It’s not always possible to avoid probate. Although many people want to skip the long court process, some estates simply require. However, for some smaller estates in Oregon, a probate shortcut is possible.
What Is Probate?
Probate is a legal process in which a court oversees how a deceased person’s estate is distributed, including the payment of debts and the distribution of assets to heirs. When the deceased person had a will in place, the probate process follows the terms of the will. When there is no will in place, the probate process follows state law.
An executor of the estate, also called a personal representative, is appointed by the court to manage the probate process. This includes determining the deceased assets and whether there are any debts that need to be paid. Serving as a personal representative is a big responsibility, and you may need a probate bond as well as a probate attorney.
Debts are paid before assets are distributed to heirs. Creditors need to be given time to make a claim against the estate, and this adds to the length of the process. In Oregon, the process typically takes at least four months and may take much longer if there are disputes or other complications.
Given how complicated and time-consuming probate can be, it’s understandable that many people want to skip it entirely. That’s not always possible – probate exists for a reason, to ensure that the estate is settled correctly, both in terms of the will and state law. However, in some cases, a probate shortcut is possible.
What Is the Oregon Probate Shortcut?
Oregon allows an abbreviated version of the probate process for qualifying small estates. According to the Oregon State Bar, this option can reduce the time and costs significantly. If an estate is eligible for the small estate proceeding, the process is completed upon filing, which can happen as soon as 30 days after death.
The small estate proceeding is possible when the estate’s value does not exceed pre-established thresholds:
- The estate’s personal property must be valued at no more than $75,000. This includes cars, boats, stocks, bonds, clothes and other personal items.
- The estate’s real property must be valued at no more than $200,000. This includes land and buildings on the land.
These values may be updated occasionally through the state legislature.
For estates that qualify, the small estate proceeding can be a practical option. However, many estates do not qualify. According to Redfin, the average sale price for a house in Oregon is $450,000. If an estate includes a house, there is a good chance that the real property value will exceed the limit. Even if the estate does not include a house, the personal property can easily exceed the personal property limit. Once you start adding up the value of a person’s investments, as well as their vehicle, jewelry and other belongings, it’s easy to pass $75,000, even if the person is not considered wealthy.
How Else Can Probate Be Avoided?
People looking to avoid probate may be able to do so through other strategies. Even if probate cannot be avoided entirely, it may be possible to keep certain items out of probate.
For example, assets that are co-owned typically do not have to go through probate when one of the co-owners dies. In this case, the surviving co-owner simply retains ownership. In Oregon, you can keep vehicles out of probate by using joint ownership with the right of survivorship on the title.
Another possible way to avoid probate is to use a transfer-on-death or payable-on-death designation. For example, a real property deed with a transfer-on-death designation allows the property to transfer to the beneficiary when the original owner dies.
Trusts and life insurance payouts can also avoid probate. However, there can be exceptions. For example, if the insured’s estate is listed as the beneficiary of a life insurance policy, the death benefit will be subject to probate. The death benefit can also become part of the estate, and therefore be subject to probate, if the beneficiary pre-deceases the insured. This is one reason why it’s important to keep beneficiary designations up to date, and you may want to consider adding a contingent beneficiary just in case.
Are You Trying to Avoid Probate?
Probate isn’t necessarily a bad thing. It can be time-consuming and complicated, but it can also ensure that a person’s estate is handled correctly. At the same time, estate planning strategies that help you avoid probate can simplify things considerably.
If you’re interested in the Oregon probate shortcut, Skinner Law can help. We can also help if you need guidance on how to set up your estate plan to avoid probate, or if you’re currently facing the probate process as a personal representative. Contact Skinner Law.