
    • Get court approval before making certain gifts.

    LIABILITY OF CONSERVATOR TO PROTECTED PERSON

    Standard of care:

    • The Conservator is held to the standard of care presented under Oregon’s prudent investor rule, ORS 128.196.
    • The court may apply a higher standard of care to a Conservator who claims to have greater than ordinary skill or expertise. ORS 125.225(2).

    The Conservator may be personally liable for the following:

    • Sums not properly accounted for.

    Attorney fees incurred by a Respondent or PP because of the Conservator’s failure to perform a fiduciary duty or other duty imposed under the law. ORS 125.025(3)(e).

    • Funds lost because of failing to follow the statutory investment standard.
    • Issues of liability of the Conservator to the estate can be brought before the court by an objection to an accounting or by separate action for surcharge, indemnification, and so on. ORS 125.485(4). The court may also act on its own motion. ORS 125.025.

    LIABILITY OF CONSERVATOR TO THIRD PARTIES:

    In general the Conservator is not personally liable on contracts entered into as Conservator. See ORS 125.485 and 125.490 for further explanation.

    The Conservator is personally liable for obligation arising from ownership or control of the estate property and torts committed during administration only if the Conservator is personally at fault. ORS 125.485(2).

  • DEFINITIONS

    • Conservator: A person appointed to be responsible for the estate of a PP.
    • Fiduciary: A person appointed to assume duties for a PP under Chapter 125. Generally, this includes a Guardian or Conservator or Temporary Guardian or Conservator.
    • Guardian: A person appointed to be responsible for the “person” of a PP. For the court to appoint a Guardian, the person must be “incapacitated” and in need of a Guardian.
    • Incapacitated: A condition in which a person is impaired to the extent of being unable to meet the essential requirements for the person’s physical health or safety. These “essential requirements”include providing healthcare, food, shelter, clothing, personal hygiene, and other care without which serious physical injury or illness is likely to occur. ORS 125.005(5).
    • Protective Order: A court order to protect the person or the assets or of a Respondent or Protected Person.
    • Protected Person (“PP”): A person for whom a Protective Order has been issued.
    • Protective Proceeding: Any Proceeding governed by ORS Chapter 125. Generally this includes Guardianships, Conservatorships, but can also include other actions, including direct court action in the person’s affairs.
    • Respondent: A person for whom a Protective Order is sought.

    • Visitor: A person appointed by the court to interview and evaluate a Respondent or PP the law requires the court to appoint a visitor to make a report before a Guardian is appointed for an adult Respondent. The court may appoint visitors other times also.

    DUTIES OF A GUARDIAN

    A Guardian undertakes serious duties and responsibilities that are required by the laws of Oregon. Chapter 125 of the Oregon Revised Statutes governs Guardianships and outlines those responsibilities.

    A Guardian must:

    • Promptly report to the court any change the Guardian’s name, residence, or mailing address.
    • Follow the laws about being a Guardian (see Chapter 125).
    • File a Guardian’s report every year (explained below).
    • Get court approval before using the Protected Person’s funds for room and board that the Guardian or the Guardian’s spouse, parent, or child have furnished to the Protected Person.
    • File a statement with the court and notify the Protected Person before placing an adult Protected Person in a residential facility (explained below).
    • Tell the court if the Guardianship is no longer needed because the Protected Person has died or for other reasons.

    GUARDIAN’S REPORT

    A blank Guardian’s report is available in our forms section of this web site. The Guardian’s report must be signed before a notary public.
    The report must be filed within 60 days after the anniversary of the Guardian’s appointment each year, unless the court grants an extension of time.
    The law requires the Guardian to send copies of the report to certain people. These people are:

    • The Protected Person;
    • The Protected Person’s Conservator, if any; and
    • Any person who has filed with the court a request for notice of the Proceedings.

    Each year, the Guardian should fill out and send to the court a proof of mailing to show that the Guardian sent the copies of the report as required by law.

    PLACEMENT IN A RESIDENTIAL FACILITY

    The Guardian must file a statement with the court before placing an adult Protected Person in a residential facility. (A “residential facility” includes a foster care home, a nursing home, a mental health treatment facility, etc…).

    The statement tells the court where the Guardian intends to place the Protected Person and why.

    The Guardian must also give notice of the placement to the Protected Person and others as required by statute before placing the Protected Person. The Guardian must give the court proof that this notice was made.

  • Special Needs Trust or Supplemental Needs Trusts (SNT) are Trusts designed to preserve funds for the beneficiary of Medicaid or other needs based benefits. The purpose of an SNT is to restrict the funds of the beneficiary so that they are not treated as available resources for purposes of public benefits. The distributions from SNT’s are prohibited for any use that would reduce the amount of public benefits which the beneficiary would other wise be entitled.

    There are essentially two different types of SNT’s, payback and non payback Trusts. These refer to whether or not the first remainder beneficiary of the Trust is the state of Oregon or other individuals named by the person who establishes the Trust.

    As a general rule, payments from the SNT can be for anything but food, shelter and basic medical health requirements. The purpose of the SNT is to enhance the quality of life of the beneficiary without disqualifying him/her from public benefits. The information we will require in order to begin working on Special Needs Trust is available in our FORMS section of this website.

  • Probate is the process of using the Court to settle and distribute the assets in a persons estate. It is used only if there are assets not controlled by some other probate alternatives.

    Probate in Oregon is different from many other states, in that it generally only takes 5-8 months if there are no disputes or complications, and also due to the fact that legal fees are charged on an hourly basis, not a percentage of the estate. These differences make it a much less onerous process than in other states. It is also a common misconception that probate freezes everything, when in fact the probate period is when nearly everything gets done. The Personal Representative (executor) gathers all assets, and bills. Any items that need to be sold, including possibly the residence, are sold. All the bills are paid, necessary tax returns filed, and, at the end of the process (after a final account has been mailed to all interested persons and approved by the Court) distribution is made. It is often possible to make a partial distribution early in the process if there are sufficient assets to insure payment of all bills and costs of administration.

    Are there any circumstances where probate is an advantage? We will often advise the filing of a probate petition in situations where there may be some ongoing potential of liability. A person in a profession can have potential liability for their actions which will exist many years after providing the service. Physicians, lawyers, real estate professionals, contractors, and many others can fall in this category. If their estate is not probated this potential liability is limited only by the applicable statute of limitations, which can be many years after the death. If, however, their estate is probated, any claims must be presented during the probate, or they will be lost.

    We also find probate to be an advantage if there is a likelihood of conflict or litigation between surviving family members. With the probate process all contestants must take their disputes to the same place at the same time, preventing multiple lawsuits and traveling to different courts. Also, with one court hearing all the disputes there is a much better chance that a clear picture will appear, rather than several different presentations which are biased one way or another. When all disputes are resolved in one place there is usually a much lower cost for legal fees than with multiple suits, and, since there is a lot of prior case law in the probate courts, many of the issues will have already been resolved in other cases, which can also lower costs and allows a better evaluation of success or failure based upon the particular facts at hand.

  • We are often asked if there is a way to avoid probate, or if a client really needs a trust. The approach we tend to use is to determine what the client actually wants to accomplish and then recommend solutions that reach their specific goals with a minimum of expense and hassle.

    In many cases our client may have an estate that is composed only of bank, credit union, mutual fund, and brokerage accounts. In this situation we often recommend an ideal solution of a Pay on Death or Transfer on Death designation.

    Virtually all financial institutions have a form of non-probate transfer to be used in the event of the death of the account owner. It is variously referred to as ‘Pay on Death’ (banks), ‘Beneficial Designation’ (credit unions), or ‘Transfer on Death’ (mutual funds and brokerages).

    Each of these designations functions in the same manner. The owner of the account can list the person(s) to whom they want the proceeds in that particular account distributed upon their death. When death occurs, the designated persons need only to present a death certificate and identification and their share of the account will either be paid to them immediately, or, in some cases, their share will be will be placed (transferred) into their own account at the financial
    institution.

    This process has many advantages over other methods of passing property upon death:

    1. The client maintains absolute control over the asset until their death. They can change the pay on death designation any time they wish, depending upon what occurs in their beneficiaries lives.
    2. The client’s funds are not subject to the debts or misfortunes of their beneficiary, unlike the effect of making that person a joint owner of the account.
    3. The client can close or change the account without the signature or consent of any other person.
    4. The funds are not subject to any probate or trust administration process, minimizing cost and delay.
    5. The client can adjust between different accounts and different beneficiaries to accomplish mixed goals in their estate distribution.
    6. There is no legal expense or filing fee required.
  • Unfortunately, as our population has aged and our life expectancies have increased, so has the number of unscrupulous people willing to exploit seniors financially. The method for exploiting seniors are countless and financial abuse is all too prevalent.

    As with any crime, the best way to protect yourself from potential financial abuse is to be prepared. Although it is not necessary to become paranoid and untrusting, vigilance and education are important.

    One of the ways to avoid becoming a victim of financial exploitation is to maintain a close relationship with a trusted relative, long-time friend or trusted financial adviser. The Power of Attorney can be a very useful tool in protecting seniors from financial abuse. If used improperly a Power of Attorney can also be a tool for a person to exploit an elderly individual. It is important that the person appointed in the Power of Attorney be absolutely trustworthy.

    If an offer sounds too good to be true, it probably is a scam. In addition to phone solicitations for free trips and lotteries, some financial exploitation becomes very personal. Some of the worst financial abuse comes from relatives or individuals who befriend seniors with the intent to take money, jewelry, cars and even real property from them.

    Following are a list of some of the most common forms of financial abuse of elders:

    Credit Card Fraud – Credit Card Fraud costs you time, inconvenience and money. Never give credit card information to anyone who solicits it over the phone and/or internet.

    Door-to-Door Sales – Seemingly friendly salespersons may actually be con artists. It is important to ask questions about their business and if you have concerns, do not buy anything “on-the-spot.” You can always check with the city business office to find out if they have a business license, or if there have been any complaints.

    Identity Theft – When someone uses your personal financial information to apply for loans, credit cards or leases, they are perpetrating identity theft. Be sure to protect your Social Security number, and all bank account numbers.

    Medicaid Drug Discount Card Scams – Many con artists are already selling phony discount cards. Check into them very carefully before purchasing.

    Nigerian Money Offer Scams – Nigerian Money Offer Scams are among the most common types of fraud arriving by email and telephone. You should be wary of any offers of money over the telephone or by mail or email. They may come from any country, but originally started in Nigeria.

    Sweepstakes Promotions – Sweepstakes Promotions you receive in the mail are seldom legitimate. Be particularly suspicious if they want money, even for “Postage and Handling.”

    Travel Fraud – Avoid offers for free or very inexpensive trips. These are usually scams.

    Work-at-Home Scams – Do not fall for Work-at-Home schemes. They promise large financial rewards, but you will not get rich falling for them. They usually require you to invest money for merchandise, etc., which is worthless.

    If you believe you or someone you know may be the victim of financial abuse, you should contact your local Adult Protective Services staff in Jackson County at (541) 776-6222.

  • Many people mistakenly believe that only the wealthy need to worry about estate planing. While most of us do not need to plan for estate taxes, parents of young children should at least have wills prepared to provide for their children in the event something were to happen to both of them.

    Who Will Take Care of Your Children?

    Parents of minor children should have wills prepared to say who they wish to appoint as guardian(s) of their children if something should happen to both parents. The guardians will assume the responsibility of raising the children and helping meet their needs. Guardians are not automatically financially responsible for children however. That should be addressed through children’s trusts, discussed below.

    Living Trust or Will?

    Most married couples own their property (real and personal) in some form of survivorship. In other words, if one spouse dies the property automatically passes to the surviving spouse without the necessity of probate. Probate is a legal procedure in which a court settles claims and determines who gets non-survivorship property that was owned by the person who died.

    Some attorneys recommend establishing a Revocable Living Trust in order to avoid probate. Trusts are advantageous in some situations but often-times a will can suffice. Your attorney should be able to discuss with you the advantages and disadvantages of establishing a Trust instead of a will.

    Minor problems

    If you have minor children at home and you intend for those children to be the ultimate recipients of your estate, a will to provide for such children is appropriate. Preparing wills becomes even more important if your family consists of step-children or disabled children. In such situations if parents fail to have wills prepared their property may be divided in a manner contrary to their wishes, and in some cases the distribution may be detrimental to the well-being of the disabled children.

    Although minor children can own property, they cannot sell, exchange, mortgage, lease, or otherwise dispose of assets until they reach the age of majority – 18 years of age in Oregon. If parents of minor children die without a will in place (intestate), their property passes to the children by law. The laws of intestacy were essentially established to distribute a person’s property in a manner that seems the most fair. This would mean that if a couple had three children together their property would be divided in thirds and each child would receive an equal share, regardless of differing levels of need.

    Generally, some sort of protective arrangement must be established to preserve the property or money until the children attain the age of eighteen. This would ordinarily be a conservatorship or at the very least a custodial arrangement. With either of these options, once the minor reaches age eighteen, he or she will receive his or her entire share. Without a will there is no direction as to who will serve as the conservator or custodian. Furthermore, many eighteen-year-olds are not fiscally responsible enough to manage large sums of money or property.

    Trusts for Children

    A will can establish testamentary trusts to provide for children under a designated age. If you have minor children your wills should have a children’s trust that leaves the children’s shares of your estate to a responsible adult, to be held in trust until the children reach a certain age. This allows the flexibility to provide for assistance in your childrens’ education or purchasing a home and not distributing everything to the children when they turn eighteen. A typical children’s trust will distribute the assets to the children as they turn twenty-five or some other age that may be more appropriate for them to receive a large sum of money. The children’s trust may be funded with the parents’ assets as well as the proceeds of any life-insurance the parents may have had.

    Special Needs Trusts

    There are special considerations involved when parents have children that are disabled and recipients of public assistance. To qualify for public benefit programs based on financial need, such as Medicaid and Supplemental Security Income (SSI), a person cannot have resources or income in excess of the program’s standards. If the person receives resources or income in excess of the allowed amounts, he or she will not be eligible for benefits until the excess funds have been spent. If you have a child with special needs, you should consult your attorney about establishing a testamentary supplemental needs trust to provide for the child without disqualifying him or her from any needs-based programs.

  • I. HEALTH CARE DECISIONS
    (When you cannot speak for yourself)

    As long as you are awake and able to decide, you have the right to control your own health care. If you are able to make decisions, your doctor will discuss treatment plans with you and you choose what plans, if any, to implement.

    If, for any reason, you become unable to express your wishes for healthcare, the Advance Healthcare Directive allows your physician and family members to know your healthcare decisions.

    If recovery from a severe medical problem is not likely, some patients do not want the burdens of continued treatment. With the Advance Directive, you can choose to accept or refuse life-sustaining treatments. As an example, some people do not want medical treatment if they become very near to death. Others may want no treatment if they can no longer recognize friends or family, because of severe mental deterioration. With the Advance Directive, you have the ability to choose to maximize the length of your life or request that treatment focus on your comfort.

    Even if you choose to discontinue life support or tube feeding, this does not mean you will be abandoned. Everyone has a right to care that ensures comfort, cleanliness and dignity. As an example, you will get medications to reduce pain and you will be offered food and fluids by mouth, kept clean and warm and your privacy will be respected.

    You do not have to fill out an Advance Directive. If you do fill one out, your healthcare decisions will be respected.

    In the Advance Directive, you will appoint a healthcare representative to act for you. You should select the person you want and trust to discuss your healthcare with your physician or physicians. Although it is not required, you should also name an alternate representative, in case your first choice cannot or will not act for you.

    The healthcare representative should read the Advance Directive carefully and discuss your wishes with you. Your healthcare representative will be standing in your place, discussing your healthcare plan with the doctors. It is important the he or she knows your desires.

    If you are comfortable that your healthcare representative will make decisions in your best interest, then you do not need to complete Part C of the Advance Directive. Part C is the healthcare instructions. The healthcare instructions deal with specific situations regarding end-of-life decisions. Those include:
    whether or not you desire tube feeding in situations such as being close to death, or unconscious with little likelihood of becoming conscious again or being in the advanced stage of a progressive illness.

    Frequently people who have strong feelings about this choose the catchall which is

    I do not want my life to be prolonged by life support. I also do not want tube feeding as life support. I want my doctors to allow me to die naturally. If my doctor and another knowledgeable doctor confirm I am in any of the medical conditions listed described above.

    Life support refers to any medical means for maintaining life, including procedures, devices and medications. If you refuse life support, you will still get routine measures to keep you clean and comfortable.

    One sort of life support is food and water supplied artificially by a medical device known as tube feeding.

    The Advance Healthcare Directive also allows you to insert special instructions or limitations regarding your health plan.

    The Advance Directive must be signed in front of two adults, as witnesses. In addition, your healthcare representative and alternate healthcare representative must read your Advance Directive and sign and date at the end of the Advance Directive.

    Once the Advance Directive is completely signed, you should give copies to your physician and the hospital you would most likely go to, to be kept in your patient file. In addition, your healthcare representative should have a copy.

    Your Advance Directive may be revoked at any time. If you revoke it or sign a new one, send a copy of the revocation or the new one to the same people that have the original Advance Directive.

    You can obtain Advance Directives at most healthcare facilities. Most attorneys will also offer them for free if you want to fill them out or for a reasonable fee.

    II. HEALTH CARE DECISIONS
    (End of Life Treatment)

    The Physician Orders for Life-Sustaining Treatment or what are called POLST forms represent a person’s wishes to a physician or nurse practitioner for specific written medical orders.
    As you can see they are bright pink.

    The POLST form asks for information about your preferences for resuscitation, medical conditions, the use of antibiotics, as well as artificially-administered fluids and nutrition.

    The POLST form helps you and your doctor discuss and develop plans to reflect your wishes. It also assists your physician and emergency personnel in honoring your wishes for life-sustaining treatment. The POLST form directs appropriate treatment by emergency medical services personnel.

    The POLST must be signed by your physician or nurse practitioner in order for it to be a medical order that is understood and followed by other healthcare professionals.

    The POLST and the Advance Healthcare Directive work together.

    For instance, the healthcare representative appointed by the Advance Directive can complete the POLST form.

    You should keep your POLST form in a prominent location such as on your refrigerator. If you live at a long-term-care facility your POLST will be kept in your medical chart along with other medical orders.

    III. COMPETENCY

    A person is considered competent if the person possesses the requisite physical, mental, natural or legal qualifications to make decisions for themselves. To be competent, one must be legally fit.

    It is very seldom that a person is competent one day and not competent the next. Competency is a sliding scale.

    Even a person with moderate- to severe- dementia can have what are termed lucid intervals, that is to say they have moments of lucidity when they can make decisions for themselves and fully appreciate the consequences of those decisions.

    As a practical matter, a person may not be legally competent, however, they can still manage their day-to-day activities.

    As I mentioned, the legal definition of competency is having sufficient capacity, ability or authority, possessing the requisite physical, mental, natural or legal qualifications. For instance, to be competent to sign a will, a person must understand:
    The nature of the act of signing the will;

    1. The nature and extent of their property;
    2. Know, without prompting, the claims, if any, of those who are, should or might be the natural objects of their bounty;
    3. Be cognizant of the scope and reach of the provisions of the will.

    If a person is signing a will or trust, it is up the witnesses of the will or notary public on the trust to determine if the person has the requisite competency, based on the four factors I just mentioned.

    If a person is not competent to manage their own affairs or make decisions in their own best interest, someone else must determine whether they are legally incompetent.

    Often times, a trust will allow the successor trustee to act if the initial trustee is incompetent, based on a written notice from the trustee’s physician.

    It may also be necessary to petition a judge to make a Determination of Competency.

    IV. SOLUTIONS TO LACK OF COMPETENCY

    There are ways to plan for, or at least be prepared for a person’s lack of competency.

    The first is a Power of Attorney. With a Power of Attorney, the principal appoints an agent or Attorney-in-Fact to take care of the necessary financial, banking, tax, legal and other matters in the event that the principal is unable to do so.

    A Power of Attorney can be made very broad or tailored to specific areas of need. The Power of Attorney is an extremely important document that entrusts the agent with authority to take care of the principal’s affairs.

    The Power of Attorney must be notarized. Since a Notary Public must make a Determination of Competency before he or she will notarize a document, a Power of Attorney is not available if a person is already incompetent.

    Your attorney can prepare a Power of Attorney form for you. Again, if you want the Power of Attorney to specifically spell out what the agent can and cannot do, you should discuss this with your lawyer. You can also obtain form Powers’ of Attorney at some stationary stores or at banks.

    Banks and Brokerage Firms oftentimes have their own financial Power of Attorney forms that are specific to their company. It is important that when you sign a Power of Attorney, you know exactly what you are and are not delegating to the agent or Attorney-in-Fact. Also, you should understand that unless you somehow provide otherwise, the Power of Attorney becomes effective immediately upon your signing it.

    Most Powers of Attorney are designated as a Durable Power of Attorney, under Oregon law, that means it will remain effective even though the principal may become incapacitated or incompetent.

    Another way to plan for the possible loss of competency is the create a trust. As with the Power of Attorney, a trust agreement can define exactly what the agent, in this case, a trustee or successor trustee can and cannot do with the trust assets.

    Also, as with the Power of Attorney, a trust is not available if the settlor or trustor, the person establishing the trust is not competent.

    Again, you should consult with an attorney to discuss whether or not a trust is necessary (which I will discuss later) and exactly what the purpose of the trust is. As with the Power of Attorney, oftentimes, banks and financial planners will have their own form of trust. A word of warning to filling out a financial trust is that it is seldom tailored to meet your specific needs.

    A trust must be properly funded in order to work correctly. Simply setting up a trust is not often enough to prepare for incompetency. In order for the trustee to have authority to transfer assets, all titled property such as vehicles and real property must be transferred to the trust. In addition, any financial accounts at banks or brokerage funds must also be transferred into the trust and those institutions will want copies of the trust for their files.

    Trust agreements also are effective across state lines. This is particularly useful for people who own real property in different states.

    While a Power of Attorney is generally a relatively simple and inexpensive document, trusts can be extremely complex and are usually expensive, typically from $750.00 to thousands of dollars to set one up. Trusts can be very useful to deal with competency issues and distribution of estate assets upon death. As many of you may have already heard, if a trust is properly funded and if it is desirable, the use of a Revocable Living Trust can help one avoid probate.

    Now I want to talk specifically about some incompetency definitions and what happens if a person does not adequately prepare for incompetency. Protective proceedings are cases where a person is either financially incapable or incapacitated or both. If the person has not adequately prepared for these things then the burden usually falls on the family to take care of the person and his or her belongings.

    V. DEFINITIONS

    Incapacitated – A condition in which a person’s ability to receive and evaluate information effectively or to communicate decisions is impaired to such an extent that the person presently lacks the capacity to meet the essential requirements for the person’s physical health or safety. “Meeting the essential requirements for physical health and safety” means those actions necessary to provide the healthcare, food, shelter, clothing, personal hygiene and other care without which serious physical injury or illness is likely to occur.

    VIII. SOLUTIONS TO LACK OF COMPETENCY

    If a person is deemed to be incapacitated as defined previously, a Guardianship may be necessary. This may be the case even if a person has prepared an advance directive and Power of Attorney because the guardian will sometimes have to make decisions that are in conflict with a person’s desire, for instance to stay at home when it is no longer safe for that person to live at home alone.

    A Guardian may be appointed for an adult only when “necessary to promote and protect the well-being of the protected person”. In our office we try to tailor Guardianships to protect people without interfering in their own decision making any more than is absolutely necessary. Again, competency is a sliding scale and people oftentimes do not need a broad guardianship.

    The Guardianship must be designed to encourage the development of maximum self-reliance and independence of the protected person and may be ordered only to the extent necessitated by the person’s actual mental and physical limitations.

    In order for a Court to appoint a Guardian for an adult, the Court must determine by clear and convincing evidence that the person is incapacitated, that the appointment is necessary to provide continuing care and supervision of the person, and that the person nominated is qualified and willing to serve as Guardian.

    In addition, a Guardianship case from last year requires that the following three conditions be proven in order for a petitioner meet his or her burden of proving incapacity:

    1. The person to be protected has severely impaired perception or communication skills;
    2. The person cannot take care of his or her basic needs to such an extent as to be life- or health-threatening;
    3. The impaired perception or communication skills underlying cause and underlying life threatening disability.

    The court said, “The key in this analysis is the nexus between the inability to process and communicate information, on the one hand, and the inability to perform essential functions, on the other. For a judge to order a Guardianship, he or she must find by clear and convincing proof that there is a causal link between a severe cognitive or communicative impairment and a life-threatening disability.”

    A Guardian has the following powers and duties:

    Unless limited by the Court, the Guardian has custody of the protected person and may establish that person’s place of abode, in or out of Oregon.

    The Guardian must provide for the care, comfort, maintenance and when appropriate the training and education of the protected person. The Guardian must take reasonable care of the protected person’s clothing, furniture, and other personal effects, unless a Conservator has been appointed.

    Subject to the provisions of an Advance Directive, the Guardian has the power to consent or refuse consent to healthcare for the protected person, with the qualification that the Guardian is not liable for injury to the protected person solely by reason of consent.

    The Guardian also takes upon himself or herself a great deal of responsibility.
    The Guardian stands in a fiduciary and trust relationship with the protected person and will be held to high standards in the exercise of the Guardian’s powers and duties. Oftentimes, adult children become Guardians of their parents. This is essentially a role reversal, because now the child is making decisions for the parent. The one difference is that Guardians are not financially responsible for the protected person.

    Before placing the protected person in a mental-health facility, nursing home, or other residential facility, the Guardian must file a statement with the Court informing the Court of that intent. The Guardian must also provide that Notice to the protected person and other interested person, usually the protected person’s immediate family. The protected person has an opportunity to object and be heard in Court, if he or she does not feel that such a move is in his or her best interest.

    A Guardian for an adult-protected person must file a report, the form of which is set forth in the statute, within thirty (30) days after each anniversary of appointment. In the Guardian’s report, the Guardian typically discusses where the protected person is currently living and some of the programs and activities the person engaged in. The Guardian also reveals any payment made pursuant to the Guardianship. Any major decisions made during the term of the report and a general statement regarding the protected person’s condition.

  • Planning for the Second Marriage


    When one or both parties to a marriage have children from a prior marriage, the estate planning process must deal with some additional complications.

    A common element of planning for couples is the desire they have to maintain control of their assets. They usually want the survivor to have maximum control. When the children are the children of both of them, they know they share a common concern for the children, and each is usually willing to let the survivor of them have complete control. However, in a second marriage situation where there are children from a prior marriage, the parent wants to assure that the interest of his or her children is protected, even if a spouse is to benefit from the parent’s estate. A common concern is that the spouse will re-marry after the death of the parent and that assets will be diverted to the new marriage.

    Many couples recognize this problem, but choose to trust each other to preserve their common estate plan after the death of either of them. In my experience that usually works, but sometimes it does not. One problem that sometimes arises is that the survivor of the couple is pressured by his or her children to revise the estate plan to exclude the children of the first to die, particularly if those children do not stay in touch with the survivor. Another problem is that the survivor may re-marry (which has the effect of revoking the will) and simply fail to prepare a new will.

    There are three ways to protect the interests of children from a prior marriage. The simplest method is to divide the parent’s estate between those children and the current spouse so that they can go their separate ways. This method is particularly useful if the parent has a large estate which can handle both obligations or if the spouse and children are close in age, so it is less probable that the children will survive the spouse. In most cases, the couple’s assets are not great enough to use this method without creating risk that the surviving spouse will run out of money during his or her remaining lifetime.

    A second method of protecting children from a prior marriage is to leave assets in trust to a current spouse for life with the remainder over to the children at the death of the spouse. This method ties the children to their step-parent, so it should be used where there is already a good relationship between them. Otherwise the trust can be a source of tension between them in the future. Everything taken from the trust for the surviving spouse will reduce what is left for the children in the future.

    A third method is for each of you to agree to be bound by your new wills and not change them, even after the death or disability of the other. This agreement is made in a clause inserted in the will. One advantage to this relatively simple arrangement is that the survivor can use the clause to explain to children why the estate plan cannot be changed.

    If you are in a subsequent marriage with children from an earlier marriage, we will need to discuss these options during our first meeting.

  • TOP FIVE ESTATE PLANNING MISTAKES

    1. Failing to Make an Estate Plan – Many people simply avoid making an estate or disability plan. The typical reasons why range from fear of death, to perceived costs, to complicated family situations. However, without an estate plan, you will leave your loved ones in the dark, and they will end up spending thousands of dollars (that you thought you saved by not creating a plan) figuring out what to do for you if you become disabled and what to do for themselves after you die. Begin your planning early, while you still have your wits about you, and then review and update your estate plan frequently to insure that it will work the way you intended when it’s actually needed.

    2. Forgetting about the Little Things – Many people overlook making a plan for their personal effects, including jewelry, art work, and collectibles. People simply assume that their loved ones will be able to agree on how to divide it all up. In my experience, these things are what people argue over the most. I have worked on estates where family litigates for years over the “stuff” left in their parent’s house. They ended up spending tens of thousands on attorney’s fees fighting over items that appraised for only a few hundred dollars. Don’t let this mistake happen to you and your loved ones. Ask what everyone wants and then make a simple but smart plan for your “stuff.” Your will or trust should include a provision requiring your personal representative or trustee to follow any list or memorandum you made during your life.


    3. Failing to fund your Revocable Living Trust – People don’t understand the importance of funding their revocable living trust. If you’ve taken the time and spent good money on creating a solid foundational estate plan, then don’t stop there, or your assets will end up in a court-supervised guardianship if you become disabled, and they’ll have to go through probate after you die. Instead, take the time to fund your assets into your trust and update the beneficiaries of your life insurance and retirement accounts. Otherwise, your plan will only be worth the paper it’s written on.

    4. Choosing the Wrong Fiduciaries – People often choose the wrong people or institutions to serve as their Personal Representatives, Successor Trustees, Attorneys in Fact, and/or Health Care Agents. In fact, choosing the right fiduciaries for your estate plan is just as important as creating the plan in the first place. Your plan will not work as you intended if your fiduciaries are not capable of doing the jobs you have given to them. Avoid this mistake by working with your estate planning attorney to choose the right people or institutions for the right jobs.

    5. Forgetting about Disability – People think about death before they think about disability. They want to draft their will or trust. But equally important is creating a plan for disability. Most of us will experience failing health and will need assistance with tasks of daily living, finances and medical decisions. Preparing documents that create clear authority on who will handle these tasks and how to determine when you are incapacitated avoids costly Guardianship or Conservatorship proceedings.