Lauren's Blog

Demystifying Estate Planning

Starting your estate planning process might not be the most thrilling ride, but it’s one you’ve gotta take! Whether you’re in your 30s just starting to accumulate assets or caring for aging parents, it’s never too early to think about estate planning.

And I get it — talking about wills, family, and, well, the whole mortality thing is like entering a labyrinth. But here’s the deal: avoiding it won’t make it disappear.

So, I had a chat with Megan Fuhrer (@wyeastlaw), my go-to estate planning attorney, and we unraveled it all. Here’s what we covered:

The Basics – from wills, trusts, to powers of attorney
Your first step if a deceased left no financial records
How to shield yourself against creditors
Making tough calls about family with dementia
Leaving money for disabled kin
The one thing you MUST do after reading this

And much, much more…

I learned a ton from our IG Live sesh (watch it here), and I’m confident you will too! Our goal is to help as many people as possible in avoiding less-than-ideal situations.

So stick around as we demystify estate planning in all its complexities. Cheers!

If you’re new here, I’m Lauren Goché — a Portland realtor with a decade of experience backing me up. Which means I’ve weathered more than a few market shifts over the course of my career, and specialize in making sure you can make the most of the market for your goals. Read more about me here.

Meet Megan Fuhrer:

Megan (@wyeastlaw) specializes in Elder Law, estate planning, probate, trust administration, special needs planning, and small business law. She works with all ages. You can find her over at Wy’East Law.

When I began working with Megan, what really got my attention was how at ease she made me feel while dealing with my family situation.

She understands families are complicated (as we all know) and talking about death and inheritance is even more complicated. If you’re looking for an estate planner with compassion and empathy, who knows how to navigate those complex situations, Megan is your gal!

JOIN OUR WORKSHOP IN MARCH!

We’ve cooked up a workshop specifically for those of you with dreams of owning a home alongside your pals but feel overwhelmed by the process.

My team and I joined forces with the mortgage lending legend, Julee Felsman (@workshopmortgage), to bring you the ultimate expert guide to navigating the exciting world of co-buying.

Hope to see you and your besties there!

The Basics: Wills, Trusts, and Powers of Attorney

We all navigate life’s journey, and part of that journey involves planning for what happens when we’re no longer here. It’s not the most comfortable topic, but setting up your will, advanced directive, and naming an agent you trust in your power of attorney should be your first steps.

How much should you expect to pay? For someone like me who has a house, some dogs, and no kids you can expect to pay $1,200 – $1,500 but it can be more if your situation is a bit more complicated.

Let’s break these down!

1. The Will

Where there is a will there’s a way… literally. This is the document that tells people who you’re giving your stuff to when you die and it’s also where you name who you want to be in charge of distributing those things.

Your will only goes into effect when you die and if you don’t have one set up, then there are laws in Oregon already in place which outline in what order your kin will inherit things.

A common misconception is that having a will automatically avoids probate, but that’s not quite the case. With a will, you decide who gets what from your estate, bypassing Oregon’s intestacy laws. But if avoiding probate altogether is important to you, seeing a skilled attorney about setting up a trust should be your next step.

2. Advanced Directive

An Advanced Directive is where you nominate somebody to be your healthcare representative in the event that you can no longer communicate your wishes to doctors. It only applies when you can no longer communicate. In this document you decide whether you want life support or tube feeding under three scenarios:

Terminal Condition
- Cannot be cured or reversed and death is likely to occur within six months
Advanced Progressive Illness
- Advanced progressive illness (think end stage Alzheimers);
- Likely to worsen as time progresses ultimately resulting in death; and
- Healthcare providers anticipate the loss of the ability to communicate, swallow food/water, and recognize family and others
Permanently Unconscious
- Not conscious; and
- Healthcare providers have no reason to believe I will ever be conscious again

“The key to making the right decision for yourself is to remember that the document only comes into effect when you can no longer communicate (i.e. speak, blink, snort, or pinch your consent or opposition). With this in mind, reflect on the quality of life you would then want for yourself as the years go by.”

Personally, doing my will and POA was fine, but once I got to my advance directive it felt like I was really facing my mortality. So you might need some mental preparation before diving into this one! Here’s some advice for Megan:

3. Power of Attorney

***If you’re gonna do one thing, it should be this!***

The Power of Attorney is the most important estate planning document out of the three as it governs your finances and decision making if you become incapacitated. That means that, unlike your will which goes into effect when you die, your POA is only good for when you’re alive.

In Oregon we do “durable powers of attorney” which remain valid even if you become incapacitated. Look, any one of us could go out in the street and get hit by a car and someone will need to pay our bills and sell our house. Without a power of attorney, a costly conservatorship proceeding may have to take place — we all learned how that can go from Britney Spears!

For you single parents out there (hats off to ya!), a POA is essential for designating who would manage finances and care for a child if something happened to you.

And you married couples are not off the hook either! Most spouses assume they can control the jointly owned assets just because of marriage. Here’s Megan’s fair warning:

“A situation I see a lot is when one spouse doesn’t have a POA, there’s a stroke, the house needs to be sold, and depending on how it’s held/titled, the husband may need to get a conservatorship over the wife in order to have the right to sign/sell her half of the home.”

What’s the difference between a POA and a Personal Representative?

They serve the same function. It’s just that the agent under the power of attorney only has authority while the person is alive and then the personal representative when they’re dead. It’s like a continuum split by death.

How much does it cost?

You might be surprised by this but getting a POA only costs around $250. You might find it for even less online, but here’s why Megan advised against doing your POA online:

“The powers of attorney are specific to the states and what I’ve found when I type “Oregon POA”, it’ll pull up all kinds of forms that are incorrect or just AI plug-ins. So let’s say you went that route, maybe somebody would catch it and correct it before something happens, but for our parents, chances are we only catch it when it’s too late to execute a new one because mom or dad no longer has the capacity to sign estate planning documents.”

So guys, if you take one thing away after reading this, spend the 250 bucks and do your POA the right way!

Trusts vs. Wills — which is better?

A will goes into effect only after you die, but the trust does the whole shabang. A trust is a legal arrangement where you place your assets in the care of a trustee and they manage those assets both during life and after death.

That includes managing during the case of incapacity and also managing the payout of the assets after death which will avoid probate (more on that later).

Megan is a big fan of trusts, here are her three reasons why:

“I appreciate trusts because they offer privacy – your assets stay off public records. And when the beneficiaries get along it’s quite quick to administer, you can essentially waive many formalities if everyone agrees. I also like trusts because depending on the situation it can be possible to fix mistakes after someone dies – if everyone involved agrees and the changes don’t affect the main goals of the trust, the trustee and beneficiaries can make adjustments to parts of the trust allowed by Oregon law. But it’s important to know that even if the changes are acceptable under Oregon law, the IRS might not recognize them.”

How to Choose an Executor/Trustee/PR

Choosing an executor (also known as a personal representative depending on what state you’re in) is a crucial decision in the estate planning process.

The terminology may vary by state, but the job description stays the same: this is the person you’re banking on to ensure your wishes are honored and your affairs smoothly handled once you’ve left the stage.

So, how do you choose the ideal executor? Here’s the qualities Megan looks for:

“Someone financially savvy who you trust with your money and who you trust is going to be fair with whoever you named as beneficiaries when you’re gone. And definitely someone who you would consider emotionally stable.”

It may be your child, a sibling, or even a trusted professional who’s always had your back. What matters most is choosing someone whose competence matches the weight of the role. Your chosen executor/trustee/PR is the guardian of your intentions after death and their job is to ensure a seamless transition for your loved ones.

What the Heck is Probate?

Probate is the court-sanctioned process of transferring assets from the deceased person to their heirs. This occurs when there’s no trust, joint ownership, designated beneficiary, or Pay on Death designation for an asset. It happens A LOT with houses — trust me, I know.

It can last for six months or stretch into years. Several factors contribute to the prolonged process, such as multiple sets of family members claiming beneficiary status.

Picture this: half-siblings in Florida battling with siblings in Illinois, creditors thrown into the mix—things can get messy. It’s a total headache for everyone involved. That’s why having a trust in place is crucial, saving everyone from the prolonged hassle.

Beyond the Basics — Delving Into the Nitty Gritty

Now that we’ve covered the basics, Megan and I dive into your questions. While we’ve got a few hella important ones here, I strongly recommend watching the entire live session here to catch the full range!

Here we’ll be sticking to crucial topics like protecting yourself from creditors, navigating situations with parents dealing with dementia, and a super-duper important tip for anyone considering giving money to someone with special needs.

Let’s jump right in!

Q 01: How to start if the deceased left no financial records?

Navigating the aftermath of a loved one’s passing with no financial records is something a lot of people are dealing with and my heart goes out to them! How do you even start to locate shit???

Well Megan blew my mind with this one: The first place to start is to forward their mail.

“There’s been a lot of cases of mine where we haven’t been able to do much for like three or four months because we’ve just been waiting to see what comes in.”

Well hey! It’s better than nothing. Unfortunately, this is only going to get tougher as more and more folks manage their finances online. So, what I do is have a LastPass with all of my passwords that I share with someone I trust.

Q 02: Can creditors come after the family of the deceased?

This is a tricky one and can really depend on the fine print of your situation.

Let’s start off with an example including spouses. The good news? — A spouse is NOT responsible for the other spouse’s debt unless both have joint debt… but it’s a little more complicated than that.

Here’s a great example from Megan around spouses who own homes together, but have separate bank accounts:

“Let’s say that a couple bought a home as tenants in common prior to getting married. They each own a separate but undividedable one-half interest in the home. Husband has $40,000 of private student loan debt and tragically dies. There is a probate to transfer his interest in the home to his wife as well as a $20,000 bank account of his.

Wife, as PR, uses the $20,000 cash to pay off part of the $40,000 debt. Though she is not legally liable for the remaining $20,000, practically if she refuses to pay it from her own assets, probate law would force the sale of the home to pay the creditor the remaining $20,000.”

Yikes. But now you know! Take this as a lesson for why you need to get your estate planning in order to avoid situations like this!

So what about parents that have hella debt that die, does the debt die with them?

Here’s Megan’s expertise:

Yes, to the extent their debt exceeds the equity of the assets in their estate. The one question many people are left wondering about is what happens to the debt when a person dies and there is a co-signer? This is obviously very common with student loans, mortgages, etc.

Imagine your parent co-signs for your mortgage, but then they pass away. Under the law, they are not responsible for that debt. Even though they co-signed, you were the primary borrower, and they were your guarantor. The main responsibility for paying back the mortgage is still yours. If you don’t make payments, then the lender turns to the co-signer for payment. Here the effect of a parent’s death is that the lender has no one to pay if you cannot.

Now, think about it the other way around. If you’re the one who dies after your parent co-signs for your mortgage, then your parent becomes responsible for paying back the loan. The mortgage doesn’t just disappear because you’re gone. There’s still someone alive (your parent), who signed the contract with the lender at one point in time, and will now be expected to honor their part of the contract and repay the debt.

Q 03: What happens to your home if your Medicaid-covered spouse requires nursing care?

This is also tricky, but Megan’s simplest answer is if you have not done any type of planning ahead of time, your spouse can get Medicaid without you having to spend down the equity in the home simply because of spousal impoverishment law. That allows the healthy spouse to keep home and some assets while caring for the sick spouse only as long as the healthy spouse remains living in the property.

Here’s what Megan has to say:

“Now, it gets complicated again because Oregon is one of the strictest states when it comes to Medicaid eligibility and long term care/estate recovery. There was an Oregon Appellate Court case three years ago where the court agreed with DHS’s position that transfers of an ill spouse’s interest in a home to their healthy spouse, which provided the healthy spouse the ability to downsize when appropriate, could be voided years after the death of both spouses, and presumably after home sale proceeds had been inherited by children, under the theory that the transfer was made with the intention to hinder the ability of DHS to recover care costs from assets in the estate of the medicaid recipient.

This is all to say that Medicaid law is constantly evolving and the level of uncertainty makes it difficult to properly plan without the help of a skilled practitioner. There are not many in the Portland-Metro area (or even Oregon). Do not wait to attend to these issues if you have reason to believe they are relevant to you or your loved ones.”

Q 04: How to plan when you have family members with dementia?

Alright, let’s get real about dementia – it’s a growing issue, and there’s not enough support or resources to go around. Personally, I’m in the thick of it with clients dealing with early stages of dementia in the family, and it’s gotten to the point where they’re selling the house to cover care costs. So I’m diving into educating myself, figuring out how I can guide my folks through it!

Megan could not stress enough that early planning is key when it comes to dementia. In those early stages, while capacities are still fairly good, especially in the mornings, take action right away — Talk to an experienced elder law attorney pronto to sort out the legal stuff. Get that durable power of attorney sorted — it’s the safety net for when things inevitably go south.

As the disease digs its heels in, you’ll probably need more care. That’s when Medicaid planning comes into play. But here’s the kicker – the help available ain’t keeping up with the demand. It’s a real mess out there, and the rules keep changing. Having an attorney who knows their stuff can make the whole ordeal much smoother.

Here’s some last advice from Megan:

“Don’t let them continue if they’ve been generously giving gifts to the church, charities, grandkids, or anything else. Put a stop to it!”

Q 05: Can you leave money for a special needs family member?

For folks that don’t know, my sister has Down Syndrome and years ago, my family made a special needs trust for her. This came into play when I set up my will because we had to be very careful to not mess up my sister’s benefits — Yes! If you leave money for a special needs person, even if you have the best intentions, it might screw up their benefits.

I’ll let Megan take it from here:

“I see a lot of people come in who were told that they can’t leave their family member money because they’ll lose their benefits — which is smart and I’m glad someone was thinking ahead. But then it’s sad that they think that this grandchild can’t be left any money.”

As Megan clarifies, you CAN leave them money, it just requires good communication with other family members so you don’t jeopardize their benefits.

“If you’re considering leaving money to a niece or nephew, especially if they have special needs like Down Syndrome, here’s the catch: if you haven’t checked with your sibling about their estate planning, you might not know they’ve set up a special needs trust for their child. If you leave money directly to your niece or nephew without coordination, they could lose their benefits. It’s commendable to think about their well-being, but it’s crucial to communicate with your siblings. Make sure your gift can be safely channeled through their existing trust so you don’t inadvertently jeopardize their benefits.”

Wrapping Things Up…

While estate planning might not be the most exciting journey, it’s one you just can’t avoid! We aimed to demystify some of the estate planning process, and I hope you picked up a thing or two – I sure did.

Through all of this, finding an attorney you can trust is key. Someone to guide your situation with compassion, trust, and a sprinkle of creativity. If you have more questions or are looking for an estate planning attorney, you can find Megan’s contact information here.

And if you’re looking to buy or sell a home in Portland, get the experienced support you need — don’t hesitate to reach out to me and my experienced team to start that journey!