- What if there is no Will?
- What if there is a Will?
- Small Estates
- Duties of a Personal Representative
- Removing a Personal Representative
- Managing Estate Assets
- Notice Requirements
- Inventory
- Searching for Claims
- Presentation of Claims
- Allowance or Disallowance of claims
- Priority of Payments for Insolvent Estates
- Elective Share for Surviving Spouse
- Support for Surviving Spouse and Dependents
- Undue Influence
- Lack of Capacity
- Execution Formalities
- Income Taxes
- Oregon Estate Taxes
- Federal Estate Taxes
- Fiduciary Income Taxes
- Personal Representative Fee
- Attorney Fees
- Other Administrative Expenses
- Verified Statements
- Distributions
- Receipts
1. Terminology
- Decedent - The person who passed away.
- Intestate - Dying without a will.
- Testate - Dying with a will.
- Heir - Someone who inherits property when there is no will.
- Devise - A gift made by a will.
- Devisee - The person who receives a gift made by a will.
- Testator/Testatrix - The person who creates a will.
2. How to File
You must petition the probate court to admit any will to probate and to appoint you as the personal representative. The petition contains some basic background information of the decedent, and this information is described in ORS 113.035 -Petition for appointment of personal representative and probate of will. Where to file for probate depends on which county the decedent lived, died or owned property.
2.1 What if there is no Will?
If there's no will, Oregon's laws of intestate succession determine who inherits. I've outlined common scenarios for dying without a will in Oregon.
The process for intestate estates differs from a testate estates. The personal representative is appointed, not nominated by the will, as per ORS 113.085. Usually, the surviving spouse or children serve as the personal representative.
In the Portland Metro counties (Multnomah, Washington, Clackamas), there's a preference to avoid having co-personal representatives for estates. It's often recommended that one person declines to serve rather than having multiple representatives.
When there's no will, probate court typically requires a probate bond to protect heirs and creditors.
2.2 What if there is a Will?
If there is a will, you petition the court to appoint to prove the will and to appoint the personal representative nominated in will. In Oregon, it is a common practice for the will to waive bond.
You can learn more about wills and who can make a will by reading our article, Basics of Estate Planning Part 1. What is a will?
2.3 Small Estates
You can settle a small and simple estate in Oregon with an affidavit of claiming successor. (ORS 114.515) Estates that are eligible for an administration by affidavit are those that have probate assets:
- Less than $200,000 worth of real estate
- Less than $75,000 worth of personal property
- Less than $275,000 worth of combined value
Similar to the probate petition, the small estate affidavit requires that the claiming successor to state some of the decedent's personal information, list the heirs of the decedent, describe the fair market value of any property as well as other items.
The affidavit may not be filed until 30 days after the death of the decedent.
Often estates that are modest or that are made mostly of non-probate property will be settled by affidavit. Similar to a personal representative in a typical probate proceeding, the affiant has the ability to administer the probate property. Unlike the typical probate estate, the affiant has less oversight from the court.
For the simplest estates, you can check with the county court websites for Free Small Estate Affidavits.
3. Personal Representative
The personal representative is the person appointed by the court to serve as a fiduciary of the decedent's estate. The preference for a personal representative is the person nominated by the will or, typically, the next of kin.
Some Oregon counties require a newly appointed personal representative to attend a fiduciary education class.
3.1 Duties of a Personal Representative
Once you are appointed a personal representative you will have certain fiduciary duties to the estate of the decedent. ORS 114.265 explains the general duties of the personal representative.
A personal representative is a fiduciary who is under a general duty to and shall collect the income from property of the estate in the possession of the personal representative and preserve, settle and distribute the estate in accordance with the terms of the will and ORS chapters 111, 112, 113, 114, 115, 116 and 117 as expeditiously and with as little sacrifice of value as is reasonable under the circumstances.
I've written a full article on the Duties of an Oregon Personal Representative. That article along with Oregon Personal Representative Checklist will provide you with a good overview of the what you need to do as a personal representative.
3.2 Removing a Personal Representative
Occasionally a personal representative will have to be removed from managing the estate. Often times this happens when the personal representative becomes sick or is otherwise incapable of performing their duties. Less commonly, the personal representative has neglected the estate's property or stolen estate funds.
In all of these situations any interested party, or the court may petition the court for the removal of the personal representative. ORS 113.195 describes the process for the Removal of Personal Representative.
3.3 Managing Estate Assets
Preserving and maintaining estate assets is often the most difficult job of a personal representative. Along with the duties described in 3. 1 Duties of the Personal Representative, the personal representative has the right and shall take possession and control of the estate.
A personal representative has a right to and shall take possession and control of the estate of the decedent, but the personal representative is not required to take possession of or be accountable for property in the possession of an heir or devisee unless in the opinion of the personal representative possession by the personal representative is reasonably required for purposes of administration
Bank accounts, retirement accounts and other financial accounts should be identified and monitored. The personal representative should monitor the decedent's mail and go through the decedent's residence to find information about the estate. If the decedent owned or operated a business, the personal representative must review the business's records.
Many times, the primary asset of the estate is the family home. Oftentimes the home will remain vacant until it can be sold. Most insurance policies will not cover vacant homes. Vacant home insurance can be costly, but it is a must. The policy will protect both the estate from loss and the personal representative from any potential liability from a vandalized home.
4. Probate Bonds
Most Oregon Courts will require the personal representative to post a bond unless the bond was waived by the will. The courts require bonds in order to protect heirs, devisees and creditors of the estate.
I've written an article about Probate Bonds that explains in more detail when a bond is necessary.
5. Steps of Probate
Probate can take as little as 5 months but often is closer to 9-month process. I've highlighted the main steps of the process.
- Appointment of the Personal Representative. The Executor of the will or any interested party may petition for the appointment of a Personal Representative and the probate of the will.
- Proving the Will. This is the process of convincing the court that will is authentic. ORS 113.055
- Notification of Heirs and known parties. As part of the process, the PR must file a list of names of potential heirs and other interested parties and mail notice to them. The PR has 30 days after appointment to file proof with the court that these parties received notice or were mailed. ORS 113.145 and ORS 113.035 (8) and (9)
- Inventory and Assessment of the Estate. Within 90 days of appointment, the PR must file with the court an inventory and estimates of cash value for the property of the estate. ORS 113.165
- Notification of Unknown interested parties. Legal Notice must be published in a local newspaper for 3 consecutive weeks. ORS 113.155(1)
- Filing of Claims against the Estate. Creditors have 30 days after notice is mailed to them to file a claim against the estate. Otherwise, other claims against the estate must be filed 4 months after the publication in the newspaper. Those claims which were not filed on time could potentially be barred. ORS 115
- Filing of Tax Returns and payment of any taxes.
- File for approval of final accounts. The PR must maintain and provide an accounting to the court before the distribution of assets of the estate. ORS 116.083(3)
- Court Approval. Assets are distributed to the heirs and interested parties. ORS 116.113
5.1 Notice Requirements
After the personal representative is appointed by the court, several parties must be notified of the probate.
- Heirs and Devisees. These are the people who are named in the will or would have inherited through intestate succession.
- Interested parties. This is a term described in the statutes and is generally someone who alleges an interest in a will that the decedent made or promised to make.
- Oregon Health Authority Estate Administration Unit. The State of Oregon may have paid some benefits to the decedent and those benefits may be eligible for recoupment.
- Public Notice. This is the notice you will see in the local papers stating that probate has started.
- Known Creditors. The personal representative has a duty to search for creditors of the estate and provide them with notice of the probate proceedings.
5.2 Inventory
The personal representative is required to file an inventory with the court within 90 days of their appointment. The inventory will list the cash values of the property as of the date of death. (ORS 113.165 Filing Inventory and Evaluation.) You may have to hire an appraiser to determine the cash value for the inventory.
Sometimes assets are found after the initial inventory has been filed. In those instances, a supplemental inventory will be filed with the courts.
5.3 Searching for Claims
The personal representative is required to make a search for claims against the estate during the three months after appointment. After this search period, the personal representative has 30 days to provide notice to anyone that has a claim or potential claim against the estate.
Once those steps are completed, the personal representative will file a compliance with the court regarding the search for claims. (ORS 115.003 Personal Representative to Make Diligent Search for Claimants)
6. Settling Claims
One of the duties of the personal representative is to settle and manage any claims against the estate. Common claims are from credit card companies and hospitals but can be for any debt, liability or obligation created by the decedent during their lifetime.
Most of the time the process is fairly straight forward. The decedent has a credit card bill of a few hundred dollars; the credit card company presents a claim; and the personal representative pays it as an allowable claim. Other times a claim may be for hundreds of thousands and the personal representative, and their attorney, will spend much more time managing the claim.
6.1 Presentation of Claims
There are special rules and forms spelled in ORS 115.005 for Presentation of Claims.
Claims are barred if is not presented before four months after the first publication of notice to interested persons or 30 days after a notice was deliver to the claimant.
The form of the claim presented to the personal representative must be:
- In writing.
- Describe the nature and the amount thereof, if ascertainable.
- State the names and addresses of the claimant and, if any, the attorney of the claimant.
6.2 Allowance or Disallowance
Once a claim is presented, the personal representative must decide whether to allow or disallow the claim. To allow the claim, personal representative doesn't have to do anything but wait 60 days.
To disallow a claim, the personal representative needs to mail a notice of disallowance of the claim to the claimant and to the claimant’s attorney. The notice of disallowance must inform the claimant that the claim has not been allowed and that it will be barred unless, within 30 days, the claimant:
- Requests a summary determination with the probate court; or
- Commence a separate action in any court that has jurisdiction.
The personal representative may also compromise a claim against the estate.
6.3 Priority of Payments for Insolvent Estates
Sometimes the estate doesn't have the assets to pay all of its debts. In those cases, the personal representative will pay the claims in the following order:
If the applicable assets of the estate are insufficient to pay all expenses and claims in full, the personal representative shall make payment in the following order:
(a)Support of spouse and children, subject to the limitations imposed by ORS 114.065 (Limitations on support).
(c)Expenses of a plain and decent funeral and disposition of the remains of the decedent.
(d)Debts and taxes with preference under federal law.
(e)Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending the decedent.
(f)Taxes with preference under the laws of this state that are due and payable while possession of the estate of the decedent is retained by the personal representative.
(g)Debts owed employees of the decedent for labor performed within 90 days immediately preceding the date of death of the decedent.
(i)The claim of the Department of Veterans Affairs under ORS 406.100 (Claims against estate by department), including a claim the waiver of which was retracted by the Director of Veterans Affairs under ORS 406.110 (Waiver of claims).
(j)The claim of the Department of Human Services or the Oregon Health Authority for the amount of the states monthly contribution to the federal government to defray the costs of outpatient prescription drug coverage provided to a person who is eligible for Medicare Part D prescription drug coverage and who receives benefits under the state medical assistance program or Title XIX of the Social Security Act.
(k)The claim of the Department of Human Services or the Oregon Health Authority for the net amount of assistance paid to or for the decedent, in the following order:
(A)Public assistance, as defined in ORS 411.010 (Definitions), and medical assistance, as defined in ORS 414.025 (Definitions for ORS chapters 411, 413 and 414), funded entirely by moneys from the General Fund; and
(B)Public assistance, as defined in ORS 411.010 (Definitions), and medical assistance, as defined in ORS 414.025 (Definitions for ORS chapters 411, 413 and 414), that may be recovered from an estate under ORS 416.350 (Recovery of medical assistance), funded by a combination of state and federal funds.
(L)The claim of the Department of Human Services or the Oregon Health Authority for the care and maintenance of the decedent at a state institution, as provided in ORS 179.610 (Definitions for ORS 179.610 to 179.770) to 179.770 (Rules).
(m)The claim of the Department of Corrections for care and maintenance of any decedent who was at a state institution to the extent provided in ORS 179.610 (Definitions for ORS 179.610 to 179.770) to 179.770 (Rules).
(n)All other claims against the estate.
(2) If the applicable assets of the estate are insufficient to pay in full all expenses or claims of any one class specified in subsection (1) of this section, each expense or claim of that class shall be paid only in proportion to the amount thereof.
