Death during a Divorce

In Oregon, a couple is married until the death of one spouse or a judge signs, and the court enters, a formal judgment dissolving the couple’s marriage.  Up until the occurrence of one of these events, the parties are considered married.  Contested divorces generally revolve around who gets what property.  Consequently, when an individual going through a divorce dies during the divorce the question becomes two parts, “what happens to the divorce and who gets what property?”

Fraudulent Transfers and Irrevocable Living Trusts

The use of trusts in estate planning is a common way for individuals during their lifetime to transfer assets to their children and grandchildren.  Generally, a trust can be established for any lawful reason.  An individual may establish a trust to avoid probate, to reduce potential estate tax liability, to provide for the special needs of a disabled child or grandchild, or to fund a child or grandchild’s education.  Other individuals utilize trusts for nefarious reasons such as to moving their assets out of the reach of their creditors.

Future Changes to the Oregon Inheritance Tax Laws

HB 2541 has been submitted to Oregon’s House of Representatives and, if passed, will result in significant changes to the Oregon Inheritance Tax – in fact, even the name will need to be changed to the Oregon Estate Tax.  Currently, estates for decedents residing in Oregon at the time of their death or nonresident decedents that owned real property or tangible personal property located in Oregon at the time of their death must pay Oregon Inheritance Tax if the estate is valued at over $1.0 million.

Special Needs Planning: Gifting to Individuals with Mental or Physical Disabilities

Individuals with mental or physical disabilities oftentimes receive government benefits based on their financial needs.  Most of the time these benefits are insufficient to meet the disabled person’s needs, and relatives and friends want to make gifts to a disabled person or make a bequest to that person in a will or trust to supplement the government benefits that the individual receives.   However, by gifting directly to the disabled person, the friend or relative may actually decrease the amount of benefits or even eliminate the person’s ability to receive government benefits for a period of time.

Out of State Resident Owning Property in Oregon: Will Your Estate Have to Pay an Oregon Inheritance Tax?

With President Obama’s proposed tax cuts passing the Senate, the House is set to vote on the proposed legislation before the end of the year.  If the House approves the legislation as written, individuals that die in 2011 or 2012 and have an estate which is under $5 million dollars ($10 million for married couples), the decedent’s estate will be exempt from the federal estate tax.

Overview of Federal Estate Tax Changes under President Obama’s Proposed Tax Cuts

President Obama is currently pitching a tax cut program that includes substantial changes to existing federal estate tax laws, including: exempting estates valued at under $5.0 million from federal estate taxes and setting the maximum estate tax rate at 35 percent. Under this plan, couples could potentially pass up to $10.0 million to their children and other heirs without paying federal estate taxes.

Life Insurance and Estate Planning Considerations for Individuals with Minor Children

The use of life insurance is an important tool in the estate planning process.  Married couples with children will obtain life insurance to make sure that that the surviving husband or wife and children are taken care of in the event of a spouse’s untimely death.  Divorced individuals may also have life insurance policies to ensure their children receive appropriate support following their death.

When “Fair Value” is not Fair

The recent Oregon Court of Appeals case, Marker v. Marker, is a fine example of a case that could have had a different result with proper planning.  The facts are simple and common:  A father and son organized a trucking company in 1982.  Father owned 52 percent of the shares and Son owned 48 percent, meaning that Father essentially controlled the company.  Both are employees.  Over time, disputes arose between Father and Son and in 2006 Father fired Son.  Son continued as a shareholder but Father stopped sharing any corporation information with Son.  There is no indication that a buy-sell agreement between Father and Son existed.