Bankruptcy?!

Bankruptcy is scary to think about. Many of my client from the wealthy and the not-so wealthy come into my office desperate and shell-shocked. “How did it come to this,” they may ask. But the real question to ask is, “Where will I go from here?”

Bankruptcy is an ending but it is also a new beginning. It is an ending of the debts, the calls and the panicky feelings in the middle of the night. It is the beginning of your fresh start. The US Constitution grants the right to a do-over- a chance to put the debts to rest and start over. So instead of the worry – think about how you will do it better next time.

For inspiration from others who have been in your shoes:

https://www.forbes.com/sites/jrose/2019/02/19/9-famous-people-that-went-bankrupt-before-they-were-rich/#1533c48641cf

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Why Create a Trust?

There are many types of trusts but generally people are thinking of a Revocable Living Trusts for estate planning. There is no one size fits all estate plan but Revocable Living Trusts can:

  1. Avoid probate and simplify the transfers of your assets upon your death.
  2. Eliminate or reduce potential estate taxes if your estate is over one million dollars.
  3. Planning for your possible incapacity. The trust defines how the trustor wants to be taken care of if they become incapacitated. The trust then allows the successor trustee to access the trust funds for that purpose. During your life-time if you are the trustee and trustor you generally continue managing you affairs in the same way you have in the past. However, if you become incapacitated your wishes are clear and become legally binding on your next successor trustee.
  4. Hold property for the benefit of others. Trusts ensure that a responsible individual manages and spends funds for a the benefit of an individual who cannot or should not receive funds for example: minor children, children with poor spending habits, or elderly/disabled relatives who must retain healthcare or other government benefits and cannot receive additional funds.
  5. Ensure privacy. Generally the terms of your living trust are confidential, with only your named beneficiaries and trustee having access to that information. With probate, your assets and affairs become public record.

It is important to understand your estate planning options and alternatives. This is only a short overview of general information about Revocable Living Trusts. To decide whether a trust is appropriate for you, discuss your goals, family situation, and assets with an attorney. Our office schedules free consultations when the attorney will meet with you, answer your questions, and recommend an appropriate estate planning options.

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When Should You Change Your Estate Plan?

You completed and executed your estate plan. Everyone you’ve selected to serve — your agent, guardian for minors, trustees, health care proxy, and your personal representative, —has signed the paperwork. All set?

For now, yes. But it’s a good idea to review these selections annually, because change is inevitable as time goes on. Your life will change, as will the lives of the people you have designated to serve in your plan. Mark New Year’s as the time to consider if your plans will still be effective.

When should I consider replacing people? Any time there has been a big life change that could affect his/her ability to serve in the role.

Examples include unexpected events such as a health care crisis, an unexpected death, or a job loss, as well as other transitions like divorce, relocation, or remarriage. Imagine your choice for guardian has just given birth to twins. How well can she care for your child in these new circumstances?

Another consideration is time. The relatives from your parents’ generation who stepped forward when you first made your plan as a young family may no longer be up to the task. You may no longer have as strong a relationship with your college roommate as with your new sister-in-law. You always want to be confident that your guardian or trustee is competent an willing to take on the additional work.

What events in your life might make you reconsider? Apply the same standard to your own circumstances. Do you want the same team if you’ve had to relocate to another city? What if you become widowed or divorced? Also, bear in mind that if you are the parent of a special needs child once he or she hits the age of majority, you will no longer be able to make a lot of the decisions that you have probably been making for him during his childhood. This is a good time to check in with your special needs planner to go over what you’ll need to do for this transition, including guardianship and conservatorship.

You are in the best position to know what matters most. You chose the agents in your plan to meet this standard. Stay in touch with them regularly and evaluate their ability and willingness to serve. Then don’t be afraid to take the next step and update your plan with your attorney. If they are truly in tune with your situation, they will appreciate your your reasons.

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Do I Need a Power of Attorney?

A power of attorney grants another person the authority to step into your shoes and make legal and financial decisions on your behalf. This does not take away your authority to act, rather your power of attorney adds another person to your chain of command. When you give someone a power of attorney, you are giving them the right to exercise a power that you already have such as the power to spend money, sell property, cash checks, or withdraw money from the bank.

People often consider their spouse as a de facto agent- however, without written legal authority your spouse cannot sell your house, cash in your IRA in an emergency or sign legal papers on your behalf. Similarly, if you became incapacitated, your children would sign any required legal paperwork with their promise to be financially responsible- where as with a power of attorney, they could simply sign on your behalf.

A power of attorney can be the most useful document you ever execute. It can save your family time and money in a crisis and avoid the institution of a court supervised conservatorship- which in addition to being costly also make your illness and financial affairs public record.

However, a strong word of caution: A Power of Attorney is one of the most abused documents-with it you place your fiances in the hands of another. That other person should be utterly trustworthy, above reproach and have spending habits that are in line with your own. It is important to discuss whether this document is helpful to you with an attorney or trusted advisory. We are happy to help you evaluate this decision.

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Interesting Times

I myself have never wanted to live in interesting times. I liked my small law practice, my family time and my pets. Fortunately, I also like gardening as I will be doing quite a bit of that in the days to come. Not too much gardening though. There is still quite a bit of work through my office. My office has been set up for some time for telecommuting, though I had hoped to launch that feature more extensively while spending a month exploring Spain or perhaps an unfamiliar beach, but here we are, interesting times.

To all our clients out there, please be assured your cases are being managed. To new clients, we may not have the pleasure of your company but we are prepared to assist you as you too navigate these new challenges. For those who need expedited services, we plan to devote Mondays to powers of attorney and simple wills while you wait (in the comfort of your car). Please call (541)738-2445 or email us for more details at info@cherrytree.law

We are here – though we may need to ask for your patience as our phone system didn’t quite make a smooth transition. Please leave us a message- we hope to chat with you soon about how we can help.

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Tales from the Apocalypse

The dawning of the apocalypse has brought to fruition the closely held dreams of my three children- that school is now canceled-possibly indefinitely. Well, I am glad they have some joy in these troubling times. For the rest of us, as we face an uncertain future and stock up on the necessities of life (coffee- wait I mean toilet paper), the questions of tomorrow bring a certain unease. Here at my office (the one with the beautiful flowering cherry tree) – we are fielding calls from a number of deeply concerned clients. Be assured that we are here for you. We are now offering phone appointments and will be working on an expedited estate planning service for people in need. Please be patient when you call us as we are also working with the needs of our staff to keep everyone employed and safe. Be well and take care.

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Choosing a Guardian for Your Child

Preparing a comprehensive estate plan to protect a child can be an difficult.  On the one hand, parents should be relieved that they are taking steps to guarantee that their child will be cared for after they are gone.  On the other hand, confronting one’s own mortality and having to decide who will manage the affairs of a child can be stressful.  

Out of all of the decisions that parents have to confront, the choice of a guardian stands out as one of the most challenging.  But you don’t have to dread this decision, especially if they follow these steps:

1. Take Time to Choose, But Don’t Take Too Long

Choosing someone to become the guardian is not a decision that should be made lightly, but this doesn’t mean that the decision should keep you up at night, either.  Start by putting together a list of every potential candidates.  Then go through the list and eliminate anyone who, for whatever reason, doesn’t strike you as an good choice, keep in mind that no one is going to be a perfect because they will never be you.  Take some time to think about each likely candidate. 

The key at this stage of the game is to not get overwhelmed with worry about your choices, especially since you haven’t even asked anyone if they are willing to serve.  One of the biggest obstacles to completing an estate plan is getting so caught up in the decision making process that you stop moving forward.  Don’t let this be you — make your list, start to narrow it down, and then proceed to the next step.  Don’t stop planning.

2. Talk to Your Potential Guardians and Encourage Honesty

After you’ve narrowed your list of potential guardians down to a few names, take each one out for coffee (separately) and ask them if they are willing to serve.  Don’t put people on the spot with statements like, “If you don’t do it, I don’t know what we’ll do.” You don’t want them to agree to make you feel better but then back out later. Encourage each person to be honest with you about his or her questions and concerns.  Don’t look for immediate answers; give your potential guardians time to think about things and get back to you. This is an important commitment and should be carefully considered by both of you. 

This conversation may immediately narrow down your list, as some people may tell you that they absolutely cannot serve.  At the same time, talking face to face with your choices may help you to weed out a few more people.  

3. Make a Decision and Put Your Plan into Action

After speaking with your prospective guardians you may be able to make a decision about who will serve.  But if you still need to think about your choice, keep a few things in mind.  First, you can always change your nomination at a later point, and, in fact, many people do.  For instance, it may make sense for young parents to name their parents or older relatives as guardians but later change their estate plans when the original nominee are older and may have difficulty fulfilling this role.  Likewise, as friends and family move, or have changers in their own circumstances parents may have to update their estate plans.  Nothing is set in stone.  

That said, here are some additional questions to consider if you are having a hard time choosing a guardian:

  • Do I want my child to stay in his community and is the guardian willing to move here if s/he doesn’t already live here?
  • How does the guardian interact with my child specifically?
  • Does the guardian have too much going on in his/her own life to care for a child, especially one with special needs?
  • Does the guardian have children, how old are they and can the guardian take on another child?
  • How old is the guardian?  Do I have a backup in case s/he can’t serve?
  • Does the guardian share my values about things like religion, education and finances?
  • if my child has special needs, does the guardian have experience or patience to manage these issues?

Although the decision making process may not be easy, it is a necessary one.  Remember, the worst thing that you can do is to leave guardianship to chance, which is what will happen if you don’t have an estate plan that reflects your wishes.  Once you’ve followed these simple steps and made your decision, put it into effect by meeting with your attorney and drafting the proper documents immediately.  Don’t put it off.

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Guardianship Basics

In Oregon, every adult is assumed to be capable of making their own decisions unless a court determines that the individual is incompetent. If an adult is incapable of making responsible decisions due to a mental disability, the court may be asked to appoint a substitute decision maker called a “guardian.” Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is not able to take care of his/her own affairs (the “protected person”).

If you are a parent who has a child with special needs, it is important to know your options when it comes to managing the medical and financial well-being of your child. Once your child turns 18, your legal relationship with her changes, because suddenly, it is presumed that your child has the ability to make decisions on her own, regardless of her abilities. At this point, one option worth exploring is becoming your child’s legal guardian, so that you can continue to make the important medical and financial decisions on behalf of your child. The following is a basic explanation of what an Oregon guardianships.

The Guardianship Process

The guardian can be authorized to make legal, financial, and health care decisions. Note, if the protected person has assets in excess of $11,000, a “conservator” may need to be appointed to manage finances. Some incapacitated individuals can make responsible decisions in some areas of their lives but not others. In such cases, the court may give the guardian decision-making power over only those areas in which the incapacitated person is unable to make responsible decisions (a “limited guardianship”). In other words, the guardian may exercise only those rights that have been removed from the protected person and delegated to the guardian.

A guardian can be any competent adult — the spouse, another family member, a friend, a neighbor, or a professional guardian. A competent individual may nominate a proposed guardian through a durable power of attorney in case she ever needs a guardian. If two individuals wish to share guardianship duties, courts can name co-guardians.

In Oregon, any interested party can initiate a request for guardianship. Proper notice of the proceeding must be given to the potential protected person, who then has the opportunity to object in which case a hearing will be held in court. An attorney is usually retained to file a petition for appointment and facilitate the process. The attorney assists the guardians in choosing the appropriate form of the protected proceeding, understanding the legal duties involved and implementing the guardianship successfully.

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DOT Guidance for Travelers with Support Animals

DOT has provided some much-needed guidance on airlines’ responsibilities to accommodate support animals. Unlike service animals, which must be trained and are certified to assist people with disabilities, emotional support animals are not required to have undergone such training.  Support animals provide companionship and often help people with depression, anxiety, and certain phobias. 

In the past year, multiple major airlines have been imposing sweeping restrictions on animal flight companions. Delta banned pit bulls. United Airlines went further, banning pit bulls and 20 other dog breeds. However, the federal Department of Transportation (DOT) is now rejecting such categorical bans. Under new guidance released in August, airlines may no longer reject breeds of service and emotional support animals without an individualized assessment of whether the animals pose a safety threat. 

In a summary of the new guidance, the DOT explains that airlines may prohibit animals if they are too large or heavy for the plane. While prohibitions on animals less than four months old are permissible, limits on the number of service animals are not allowed. When flights are more than eight hours long, airlines can require travelers to provide proof that the animal will not have to relieve itself mid-flight. 
 
Airlines may require passengers to provide documentation related to an animal’s training and behavior, as well as vaccinations, provided that the documentation “would assist the airline in making a determination as to whether an animal poses a direct threat to the health or safety of others.” Airlines are allowed to require people with emotional support animals, but not service animals, to go through check-in an hour prior to take-off. 

The new guidance is an interim step while the DOT works on proposed, formal regulations updating the Air Carrier Access Act, expected next spring or summer. Congress mandated that the DOT issue new regulations in 2018, as part of a larger bill that also directed the Federal Aviation Administration to create an Airline Passengers with Disabilities Bill of Rights. According to the industry trade group Airlines for America,  the number of people traveling with emotional support animals increased from 481,000 in 2016 to 751,000 in 2017, as reported by the Washington Post.C

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Probate: Basic Steps

  • Probate is often consider an insurmountable feat with untenable complexity- however, I jokingly tell my clients that’s California NOT Oregon. Oregon Probate is a series of relatively straight forward steps that must be taken in a particular order. The complexity often comes more from the people involved or the nature of the assets. An attorney’s job is to help you understand the steps, file the proper paperwork at the proper time and make appropriate decisions about the people, property and debts involved. Although I have been working as a probate attorney for over 20 years, I find that each case has unique individuals with different needs and addressing that complexity often results in a simplified probate experience.
  • The general steps for probate are as follows:
    • Secure Decedent’s Assets & Pets Needing Immediate Attention
    • File the Petition to Open Probate
    • Locate and Manage Estate Assets
    • File an Inventory of the Decedent’s Assets with the Court
    • Search for Creditors and Claims Against the Estate
    • Prepare Assets for Distribution, Pay all Approved Estate Claims
    • Prepare and File All Tax Returns, and Pay All Taxes Owed
    • File an Accounting with the Court
    • Distribution to Heirs/Beneficiaries
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