Source: https://willvalleylaw.com/blog/
Timestamp: 2019-04-25 16:07:43+00:00

Document:
Happy to Give to a Great Cause!
With Oregon's residential Landlord-Tenant law as it is, it is very important for residential Landlords to know when and how they can lawfully terminate a tenant's rental agreement and take possession of the premises. The following contains a brief, non-exhaustive look at a residential Landlord's causes of termination of a rental agreement.
1. Oregon law (ORS 90.392) provides that a Landlord can terminate a rental agreement "for cause," and upon notice to the tenant, in the following circumstances: (i) there is a material violation by the tenant of the rental agreement (e.g., nonpayment of a late charge); (ii) there is a material violation by the tenant of his or her duties under Oregon law (e.g., failing to use the premises in a reasonable manner - see ORS 90.325); or (iii) the tenant fails to pay rent. However, ORS 90.392 provides that if the violation can be cured by the tenant by a change in conduct, repairs, payment of money, or otherwise, the rental agreement does not terminate if the tenant cures within a specific time.
2. Oregon law (ORS 90.394) also provides that a Landlord can terminate a rental agreement, upon notice to the tenant, for nonpayment of rent. How far in advance such notice must be given depends on the type of tenancy at issue (e.g., week-to-week or month-to-month), but may be less than a "for cause" (ORS 90.392) termination. ORS 90.394 also allows a tenant to cure the nonpayment of rent within a specific time, and if the tenant does so, the rental agreement will not terminate.
4. Finally, Oregon law (ORS 90.427) provides that a Landlord can terminate a rental agreement, upon notice to a tenant, for no reason at all. How far in advance notice must be given for such a "no cause" termination depends on the type of tenancy. Notice must generally be given at least 10 days before the termination date in the case of week-to-week tenancies, not less than 30 days before the termination date in the case of month-to-month tenancies that have been in effect for one year or less, and not less than 60 days before the termination date in the case of month-to-month tenancies that have been in effect over one year. Note that different rules may apply in certain locations throughout the State - e.g., in Portland, Oregon.
If you are interested in learning more about a Landlord's causes of termination (including exactly how the time periods for notices are calculated or what information a particular notice must contain), or are a Landlord in need of legal assistance or advice, please do not hesitate to contact me.
To pick up where we left off, two of the major advantages of the Last Will and Testament are that it allows its creator to specify to whom or what his or her assets are distributed upon his or her death (instead of relying on a complicated statutory distribution scheme), and it allows that person to choose a Personal Representative who will be in charge of all the creator's worldly possessions during the probate process. This is a giant leap above merely (and perhaps naively) relying on the complicated distributive and administrative laws of probate. However, depending on individual factors and the nature of one's estate, the Last Will and Testament may not be the best or more cost-effective choice for disposing of one's assets after his or her death, and it is certainly not the best choice (or even a choice at all) for managing one's estate prior to his or her death.
For all of the Last Will and Testament's advantages, it does have certain drawbacks. First, even though the Last Will and Testament is executed while its creator is alive, the instrument itself only becomes effective at the death of its creator, to ensure that the creator’s assets (i.e., his or her estate) are managed and distributed as he or she has specified in his or her Last Will and Testament. That is to say, the Last Will and Testament has no control over its creator's assets while he or she is still alive. This lack of control can be problematic. For example, in the event a person is alive but incapacitated or financially incapable to such an extent that he or she cannot make decisions about his or her care or finances, that person's Last Will and Testament cannot control how that person's assets are used (because he or she is still alive). This means that, in the absence of other estate planning, in order for the incapacitated or financially incapable person's assets to be used for his or her benefit, a guardianship or conservatorship, or both, must be established. Guardianship and conservatorship proceedings, as will be discussed below, are time-consuming, expensive, and fairly intrusive.
Second, although not an onerous burden, the original Last Will and Testament must be preserved, as the probate court will, in the normal course, accept only the original Last Will and Testament as the "word" of its creator. If the original Last Will and Testament cannot be found, the court may not follow the creator's wishes with respect to the management and disposition of his or her estate, and may instead apply the complicated laws of "intestate succession," which the Last Will and Testament has sought to avoid. See Part One for a discussion of the laws of "intestate succession." Similarly, if the original Last Will and Testament is marked up, for example, with pen or pencil (including, but not limited to, notes in the margins, lines crossed out, or words replaced), the court may consider the Last Will and Testament to be "revoked" and may, likewise, refuse to follow its creator's wishes with respect to the management and disposition of his or her estate. In other words, to ensure that the court will actually honor it, a Last Will and Testament must generally be kept in its original, immaculate condition and must be kept in a place easily accessible to the Personal Representative (so that it may be "probated"). That is not to say that one cannot amend his or her current Last Will and Testament, or create an entirely new Last Will and Testament; the point is simply that whatever the document is (the Last Will and Testament or an amendment), the original thereof must be available to the court and must be undisturbed. Obviously, this puts somewhat of a burden on the creator, to ensure that the Last Will and Testament is unaltered, protected, and accessible, and on the Personal Representative, to actually find and present the original Last Will and Testament to the court when the time comes.
Third, as noted in Part One, the creation of a Last Will and Testament does not, in and of itself, obviate the need for probate. The Last Will and Testament, while certainly simplifying the probate process and giving its creator greater control over his or her estate, must still be "probated" - i.e., go through the probate process. Unfortunately, the probate process is extremely time consuming and expensive. On average, probate takes 6 months to complete. This length of time is extended if the probate is complicated due to, for example, numerous claims against the decedent's estate. This means that from the time the decedent's estate is brought before the probate court, which is usually not immediately after he or she has died, it may take up to 6 months, or more, for the probate to be closed and for the decedent's assets to be distributed to those rightfully entitled to them. In other words, it could take 6 or more months for a beneficiary to receive his or her share of the decedent's estate. Moreover, probate is expensive, and during the lengthy probate process, the decedent's estate will continuously rack up numerous fees, potentially including court costs, bond, Personal Representative fees, and attorney fees. On average, the total fees for probate amount to 5 - 15% of the value of the decedent's estate. For example, if the decedent's estate is worth $100,000, his or her estate could end up spending up to $15,000 in probate-related fees. That’s $15,000 that goes to someone or something other than the decedent's heirs or beneficiaries. Additionally, as a public court proceeding, anyone, and I do mean anyone, can look into the decedent's probate and learn about his or her estate, who his or her heirs or devisees are, and other private information.
Given the drawbacks of the Last Will and Testament, particularly that it cannot control the creator's assets while he or she is alive and that it must still be probated, what other estate planning option does one have? The best answer is the "Trust Agreement."
A Trust Agreement, also known as a "Revocable Living Trust," or simply a "Living Trust," is an arrangement created by a person, called a “Trustor,” which is set forth in a legal document, that allows a third party, called a “Trustee,” to hold the trustor’s assets on behalf of and for the benefit of a beneficiary or beneficiaries, including the trustor. Unlike a Last Will and Testament, which becomes effective only upon its creator’s death, the Trust Agreement controls the management and distribution of its creator’s assets both while the creator is alive and upon his or her death. As such, the Trust Agreement is effective immediately upon its creation.
Given the complicated definition of a Trust Agreement, it will be beneficial to consider how the Trust Agreement (or "Trust") actually works. For most purposes, the Trust Agreement itself is considered an entity separate and apart from its creator, the Trustor. When the Trust Agreement is created, its creator transfers all of his or her assets to the Trust (except for certain assets that cannot or should not be transferred to the Trust). For example, if the creator of the Trust owns a home in his or her individual name, he or she will convey the home to the Tust, and the home will then be titled in the name of the Trust. The same is true for bank, stock, brokerage, and most other financial accounts. The Trust, then, as an entity separate from its creator, owns the creator’s assets. Because the Trust owns the assets, how those assets are used is controlled by the Trust Agreement, which specifies the creator’s wishes with respect to the management and disposition of his or assets held by the Trust. The person in charge of the management, administration, and disposition of Trust assets, that is, the creator’s assets, is called the “Trustee.” The Trustee may be the creator him-or herself, or any other person or entity designated by the creator. Whoever the Trustee is, he or she is in charge of the Trust assets and how to manage and use them, both during the creator’s life and after his or her death.
At this point, you may be asking why you would want to “give” your assets to a separate entity called a Trust Agreement. The answer, in short, is that there are a number of reasons why a Trust Agreement is beneficial, especially over a Last Will and Testament, and why it is considered by many to be the pinnacle of estate planning. Consider the following.
First, the creator of a Trust Agreement has almost absolute authority when it comes to drafting the terms and conditions of his or her Trust. Through a Trust Agreement, its creator may specify exactly how his or her assets, that is, the Trust’s assets, are to be used and distributed during his or her lifetime, may specify to whom or what, and under what conditions, the assets are to be distributed upon his or her death, and may include as many separate trusts within the Trust Agreement itself as he or she pleases. This a big step up from the Last Will and Testament, especially when it comes to lifetime planning, which the Last Will and Testament cannot address (because it is only effective on its creator's death).
With respect to lifetime planning, the Trust Agreement can specify how Trust assets are to be used both while the creator is alive and competent and while the creator is alive but "incapacitated" or "financially incapable." See below. In the normal course, the Trust Agreement will provide that, while the creator is alive and "competent," all trust assets may be used by him or her, in any manner he or she pleases. This is really no different from the what the creator could do in the absence of a Trust. But where the Trust Agreement shines is that it can also plan and provide for how assets are to be used, and how the creator is to be treated, in the event the creator is incapacitated or financially incapable. In that regard, the Trust Agreement can contain provisions specifying that, in such an event, the Trust assets be used for specific purposes, like in-home care, facility care, additional hospital or medical services, and the like. Of import, unlike a Last Will and Testament, the creator’s ability to plan and provide in the Trust Agreement for what will happen in the event of his or her incapacity or financial incapability avoids the need for a conservatorship and grants the creator greater control in the event of a guardianship. That said, what a conservatorship, and its counterpart, the guardianship, are, and when they are imposed, ought to be considered.
A guardianship proceeding is a court proceeding by a which a person, called a “Guardian,” is appointed by the court to make certain important decisions about the care and well-being of another person, called the “Protected Person.” A Guardian may be given authority to decide where the Protected Person lives, provide for the Protective Person's care, comfort, and maintenance, make health care decisions for the Protected Person, make funeral and burial arrangements for the Protected Person, and receive and spend the Protected Person’s money for that person’s support, care, or otherwise. A Guardian may be appointed by the court when a person is “incapacitated,” that is, unable to manage his or her physical health or safety or to manage his or her financial resources.
Generally speaking, a guardianship proceeding is expensive and time consuming. Moreover, and perhaps more importantly, the imposition of a guardianship seriously impairs the personal liberties of the incapacitated person. Given the authority that may be granted to a Guardian, a guardianship may result in the incapacitated person’s loss of independence and decision-making in such areas as where to live, what medical treatment to receive or refuse, and how his or her money or property is used. Furthermore, as the a Guardian is essentially charged with the total and complete care of the Protected Person, the Guardian selected by the court shoulders a heavy burden that the Protected Person may not want the Guardian to shoulder. This is why the Trust Agreement is such an important estate planning tool.
As noted above, the Trust Agreement allows its creator to specifically provide for how he or she wants to be treated, and how his or her assets, that is, the Trust assets, are to be used in the event of his or her incapacity. Because the creator can make such specifications before becoming incapacitated, the Trust Agreement ensures that the creator retains his or her independence in certain important decision-making areas (even post-incapacity), and ensures that his or her wishes with respect to certain items, like where to live (e.g., in his or her home or a retirement community) or how his or her money is used, are honored.
Similar to a guardianship, a conservatorship is a court proceeding by which a person, called a “Conservator,” is appointed by the court to manage the finances and make financial decisions for another person, called the “Protected Person” (as in a guardianship). Unlike a Guardian, however, a Conservator deals only with the Protected Person’s personal property and does not make decisions about, for example, the Protected Person’s living situation or medical care. A Conservator may be appointed by the court when a person is “financially incapable,” that is, unable to manage his or her financial resources - his or her property - for reasons including, but not limited to, mental illness, mental deficiency, physical illness, or physical disability.
Like a guardianship proceeding, a conservatorship proceeding is time-consuming and expensive. Although not as invasive as a guardianship, a conservatorship strips the protected person of his or her right to manage his or her own finances, that is, his or her own property. As does a Guardian, a Conservator shoulders a heavy burden; the Conservator is charged with taking control of and safeguarding the Protected Person’s property, filing taxes on behalf of the Protected Person, obtaining permission from the court before acting on behalf of the Protected Person, and periodically reporting to the court with respect to his or her duties as a Conservator, to name a few. A Trust Agreement can avoid all that.
The Trust Agreement allows its creator to specifically provide for how his or her assets or financial resources, that is, the Trust assets, are to be used in the event of his or her “financial incapability.” By specifying in the Trust Agreement how his or her assets are to be used in the event of his or her financial incapability, the creator can ensure that his or her “financial resources” are used according to his or her wishes in the event of such incapability. Through a Trust Agreement, then, the creator can retain control of his or her assets even after he or she would otherwise be unable to do so. Moreover, provided the Trust is properly "funded," because it is the Trust, and not the creator individually, that owns the creator’s property, whether or not the creator is “financially incapable,” that is, unable to manage the financial resources in his or her own name, is immaterial, and a conservatorship proceeding is unnecessary.
A Trust Agreement can also provide other benefits to its creator, especially to one who is married. In certain circumstances, and in certain forms, a Trust Agreement can serve to reduce or eliminate the amount of estate tax that is due upon the creator’s death. How this is accomplished is fairly technical and will not be discussed here, but suffice it to say, it can be done - it is informally called "tax planning" and is a major benefit for estates in excess of $1,000,000.
Finally, a major benefit of a Trust Agreement is the avoidance of probate. Because probate is concerned only with those assets of a decedent that are not held jointly, are not held in the name of another person or entity, or that do not automatically pass to someone else upon the decedent's death, the creation of a Trust Agreement, and the proper “funding” of the trust agreement (i.e., the transfer of ownership into the name of the Trust), avoids the need for probate. This is because all of the creator’s assets, with certain few exceptions, are in the name of the Trust, not the creator’s individual name. Such assets are, therefore, not considered part of the creator’s “probate estate” because the Trust, not the creator, owns them. This means that, assuming all assets are in the name of the Trust, there is no need for a probate proceeding, and the Trust Agreement, as opposed to the court or the creator’s Last Will and Testament, determines how the creator’s assets are to be distributed upon his or her death. This avoidance of probate is important. While there are still expenses associated with administering the Trust, the high cost of probate is avoided by a properly funded Trust Agreement. Additionally, because the creator’s estate does not have to be probated, the distribution of the creator’s assets to the beneficiaries named in the Trust Agreement will take much less time; instead of waiting 6 or more months, as one would in probate, Trust property can normally be distributed within 4 - 6 weeks after the creators death. Furthermore, because the Trust Agreement is essentially a private contact, and the Trust Agreement is not probated, private information, including information about the creator’s assets and beneficiaries, is kept confidential. That is to say, the only persons who will know such information are those whom the creator selects to know.
Having thus considered what a Trust Agreement is, and the benefits of creating one, it is important to consider when a Trust Agreement might be needed. Not all estates need a Trust Agreement, and as Trusts are moderately expensive, such consideration is necessary. There are many factors to look at when determining whether a Trust is needed; for the sake of time, I will note what I consider to be the top four. First, for the person over 50 years of age and interested in avoiding a potential guardianship or conservatorship in the future, the Trust ia a good investment. Unfortunately, as time marches on, we tend to experience more physical and, perhaps, mental ailments. In this regard, the Trust provides a nice safety net, ensuring that its creator retains control over his or her well-being and finances when a guardianship or conservatorship would otherwise be necessary. Second, if one's entire estate, which includes financial assets, real property, and personal property, is worth over $150,000, a Trust Agreement is a smart choice. As previously noted, probate can cost up to 15% of the value of a decedent's estate. If an estate is at the $150,000 mark and must be probated, up to approximately $22,000 of the estate may be lost to probate-related costs, and that number only gets higher the more valuable the estate is. A Trust Agreement can avoid that loss. Third, for the person interested in avoiding the time, expense, and lack of privacy generally associated with probate, a Trust Agreement can help him or her do so. Finally, if one has complex objectives that he or she wants to accomplish with his or her estate planning, for example, different trusts for children and grandchildren, distributions to multiple beneficiaries in varying percentages or amounts, or complex contingent plans, a Trust Agreement is a must because it will likely be the only estate planning tool that can completely and comprehensively effectuate complex lifetime and postmortem plans.
The benefits a Trust Agreement has over a Last Will and Testament are plain: To name a few, the Trust Agreement gives its creator greater flexibility when it comes to using and distributing his or her estate, both during life and after his or her death; the Trust Agreement gives its creator the ability to retain control over his or her assets when he or she would otherwise be unable to do so because of incapacity or financial incapability; and the Trust Agreement avoids the time, expense, and complicated nature of probate. If the choice is between creating a Last Will and Testament or a Trust Agreement, and the creator has even the slightest inkling that a Trust Agreement will better suit his or her needs, creating a Trust Agreement is worth the expense.
If you are interested in learning more about the Trust Agreement (or Last Will and Testament), or are interested in having a Trust Agreement (or Last Will and Testament) prepared, please do not hesitate to contact me. I will be more than happy to speak with you and prepare your estate planning documents.
One important, non-financial component of estate planning is designating a person to make medical decisions on your behalf when you are unable to do so. In Oregon, the current method by which such a person is designated is through a document called an "advance directive." The advance directive, the form of which is currently governed by ORS 127.531, allows the person creating the advance directive (called the "principal") to both (1) designate a "health care representative" (i.e., the person responsible for directing the principal's health care when the principal is unable to do so) and (2) instruct the health care representative as to what medical care the principal wants or does not want in the event the principal is unable to make such a designation him- or herself. The advance directive is, currently, the only method by which a health care representative may be appointed, and Oregon law currently governs many elements, including definitional terms, related to the advance directive. Senate Bill 494 aims to change all that.
On January 9, 2017, Senate Bill 494 was introduced to the Oregon Senate. Senate Bill 494 (hereinafter "SB 494" or "Bill") is aimed at creating and amending certain provisions of the Oregon Revised Statutes ("ORS") that deal with the creation and form of the Advance Directive and the (proposed) Appointment of Health Care Representative.
To begin, SB 494 proposes to establish an Advance Directive Rules Adoption Committee (the "Committee"). The Committee will be charged with adopting the form of an advance directive to be used in the State of Oregon, which, at minimum, must include certain elements enumerated in the Bill (see below). The form adopted by the committee will be the only valid form of an advance directive until a new advance directive form is adopted by the Committee. To that end, the adopted form of advance directive must be reviewed by the Committee once every four years for the purpose of adopting "necessary" changes. SB494, §§ 2-3.
Of interest, SB 494 proposes a new form in the world of Oregon advance directives and health care representatives: The "Appointment of Health Care Representative and Alternate Health Care Representative" (hereinafter the "Appointment"). SB494, § 5. Unlike an advance directive, the Appointment from contains no option for the "principal" to give instructions to his or her appointed health care representative(s) governing the principal's "end of life" care - i.e., "tube feeding" and "life support." (See form Appointment of Health Care Representative and Alternate Health Care Representative). This suggests that the Appointment form gives the appointed health care representative(s) absolute authority, within the confines of ORS 97 and 127 (including any changes to those statutes caused by SB 494), to make health care decisions on the principal's behalf when the principal is unable to do so. That is to say, unless a health care representative receives instructions from the principal (either in writing or orally), and the principal's desires as to his or her health care are, therefore, known to the health care representative, the health care representative has only a (rather subjective) duty to act in a manner that the health care representative "in good faith" believes to be in the best interests of the principal. ORS 127.535(4). The problem? What the principal thinks is in his or her best interest may be very different from what the health care representative (who has received no instructions) thinks is in the principal's best interest.
That having been said, the way to avoid the aforementioned problem seems fairly simple: The principal must make his or her desires with respect to health care known to his or her health care representative(s) - either orally or in writing. But here we run into another quirk of SB 494. While § 3 of SB 494 expressly provides that "[t]he principal may attach supplementary material to an advance directive" and that "supplementary material attached to an advance directive under this subsection is a part of the advance directive," no like-language can be found in § 5, which sets forth the proposed Appointment form. SB 494 § 3, § 5 (emphasis added). This suggests that the legislature intends that supplementary material attached to an Appointment not be part of the Appointment. That is to say, the fact that the legislature has expressly allowed for supplementary material with respect to advance directives means that they have considered the effect of supplementary materials, and the omission of any reference to supplementary material with respect to Appointments (in light of the fact that the legislature has clearly considered such material) must be purposeful, meaning that the legislature intends that supplementary material attached to an Appointment not be considered part of that form. So, what exactly does this mean? If a person executes an Appointment and attaches a sheet of instructions concerning his or her health care preferences to it, how do we treat them - i.e., the instructions? According to SB 494, the instructions are not part of the Appointment. If that is so, is the health care representative to honor them? Fortunately, all signs point to yes. Even as amended by SB 494 (proposed), ORS 127.535 provides that "[i]n making health care decisions, a health care representative has a duty to act consistently with the desires of the principal as expressed in the principal’s advance directive, or as otherwise made known by the principal to the health care representative." ORS 127.535(4) (as amended by proposed SB 494). As such, the written instructions (whether physically attached to the Appointment or not), even though not considered by SB 494 to be part of the Appointment, have been "made know by the principal," and the health care representative must honor them. (Under ORS 127.535(4), oral instructions will do the trick as well). My point? SB 494 could be better drafted: (1) it could make the rules with respect to advance directives and Appointments uniform, allowing supplementary material with respect to both (avoiding any confusion over the effect of supplementary material attached to an Appointment), or (2) it could better clarify what authority a health care representative has when an Appointment is executed (instead relying on default provisions), or (3) it could do both.
A statement explaining that to be effective the advance directive must be (1) accepted by signature or other applicable means, and (2) either witnessed and signed by at least two adults or notarized.
A statement explaining that, to be effective, the appointment of a health care representative or an alternate health care representative must be accepted by the health care representative or the alternate health care representative.
A statement explaining that the advance directive, once executed, supersedes any previously executed advance directive.
The name, date of birth, address, and other contact information of the principal.
The name, address, and other contact information of any health care representative or any alternate health care representative appointed by the principal.
When the principal desires comfort care instead of health care necessary to preserve life.
A section where the principal and the witnesses or notary may accept by signature, or other means, including electronic or verbal means, the advance directive.
A section where any health care representative or any alternate health care representative appointed by the principal may accept the advance directive by signature or other means, including electronic or verbal means.
SB 494 § 3(3)(a)-(i). Additionally, the advance directive must incorporate the components of the form Appointment (as the method for selecting a health care and alternate health care representative). SB 494 § 3(5). § 6 of SB 494 sets forth a temporary form (hereinafter "Temporary Form" for an advance directive, in lieu of the form of the advance directive adopted by the Committee under § 3 of SB494, which is valid until January 1, 2021. SB 494 § 6. The Temporary Form contains most of the aforementioned mandatory elements.
Considered side-by-side, the current advance directive form and the Temporary Form are substantially similar. For example, both forms contain warnings for the principal and advise the principal of his or her rights. Moreover, both forms allow the principal to provide instructions/directions to the health care representative(s) regarding the principal's end of life care. There are, however, subtle, and concerning, differences.
The current advance directive form speaks in terms of the principal's "desires" for health care, while the Temporary Form speaks in terms of the principal's "preferences" for health care. See SB 494 § 6. Neither the term "desire" nor the term "preference" are defined in Oregon law or in SB 494. In plain English, "desire" is defined as "to express a wish for." "desire." Merriam-Webster.com. 2017. https://www.merriam-webster.com/dictionary/desire (March 6, 2017). "Preference," on the other hand, is defined as "one that is preferred." "preference." Merriam-Webster.com. 2017. https://www.merriam-webster.com/dictionary/preference (March 6, 2017). To "prefer" something, then, is "to like [it] better or best." "prefer." Merriam-Webster.com. 2017. https://www.merriam-webster.com/dictionary/preference (March 6, 2017). The legislature's decision to change "desire" to "preference" is somewhat concerning. While "desire" is understood to express one's wish (I want X), "preference" seems less mandatory. Colloquially speaking, when a person "prefers" that he or she receive a certain kind of care, we do not necessarily understand that to mean that he or she absolutely mandates (desires/wishes/wants) that care. Thus, turning from the principal's "desires" to his or her "preferences" in the advance directive seems to lessen the effect of what the principal actually wants, which is concerning. This movement away from the principal's express wishes is seen elsewhere in the Temporary Form. For example, in the current advance directive form, the health care representative agrees to the following in accepting his or her position as health care representative: "I understand I must act consistently with the desires of the person I represent, as expressed in this advance directive or otherwise made known to me." ORS 127.531. The Temporary Form, on the other hand, omits any such acceptance on the part of the health care representative, and the health care representative merely "accept[s]" appointment and "agree[s] to serve as health care representative" under the Temporary Form (and Appointment). SB 494 § 6.
Of other concern is SB 494's proposed removal of the terms "life support" and "tube feeding" from ORS Chapter 127. The current advance directive form (and the Temporary Form) provide space for the principal to make designation with respect to end of life care decisions; these designations concern whether the principal wants "life support" or "tube feeding" in certain situations (i.e., when the principal is "close to death" or "permanently unconscious," has an "advanced progressive illness, or is experiencing "extraordinary suffering"). ORS 127.531; SB 494 § 6. (Even without an advance directive, if the principal has executed an Appointment, under Oregon law he can also make such designations to his health care representative(s) by simply expressing them to the health care representative(s).) Currently, "life support" is defined as "life-sustaining procedures" (“fife-sustaining procedures” mean "any medical procedure, pharmaceutical, medical device or medical intervention that maintains life by sustaining, restoring or supplanting a vital function") and "tube feeding" is defined as "artificially administered nutrition and hydration." ORS 127.505(16), (17), (24). These definitions apply to the current advance directive form, are paraphrased in the current advance directive form, and are necessary to limit the authority of a health care representative. For example, under the current law, if a principal is "close to death," and has designated in his or her advance directive that he or she does not want "tube feeding," the health care representative may direct the physician that the principal is to receive no "artificially administered nutrition and hydration," but the health care representative arguably could not, for example, direct the health care provider to forego assisting the principal with eating (e.g., spoon feeding). See In the Matter of the Guardianship of Nora Raupers Harris, Jackson County Circuit Court Case No. 13017G6.
As noted above, SB 494 proposes to remove the definitions of "life support" and "tube feeding" from ORS Chapter 127. This is problematic for a number of reasons. First, without definitions for "life support" and "tube feeding," the authority of a health care representative is not clear. That is to say, without definitions for "life support" and "tube feeding," a health care representative cannot know what medical procedures, medication, or otherwise he or she is authorized to allow or withhold under the principal's advance directive (which may attempt to instruct the health care representative with respect to "life support" or "tube feeding") or Appointment. Second, and relatedly, removal of the above definitions will increase litigation with respect to end of life decisions. By removing the definitions of "life support" and "tube feeding" from the statute, the legislature is essentially "passing the buck." That is to say, instead of defining the terms itself, the legislature is relying on the Oregon courts to define "life support" and "tube feeding. This will be time consuming and expensive for both principals and health care representatives, a scenario the advance directive is arguably designed to avoid. That having been said, in light of Harris (see above), this might be the legislature's intent - to force a court to define (and arguably broaden) the definitions of "life support" and "tube feeding." But such is poor legislation.
Additionally, it is odd that SB 494 proposes to remove the definitions of "life support" and "tube feeding" from the statute, but provides for those terms' respective meanings in the Temporary Form. The Temporary Form defines "life support" as "any medical treatment that maintains life by sustaining, restoring or replacing a vital function," and defines "tube feeding" as "artificially administered food and water." (Interestingly, these definitions mirror the current definitions contained in ORS 127, the definitions that SB 494 proposes to remove.) The inclusion of definitions in the Temporary Form raises an interesting question: Does the proposed removal of the definitions from ORS 127.505, in light of their inclusion in the Temporary Form, mean that however the principal defines "life support" and "tube feeding" controls (whether in the advance directive, in supplementary materials attached thereto, or otherwise made known to the health care representative)? In absence of case law to the contrary, this may very well be the case, especially in light of ORS 127.535(4) (as amended by SB 494) which requires the health care representative to act consistently with the desires of the principal however expressed, arguably including what the principal considers "life support" and "tube feeding." But this means that the principal, whether he or she has an advance directive or an Appointment, must expressly tell his or her health care representative(s) what he or she considers to be "life support" and "tube feeding." In the absence of such express definitions, which a person is not likely to express to his or her health care representative(s), we are back to where we were above, with the health care representative not knowing what medical procedures, medication, or otherwise he or she is authorized to allow or withhold on the principal's behalf. SB 494 needs to include specific, well-thought out definitions of "life support" and "tube feeding."
In conclusion, SB 494 proposes major changes to the current advance directive and health care representative scene. First, with the creation of the Committee, legal practitioners can expect periodic changes to the required form of an advance directive, meaning that what is currently valid, may not be valid four years from now, and meaning that practitioners will have to keep track of every iteration of the advance directive form just in case they have to prove the validity of an advance directive drafted using a previously valid form (assuming advance directives created using previously valid forms continue to be valid). In the same vein, periodic "updates" to the advance directive form will force health care providers to likewise periodically update their procedures with respect to handling advance directives, and will, to some degree, force principals and health care representatives to be masters of the law of advance directives (since they must be able to show why their particular advance directive is valid). Second, SB 494 provides for the creation of a brand-new document: The Appointment of Health Care Representative and Alternate Health Care Representative. While the Appointment provides an easy way to appoint a health care representative, it is not without its drawbacks, and unless a health care representative receives instructions from the principal (either in writing or orally) as to the principal's wishes with respect to his or her health care, the health care representative merely has a duty to act in a manner that the health care representative "in good faith" believes to be in the best interests of the principal, and what the health care representative believes to be in the best interest of the principal may not be what the principal considers to be in his or her best interests. ORS 127.535(4). Third, with respect to the advance directive, at least the current advance directive form and the Temporary Form under SB 494 are substantially similar. Unfortunately, SB 494's proposed change from "desires" to "preferences" in the statute and Temporary Form, and the omission of the health care representative's acceptance that he or she must act consistently with the desires of the principal, seemingly lessen the effect of what the principal actually wants with respect to his or her medical care. If the advance directive is to continue functioning as it has, as the mechanism by which one's specific health care wants are met when he or she cannot express those wants him- or herself, lessening the effect of what the principal actually wants by using the term "preferences" and omitting other certain language from the Temporary Form (and Appointment) is not the way to accomplish that. Fourth, and finally, SB 494's proposed removal of the definitions of "life support" and "tube feeding" is particularly problematic. Unless the principal (in the absence of a court decision otherwise defining the aforementioned terms) expressly defines "life support" and "tube feeding," and makes those definitions known to his or her health care representative(s), in many circumstances, the health care representative will not know what medical procedures, medication, or otherwise he or she is authorized to allow or withhold under the principal's advance directive or Appointment. Moreover, removal of the above definitions will increase litigation with respect to end of life decisions (as the courts will be forced to define "life support" and "tube feeding"), and such litigation will be time consuming and expensive for both principals and health care representatives, a result that the advance directive has traditionally been designed to avoid.
As an estate planning attorney, I often get asked by clients whether it is even necessary to have an estate plan prepared (for purposes of this post, a Last Will and Testament). They generally assume that, upon their deaths, their respective assets will simply be distributed to those whom they want the assets to go to, "no muss, no fuss." Sometimes, a client will relay that he or she told a family member or friend that one item or another will go to that person upon the client's death, assuming that such item will actually make it to that person at the designated time. In short, the clients assume that an estate plan is not necessary, and that their respective assets will simply go where they "need" to go. Whether these assumptions are true requires a look at the laws of "intestate succession."
If the person dies leaving behind a spouse and no "issue" (defined as "all lineal descendants" of a person, e.g., a child or children, including "adopted children and their issue"), the person's spouse inherits the entire "net estate" (see above). ORS 111.005(23); ORS 112.035.
If the person dies leaving behind a spouse and issue, that are also the issue of the spouse, the person's spouse inherits the entire "net estate." ORS 112.025(1).
If the person dies leaving behind a spouse and issue, one or more of whom are not the issue of the spouse, the person's spouse inherits one half of the "net estate." ORS 112.025(2).
If the person dies leaving behind a spouse and issue, one or more of whom are not the issue of the spouse, the issue inherit one half of the "net estate," in equal shares. ORS 112.025(2); ORS 112.045(1).
If the person dies leaving behind no spouse but issue, the issue inherit the entire "net estate." ORS 112.045(1).
If the person dies leaving behind no spouse and no issue, the person's parents, or the survivor, inherit the entire "net estate." ORS 112.045(2).
If the person dies leaving behind no spouse, no issue, no parents, and no issue of a parent, the person's grandparents and/or the issue of the persons deceased grandparent(s) inherit the entire "net estate." ORS 112.045(4)(a).
If the person dies leaving behind no spouse, no issue, no parents, no issue of a parent, no grandparents, and no issue of a grandparent, the person's estate "escheats," and the "net estate" reverts to the State or Oregon. ORS 112.055.
I did warn you that the laws of intestate succession are complicated. Please also keep in mind that the above is not an exhaustive look at the laws of intestate succession, and there are many other nuances and intricacies to the laws, which brings us to back to my clients' assumptions.
I suppose a person could get lucky. If who the "intestate" person want his or her estate to go to happens to match up with who inherits that person's estate under the laws of intestate succession, that person's assets will be distributed to whom he or she wants them to go to, "no harm, no foul." However, such luck cannot be counted on. A simple example will suffice: Take the case of Thomas, who wants his toy train collection to go to his brother upon Thomas's death. Thomas dies without a Last Will and Testament ("intestate"), leaving behind a spouse and no "issue." Will Thomas's toy train collection go to his brother? No. Under the laws of intestate succession (ORS 112.035 to be specific), Thomas's toy train collection, as part of his "net estate," will be inherited by his surviving spouse (who happens to have hated Thomas's toy train collection). With a little imagination, many more like-scenarios can be imagined where the assets of an intestate person do not go where that person hoped they would. In short, then, my clients' assumption that an estate plan is not necessary, and that their respective assets will simply go where they "need" to go, is, in a majority of cases, false. This leads us to a major advantage of an estate plan (i.e., a Last Will and Testament): The creator of the Last Will and Testament, not some statute, decides where his or her assets go upon death.
The Last Will and Testament affords its creator (called a "testator," from the Latin word for "will") the opportunity to specify to whom (or what) his or her property is to be distributed upon his or her death. Such provisions in the Last Will and Testament supersede the laws of intestate succession with respect to the distribution of the person's assets, and the creator of the Last Will and Testament can rest assured that his or her property will be distributed according to his or her wishes. ORS 112.227. Peace of mind that one's property will go to whom he or she wants it to upon his or her death is extremely valuable. No one wants to have to continually consult the laws of intestate succession every time a family member dies or has children to determine who will inherits his or her assets; the Last Will and Testament eradicates such a burden and gives its creator much more flexibility with respect to who inherits his or her assets (e.g., allowing the creator to designate that his or her assets be distributed to a non-family member or organization). The Last Will and Testament also affords its creator another major advantage: The creator decides who will manage his or her assets through the dreaded (but ultimately nonthreatening) probate.
The Last Will and Testament allows its creator to select the person that he or she wants to manage his or her assets during the probate process. Under Oregon probate law, the court gives preference to the Personal Representative named in the decedent's Last Will and Testament when appointing the Personal Representative. ORS 113.085(1)(a). Conversely, where a decedent dies "intestate," naming no person to act as Personal Representative of his or her estate, the court looks to other persons to serve as Personal Representative--e.g., the decedent's spouse or nearest of kin. ORS 113.085(1)(b)-(c). If the decedent has no Last Will and Testament, the person appointed by the court may not be the person the decedent would have chosen to manage his or her estate. This may not seem like a big deal, but it is. The Personal Representative is responsible for gathering the decedent's assets and taking inventory of them, transferring title of the decedent's assets into the name of the Personal Representative (as a fiduciary of the estate), bringing legal actions to collect assets belonging to the decedent, dealing with the decedent's creditors (i.e., claims against the estate), handling the tax matters of the estate, and, ultimately, distributing the decedent's assets to those persons entitled to them. The prudent person will not want to leave who is in charge of all his or her worldly possessions to chance. Peace of mind that, upon death, one's property will be managed by a responsible person of the creator's choosing is immeasurably valuable, and the Last Will and Testament gives its creator the ability to so-designate such a person.
It is not hard to see why creating a Last Will and Testament is preferable to allowing one's estate to pass by intestate succession. As noted above, the major advantages of a Last Will and Testament are that it allows its creator to specify to whom or what his or her assets are distributed upon his or her death (instead of relying on a complicated statutory distribution scheme), and it allows that person to specify a Personal Representative of his or her choosing who will be in charge of the decedent's worldly possessions during the probate process. The Last Will and Testament also affords its creator a myriad other advantages not discussed above. For example, the creator of a Last Will and Testament who has a minor child or children may specify in his or her Last Will and Testament who will be the guardian(s) of the minor child or children upon his or her death.
If the choice is between relying on the complicated laws of intestate succession and relying on a Last Will and Testament, which, among other things, expresses its creator's desires with respect to distribution and management of his or her estate, and thereby gives its creator peace of mind, the choice is clear: The Last Will and Testament.
If you are interested in learning more about the Last Will and Testament or are interested in having a Last Will and Testament prepared, please do not hesitate to contact me. I will be more than happy to speak with you and prepare your estate planning documents.
More to come: While certainly a necessary step above relying on the laws of intestate succession, depending on the nature of one's estate, the Last Will and Testament may not be the best or most cost-effective choice for disposing of one's assets after his or her death, and the Last Will and Testament certainly fails when it comes to managing one's estate during life. Another option is the Trust, which will be considered in a future post.

References: § 5
 § 3
 § 5
 § 3
 § 5
 § 3
 § 3
 § 6
 § 3
 § 6
 § 6
 § 6
 § 6