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Scott Barbur, Partner

New Laws for Oregon Estates in 2024

| Scott Barbur, Partner

We regularly hear about ineffective government in our daily lives. However, while bad politics make for good headlines, it is important to note that much goes on in government that is not captured in the news cycle. That is true even of the Oregon State Legislature, which took it upon itself to pass several important new state laws affecting probate and estate administration. In my view, these new laws are all reasonable, necessary, and possibly even well-written. Who knew? In any case, here are synopses of the most important new laws:

Senate Bill 308A – Simple Estate Affidavit

For years, I have had several estate planning attorney colleagues bemoaning that a Small Estate Affidavit should instead be a Simple Estate Affidavit. They now have their wish – with a quirk that makes creating a revocable living trust even more effective.

The reasoning behind a Small Estate Affidavit is that an estate with limited value should have an easier path through the court system. This is probably generally true, however, while smaller does not necessarily mean simpler, and larger does not always mean more complex. Some tweaks were needed to the statute. Interestingly, the maximum value threshold for filing did not increase. The maximum estate value has been set at $75,000 in personal property and $200,000 in real property for many years now and seems to be lagging behind what a “small” actually means contextually. There are not many real properties in the Portland metro area that qualify!

While the new law does not increase what is a “small” estate, it casts a significantly wider net for larger estates to qualify as a Simple Estate. This net is limited, however, to trusts. If somebody creates a revocable living trust to be effective during their lifetime but fails to transfer their property into the trust, it is possible for their estate – now regardless of size – to pass through a Simple Estate Affidavit process rather than a regular probate. As this is a fairly regular occurrence, this will be a sizeable boon for trust administrations where trusts are partially or wholly unfunded.

An interesting result of this statute is that one could create a revocable living trust during one’s lifetime and leave it completely unfunded with the idea that it would become funded with their entire estate through a Simple Estate Affidavit on death. This could save the trustor time and effort during their lifetime, which could be especially valuable if the trustor does not have much time left. Do note that, while this is possible, this is not necessarily the best course of action, and having a trust funded during lifetime has many other benefits – including the ability to avoid a Simple Estate process altogether! Also, note that to make this effective requires some technical elements of trust planning so work with a lawyer and do not think that you can just do it yourself.

Senate Bill 309 – Probate Notices

In probate estates, it is currently required that a general notice to creditors be published in a local newspaper for three consecutive weeks. The purpose of this notice is to alert creditors of an estate filing. The first publication date sets the start date for a four-months claims period for creditors to submit their claims or forever barred from collection. The second two weekly publications, however, did nothing significant other than provide additional notice. Beginning next year, this statute is amended to remove the extra two weeks and require only one week of notice publication. The end result is hopefully a reduced publication cost for the estate, however, it is quite possible that newspapers will simply triple their prices for a notice! We will see.

House Bill 2329 – Signing Formalities for Appointment of Person to Make Decisions Concerning Disposition of Human Remains

We estate planners often refer to the trifecta of estate planning documents: a will, a power of attorney, and an advance directive. Unbeknownst to many, however, is the mysterious fourth estate planning document: the Appointment of Person to Make Decisions Concerning Disposition of Remains. Basically, who is going to be in control of your body when you pass. Not many people think about this issue, and, in many cases, it does not matter. However, sometimes it matters a lot.

As with other estate planning matters, if one does not prepare their own documents the process is controlled by statute. In the case of human remains, this is controlled by ORS Chapter 97 (which is somewhat creepily stashed in the “Property Rights and Transactions” section of the statutes). ORS 97.130 sets the priority for who has the right to control remains in the following order: (a) spouse, (b) adult son or daughter, (c) parent, (d) brother or sister, (e) guardian, (f) next of kin, (g) personal representative. So, who should consider an estate planning “quadfecta” of documents? Most notably, long-term unmarried couples and persons who want stepchildren to handle their estate. Note how far down the list a personal representative is – below the dubious “next of kin”!

So, what’s the new law related to this document? Currently, to be effective it needs to be witnessed by two persons. Starting next year, it can either be witnessed by two persons or notarized. A simple, yet effective, change.

Bills Not Passed

The above laws passed as new legislation and will go into effect on January 1, 2024. A couple of proposed bills dealing with estates died in the legislature (hopefully they had their estate plans in place). These include Senate Bill 68 which would have increased the Oregon estate tax exemption from $1M to $1.5M (with other changes) and House Bill 3218 which would have allowed for remote attestation of wills. Perhaps these will get a new life in the next session – especially regarding Oregon estate tax as an increase in the exemption of even an additional $500,000 would relieve a burden on many middle-class families whose deceased relative simply owned a home and had a retirement account who find themselves having to file an estate tax return. Here’s to hoping the next Oregon legislative session will bring about some more effective results in moving estate planning and administration forward!