Wealth Law Blog : Oregon Asset Protection Lawyers & Attorneys : Samuels Yoelin Kantor Seymour & Spinrad Law Firm : OR Estate Planning, Fiduciary Litigation

From time to time, we will publish blurbs on recent local court opinions and state legislation:

Senate Bill 237

Senate Bill 237 amends ORS 127 and legally sanctions the use of a “springing” power of attorney. This means that a person may execute a power of attorney that indicates by a specific date or occurrence, the power of attorney will become effective. If a person does not indicate a “trigger” event (usually financial or physical incapacity), the power of attorney becomes effective upon execution and remains effective until revoked. 

The bill attempts to place multiple safeguards against abuse of the springing power of attorney. First, the statute allows a person or "principal” to designate in their power of attorney who shall make the determination that the trigger event has occurred. This person does not have to be the same person that will be the agent under the power of attorney. If such a person is designated, the bill provides that this person will be considered the personal representative of the principal for purposes of ORS 192.518 et seq., which deals with state health care information, and 45 C.R.F. 160 & 164, which deal with federal health care information.

Second, if the trigger event is the financial incapability of the principal, but a person is not designated in the power of attorney to make this determination, any physician can make the determination in writing. Once this determination is made, all acts by the agent under the power of attorney on behalf of the financially incapable principal will bind the principal as if he had taken the action himself while financially capable. 

The final substantive amendment to ORS 127 by Senate bill 237 is a clause meant to provide protection for an agent that acts in good faith, but without proper authority. Section three of the bill states that a power of attorney terminates upon a designated event or the death of the principal. But, the power of attorney is still effective, if the agent acts in good faith on behalf of the principal without the knowledge that the terminating event has already occurred. Absent fraud, an affidavit by the agent that states such facts is conclusive proof that the action is binding upon the principal and his heirs, even though the power of attorney was technically no longer in effect. 

Last, this bill applies to all powers of attorney, regardless of whether they were executed prior to the effective date of the bill (January 1, 2010).

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Jay Folberg recently wrote the four page article,
 "Mediating Family Property and Estate Conflicts"
in the ABA's December 2009 issue of Probate &
Property.  I've distilled it into the top five reasons
why you want to heed his advice to mediate rather
than litigate:

1.       Expense.  Litigation is ridiculously expensive.  It takes
untold hours for partners, associates, and paralegals to wade through
discovery documents, take depositions, fight numerous pre-trial battles,
and properly prepare a case to proceed to a hearing or trial.  Don't get
me wrong - that's how I make my living and sometimes there is no other
choice, but it takes a tremendous amount of time and money to litigate.
Settlement at any stage of litigation stops the bleeding of attorneys'
fees. 

2.       Publicity.  Certain family members are good at starting a fight
without looking down the road to see where that path leads.  When the
mud between disgruntled family members starts to be tossed around, it
may feel good for the person that starts the fight to file their
salacious allegations, but those become public documents for curious
gawkers to review.  And the responsive documents filed could turn out to
be even more salacious and damaging.  Early mediation avoids battling in
a very public forum. 

3.       Non-Party Participation.   The plaintiff or petitioner files
the lawsuit or petition and the defendant or respondent answers.  But
with family disputes, there are often non-party players that are pulling
the strings behind the scenes that have great influence.   With
mediation, the non-parties may be allowed to participate in the process,
which allows them to voice their opinions and can be beneficial in
allowing all to feel they have had their "day in court" without actual
litigation.

4.       Creative Resolution.  Often times in litigation there is a
winner and a loser, without much gray area in between.  Mediations are
opportunities to toss around creative resolutions that the court may not
have the ability to use.  For example, Folberg notes a settlement in
which one brother settled for income producing real property, because
that met with his needs and interest, and the other brother received the
real property with the development potential, because that met with his
very different needs and interest. 

5.       Family Communication.  Conventional litigation, with the
parties speaking through their attorneys, does not allow for the
interaction that may be necessary to help frustrated family members
resolve their conflict.  The right mediator and the right attorneys can
be powerful in guiding conflicted families back toward some sort of
relationship.  Can it happen?  Absolutely.  Does it happen?  Not nearly
often enough.       

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From time to time we will publish recent local cases or legislative bills:

Oregon Senate Bill 403

Senate Bill 403 makes a very small amendment to ORS 30.030, which deals with the dispersal of damages received from a wrongful death action. Originally the remainder of damages from a wrongful death claim could only be dispersed in a manner similar to intestate succession. Senate bill 403 amends ORS 30.030(5) to allow the remainder of damages to be dispersed in any way agreed by the beneficiaries or in a manner similar to intestate succession. 

This bill became effective on March 31, 2009.

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From time to time, we will publish blurbs on recent local court opinions and state legislation: 

Force v. Dep’t. of Rev., 2008 WL 5191844 (Or.Tax Magistrate Div.) (pdf)

Background: Decedent’s personal representative completed federal and state estate tax returns resulting in no tax owed on decedent’s farm. The state of Oregon issued a notice of deficiency for approximately $27,000. The personal representative argued that the state of Oregon, by statute, had to use the federal valuation method, which would result in $0 in state tax. 

Holding: The federal determination of federal estate tax is not binding upon the state in its separate and distinct calculation of the Oregon inheritance tax. Instead, the state tax imposed is appropriately determined based upon the formula contained in IRC section 2011(b)(1) (2000) as expressly adopted in ORS 118.010(2).

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