What is a will?
Your will is a formal set of written, signed, instructions that describes how you want your money and property distributed after you die. In order to be valid, your will has to meet certain legal requirements.
What are the benefits of having a will?
If you have a will, you decide how your estate will be distributed after you die. You can make provisions for the people and the charities that are important to you. You choose the personal representative (also known as the executor) who will be in charge of handling your estate. Parents of minor children can name a guardian to care for the children in case both parents die. If you do not have a will or a revocable living trust, the Oregon laws on intestate succession define who your closest relatives are and determine who gets the money and property in your estate when you die. A domestic partner (unless you have registered as domestic partners with the state), close friends, and charities will not get anything from your estate if you do not have a will or a revocable living trust that names them as beneficiaries.
How much money or property has to be involved?
Almost anyone who owns a home or other assets, or who has minor children, can benefit from having a will. A will is particularly important if you want part of your estate to go to someone other than your spouse or children, or to a minor child, or to a disabled beneficiary who gets government benefits, or to a beneficiary who has difficulty managing money.
Does having a will avoid probate?
Having a will does not avoid probate. Probate is the name for the process that the court follows to resolve claims by creditors or others about the estate and to distribute the money and property that was owned by the person who died. Since the probate process sets a time limit for filing claims against an estate, it is particularly important for the estate of a landlord, a business owner, or a professional.
Does having a will save on estate taxes?
If an estate may be taxable, a will (or a revocable living trust) can include provisions that will help to reduce or eliminate federal and state estate taxes. In Oregon, an estate is taxable if the value of the gross estate is more than $1,000,000 for a person who dies on or after January 1, 2006. For federal estate tax purposes, an estate is taxable if the value of the gross estate is more than $3,500,000 for a person who dies during 2009. Unless Congress acts to change the law, the federal estate tax will be eliminated for 2010, then reinstated in 2011 with an exclusion amount of $1,000,000.
When should a will be updated?
You can change your will whenever you want to, as long as you are able to understand what you are doing. You should plan to have an attorney review your will every three to five years or whenever there is a major change in your life, such as getting married, getting a divorce, beginning or ending a domestic partnership, having (or adopting) a child, experiencing the loss of a spouse or domestic partner, or making a significant change in your assets. Getting married or divorced or registering as domestic partners or dissolving a registered domestic partnership usually revokes all or part of a will. If you have this type of major change in your life, you may also want to update your durable financial power of attorney and your advance directive for health care.