Administering Oregon Estates 2018

ADMINISTERING
OREGON ESTATES
2012 Revision
with
2018 Legislative Supplement
NOTE: This package contains the 2012 revision of Administering Oregon

Estates, with the 2018 supplement following each updated section. Forms 11-4 and
11-16 were replaced in their entirety. This revision completely replaces the 2004
revision and 2006 supplement.
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The Oregon State Bar Legal Publications resources are designed to help
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is reviewed carefully before publication, in dealing with specific legal matters the
lawyer should research original sources of authority. Neither the Oregon State Bar
nor the contributors make either express or implied warranties regarding the use of
these materials. Each lawyer must depend on his or her own research, knowledge
of the law, and expertise in using or modifying these materials.
Drafting forms is essentially rendering legal advice. No handbook can assume that
responsibility. The responsibility ultimately rests with the individual lawyer. The forms in this
book are suggested only. They have been carefully checked for conformity with the law. Still,
the facts in every case inevitably require a variation from the published form. The forms are
offered here for the limited purposes of illustrating the text and encouraging the elimination of
obsolete and superfluous language.
The case citations in this book were Key Cite checked through September 11, 2018. The
ORS citations were checked through 2018. All URLs cited were accurate as of September 11,
2018.
Printing History:
First edition................................................................. 1970
Second edition ............................................................ 1972
Third edition ............................................................... 1977
Supplement ................................................................. 1983
Supplement ................................................................. 1986
Fourth edition ............................................................. 1991
Supplement ................................................................. 1996
Cumulative supplement .............................................. 2000
Legislation supplement .............................................. 2002
Fifth edition ................................................................ 2004
Legislative supplement ............................................... 2006
Sixth edition ............................................................... 2012
Legislative supplement ............................................... 2018
This handbook may be cited as:

1 or 2 Administering Oregon Estates (OSB Legal Pubs 2012 & Supp 2018)
Library of Congress Catalog Card No. 91-60289
© by the Oregon State Bar
ISBN 1-879049-16-3
EDITORS:
JONATHAN A. LEVY, A.B., Harvard College (1977); J.D., University of Michigan
Law School (1982); admitted to the Oregon State Bar in 1988; partner, Wyse
Kadish LLP, Portland.
PHILIP N. JONES, B.A., Lewis & Clark College (1973); J.D., Lewis & Clark Law
School (1976); admitted to the Oregon State Bar in 1976; partner, Duffy
Kekel LLP, Portland.
OREGON STATE BAR

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EDITORS’ PREFACE
This volume represents the sixth edition of Administering Oregon Estates
since its original publication in 1970. A number of substantial changes—some
appearing in the 2006 supplement and some new to this latest revision—have been
made since the 2004 fifth edition. These changes reflect Oregon’s statutes
regarding orders and judgments; changes to the small estate statute; revisions to the
anatomical gift statutes; registration of domestic partners; the authorization of
transfer on death deeds; the revamp of the spousal elective share; the significant
increase in the federal estate tax exemption; the revisions to the Oregon estate tax
(formerly known as the Oregon inheritance tax) and its continuing disconnect from
the federal estate tax; and many other changes.
The 2018 legislative supplement updated the sixth edition of Administering
Oregon Estates. A number of substantial legislative changes occurred after the 2012
edition was published. Those changes reflected Oregon’s statutes regarding new
procedures involving noncompliant writings to prove, revoke, or alter a will; updated
bonding requirements in probate; amended notice requirements in probate and will
contests; added new provisions relating to attorney fees, advance directives, and
personal representative compensation; and addressed when a child “conceived from
the genetic material of a decedent who died before the transfer of the decedent’s
genetic material into a person’s body” is entitled to an interest in the decedent’s
estate.
As always, we are indebted to the chapter authors of this and previous
editions, and the untold hours of work they have contributed to the cause. Without
their generosity, probate lawyers and judges in Oregon would have many more
trails to blaze and thickets to untangle.
We would appreciate hearing from readers who have comments or
corrections to offer.
JONATHAN A. LEVY
PHILIP N. JONES
Editors
TABLE OF FORMS
Click here to download a zip file of all the forms in Word format.
Chapter 1—Alternatives to Probate

Form 1-1 Affidavit of Heirship
Form 1-2 Affidavit Pursuant to ORS 708A.430(2)
Chapter 2—Probate Jurisdiction and Procedures

Form 2-1 Order Transferring Venue
Form 2-2 Order Establishing Venue Where First Commenced
Form 2-3 Notice of Hearing
Form 2-4 Admission of Personal Service
Form 2-5 Waiver of Notice
Form 2-6 Waiver of Notice and Consent to Entry of Order
Chapter 3—Preadministration Procedures

Form 3-1 Appointment of Person to Make Decisions Concerning Disposition
of Remains
Chapter 5—Initiating Probate and Small-Estate Proceedings

Form 5-1 Initiating Probate: Critical Dates Checklist
Form 5-2 Letter to Personal Representative
Form 5-3 Petition for Probate of Will and Appointment of Personal
Representative
Form 5-4 Petition for Administration of Intestate Estate and Appointment of
Personal Representative
Form 5-5 Affidavit of Attesting Witness to Will
Form 5-6 Affidavit of Witness to Signature of Testator or Witness
Form 5-7 Limited Judgment Admitting Will to Probate and Appointing
Form 5-8 Limited Judgment for Administration of Intestate Estate and
Appointment of Personal Representative
Form 5-9 Personal Surety Bond
Form 5-10 Information to Heirs and Devisees (Testate Estate)
Form 5-11 Information to Heirs (Intestate Estate)
Form 5-12 Affidavit of Proof of Mailing or Delivery of Information to Heirs
and Devisees
Form 5-13 Affidavit of Mailing Information to Oregon Department of Human
Services
Form 5-14 Waiver of Notice of Information
Form 5-15 Notice to Interested Persons
Form 5-16 Affidavit of Publication
Form 5-17 Affidavit of Claiming Successor of Small Estate (Testate Estate)
Form 5-18 Affidavit of Claiming Successor of Small Estate (Intestate Estate)
Chapter 6—Special Considerations

Form 6-1 Petition for Appointment of Special Administrator
Form 6-2 Order Appointing Special Administrator
Form 6-3 Petition for Order Awarding Support
Form 6-4 Answer of Personal Representative to Petition for Support
Form 6-5 Order Awarding Temporary Support and Setting Time for Hearing
Form 6-6 Order Awarding Support to Spouse and Dependent Children of
Decedent
Form 6-7 Petition for Order Setting Aside Whole Estate for Support and
Terminating Administration
Form 6-8 General Judgment Setting Aside Whole Estate
Chapter 7—Initial Responsibilities and Liabilities of Personal Representative

Form 7-1 Inventory of Property of Decedent’s Estate
Form 7-2 Supplemental Inventory
Form 7-3 Amended Inventory
Chapter 8—Rights of Interested Persons

Form 8-1 Election to Receive Elective Share of Estate Under ORS 114.610
Form 8-2 Disclaimer by Heir
Form 8-3 Disclaimer by Surviving Spouse
Form 8-4 Written Partial Disclaimer of Bequest of Partnership Interest
Form 8-5 Disclaimer to Cover Residuary Interest
Form 8-6 Disclaimer of Intestate Succession or Devise
Form 8-7 Nontestamentary Disclaimer
Chapter 9—Claims against the Estate

Form 9-1 Form of Claim against Decedent’s Estate
Form 9-2 Personal Representative’s Creditor Search Checklist
Form 9-3 Notice of Right to Assert Claims against the Estate
Form 9-4 Proof of Personal Representative’s Compliance
Form 9-5 Notice of Disallowance of Claim
Form 9-6 Request for Summary Determination of Claim
Form 9-7 Notice by Personal Representative of Separate Action on Claim
Required
Form 9-8 Checklist for Priority of Payment of Expenses and Claims
Chapter 10—Managing Estate Assets

Form 10-1 Relinquishment of Possession and Control of Decedent’s Property
Form 10-2 Application of Personal Representative for Authority, Approval, or
Instructions
Form 10-3 Petition of Personal Representative for Authority to Sell Property
Form 10-4 Order Authorizing Sale of Property
Form 10-5 Petition for Order Requiring Testimony
Form 10-6 Order Requiring Testimony
Chapter 11—Accounting, Distribution, and Closing

Form 11-1 Annual or Other Accounting
Form 11-2 Final Accounting and Petition for General Judgment of Final
Distribution
Form 11-3 Notice for Filing Objections to Final Accounting and Petition for
General Judgment of Final Distribution
Form 11-4 Statement under ORS 116.083(4) in Lieu of Final Accounting and
Petition for Judgment of Final Distribution
Form 11-5 Receipt for Partial Distribution
Form 11-6 Deed of Personal Representative
Form 11-7 Final Distribution Receipt
Form 11-8 Report of Unclaimed Assets
Form 11-9 Order of Escheat (of Unclaimed Assets)
Form 11-10 Receipt for Unclaimed Assets
Form 11-11 Supplemental Judgment Discharging Personal Representative and
Closing Estate
Form 11-12 Order Directing Notice of Petition to Reopen Estate
Form 11-13 Notice of Petition to Reopen Estate
Form 11-14 Order Reopening Estate
Form 11-15 General Judgment Approving Final Account and Authorizing Final
Distribution
Form 11-16 Statement for Attorney Fees and Costs
Form 11-17 Petition to Reopen Estate
Chapter 15—Litigation
Form 15-1 Petition of Personal Representative for Approval and Authority to
Settle Wrongful Death Claim
Form 15-2 Affidavit of Lawyer
Form 15-3 Order Approving Settlement of Wrongful Death Claim
Form 15-4 Petition for Apportionment of Proceeds of Wrongful Death
Settlement or Judgment
Form 15-5 Agreement of Spouse, Children, and Parents for Apportionment of
Wrongful Death Settlement or Judgment
Form 15-6 Order of Apportionment of Wrongful Death Settlement or
Judgment
Chapter 1: ALTERNATIVES TO PROBATE
DAVID C. STREICHER, B.S., Portland State University (1979); J.D., University of Oregon School
of Law (1984); member of the Oregon State Bar since 1984; member, Black Helterline
LLP, Portland.
The author acknowledges the work of D. Charles Mauritz and Kimberly K. Tellin, who
contributed to the prior edition of this chapter.
2018 Supplement Authors
KATE KILBERG, B.A., University of Michigan (1998); J.D., Harvard University School of Law
(2001); admitted to the State Bar of Michigan in 2001, the District of Columbia Bar in
2002, and the Oregon State Bar in 2011; attorney, Catalyst Law, Portland.
KIMBERLY PRAY, B.S., Brown University (1997); J.D., Gonzaga University School of Law
(2008); LL.M. (Taxation), University of Washington (2009); admitted to the Oregon
State Bar in 2008; attorney, Catalyst Law, Portland.
§ 1.1 INTRODUCTION
Some form of estate administration inevitably occurs on the death of a
person. It can take many forms, ranging from formal probate administration to
several informal avenues for transferring the decedent’s property to the persons
entitled to it under the decedent’s will or by operation of law. No single form of
estate administration achieves the desired result in every situation. The lawyer
must have a working knowledge of the alternatives available, and match the most
efficient and economical approach with the underlying facts and circumstances.
Probate is the most common form of administration after death. To most
clients, probate is a mysterious term; they do not know what it means, but believe
it is a costly bureaucratic nightmare that will delay receipt of their inheritances and
should be avoided if at all possible. Probate is the court-supervised procedure for
settling the decedent’s liabilities, determining who is entitled to the decedent’s
property, and making the transfers. Mechanically, probate is effectuated through
approximately a dozen filings with the court over a period ranging from six months
to two years.
As this chapter demonstrates, probate is not always necessary or desirable.
The lawyer must look ahead and identify potential circumstances that may tilt one
way or the other on the decision whether to commence probate administration. The
ability to make this judgment call is the mark of capable probate counsel.
§ 1.2 GENERAL OVERVIEW OF PROBATE
Probate requires the appointment of a personal representative (referred to as
the executor in some states). If the decedent dies testate, the personal
representative ultimately appointed is usually the first nominee named in the
decedent’s will. If the decedent dies intestate, the personal representative is usually
the decedent’s spouse, child, or close relative. See ORS 113.085. In many counties
(including Multnomah County), petitioners who lack preference under ORS
113.085 will usually not be appointed. Among petitioners with equal preference,
the first to file will usually be appointed. See chapter 5.
For testate estates, the will is proved and admitted by the court. Proof is
usually through an affidavit of attesting witnesses to the will. See ORS 113.055(1).
See also §§5.2-4(a) to 5.2-4(b).
Within 30 days after the appointment of the personal representative, the
heirs, devisees, and persons described in ORS 113.035(8)–(9) are notified of the
decedent’s death and the pending probate administration. ORS 113.145(6). See
§§2.5-1 to 2.5-7, 7.3-1(a).
The personal representative identifies and values the assets of the estate and,
within 60 days after appointment, files an inventory with the court. ORS 113.165.
See §§7.4-1 to 7.4-6.
The personal representative must make a reasonably diligent search for
creditors of the estate and provide them with notice of the probate proceeding.
ORS 115.003. Unidentified creditors are notified by publishing notice of the
personal representative’s appointment once in each of three consecutive weeks in a
local newspaper of general circulation. ORS 113.155(1). Each creditor must file a
claim against the estate for debts owed by the decedent no later than 30 days after
personal notice is mailed or four months after the newspaper notice is published,
whichever occurs later. ORS 115.005(2). If the claim is not filed within the
applicable period, the underlying debt is either subordinated to timely filed claims
or is barred. ORS 115.005(3). A different procedure applies to mortgage loans and
other secured debt. See chapters 7, 9.
As appropriate, the personal representative liquidates some or all of the
decedent’s property and pays allowed claims and expenses of administration. See,
e.g., chapters 7, 10.
The personal representative files any required state or federal income and
death tax returns and pays any taxes due. See ORS 114.305(17). See also §§7.6-1
to 7.6-6(p); chapters 12–14.
After completion of the foregoing steps, the personal representative files a
final account with the court. ORS 116.083(3). See chapter 11.
After court approval of the final account, the assets of the estate are
distributed to the beneficiaries under the will or to the heirs at law. ORS 116.113.
See §§11.8-2 to 11.8-2(d).
CAVEAT: Probate is deceptively complicated. Although generic
probate filings can be routine, there are ample opportunities for malpractice.
If claims are not disallowed within 60 days, they are deemed allowed. ORS
115.135(1). Death taxes must be paid within nine months after the
decedent’s death or there will be substantial penalties (usually 5% per
month). See, e.g., ORS 118.260(4); IRC §6651(a)(1). Death taxes may have
to be apportioned among various classes of beneficiaries. It may be
necessary to select a fiscal taxable year so that excess deductions are
transferred to the beneficiaries under IRC §642(h), and not lost. It may be
necessary to fund tax-planning trusts based on a formula clause in the will.
Although not technically part of the probate, tax guidance on distributions
from IRAs is often necessary. This list could go on for pages. Supervision by
an experienced probate lawyer with a tax background is recommended.
2018 Supplement Text
The 2015 Legislature added ORS 112.238 to Oregon law to create a
procedure allowing the court to admit for probate a writing that does not comply
with the formalities of a validly executed will. The statute allows the proponent of
the writing to establish “by clear and convincing evidence” that the decedent
intended the writing to constitute
(1) “[t]he decedent’s will”;
(2) “[a] partial or complete revocation of the decedent’s will”; or
(3) “[a]n addition to or an alteration of the decedent’s will.”
ORS 112.238(1).
NOTE: For further discussion of ORS 112.238, see Supplement § 8.2-6
(petition to admit noncompliant writing as decedent’s will or a revocation or
alteration of the will).
In the third paragraph of the 2012 text, the citation to ORS 113.145(6)
should be to ORS 113.145(1) and (4). As stated in that paragraph, the personal
representative must, within 30 days after appointment, notify heirs, devisees, and
persons described in ORS 113.035(8) to (9) of the decedent’s death and the
pending probate administration. ORS 113.145(1), (4). ORS 113.145(1) sets forth
the information that must be included in the notice. See § 2.5-1 to § 2.5-7, § 7.3-
1(a). The personal representative also must mail or deliver that information and a
copy of the decedent’s death record to the Department of Human Services and the
Oregon Health Authority or as otherwise provided by rule. ORS 113.145(6).
The 2017 Legislature amended ORS 113.165 (cited in the fourth paragraph
of the 2012 text) to give the personal representative 90 days after appointment to
file an inventory with the court. ORS 113.165. Previous law accorded the personal
representative only 60 days to file the inventory.
The 2017 Legislature also amended ORS 115.005(2) (cited in the fourth
paragraph of the 2012 text). Except as provided in ORS 115.005(3), the statute
provides that a claim is barred from payment from the estate if it is not presented
within the statute of limitations applicable to the claim and before the later of the
following time periods: (1) four months after notice to interested persons was first
published; or (2) if the claim “was one with respect to which the personal
representative was required to deliver or mail a notice under ORS 115.003(2), 45
days after a notice meeting the requirements of ORS 115.003(3) is delivered or
mailed to the last-known address of the person asserting the claim.” ORS
115.005(2). See § 9.3-4 (time for presenting claims).
§ 1.3 PROBATE PROPERTY AND NONPROBATE PROPERTY

DEFINED
Broadly speaking, probate property is any asset for which title or ownership
does not automatically transfer by survivorship, beneficiary designation, contract,
or operation of law on a decedent’s death. The type of property—tangible or
intangible, personalty or realty—is not relevant. Instead, the focus is on the form of
ownership.
Ownership or title is usually evident from monthly statements (for bank or
brokerage accounts) or commonly used documents, such as deeds for real property,
certificates for stocks and bonds, and certificates of title for vehicles. Such
documentation may be particular to items such as patents, mineral and royalty
interests, or interests in sole proprietorships and informal partnerships. Finally,
most tangible personal property (e.g., personal effects, household furnishings, and
currency) has no formal ownership documentation, which can be problematic in a
second marriage or contentious family situation.
For purposes of this chapter, nonprobate property is property that
automatically transfers at death without probate. This chapter discusses several
types of nonprobate property, including:
(1) Property that transfers by form of ownership to the survivor on the
decedent’s death (e.g., tenancy by the entirety real property and joint bank
accounts);
(2) Property that transfers by beneficiary designation on the decedent’s
death (e.g., payable-on-death accounts, IRA accounts, annuities, life insurance, and
trusts); and
(3) Property having a statutory nonprobate status (e.g., Social Security
and veterans benefits).
§ 1.4 ASSESSING THE NEED OR DESIRABILITY FOR PROBATE

§ 1.4-1 In General
Most estates include at least some probate property, but this does not
automatically mean that probate is necessary or desirable. No Oregon statute
requires a probate simply because the estate contains probate assets. The necessity
of probate hinges on the purposes to be accomplished and the adequacy of
nonprobate means to achieve these results. Factors to consider when assessing the
need or desirability of commencing a probate are discussed in §§1.4-2 to 1.4-6.
§ 1.4-2 Perfecting Chain of Title
Perhaps the most obvious purpose of probate is to transfer title to property.
The personal representative’s conveyance establishes the legitimacy of the
successors’ interests. Real estate is the most commonly affected class of property
for which the chain of title is critical. Probate can resolve past title deficiencies and
ensure that the successor can sell the property without title complications.
§ 1.4-3 Resolving Disputes Among Heirs and Beneficiaries
Most nonprobate alternatives require cooperation and agreement among all
interested parties. If this is not realistic, or if there are disputes among heirs and
devisees, probate is probably necessary to bring a conclusive resolution. See §1.5-
5.
§ 1.4-4 Protecting Against Creditors’ Claims
Probate assets transferred without probate administration generally remain
subject to all claims available against the decedent. Conversely, a probate insulates
the successors from all unsecured claims. Particular attention should be paid to
potential claims against the decedent for guarantees of business indebtedness,
professional negligence, and personal injuries. These potential liabilities may
warrant probate even though nonprobate alternatives are available.
§ 1.4-5 Settling Tax Matters and Allocations
The absence of a probate proceeding does not avoid the obligation to file
income tax returns and death tax returns and to pay all outstanding taxes. See
§§7.6-1 to 7.6-6(p); chapters 12–14. A probate will identify the person or persons
liable for taxes. Without a probate, tax liabilities may unknowingly attach via
transferee liability to the heirs or devisees. A probate may cause these taxes to be
apportioned to, and deducted from, their shares, but this will extinguish their
personal liability.
§ 1.4-6 Value of Probate Assets
As a practical matter, the use of nonprobate means to transfer probate
property becomes less desirable and more difficult as the value of the property
increases. For example, real estate is typically transferred through probate because
the value usually warrants expending the time and resources necessary to avoid
future title problems. In addition, a small-estate affidavit cannot be used if the
value of the estate exceeds the dollar amounts discussed in §§1.5-4 and 5.3-2.
§ 1.5 NONPROBATE TRANSFERS OF PROBATE PROPERTY
§ 1.5-1 In General
The objective of transferring probate property through nonprobate means is
to achieve a valid transfer in a more efficient and economical manner. The quality
of the title received is largely based on whether third parties (e.g., purchasers, title
companies, transfer agents, and banks) will respect the transfer. The risk of
nonprobate transfers is that potential creditors will not be barred. Techniques for
transferring probate property through nonprobate means are discussed in §§1.5-2 to
1.5-18.
§ 1.5-2 Untitled Assets
Assets without formal documents of title are generally assumed to be owned
by the person in possession. Such assets include currency, personal effects, sole
proprietorship equipment, household furnishings, and jewelry. The key document
memorializing distribution of these items is a receipt acknowledging delivery and
possession. Business assets may warrant a Uniform Commercial Code search to
confirm that they are not encumbered by security interests. If so, the interested
parties should investigate the status of the underlying debt and consider
abandoning the item or requiring the recipient to sign an agreement assuming the
debt.
§ 1.5-3 Affidavit of Heirship
An affidavit of heirship is a verified statement of the facts surrounding a
proposed distribution. It typically includes the same information required under
ORS 114.525 for a small-estate affidavit. See §§1.5-4, 5.3-3(a). Many financial
institutions and insurance companies have preprinted forms available. The purpose
of the affidavit is to substantiate the right to receive property from a decedent, or to
create a public record of the chain of title to a particular asset or from a particular
ancestor. The affidavit is not a transfer document in itself, but merely substantiates
the interests of the heirs and devisees. An affidavit given to authorize the transfer
of property in the possession of a third party is usually combined with an
indemnification agreement. An example of an affidavit of heirship is included as
Form 1-1.
A sample affidavit of heirship is available at http://affidavitforms.org/or
/oregon-affidavit-of-heirship.
§ 1.5-4 Small-Estate Affidavits
When a probate is unavoidable, a lawyer should evaluate whether to use a
small-estate affidavit under ORS 114.505–114.560. Under current law, the small-
estate affidavit procedure is available if the probate estate contains no more than
$75,000 of personal property, no more than $200,000 of real property, and no more
than $275,000 in the aggregate. ORS 114.515(2). Estates within these limits may
be transferred by filing an affidavit with the court, rather than a “full” probate. This
approach is usually faster and cheaper, albeit with several drawbacks. A detailed
discussion of the small-estates law is set forth in §§5.3-1 to 5.3-8(d).
§ 1.5-5 Settlement Agreements
Probate is frequently used to settle disputes among heirs and to determine
the persons to whom third parties may transfer estate assets. If the assets in dispute
are transferable by nonprobate means, a settlement agreement among the parties
may be sufficient. The basis of the settlement agreement is contract law rather than
the probate statutes. The primary limitation of a settlement agreement is that it
binds only the parties to the agreement. Consequently, unnamed parties may still
assert an interest in the estate, which may cause third parties to insist on a probate.
Conversely, a probate settles the interests of all parties in the assets of the estate,
whether or not the parties are identified.
§ 1.5-6 Indemnification Agreements
Third parties having a direct or indirect interest in assets of an estate may be
willing to participate in a nonprobate administration if they are adequately
protected from liability. For example, a title company may agree to insure a
successor’s title on presentation of an affidavit of heirship and an agreement
holding the title company harmless from any defects in title not appearing on their
records. See §1.5-8. A similar arrangement may be acceptable to a transfer agent
who is requested to informally transfer shares in a closely held business. An
indemnification agreement is not a transfer document; it merely shifts the risk of a
title defect away from the person in possession to those who receive it, or who
have the benefit of the recognition of their ownership. Indemnity agreements have
no specific terms and are wholly subject to the negotiations between the parties
involved.
§ 1.5-7 Transfers of Interests in Closely Held Businesses
Absent a payable-on-death designation, publicly traded securities are
difficult to transfer without probate. If the decedent holds the certificates, the
transfer agent will inevitably demand letters testamentary. The same is generally
true if the securities are held in “street name” in a brokerage account.
Shares of closely held businesses are different. Third-party transfer agents
are rarely used. If the other owners cooperate, interests in such businesses can
often be transferred on the entity’s books with only modest supporting
documentation. In general, a business entity’s ownership of its assets is not
affected by transfers of interests in the entity itself. There are, however, exceptions.
For example, if individual partners are the record owners of partnership assets, an
informal transfer of a partnership interest may need to be coupled with a formal
record transfer (such as a deed) of the underlying assets.
For securities and security accounts transferable on death to a named
beneficiary, see §1.6-1(c).
§ 1.5-8 Real Estate Title Insurance
If the sole purpose of a probate is to establish marketable title to real
property, this result may be achieved through title insurance. Albeit in limited
circumstances, title companies may be willing to insure title to real property
without a probate or small-estate affidavit.
A universal prerequisite is that all devisees and heirs at law sign an affidavit
of heirship similar to that described in §1.5-3. If one or more heirs are excluded as
owners of the property (or if the county will not record a stand-alone affidavit of
heirship), quitclaim deeds will also be necessary to vest title in the owners.
Finally, the title insurance premium may be increased by approximately
100%, 50%, or 25% of the normal rate, depending on whether the sale occurs
within six years after the decedent’s death, six to 15 years after death, or more than
15 years after death, respectively. Real property insured without a probate or
small-estate affidavit typically has a value of $200,000 or less.
§ 1.5-9 Real Estate Transfer on Death Deeds
Effective January 1, 2012, Oregon enacted the Uniform Real Property
Transfer on Death Act (URPTDA), ORS 93.948–93.979. In general, the URPTDA
allows an individual to execute and record a deed during his or her life that is not
effective until his or her death. See ORS 93.961, 93.969. The deed can be revoked
at any time during life, and does not prevent the grantor from encumbering or
conveying the property. See ORS 93.955, 93.967, 93.977.
Oregon’s URPTDA deviates from the uniform act by giving interested
parties 18 months after the transferor’s death to challenge the deed on grounds of
incapacity, fraud, duress, or undue influence. ORS 93.959(3).
PRACTICE TIP: If real property is the decedent’s only probate asset, the
lawyer should check for a transfer-on-death deed before commencing
probate.
§ 1.5-10 Funding Disclaimers Without Probate
Disclaimer wills are a popular tax-planning vehicle. In general, the will
states that all the decedent’s property passes to the surviving spouse, except to the
extent the spouse disclaims any of the property. The disclaimed property typically
passes to a credit-shelter trust for the benefit of the spouse.
Disclaimer wills are often used for couples who have only modest death-tax
exposure and may not need a credit shelter trust. Usually, all their property is
jointly owned and would (absent a disclaimer) pass free of probate when the first
spouse dies. This begs the question whether a probate is necessary to effectuate a
disclaimer of a one-half interest in jointly held property. As an alternative, the
surviving spouse might convey a one-half interest to the credit shelter trust within
nine months after death, and note on the instrument of conveyance or a side
agreement that the spouse has not accepted any interest in the decedent’s one-half
interest and is making a direct conveyance as a means of effectuating a disclaimer
without a probate. Some lawyers use variations of this technique.
The literal language of IRC §2518(c)(3) suggests that a direct deed is a
qualified disclaimer if it is executed and delivered within nine months after death,
and the disclaiming party accepts no interest or benefits in the disclaimed property.
However, rulings and cases suggest otherwise. In IRS Tech Adv Mem 200437032
(Sept 10, 2004), the IRS took the position that IRC §2518(c)(3) treats a direct
transfer as a qualified disclaimer only if a state-law disclaimer is not available.
This is consistent with the IRS ruling in Priv Ltr Rul 9135043 (Aug 30, 1991) that
a direct deed from a surviving spouse was treated as a disclaimer because state law
barred a surviving joint tenant from disclaiming any interest created by his or her
contributions. Finally, the Tax Court denied disclaimer treatment for disclaimers
delivered to the personal representative within nine months after death, but not
filed with the court (as required under state law) until after the nine-month
deadline. Estate of Bennett, 100 TC 42 (1993). Thus, if there is no state-law
impediment to executing qualified disclaimers and effectuating the transfer through
probate, it is uncertain whether IRC §2518(c)(3) causes direct deeding to be treated
as a qualified disclaimer.
§ 1.5-11 Community Property
An in-depth analysis of community property and avoiding probate with
community-property agreements is beyond the scope of this publication. Rather,
the following discussion is merely intended to assist lawyers in identifying probate
issues related to community property.
In general, a decedent’s interest in community property does not
automatically pass to the surviving spouse, nor does the surviving spouse have
elective-share rights against the decedent’s interest. Instead, the decedent’s interest
passes under the decedent’s will or by intestate succession, both of which usually
necessitate a probate. In community-property jurisdictions, spouses frequently use
a community-property agreement to override these default rules. Typically, the
community-property agreement attaches a right of survivorship, which avoids
probate. See, e.g., RCW 26.16.120. In Washington, for example, a transfer of a
decedent’s community-property interest in real estate to the surviving spouse is
memorialized by recording the community-property agreement and a death
certificate in the local deed records. See Sherland, NONPROBATE TRANSFERS,
WSBA PROBATE DESKBOOK §4.4 (2005) (citation not verified by publisher).
QUERY: Do these dispositive rules or community-property agreements
apply to (1) Oregon property purchased by residents of a community-
property state, or (2) Oregon property purchased by Oregon residents with
the proceeds of community property? Maybe. The determination is based on
Oregon’s version of the Uniform Disposition of Community Property Rights
at Death Act (UDCPRDA), ORS 112.705–112.775, which generally
preserves dispositive rights similar to those of the current or former
community-property jurisdiction. As a practical matter, the issue is usually
overlooked. Oregon real property owned by married persons is usually titled
as husband and wife, which (as a tenancy by the entirety) passes by right of
survivorship. The parties do not realize or care that the UDCPRDA might be
used to defeat the right of survivorship. However, in a second marriage
scenario, for example, the decedent’s children might look to the UDCPRDA
to defeat rights of survivorship or an elective share. For an extensive
discussion of the UDCPRDA, see §§4.3 to 4.3-5.
§ 1.5-12 Motor Vehicles
The transfer at death of an interest in a vehicle is governed by ORS 803.094.
The statute sets forth certain procedures that must be followed for the Driver and
Motor Vehicle Services Division (DMV) to transfer an interest in a vehicle if the
decedent’s estate is not being probated. ORS 803.094(2)(b)–(c). See Oregon DMV
Form 735-0516 (Inheritance Affidavit) or Oregon DMV Form 735-6797 (Small
Estate Certification). Both forms are available at
www.oregon.gov/odot/DMV/Pages/Form/index.aspx. Local offices of the DMV
are usually willing to assist in the completion of these forms.
§ 1.5-13 Bank, Trust Company, or National Bank Deposits
A bank may, but is not required to, disburse a deceased depositor’s account
of $25,000 or less if the claimant furnishes the affidavit prescribed in ORS
708A.430(2). This procedure is available only if the decedent’s aggregate deposits
in all Oregon financial institutions (e.g., banks and credit unions) do not exceed
$25,000. ORS 708A.430(2)(b).
The deposit is payable in the following order of priority: (1) the surviving
spouse, (2) the Oregon Health Authority or the Department of Human Services (if
it has filed a claim), (3) the surviving children who are age 18 or older, (4) the
surviving parents, or (5) the surviving brothers and sisters who are age 18 or older.
ORS 708A.430(1).
Except when the claimant is the surviving spouse, the bank must wait 75
days after the date of the depositor’s death before disbursing the deposit, unless the
bank first confirms that neither the Oregon Health Authority nor the Department of
Human Services has a claim. ORS 708A.430(1)(b).
In the affidavit, the claimant must promise to pay all the decedent’s debts
(including medical and funeral costs) up to the amount of the deposit, and disburse
the remaining money to the persons entitled to it under Oregon law. ORS
708A.430(2)(d). If a personal representative is appointed, the claimant must
account for the deposit to the personal representative. ORS 708A.430(5). See Form
1-2 for an example of an ORS 708A.430(2) affidavit.
The 2015 and 2017 Legislatures amended ORS 708A.430, adding new
subsections and renumbering existing subsections. For example, ORS 708A.430(2)
was renumbered ORS 708A.430(3).
An “insured institution” (e.g., a bank) may disburse a deceased depositor’s
account of $25,000 or less if
(1) a person claiming the deposit furnishes the affidavit prescribed in
ORS 708A.430(3); or
(2) the Department of Human Services (DHS) or the Oregon Health
Authority (OHA) furnishes a declaration as provided in ORS 708A.430(4).
ORS 708A.430(1).
NOTE: This procedure is available only if the decedent’s aggregate
deposits in all Oregon financial institutions (e.g., banks and credit unions) do
not exceed $25,000. ORS 708A.430(3)(b).
The affidavit or declaration must meet the requirements of ORS
708A.430(3), including a promise to pay all the decedent’s debts (including
medical and funeral expenses) up to the amount of the deposit, and then to disburse
the remaining money to the persons entitled to it under Oregon law. ORS
708A.430(3)(d). If a personal representative is appointed, the claimant must
account for the deposit to the personal representative. ORS 708A.430(7).
An insured institution must accept from DHS or the OHA, without
additional requirements, “a declaration under penalty of perjury” meeting the
requirements of subsections (3) and (4) of ORS 708A.430. ORS 708A.430(4).
The money must be paid “to the credit of the deceased depositor” in the
following order of priority:
(a) The surviving spouse at the surviving spouse’s demand at any time
after the depositor’s death;
(b) The Oregon Health Authority or the Department of Human
Services, if the authority or the department demands the payment not less than 46
days and no more than 75 days after the death of the depositor if the depositor
does not have a surviving spouse and if the authority or department has a
preferred claim under ORS 411.708, 411.795 or 416.350;
(c) The depositor’s surviving children 18 years of age or older, if the
depositor does not have a surviving spouse and the authority and department do
not have a claim;
(d) The depositor’s surviving parent, if the depositor does not have a
surviving spouse or surviving child 18 years of age or older and if the authority
and department do not have a claim; or
(e) The depositor’s surviving brothers and sisters 18 years of age or
older, if the depositor does not have a surviving spouse, surviving child 18 years
of age or older or surviving parent and the authority and department do not have a
claim.
ORS 708A.430(1).
An insured institution may not pay money on deposit under subsections (c),
(d), or (e) (quoted above) earlier than described below:
(1) earlier than 46 days after the depositor’s death (ORS 708A.430(2)(a));
or
(2) earlier than 76 days after the depositor’s death, unless the financial
institution obtains prior verbal or written authorization from the OHA or DHS or
their designated representatives (ORS 708A.430(2)(b)).
Money disbursed to DHS or the OHA under ORS 708A.430(1) may be made
payable only to the entity. ORS 708A.430(9).
§ 1.5-14 Other Deposits
Provisions similar to those in ORS 708A.430 (see §1.5-13) also apply to a
decedent’s deposits held by mutual savings banks and credit unions. ORS 716.024,
723.466.
Similarly, a cooperative may pay up to $10,000 to the surviving spouse,
adult children, parents, or adult siblings, in that order, for the redemption or refund
value of a decedent’s capital credit or retains with the cooperative, if permitted by
the bylaws of the organization. ORS 62.430.
§ 1.5-15 Wages
Wages earned by the decedent not in excess of $10,000 are payable to the
surviving spouse or, if there is no surviving spouse, to the dependent children or
their guardian or conservator. ORS 652.190.
§ 1.5-16 Money Due from the State of Oregon
The payment of money due from the state of Oregon to the decedent may be
made on compliance with the provisions of ORS 293.490–293.500. Except for
payment of salary or wages of a deceased state employee, no payment under those
statutes may exceed $10,000.
§ 1.5-17 Bearer Bonds
Securities (usually bonds) payable to the bearer can be transferred by
delivery. Although probate is not required, it may be appropriate.
§ 1.5-18 Pets
Any animal being kept as a pet by the decedent and having a value of less
than $2,500 may be delivered to a member of the family, a friend of the decedent,
or an animal shelter as temporary custodian. The animal is not required to be listed
as an asset in the inventory of the estate. The custodian of the animal must deliver
it to the heir or devisee entitled to it on request of the personal representative, heir,
or devisee. ORS 114.215(3).
§ 1.6 TYPES OF NONPROBATE PROPERTY

§ 1.6-1 “Right of Survivorship” Property
One means of avoiding probate is to own property with another person in
such a manner that the decedent’s interest in the property automatically passes to
the survivor at the decedent’s death. See §§1.6-1(a) to 1.6-1(e).
§ 1.6-1(a) Real Property
Absent specific language to the contrary, a conveyance to a husband and
wife, as such, creates a tenancy by the entirety. ORS 93.180(1)(b). Immediately
after the death of either spouse, the survivor owns the entire interest in the
property. No postmortem action is necessary to accomplish this result—except,
perhaps, to record a death certificate in the county where the property is located.
If tenants by the entirety sell real property for an installment note secured by
the property, and one of them dies before all payments are received, the surviving
spouse automatically has the right to receive all the remaining payments, unless a
contrary intention is expressed in the instrument of conveyance. ORS 93.240(2).
A right of survivorship can be attached to property conveyed to unmarried
persons by adding the phrase “as joint tenants with right of survivorship” after the
grantees’ names. ORS 93.180(1)(a). Merely adding the words “joint tenants,”
without mention of survivorship, creates a tenancy in common. ORS 93.180(3).
The 2015 Legislature amended ORS 93.180(1)(b) to refer to “spouses
married to each other” rather “husband and wife.” In the absence of specific
language to the contrary, a conveyance to spouses married to each other creates a
tenancy by the entirety. ORS 93.180(1)(b).
§ 1.6-1(b) Personal Property
Oregon law specifically provides for a joint tenancy with right of
survivorship in personal property. ORS 105.920. It is created by a written
instrument that expressly declares the interest created to be a joint tenancy with
right of survivorship.
§ 1.6-1(c) Stocks and Bonds
If marketable securities are held in a brokerage account (i.e., in “street
name”), they may be transferred at death free of probate by designating a
beneficiary pursuant to the account agreement. Alternatively, if the brokerage
account is jointly owned, it normally passes by right of survivorship. The specific
requirements are controlled by the account agreement.
CAVEAT: If X transfers stock to X and Y as joint tenants with right of
survivorship, but X intends merely to use the transfer to avoid probate and
has no intent to transfer a present interest, the transaction is testamentary and
void. See Neuschafer v. McHale, 76 Or App 360, 367–369, 709 P2d 734
(1985).
A different procedure applies when marketable securities are registered
directly by the issuer to the decedent, who may have possession of the stock
certificates or own the shares in “book entry form.” Such securities may be
transferred at death without probate through a payable-on-death designation
conforming to the applicable Uniform TOD Security Registration Act. The
following commentary is based on Oregon’s version of the Uniform TOD Security
Registration Act, which is found at ORS 59.535–59.585.
Direct owners may register a beneficiary to whom the securities or accounts
will be transferred at the owner’s death. If multiple owners hold the securities as
tenants in common, they cannot register a beneficiary. ORS 59.540. Multiple
owners may register a beneficiary only if their ownership is with right of
survivorship, in which case the registered beneficiary receives the securities after
the death of the last surviving owner. ORS 59.565.
The registering entity may use abbreviations to show the beneficiary
designations. Acceptable formats include TOD (for “transfer on death”) or POD
(for “pay on death”) after the name of the registered owner and before the name of
the beneficiary. ORS 59.555. Also appropriate are abbreviations such as LDPS,
which means that if the named beneficiary predeceases the owner, his or her lineal
descendants per stirpes are substituted as beneficiaries. ORS 59.580. A registration
in beneficiary form may be changed or canceled at any time by the owner or
owners without the consent of the beneficiary. ORS 59.560.
On the death of the last surviving owner, the registering entity may re-
register the security in the beneficiary’s name on receiving “proof of death of all
owners and compliance with any applicable requirements of the registering entity.”
ORS 59.565. If no named beneficiary survives, the security “belongs to the estate
of the deceased sole owner or the estate of the last to die of all multiple owners.”
ORS 59.565.
Registering entities are not required to offer or to accept requests for security
registration in beneficiary form. ORS 59.570(1). Registering entities are
discharged from liability for registering or transferring a security, if done in good-
faith reliance on the registration, the Uniform TOD Security Registration Act, and
the information provided in an affidavit by the claiming beneficiary or certain
other persons. ORS 59.570(3).
§ 1.6-1(d) Contracts Requiring Payment to Survivor
A contract providing for the payment of money (or the delivery of property)
to a survivor is valid. Beach v. Holland, 172 Or 396, 412, 142 P2d 990 (1943);
Leibee v. Leibee, 220 Or 256, 264–265, 349 P2d 486 (1960). If such a contract
exists, the interest of the decedent is not subject to probate.
§ 1.6-1(e) Multiple-Party Bank Accounts
Joint bank accounts are a popular vehicle for transferring wealth at death
without probate. They are also used by individuals (usually elderly) who need the
assistance of a child or friend in handling banking matters; such accounts are often
referred to as convenience accounts. These objectives are in conflict when the
person added as a party to the account is not the intended beneficiary of the
account at the owner’s death. Another nuance lost on some clients is that rights of
survivorship arising from a joint account “trump” the owner’s will. ORS
708A.470(5). It is an understatement that joint accounts are a frequent source of
probate disputes.
“Sums remaining on deposit in a bank at the death of a party to a joint
account are rebuttably presumed to belong to the surviving party or parties as
against the estate of the decedent.” ORS 708A.470(1). If there are two or more
surviving parties, a determination of their respective interests involves a
hypothetical division of the account into two components. First, to the extent that
the surviving parties have made contributions to the account, their ownership is in
proportion to each party’s net contributions. Second, the portion of the account
attributable to the decedent’s contributions is allocated to the surviving parties in
equal shares. The right of survivorship continues between the surviving parties.
ORS 708A.470(1). The rebuttable-presumption standard also applies to credit
union accounts. ORS 723.480(1).
The rebuttable presumption in ORS 708A.470(1) may be overcome by
evidence that the decedent intended a different result or lacked capacity when the
joint account was established. ORS 708A.470(6).
Even if a claimant successfully rebuts the survivorship presumption of ORS
708A.470, a bank is not liable for distributing the account to the surviving party
unless the bank receives prior notice of the adverse claim, and the claimant
proceeds under ORS 708A.435. ORS 708A.470(7). To prevent immediate payment
to the surviving party, the claimant must give notice to the bank and either (1)
procure a restraining order or injunction against the bank in an action joining the
surviving party, or (2) deliver to the bank a surety bond or irrevocable letter of
credit indemnifying the bank against liability. ORS 708A.435(1). A bank may, on
its own initiative, interplead a deposit that is subject to an adverse claim. ORS
708A.435(3). In this manner, a bank can avoid immediate payment to the surviving
party, even if the complaining party has not complied with ORS 708A.435(1).
Newton v. Bank of the W., 183 Or App 347, 351, 51 P3d 1281 (2002).
ORS 708A.470(7) effectively extricates banks from disputes over ownership
of joint accounts. Given the heavy burden of ORS 708A.435(1)—which requires
an injunction, restraining order, surety bond, or letter of credit—most claimants
will be reluctant to try to prevent a bank from disbursing a joint account to the
surviving party.
If the account is a POD account:
(a) On the death of one of two or more original parties, the rights to
any sums remaining on deposit are governed by [ORS 708A.470(1)].
(b) On the death of the sole original party or the survivor of two or
more original parties, any sums remaining on deposit belong to the P.O.D payee
or payees, if surviving, or to the survivor of them if one or more die before the
original party. If two or more P.O.D payees survive, there is no right of
survivorship in the event of death of a P.O.D payee thereafter unless the terms of
the account or deposit agreement expressly provide for survivorship between
them.
ORS 708A.470(2).
If the account is a trust account:
(a) On the death of one of two or more trustees, the rights to any sums
remaining on deposit are governed by [ORS 708A.470(1)].
(b) On the death of the sole trustee or the survivor of two or more
trustees, any sums remaining on deposit belong to the person or persons named as
beneficiaries, if surviving, or to the survivor of them if one or more die before the
trustee, unless there is clear and convincing evidence of a contrary intent. If two
or more beneficiaries survive, there is no right of survivorship in event of death of
any beneficiary thereafter unless the terms of the account or deposit agreement
expressly provide for survivorship between them.
ORS 708A.470(3)(b).
For purposes of ORS 708A.470(3), a trust account is not an account
governed by trust provisions in a will or traditional trust agreement. Instead, the
trustee-beneficiary relationship is based solely on the deposit agreement with the
bank, and affects only the money on deposit with the bank. ORS 708A.455(12).
In other cases, “the death of any party to a multiple-party account has no
effect on beneficial ownership of the account, other than to transfer the rights of
the decedent as part of the estate of the decedent.” ORS 708A.470(4).
A right of survivorship arising “from the express terms of the account or
under [ORS 708A.470], a beneficiary designation in a trust account, or a P.O.D.
payee designation, cannot be changed by will.” ORS 708A.470(5). In other words,
a right of survivorship normally “trumps” the will.
The 2015 Legislature amended the language, but not the meaning, of ORS
708A.470. See the current statute regarding quotations in the 2012 text.
In 2015, the Oregon Legislature modified the definition of trust account
under ORS 708A.455(12) to read “an account in the name of one or more parties
as trustee for one or more beneficiaries in which the relationship is established by
the form of the account and the deposit agreement with the insured institution, and
the trust has no subject other than the sums on deposit in the account whether or
not the deposit agreement provides for payment to the beneficiary.”
§ 1.6-2 U.S. Savings Bonds
If a co-owner named on a U.S. savings bond dies, the survivor is recognized
as the sole owner, and the decedent’s interest in the bond passes without probate.
The bond will be reissued upon furnishing a death certificate and a completed
Bureau of Public Debt Form 4000. 31 CFR §353.70(b) (Series EE and HH); 31
CFR §360.70(b) (Series I); 31 CFR §315.70(b) (all other Series).
Likewise, if the owner of a bond registered in beneficiary form dies, the
surviving beneficiary is recognized as the sole owner upon proof of the decedent-
owner’s death. 31 CFR §353.70(c) (Series EE and HH); 31 CFR §360.70(c) (Series
I); 31 CFR §315.70(c) (all other Series). See www.treasurydirect.gov/forms
/sav4000.pdf.
Even if the bonds are property of the decedent’s estate, transfer without
probate or a small-estate affidavit is possible if (1) the redemption value is
$100,000 or less, (2) no probate administration or small-estate affidavit is pending
or contemplated, and (3) a “voluntary representative” steps forward and files
Bureau of Public Debt Form 5336. 31 CFR §353.71(e) (Series EE and HH); 31
CFR §360.71(e) (Series I); 31 CFR §315.71(c) (all other Series). See
www.treasurydirect.gov/forms/sav5336.pdf.
The voluntary representative may redeem the bonds or distribute them in
kind. The order of preference for a voluntary representative is similar to that in the
Oregon laws of intestate succession. 31 CFR §353.71(e)(3). In Form 5336, the
voluntary representative warrants that the bonds or proceeds will be distributed in
accordance with local law. Form 5336 requires certification of the voluntary
representative’s signature, which is usually done with a medallion signature
guarantee stamp. A notary acknowledgment is not acceptable.
The Bureau of Public Debt was renamed the Bureau of the Fiscal Service.
The procedures regarding requests to reissue a U.S. savings bond have
changed when a co-owner of the bond dies. When the Department of Treasury
reissues a Series EE or Series I savings bond, it no longer provides a paper bond.
The reissued bond is in electronic form. See the information at TreasuryDirect®,
www.treasurydirect.gov, regarding reissuing a paper bond. See also FS Form 4000
(Request to Reissue United States Savings Bonds, available at
www.treasurydirect.gov/forms/sav4000.pdf. When a Series HH savings bond is to
be reissued, the owner must also submit FS Form 5396 (Direct Deposit Sign-Up
Form), available at www.treasurydirect.gov/forms/sav5396.pdf.
§ 1.6-3 Life Insurance
If a decedent’s estate is the named beneficiary of a life insurance policy on
the decedent’s life, the proceeds are included in the probate estate. If an
organization or living person other than the estate is the named beneficiary, the life
insurance proceeds are not assets of the probate estate.
Payment of the insurance proceeds can usually be obtained by submitting a
death certificate and a proof-of-claim form provided by the insurer. The insurance
contract establishes the procedures to be followed.
If no beneficiary survives the insured decedent, the default provisions of the
insurance contract will usually assign the proceeds to the decedent’s estate.
PRACTICE TIP: When the designated beneficiary is a former spouse,
the dissolution decree and property-settlement agreement should be
examined. If the property settlement expressly awards ownership of the life
insurance policy to the decedent, or divests the former spouse of beneficial
rights in the policy proceeds, the policy proceeds might belong to the
decedent’s probate estate. See In re Marriage of Keller, 232 Or App 341,
222 P3d 1111 (2009); Prudential Ins. Co. v. Weatherford, 49 Or App 835,
621 P2d 83 (1980). The general rule is that divorce, by itself, does not affect
the former spouse’s rights as a beneficiary of a life insurance policy. 4
COUCH ON INSURANCE 3d §64.14 (1997) (supplemented periodically)
(citation not verified by publisher).
§ 1.6-4 IRAs, Annuities, and Retirement Plans
Several types of agreements other than life insurance policies create rights or
entitlements that pass to others on the death of the decedent beneficiary without
probate, normally through a beneficiary designation. These include pension and
profit-sharing plans, individual retirement accounts, and annuities. See 3 ADVISING
OREGON BUSINESSES ch 46 (Oregon CLE 2003 & Supp 2009); ELDER LAW ch 3
(Oregon CLE 2000 & Supp 2005).
IRAs, Annuities, and Retirements Benefits (new title)
See Elder Law ch 3 (OSB Legal Pubs 2017) (legal issues in retirement
planning and investing).
§ 1.6-5 Social Security Benefits
On the death of a person receiving Social Security benefits, no benefit is
payable for the month of death. For example, if the person dies in July, the benefit
received in August (which is payment for July) must be returned. A bank or other
financial institution receiving electronic deposits of Social Security benefits must
be notified as soon as possible, so it can return any payments received after death.
A lump-sum amount (currently $255) is payable by Social Security to the
surviving spouse. 42 USC §402(i). If the surviving spouse is at least 65 years of
age at the decedent’s death, he or she may be entitled to monthly Social Security
benefits based on the decedent’s work history. 42 USC §402(b). Reduced benefits
may be available if the surviving spouse is between 60 and 65 years of age. The
decedent’s unmarried children under age 18 (or up to 19 if attending high school)
may also be entitled to monthly Social Security benefits based on the decedent’s
work history. 42 USC §402(d). See ELDER LAW ch 4 (Oregon CLE 2000 & Supp
2005).
If the surviving spouse is 62 years of age or older at the decedent’s death, he
or she may be entitled to monthly Social Security benefits based on the decedent’s
work history. 42 USC § 402(b). For updated information on the entitlement of a
worker’s spouse or child to Social Security benefits based on the deceased
worker’s work history, see Elder Law ch 4 (OSB Legal Pubs 2017).
§ 1.6-6 Veterans Benefits
Monthly veterans benefits are available to the surviving spouse and children
of deceased veterans who were totally disabled from a service-connected injury or
disease at the time of death, or who died from a service-connected injury or
disease. 38 USC §1318, 38 USC §1310. Furthermore, if the deceased veteran had
wartime service, the surviving spouse or children may be entitled to benefits based
on need, even if no service-connected disability, injury, or disease was present. 38
USC §§1541–1542.
Other veterans benefits cover reimbursement of a portion of burial expenses,
entitlement of the veteran and certain relatives to be buried in a national cemetery,
and provision of free headstones and memorial markers. 38 USC §2302, 38 USC
§2306, 38 USC §2307, 38 USC §2402. Inquiries about federal benefits should be
made to the Veterans Administration Office or to a representative. For a detailed
list of veterans benefits, see 38 USC §§1101–2410.
§ 1.7 PROBATE OF NONPROBATE PROPERTY

In both probate estates and nonprobate estates, members of the family
frequently distribute the decedent’s personal effects, furniture, and other personalty
among themselves without resort to probate. Usually, the property is of small
value, and no purpose would be served to conduct a formal probate. However, a
different conclusion may follow if items are of sufficient value, such as vehicles,
jewelry, artwork, or antiques. The family members might not agree on who gets
what, or (absent a probate) potential claims of creditors may follow the personal
property. Thus, depending on the values involved, probate may be desirable even
though it is not mandatory.
The protection provided by probate, including insulation from liabilities and
determination of heirs and creditors, is not available through any other means. But
see ORS 130.350–130.450 for procedures governing resolution of creditors’ claims
against assets passing under a revocable trust.
FORMS
Form 1-1 Affidavit of Heirship

Download MS Word
AFFIDAVIT OF HEIRSHIP
The undersigned, being first duly sworn, states as follows:
1. I reside at ______________________________________.
2. I am the [relationship] of the decedent.
3. The decedent died on ___/___/20___, in _________ County, in the
state of ___________. A copy of the death certificate is attached.
4. The decedent died owning an interest in the following-described real
property:
(a) [describe real property]
5. The decedent’s estate has not been admitted to probate in any state.
6. The decedent died [with / without] a will. If the decedent died with a
will, a copy of the will is attached.
7. If the decedent died with a will, the names, relationships, and
addresses of the devisees under the will are:
NAME RELATIONSHIP ADDRESS
8. The names, relationships, and addresses of the decedent’s heirs at law

(i.e., those who would inherit if the decedent left no will) are:
9. The decedent was not married and had no registered domestic partner.
[Option: The decedent’s spouse or registered domestic partner at death was
_______________.]
10. The total value of the decedent’s estate, including the interest in the
above-described property, is $_______.
11. No claims have been filed against the decedent, and all expenses of
the decedent’s last illness and funeral have been paid in full, or will be paid from
the proceeds of the above-described property.
12. No federal or Oregon estate tax is due.
13. I make this affidavit to induce [name of title insurance company] to
issue its policy of title insurance and to show title in the name of [intended owner],
with full knowledge that [name of title insurance company] will rely on the
representations made herein to insure title.
DATED: _____________, 20___.
/s/__________________________
[affiant’s name]
STATE OF __________ )
) ss.
County of __________ )
Personally appeared the above-named _______________, who

acknowledged the foregoing instrument to be [his / her] voluntary act and deed on
_____________, 20___.
/s/__________________________
Notary Public for Oregon
My commission expires: ________
COMMENT: See §1.5-3.

NOTE: See UTCR 2.010 for the form of documents.
CAVEAT: This form is illustrative only. Each lawyer must depend on his or
her own legal research, knowledge of the law, and expertise in using or modifying
this form.
NOTE: A sample affidavit of heirship is available at
http://affidavitforms.org/or/oregon-affidavit-of-heirship.
Form 1-2 Affidavit Pursuant to ORS 708A.430(2)
Download MS Word
[name of bank] Account No. ___________

[name of decedent] (SSN ____-____-____), Deceased ___/___/20___
The undersigned, being first duly sworn, states as follows:

(a) The depositor, [name of decedent], died on __________, 20___, in
_________, Oregon. Attached is a copy of [his / her] death certificate.
(b) The total deposits of [name of decedent] in all financial institutions in
Oregon do not exceed $25,000.
(c) I am [state the relationship of the affiant to the deceased depositor].
(d) [Name of decedent] was not married at death. The names of the
decedent’s surviving children and descendants of deceased children are:
____________________________.
(e) I promise to pay the expenses of the last sickness, funeral expenses,
and just debts of [name of decedent] out of the deposit (to the full extent of the
deposit, if necessary) in the order of priority described by ORS 115.125, and to
distribute any remaining money to the persons entitled to it by law.
This affidavit is made pursuant to ORS 708A.430, a copy of which is
attached.
DATED: ______________, 20____.
/s/__________________________
[affiant’s name]
STATE OF __________ )
) ss.
County of __________ )
Personally appeared the above-named ________________, who
acknowledged the foregoing instrument to be [his / her] voluntary act and deed on
______________, 20___.
/s/__________________________

this form.
COMMENT: ORS 708A.430(2) was renumbered ORS 708A.430(3).
The 2015 and 2017 Legislatures amended ORS 708A.430. As described in
Supplement § 1.5-13 (bank, trust company, or national bank deposits), the statute
allows an insured institution to disburse a deceased depositor’s account of $25,000
or less if certain persons present an affidavit to the institution. The statute now
allows the Department of Human Services (DHS) and the Oregon Health Authority
(OHA) to provide a declaration under penalty of perjury under the same
circumstances. Form 1-2 complies with the requirements of an affidavit or a
declaration under ORS 708A.430(3).
A declaration by DHS or the OHA, however, must also comply with ORS
708A.430(4). The declaration must be signed by the declarant and must include the
following sentence immediately above the declarant’s signature line: “I hereby
declare under penalty of perjury that I am authorized by the Department of Human
Services or the Oregon Health Authority to make this declaration, that the above
statement is true to the best of my knowledge and belief, and that I understand that
it is subject to penalty for perjury.” ORS 708A.430(4).
Chapter 2: PROBATE JURISDICTION AND PROCEDURES
NIKKI C. HATTON, B.A., University of Washington (1971); J.D., LL.M., University of Florida
(1976, 1977); member of the Oregon State Bar since 1980 and the Washington State Bar
Association since 2003; shareholder, Schwabe, Williamson & Wyatt, P.C., Portland.
The author would like to thank Philip N. Jones, Duffy Kekel LLP, for preparing Appendix 2C
(Table of Judgments and Orders in Probate Court).
2018 Supplement Author
JENNIFER WOODHOUSE, B.A., Lewis & Clark College (2003); J.D. (cum laude), Lewis & Clark
Law School (2008); admitted to the Oregon State Bar in 2008 and the Washington State
Bar Association in 2013; shareholder, Schwabe, Williamson & Wyatt, Portland.
§ 2.1 RIGHT OF THE STATE TO CONTROL PROBATE MATTERS

Probate jurisdiction and procedures in Oregon are generally contained in
ORS 111.005–118.990. These statutes compose the current probate code as
amended subsequent to its enactment in 1969.
The state has the power to control the disposition and administration of
decedents’ estates, subject to federal Constitutional rights. The Oregon Supreme
Court has stated that “the right of an individual to dispose of his property by will is
not a natural right, but is one conferred by law.” In re Broders Estate, 224 Or 165,
171, 355 P2d 738 (1960). Even the right of intestate succession has been said to be
“a creature of the law” and not a “natural right.” In re Broders Estate, 224 Or at
171; U. S. Nat. Bank of Portland v. Snodgrass, 202 Or 530, 540, 275 P2d 860
(1954). The United States Supreme Court has made similar holdings. In Irving
Trust Co. v. Day, 314 US 556, 562, 62 S Ct 398, 86 L Ed 452 (1942), the Court
ruled that the “[r]ights of succession to the property of a deceased, whether by will
or by intestacy, are of statutory creation, and the dead hand rules succession only
by sufferance.”
The state’s power to legislate matters dealing with inheritance is not
unlimited. In Zschernig v. Miller, 389 US 429, 436, 88 S Ct 664, 19 L Ed2d 683
(1968), the Court held that the operation and effect of former ORS 111.070,
dealing with the right of aliens to inherit, amounted to “state involvement in
foreign affairs and international relations—matters which the Constitution entrusts
solely to the Federal Government.” Recognizing that the states have “traditionally
regulated the descent and distribution of estates,” the majority held that a state’s
probate laws “must give way if they impair the effective exercise of the Nation’s
foreign policy.” Zschernig, 389 US at 440.
In Tulsa Prof’l Collection Services, Inc. v. Pope, 485 US 478, 108 S Ct
1340, 99 L Ed2d 565 (1988), the United States Supreme Court ruled that an
Oklahoma probate claim statute was unconstitutional. In deciding that the
Fourteenth Amendment protected the right of an estate creditor to more than
published notice, the Court stated:
Nor is the State’s involvement in the mere running of a general statute of
limitation generally sufficient to implicate due process. . . . But when private
parties make use of state procedures with the overt, significant assistance of state
officials, state action may be found.
....
. . . Here, in contrast, there is significant state action. The probate court is
intimately involved throughout, and without that involvement the time bar is
never activated.
Tulsa Prof’l Collection Services, Inc., 485 US at 485–487 (citations omitted). See
§2.5-7.
The Supreme Court found the state court involvement so pervasive and
substantial that it had to be considered state action subject to the restrictions of the
Fourteenth Amendment. Tulsa Prof’l Collection Services, Inc., 485 US at 487. All
provisions of Oregon’s probate code can be assumed to be subject to the same due
process scrutiny.
§ 2.2 PROBATE JURISDICTION

§ 2.2-1 Historically
The probate court has historically been one of limited jurisdiction. In re
Murray’s Estate, 56 Or 132, 139, 107 P 19 (1910); In re Elder’s Estate, 164 Or
347, 351–352, 101 P2d 412 (1940). Property of a decedent must be located in
Oregon before an Oregon probate court will accept jurisdiction, and “[w]hether
there is property in Oregon upon which probate will operate depends on the situs
of the property.” W. v. White, 307 Or 296, 300, 766 P2d 383 (1988) (citation
omitted). In West, a decedent who had been domiciled in Massachusetts held a note
secured by a trust deed on Oregon real property. The court held that the note was
personal property, that its situs was in Massachusetts, and that the security was
merely incident to the debt. Accordingly, there was no jurisdiction in Oregon.
Prior Oregon law made proper venue a jurisdictional matter. If venue was in
the wrong county, the courts of that county lacked authority (jurisdiction) even to
appoint an administrator. Now, proper venue is not a jurisdictional matter. ORS
113.015(2).
ORS 111.005 now provides that the term estate “includes tangible and
intangible personal property of a decedent domiciled in Oregon, wherever the
property is situated.” ORS 111.005(15)(b).
§ 2.2-2 Jurisdiction Under the Probate Code
§ 2.2-2(a) Subject-Matter Jurisdiction
Under ORS 111.085, the jurisdiction of the probate court includes, but is not
limited to:
(1) “Appointment and qualification of personal representatives”;
(2) “Probate and contest of wills”;
(3) “Determination of heirship”;
(4) “Determination of title to and rights in property claimed by or against
personal representatives, guardians and conservators”;
(5) “Administration, settlement and distribution of estates of decedents”;
(6) “Construction of wills, whether incident to the administration or
distribution of an estate or as a separate proceeding”;
(7) “Guardianships and conservatorships, including the appointment and
qualification of guardians and conservators and the administration, settlement and
closing of guardianships and conservatorships”;
(8) “Supervision and disciplining of personal representatives, guardians
and conservators”; and
(9) “Appointment of a successor testamentary trustee where the vacancy
occurs prior to, or during the pendency of, the probate proceeding.”
Subsection (3) of ORS 111.085 allows heirship determinations even when
no estate is being administered.
Subsection (6) of the statute permits the probate court to construe wills,
whether or not incident to the administration or distribution of an estate. ORS
111.085(6). The probate court has jurisdiction, for instance, to construe a will to
determine whether the will exercised a power of appointment given by a separate
trust agreement to the testator, even in the absence of assets to be administered.
If the probate court has jurisdiction over an estate, but an error is committed
in appointing the personal representative, the appointment is voidable, not void. If,
however, the court lacks jurisdiction over the estate, the appointment is void and
the acts of the personal representative are generally without effect. Rennie v. Pozzi,
294 Or 334, 338 n 3, 656 P2d 934 (1982). In Rennie, 294 Or at 343, the court
decided that the provisions of ORS 114.255 supported (under certain conditions)
the “relation back” validity of a personal representative’s reappointment. In that
case, the initial invalid appointment was not due to a jurisdictional problem.
The probate court has authority to entertain an action for a declaratory
judgment. ORS 111.095; Buresh v. First Nat. Bank, 10 Or App 463, 473, 500 P2d
1063, aff’d as modified, 262 Or 104 (1972). Designating an action based on the
purported invalidity of a will as a declaratory judgment action does not, however,
permit a plaintiff to avoid the limitations period for bringing a will contest. Martin
v. Kenworthy, 92 Or App 697, 698, 759 P2d 335 (1988).
The jurisdiction of the probate court is not limited to the areas of authority
listed in ORS 111.085. See ORS 111.085 (the “jurisdiction of the probate court
includes, but is not limited to . . .”). For example, in Matter of Plue’s Estate, 63 Or
App 677, 682, 666 P2d 835 (1983), the court ruled that although the Oregon Tax
Court had exclusive jurisdiction to determine the amount of inheritance tax, the
probate court, under the provisions of ORS 111.085(5)–(6), had jurisdiction to
decide whether the tax liability would be apportioned among the persons interested
in the estate.
During the entire administration process, the probate court has exclusive
jurisdiction over the decedent’s property. See ORS 114.225. In Matter of Phillips’
Estate, 23 Or App 363, 368, 542 P2d 928 (1975), the court ruled that “jurisdiction
remained in the probate court until final distribution was decreed.” The court held
that a separate partition suit involving land that was the subject of the probate
administration was ineffective as to the property in administration. The court
stated: “The issues on appeal are whether the probate court erred in distributing the
decedent’s farm to the heirs as tenants in common despite a decree of partition by
the circuit court entered by consent of the parties decreeing otherwise while the
estate was in administration.” Matter of Phillips’ Estate, 23 Or App at 364.
Similarly, federal courts have recognized that the administrative collection
procedures of the Internal Revenue Service are not available while the assets of a
deceased taxpayer are in the “control and custody” of the probate court. See United
States v. Silverman, 621 F2d 961, 965–966 (9th Cir 1980); see also United States
v. McPherson, 631 F Supp 269 (MDNC 1986); United States v. Swink, 41 F Supp
98 (ED Va 1941).
Subject-Matter Jurisdiction and Personal Jurisdiction (new title)
The 2017 Legislature amended ORS 111.085. ORS 111.085(3) was
renumbered ORS 111.085(1)(c) (which allows heirship determinations even when
no estate is being administered); ORS 111.085(5) was renumbered ORS
111.085(1)(e) (administration, settlement and distribution of estates of decedents);
and ORS 111.085(6) was renumbered ORS 111.085(1)(f) (construction of wills).
As mentioned in the 2012 text, the probate court has authority to entertain an
action for a declaratory judgment in all matters involved in the administration of an
estate. ORS 111.095. The 2016 Legislature amended the statute to provide that the
probate court’s declaratory-judgment jurisdiction includes matters pertaining to the
title of real property and the ownership of personal property, in addition to the
determination of heirship and the distribution of the estate. ORS 111.095(3).
The 2017 Legislature added two new provisions related to the probate
court’s personal jurisdiction over recipients of estate assets. ORS 111.085(2)–(3).
ORS 111.085(2) provides as follows:
(2) The distributees of an estate administered in Oregon are subject to
the jurisdiction of the courts of Oregon regarding any matter involving the
distributees’ interests in the estate. By accepting a distribution from an estate, the
distributee submits personally to the jurisdiction of the courts of this state
regarding any matter involving the estate.
ORS 111.085(3) clarifies that the new provision does not preclude other
methods of obtaining jurisdiction over distributees.
§ 2.2-2(b) Venue
Although prior Oregon law made proper venue a jurisdictional prerequisite,
ORS 113.015(2) expressly provides to the contrary. Filing a proceeding in an
improper county is not a jurisdictional defect. See §§2.3-1 to 2.3-4(d) for further
discussion of venue.
§ 2.2-2(c) Powers of Probate Court
A court having probate jurisdiction (i.e., having the authority to consider the
subject matter) has the powers enumerated in ORS 111.095(1). The “general legal
and equitable powers of a circuit court” apply to effectuate the jurisdiction of a
probate court. The orders, judgments, and determinations of a probate court are
entitled to the same finality and presumption of regularity as those of a court of
record with general jurisdiction.
The probate courts have specific authority to make determinations regarding
their own jurisdiction and are expressly given “full” power to make declaratory
judgments in all matters involved in the administration of an estate. ORS
111.095(2).
All these powers apply with equal force to county courts when sitting in
probate, subject only to the appeal rights and procedures set forth in ORS 111.105.
§ 2.2-2(d) Due Process and Jurisdiction
Jurisdiction has several forms, including the following:
(1) Authority of a particular forum to act. This type of jurisdiction is
usually referred to as “jurisdiction of the subject matter.” See ORS 111.075–
111.085.
(2) Authority of any court in a particular state to act. This type of
jurisdiction, based on “sufficient affiliation” of the defendant with the forum state,
is exemplified in Hanson v. Denckla, 357 US 235, 250–251, 78 S Ct 1228, 2 L
Ed2d 1283 (1958). In the Hanson case, the majority of the United States Supreme
Court held that a nonresident trustee did not have sufficient affiliation, or minimum
contacts, with Florida to enable a Florida court to force the trustee to appear before
its courts. This type of jurisdiction involves the authority of a court to reach
beyond its borders and bring persons or property before it.
(3) Authority of a court to affect the rights of persons who have no actual
notice of the proceedings. This issue is present in all proceedings involving
adjudication of rights between persons (in personam) or between persons and
property (in rem), and is one of fairness or due process. The basic test is whether
the person has been given adequate notice of the judicial proceeding so that he or
she has had an opportunity to come before the court and present his or her views.
In several instances, Oregon has dealt with the issues of due process and notice, in
state judicial decisions and in legislation enacted in response to a United States
Supreme Court ruling. For a review of those cases, see §2.5-7.
§ 2.2-3 Forums for Probate
§ 2.2-3(a) Probate Jurisdiction
“Jurisdiction of all probate matters, causes and proceedings is vested in the
county courts of Gilliam, Grant, Harney, Malheur, Sherman and Wheeler counties
and in the circuit court for each other county and as provided in ORS 111.115.”
ORS 111.075.
The original proposal of the Advisory Committee on Probate Law Revision
(1968) was to give probate jurisdiction to the circuit courts throughout the state.
However, to meet certain Eastern Oregon objections, the legislature preserved
probate jurisdiction in the county courts in the six counties listed above. The
county courts in these six counties have all the broadened powers, discretion, and
jurisdiction given to probate courts by the probate code. The county courts are not
limited to probate jurisdiction in the former sense, but they have the general legal
and equitable powers and authority of a circuit court as given by ORS 111.085 and
111.095.
See §5.2-1(a).
§ 2.2-3(b) Transfer from County Court to Circuit Court
§ 2.2-3(b)(1) Discretionary Transfer
In its discretion, the county court may by order transfer an estate proceeding
from that court to the circuit court of that county. ORS 111.115(1). This
discretionary transfer requires the transfer of the entire estate proceeding. A
transfer to the circuit court requires that the circuit court continue its jurisdiction of
the entire estate until it is closed.
§ 2.2-3(b)(2) Mandatory Transfer
If a county judge is a party to, or is directly interested in, the estate
proceeding, the county court must transfer the proceeding to the circuit court of
that county. All matters, causes, and proceedings pertaining to the estate in which
the county judge has an interest must be transferred. ORS 111.115(2).
§ 2.2-3(b)(3) Procedure for Transfer
The procedure for transferring an estate from the county court to the circuit
court is set forth in ORS 111.115(3). Once the transfer order has been made by the
county court, the county clerk must certify all original papers and proceedings
pertaining to the estate and cause them to be filed in the circuit court. The circuit
court thereafter has jurisdiction of all matters pertaining to that estate, just as if
jurisdiction had originally been exclusively in that circuit court.
§ 2.2-3(c) The Probate Commissioner
§ 2.2-3(c)(1) Generally
The position of probate commissioner was created to speed up the opening
of estates and to relieve judges from duties that are essentially clerical, instead of
adjudicatory, in nature. The commissioner also has authority to handle certain
uncontested matters in connection with the opening of guardianships,
conservatorships, and decedents’ estates. See §2.2-3(c)(3). Another objective
behind the establishment of this position is to facilitate the opening of estates in the
absence of the probate judge. This is particularly significant in those counties
having only one such judge. See ORS 111.175–111.185.
§ 2.2-3(c)(2) Identity and Appointment of Commissioner
The court may appoint the clerk of the probate court or “some other suitable
person at the county seat” to act as probate commissioner. ORS 111.175. If the
clerk of the probate court is appointed probate commissioner, the deputy clerk has
the power to perform any act as probate commissioner that the clerk may perform.
The court clerk is fully responsible for the conduct of his or her deputy so acting.
ORS 111.175.
Although each county may have only one probate commissioner, when the
court clerk is appointed as the commissioner, the court clerk’s deputy may act for
him or her. As a result, appointment of the clerk, rather than “some other suitable
person at the county seat,” results in making several persons available to exercise
the powers of a probate commissioner.
PRACTICE TIP: The lawyer should check with the court clerk to
determine whether a probate commissioner has been appointed for the
county and the extent of the power and duties that have been delegated to
that commissioner.
Identity and Appointment of Commissioner and Deputy Commissioners (new
title)
The 2016 Legislature amended ORS 111.175 to permit the presiding or
county judge to appoint deputy probate commissioners in addition to appointing a
probate commissioner. The statute now provides as follows:
The presiding judge of a circuit court or the county judge of a county court may
appoint a probate commissioner and one or more deputy probate commissioners
and, if such appointments are made, shall prescribe, by rule or order, the duties
and responsibilities of the probate commissioner and deputy probate
commissioners, subject to ORS 111.185.
§ 2.2-3(c)(3) Powers of Probate Commissioner
To the extent authorized by rules of the court, a probate commissioner may
act on uncontested petitions for the (1) appointment of special administrators, (2)
probate of wills, and (3) appointment of personal representatives, guardians, and
conservators. ORS 111.185. Each probate court that takes advantage of the power
to appoint a probate commissioner must promulgate rules establishing, and perhaps
limiting, the commissioner’s authority.
Pursuant to the authority given to the probate commissioner, he or she may
make and enter orders on behalf of the court (1) admitting wills to probate; (2)
appointing personal representatives, special administrators, guardians, and
conservators; and (3) setting the amount of the fiduciaries’ bonds. ORS
111.185(1).
When entering orders, the probate commissioner is acting “on behalf of the
court.” ORS 111.185(1). Unless set aside or modified by the judge, the
commissioner’s orders have the same effect as if made by the judge. ORS
111.185(3).
The probate commissioner may refer to the probate judge any matter
presented to the commissioner. ORS 111.185(2). Because the probate
commissioner’s authority is not exclusive, any matter that he or she is authorized
to handle may also be handled by the probate judge in the first instance.
Powers of Commissioner and Deputy Commissioners (new title)
The 2016 Legislature amended ORS 111.185 so that it applies to deputy
probate commissioners as well as probate commissioners. The presiding or county
judge may authorize by rule or order the probate commissioner or deputy probate
commissioners to perform various probate functions. The 2016 Legislature also
added appointing visitors as a function that can be performed by the probate
commissioner or a deputy probate commissioner, if authorized by the judge. ORS
111.185(1).
§ 2.2-3(c)(4) Finality of Commissioner’s Orders
The orders of the probate commissioner may be set aside by the probate
court within 30 days after entry. ORS 111.185(1). See §2.9-2.
Finality of Commissioner’s and Deputy Commissioners’ Orders (new title)
The 2016 Legislature amended ORS 111.185 to provide more procedural
guidance regarding challenging orders or judgments of the probate commissioner
and deputy probate commissioners.
Any interested person may object to an order or judgment of a probate
commissioner or deputy probate commissioner within 30 days after the date of the
order or judgment, and the judgment or order “is subject to being set aside or
modified by the judge of the court” within that timeframe. ORS 111.185(3)–(4).
Unless the judge of the court sets aside or modifies an order or judgment of
the probate commissioner or deputy probate commissioner, it has “the same effect
as if made by the judge of the court.” ORS 111.185(5).
§ 2.3 VENUE
§ 2.3-1 Venue Choices for Probate
Any of the following counties have venue for a probate proceeding:
(1) The county where the decedent had a domicile at the time of his or her
death, ORS 113.015(1)(a);
NOTE: To constitute domicile, “there must be both the fact of a fixed
habitation or abode in a particular place and an intention to remain there
permanently and indefinitely.” In re Noyes’ Estate, 182 Or 1, 14, 185 P2d
555 (1947).
(2) The county where the decedent had a place of abode at the time of
death, ORS 113.015(1)(a);
NOTE: The two factors necessary to establish a domicile, that is, a
fixed abode and an intent to remain there, are absent from this alternative. A
temporary abode in a county will suffice for probate venue in that county.
(3) Any county where the decedent’s property was located at the time of
the decedent’s death or is located at the time the probate proceeding is
commenced, ORS 113.015(1)(b); or
NOTE: Any property, real or personal, establishes venue. See ORS
114.205 (the probate code applies “without distinction between real and
personal property”).
(4) The county in which the decedent died, ORS 113.015(1)(c).
Although venue may be appropriate in any one of several counties, an estate
can be administered in only one county. See §2.3-4(a). See also §5.2-1(b).
The filing of a proceeding in an improper county is not a jurisdictional
defect. ORS 113.015(2).
§ 2.3-2 Petition for Appointment of Personal Representative
The facts relied on to establish venue must be alleged in the petition for
appointment of the personal representative. ORS 113.035(3). See Forms 5-3, 5-4.
§ 2.3-3 Venue as Jurisdictional Defect
By statute, improper venue (i.e., incorrect county) “does not constitute a
jurisdictional defect.” ORS 113.015(2). Before enactment of the probate code in
1969, proper venue was a jurisdictional matter. In re Armstrong’s Estate, 159 Or
698, 705, 82 P2d 880 (1938); Wink v. Marshall, 237 Or 589, 591–592, 392 P2d
768 (1964).
§ 2.3-4 Second Administration Started in Another County
§ 2.3-4(a) Generally
An estate can be administered in only one county. If proceedings seeking the
appointment of a personal representative of the same estate or proceedings to
probate a will of the same decedent are commenced in more than one county, all
proceedings are stayed except in the county where first commenced until a final
determination of venue. ORS 113.025(1).
PRACTICE TIP: A lawyer who foresees a battle over venue should be
the first to file the petition for appointment of the personal representative.
The court where the first filing is made will be the one to resolve venue
conflicts.
When probate proceedings have been filed in more than one county, a
petition for determination of venue should presumably be filed in the county where
the first proceeding was commenced. Notice should be given in the manner
provided by ORS 111.215 to:
(1) The personal representative in the other estate proceeding;
(2) The probate court of the other county; and
(3) Each person who petitioned for the appointment of a personal
representative (these persons are “interested” in the venue determination because
they each selected a county where proceedings were filed).
In resolving venue conflicts, the court of the county where the proceeding
was first begun may order that the proceeding be transferred only to a county
where another proceeding has also been commenced. A venue transfer is strictly
discretionary with the court and must be “for the best interest of the estate.” ORS
113.025(1). The standard of appellate review of venue decisions is, accordingly,
abuse of discretion.
See Forms 2-1 and 2-2.
§ 2.3-4(b) Transfer to Another Court
Proceedings undertaken in the first county with jurisdiction are in all
respects valid and effective up to and including the entry of an order changing
venue to the second county. The court of the second county (in which venue was
ultimately determined to be “for the best interest of the estate,” ORS 113.025(1))
also has jurisdiction for all proceedings undertaken. ORS 113.025(2). Double
jurisdiction therefore exists until an order of transfer is entered. See Forms 2-1 and
2-2.
If a change of venue is ordered, the clerk of the court where the proceeding
was first commenced must send to the clerk of the court for the other county a
transcript of the proceedings, together with all the original papers filed. ORS
113.025(2). Thereafter, the recipient court has exclusive jurisdiction over the estate
proceedings. Because all papers filed in the first county are to be sent to the second
county, apparently the only record of the disposition of the estate in the first county
is the journal entry of the order transferring venue.
The 2017 Legislature amended ORS 113.025(2), which now reads as
follows:
When the court enters an order transferring the proceeding to another county, the
clerk of the court shall notify the court for the other county of the order, and the
court for the other county has exclusive jurisdiction of the proceeding to the same
extent and with like effect as though the proceeding were in the court on original
jurisdiction.
§ 2.3-4(c) Venue Determined to Be in Original County
As stated in §2.3-4(a), if venue is determined to be in the county where
proceedings were first commenced, proceedings later commenced in another
county “shall be stayed.” ORS 113.025(1). To the extent that proceedings were
actually conducted in that second county, they are considered to have been
undertaken with jurisdiction. ORS 113.025(2). See Form 2-2.
§ 2.3-4(d) Accounting by Displaced Personal Representative
The order determining proper venue in one county has the effect of
terminating the proceedings in the other county. See ORS 113.025(2). The deposed
personal representative must then turn over to the remaining personal
representative any assets in the possession of the former and, within 30 days of the
order terminating his or her authority, must also file an accounting in the court
retaining jurisdiction and venue. ORS 116.083(1)(b). In order for the outgoing
personal representative to be discharged and his or her bond (if any) exonerated, a
judgment approving the account and discharging the personal representative should
be entered in the surviving proceeding.
If the deposed personal representative had previously published a notice to
interested persons as required by ORS 113.155(1), the remaining personal
representative should republish a notice to interested persons in that same county.
Although the statute does not expressly require a second publication, the situation
is analogous to ORS 113.225, which requires republication of the notice to
interested persons by a successor personal representative.
§ 2.4 PETITIONS
§ 2.4-1 Form
The probate code provides that “[n]o particular pleadings or forms thereof
are required in the exercise of jurisdiction of probate courts.” ORS 111.205.
However, ORS 111.205 requires that the “proceedings shall be in writing” and that
all petitions, reports, and accounts in proceedings before the probate court “must
include a declaration under penalty of perjury in the form required by ORCP 1 E
made by at least one of the persons making” them. See §2.4-2.
UTCR 2.010 provides that all documents must be printed or typed.
Furthermore, UTCR 2.010 and UTCR chapter 9 set forth other rules regarding the
format of documents (e.g., size of paper, spacing, and information about the
attorney of record).
As a result of 2013 and 2017 amendments to ORS 111.205, the first
paragraph in the 2012 text should now read as follows:
The probate code provides that “[n]o particular pleadings or forms of
pleadings are required in the exercise of jurisdiction of probate courts.” ORS
111.205. However, ORS 111.205 requires that the “proceedings shall be in
writing” and that all petitions, reports, and accounts in proceedings before the
probate court must include
a declaration under penalty of perjury in the form required by ORCP 1 E, or an
unsworn declaration under ORS 194.800 to 194.835, if the declarant is physically
outside the boundaries of the United States, made by at least one of the persons
making the petitions, reports and accounts or by the attorney for the person, or in
case of a corporation by its agent.
See Supp § 2.4-2 (declaration under penalty of perjury).
As mentioned in the 2012 text, UTCR 2.010 and UTCR chapter 9 set forth the
form of documents filed in a probate proceeding. For documents filed
electronically, see UTCR chapter 21, including UTCR 21.040 (format) and UTCR
21.090 (electronic signatures).
§ 2.4-2 Declaration Under Penalty of Perjury
The probate code requires that petitions, reports, and accounts in probate
proceedings “include a declaration under penalty of perjury in the form required by
ORCP 1 E made by at least one of the persons making the petitions, reports and
accounts or by the attorney for the person, or in case of a corporation by its agent.”
ORS 111.205.
A declaration under penalty of perjury must:
(1) Be signed by the declarant; and
(2) Include the following sentence “in prominent letters immediately
above the signature of the declarant: ‘I hereby declare that the above statement is
true to the best of my knowledge and belief, and that I understand it is made for
use as evidence in court and is subject to penalty for perjury.’” ORCP 1 E.
ORS 194.825 sets forth the form of a declaration made outside the
boundaries of the United States. See also ORCP 1 E(3).
§ 2.4-3 Who May Petition
Petitions in the probate court must be filed by “a party in interest.” ORS
111.205. Pursuant to ORS 111.005(19), the term interested person includes “heirs,
devisees, children, spouses, creditors and any others having a property right or
claim against the estate of a decedent that may be affected by the proceeding. It
also includes fiduciaries representing interested persons.”
In the Comments to the probate code concerning ORS 113.035 (relating to
petitions for the appointment of a personal representative), the Advisory
Committee on Probate Law Revision said that it “considered that any person who
paid the fees and filed a petition complying with section 84 would of necessity be
an interested person.” Proposed Oregon Probate Code (Preliminary Draft) (Aug
1968), at 84. See
http://arcweb.sos.state.or.us/pages/records/legislative/legislativeminutes/probate.
COMMENT: Although it might be argued that “interested persons” are
limited to persons specifically named in ORS 111.005(19), the intent of the
drafters of the probate code appears to be that any person interested enough
to file a petition is an “interested person” qualified to do so. ORS 113.085
even names the Director of Human Services or the Director of the Oregon
Health Authority as having an interest if the decedent received public
assistance, or the Department of Veterans Affairs if the decedent was a
protected person under ORS 406.050(8). However, the safest approach is to
have the probate petition signed by an interested person as defined by ORS
111.005(19).
See Oregon Probate Law Revision Advisory Committee Records, available
at http://sos.oregon.gov/archives/Pages/records/probate-law.aspx.
ORS 406.050(8) was renumbered ORS 406.050(10).
A recent Oregon Court of Appeals decision may narrow the group of
“interested persons” by imposing a requirement that such persons have some claim
or property right against the estate that may be affected by the proceeding.” Price
v. Lotlikar, 285 Or App 692, 699, 397 P3d 54 (2017) (the decedent’s sisters were
not “interested persons” entitled to reopen an estate under ORS 116.233). The
court notes that a person who qualifies as an “interested person” for one purpose,
may not necessarily be an “interested person” in another proceeding. The court
also specifically considered a comment stating that “any person who paid the fees
and filed a petition…would of necessity be an interested person” and determined
that the comment was too cryptic to lead to any conclusions regarding the breadth of
the definition of interested person. Price, 285 Or App at 702 n 5.
§ 2.4-4 When Petitions Required
Because of the increased authority given to the personal representative by
the probate code, only two petitions may be necessary in the ordinary simple
estate:
(1) A petition to open the estate, ORS 113.035 (see §§5.2-2(a) to 5.2-
2(b)); and
(2) A petition for a judgment of distribution, ORS 116.083(3)(b) (see
§11.8-2).
See Appendix 2A for a table of when petitions to the court are required. In
the probate court, motions and complaints are rarely used. Instead, requests for the
court to take action are filed as petitions. ORS 111.205.
ORS 116.083(3)(b) was renumbered ORS 116.083(3)(e) (petition for a
judgment authorizing the personal representative to distribute the estate).
§ 2.5 NOTICE
§ 2.5-1 Generally
Notice is critical to the estate-administration process. All known persons
who may possibly be interested in the estate, its opening, its administration, and its
closing must be given adequate notice so that they have an opportunity to make
any appropriate objections. Although judicial scrutiny is substantially reduced by
the current probate code, the notice requirements are materially enhanced, giving
fair opportunity for those whose interests might be affected either to negotiate
informally with the personal representative or to bring the matter before the
probate court.
When notice is required of a hearing on a petition or other matter on which
an order is sought, the notice must include the date, time, and place of the hearing.
ORS 111.215(1). See Form 2-3.
PRACTICE TIP: The description of the subject of the hearing should be
carefully identified in the notice, so that interested persons who fail to
appear at the hearing cannot later claim that they were misled. (Attaching a
copy of the petition avoids the problem.)
In both intestate estates and testate estates, notice must be given to heirs,
devisees, and other interested persons (see ORS 113.035(5)–(9)) upon the personal
representative’s appointment or upon admission of a will to probate. ORS 113.145,
113.155. Notice of the personal representative’s appointment must be either
delivered or mailed to the heirs, devisees, and persons described in ORS
113.035(8)–(9). ORS 113.145. Heirs and devisees will accordingly have actual
notice when a will has been admitted and will have adequate opportunity to file a
timely contest. Notice to interested persons must be published in a newspaper as
described in ORS 113.155. For further discussion of notice, see §5.2-8 and §§7.3-
1(a) to 7.3-3(b).
The notice to heirs and devisees required by ORS 113.145, as well as a copy
of the death certificate, must be mailed or delivered to the Department of Human
Services and the Oregon Health Authority within 30 days after the personal
representative is appointed in all probates. ORS 113.145(6). Their mailing
addresses and telephone numbers are as follows:
Oregon Department of Human Services,
Estate Administration Unit
PO Box 14021
Salem, OR 97309-5024
phone: 800-826-5675
Oregon Health Authority
500 Summer St., NE, E-20
Salem, OR 97301-1097
phone: 503-947-2340
If, before the filing of the final account, the personal representative has
actual knowledge that the petition did not include the name and address of any
person described in subsection (4), (5), (7), (8), or (9) of ORS 113.035, the
personal representative must:
(1) “Make reasonable efforts under the circumstances to ascertain each of
those names and addresses,” ORS 113.145(5)(a);
(2) “Promptly deliver or mail information as described in [ORS
113.145(1)] to each of those persons located after the filing of the petition and
before the filing of the final account,” ORS 113.145(5)(b); and
(3) “File in the estate proceeding, on or before filing the final account
under ORS 116.083, proof of compliance with [ORS 113.145(5)] or a waiver of
notice as provided under ORS 111.225,” ORS 113.145(5)(c).
The personal representative must mail a copy of the notice of final account
to each heir, each devisee, each unpaid creditor whose claim has not been barred,
and any other person known by the personal representative to have an interest in
the estate being distributed, including the Department of Human Services and the
Oregon Health Authority. ORS 116.093.
NOTE: One of the purposes of the probate code is to give actual notice
to all persons who might reasonably have an interest in the action taken or to
be taken. The idea of notice by publication is preserved in only two
situations, discussed in §2.5-3.
The personal representative may apply to the court for authority, approval,
or instructions on any estate matter, even for actions specifically authorized under
the broad powers of ORS 114.305. ORS 114.275. The court, on such notice and
hearing as it may prescribe, must then make an appropriate ruling. Although the
notice requirements of this statute are completely discretionary with the court, all
persons who might be directly interested in the matter must receive notice in order
to be bound by the order.
Any person who has knowledge that a decedent died wholly intestate,
without a known heir, and owning property subject to probate in Oregon must give
notice to an appointed estate administrator at the Department of State Lands within
48 hours of acquiring such knowledge. If the department is appointed personal
representative, the director of the department will appoint an estate administrator to
act for the department in administering the estate. ORS 113.238. See ORS 113.235.
See Appendix 2B for a table of notice requirements.
ORS 116.093(1) now provides that the personal representative must mail a
copy of the final account and petition for judgment and notice of the time set for
objections to (1) “[e]ach distributee at the last known address of the distributee”
and (2) “[e]ach creditor who has not received payment in full and whose claim has
not otherwise been barred.”
The notice provided to the Oregon Health Authority (OHA) under ORS
113.145 is not sufficient if that agency is or may be a creditor of the estate. Notice
must also be given under ORS 115.003(3). Presumably, this applies to claims by
the Department of Human Services (DHS) and the Department of Corrections as
well. See State ex rel. Oregon Health Auth. v. Cue, 268 Or App 350, 342 P3d 98
(2014), rev den, 357 Or 324 (2015) (although the executor knew that the OHA had
a claim against the decedent’s estate, the executor failed to send the OHA the
notice required under ORS 115.003, so its claim was not time-barred).
If DHS, the OHA, or the Department of Corrections has presented a claim,
and the claim has not been settled or paid in full, notice of the final account must
also be mailed to the appropriate agency. ORS 116.093(5).
Furthermore, if a charitable trust (see ORS 130.170), a public benefit
corporation (see ORS 65.001), or a religious organization is a residuary beneficiary
of the estate, or if it will receive less under the judgment than the amount of a
specific devise to it, the personal representative must mail the notice to the
Attorney General. ORS 116.093(2).
§ 2.5-2 Notice to Persons Under Disability
Minors and incompetents must be given notice just as persons not under a
disability are given notice. ORS 113.035(5)–(8). If a guardian or conservator has
been appointed, service should also be made on that guardian or conservator. See
Appendix 2B.
PRACTICE TIP: The probate code does not require the appointment of a
guardian, conservator, or guardian ad litem to receive notice on behalf of a
minor or an incompetent. However, given that the courts are emphasizing
due process requirements in connection with notice, prudence dictates that a
guardian or conservator be appointed when the rights of an interested person
are affected.
§ 2.5-3 Manner of Giving Notice
Except when notice by publication is specifically required by statute or court
order (see, e.g., ORS 113.045), notice may be given in one or more of the
following ways:
(1) By mail, ORS 111.215(1)(a);
(2) By personal delivery, ORS 111.215(1)(b); or
(3) By publication, ORS 111.215(1)(c).
PRACTICE TIP: Notice by publication is permitted only when “the
address of any person is not known or cannot be ascertained with reasonable
diligence.” ORS 111.215(1)(c). Presumably, however, the court will not
allow service by publication in probate matters any more liberally than is
allowed in actions under ORCP 7 D(6)(a). This rule permits service by
publication only when an affidavit has been filed showing that service
“cannot be made by any method otherwise specified in these rules or other
rule or statute.”
Except as noted above, the only other instance in which notice by
publication is authorized or directed is the “notice to interested persons”
announcing the appointment of the personal representative. ORS 113.155. But see
§2.5-7. See Appendix 2B.
Notice by mail or by personal service may be made either on the person to
be notified or on that person’s lawyer if the person “has appeared by attorney or
requested that notice be sent to the attorney of the person.” ORS 111.215(1).
However, the personal representative’s notice of disallowance of a claim must be
given to both the claimant and, if any, the claimant’s lawyer. ORS 115.135(1).
On a showing of good cause, the court “may change the requirements as to
the method or time of giving notice for any hearing.” ORS 111.215(2).
Furthermore, the court may authorize “notice by electronic means.” ORS
111.215(2) (as amended in 2017). See UTCR chapter 21 (filing and service by
electronic means).
The 2017 Legislature authorized the Department of Human Services and the
Oregon Health Authority to adopt rules allowing them to accept electronic notice
in lieu of the notice required under ORS 111.215(1). ORS 111.215(4).
§ 2.5-4 Timing of Notice
Unless the court or the probate code specifies a different period for giving
notice, the method of giving notice affects the length of time required before the
hearing for which the notice must be given. See Appendix 2B. Notices of hearings
must be given as follows:
(1) If by mail, at least 14 days before the date set for the hearing, ORS
111.215(1)(a);
(2) If by personal delivery, at least five days before the date set for the
hearing, ORS 111.215(1)(b); or
(3) If by publication, once in each of three consecutive weeks, the last
publication to be at least 10 days before the date set for the hearing, ORS
111.215(1)(c).
Upon a showing of good cause, the court may change the requirements
regarding the method or time of giving notice for any hearing. ORS 111.215(2).
This provision relates to notices of hearings only.
The time period within which to object to an accounting or fee petition is 20
days. ORS 116.093; UTCR 9.060(4).
As mentioned in Supplement § 2.5-3 (manner of giving notice), the court
may now authorize “notice by electronic means.” ORS 111.215(2) (as amended in
2017). See UTCR chapter 21 (filing and service by electronic means).
See ORCP 10 B (three days must be added to the prescribed period
“whenever a party has the right to or is required to do some act within a prescribed
period after the service of a notice or other document upon that party and the notice
or document is served by mail, e-mail, facsimile communication, or electronic
service”).
§ 2.5-5 Proof of Notice
When the probate code requires that notice be given of a probate matter,
proof that notice was given must be made “at or before the hearing and filed in the
proceeding.” ORS 111.215(3). Proof of giving notice is made as follows:
(1) Proof of notice by mailing or personal delivery must be made in the
form required by ORCP 9 C. ORS 111.218(1). ORCP 9 C provides that proof of
such service may be made by a “written acknowledgment of service, by affidavit
or declaration of the person making service, or by certificate of an attorney.” The
proof of service “may be made upon the papers served or as a separate document
attached to the papers.” ORCP 9 C. See Form 2-4.
(2) Proof of notice by publication must be made in the form required by
ORCP 7 F. ORS 111.218(2). ORCP 7 F(2)(b) provides that proof of publication
may be made by an affidavit or a declaration of an employee of the newspaper
publishing the notice.
See Forms 5-12, 5-13, and 5-16.
As mentioned in Supplement § 2.5-3 (manner of giving notice), the court
may now authorize “notice by electronic means.” ORS 111.215(2) (as amended in
2017). See UTCR chapter 21 (filing and service by electronic means). ORCP 9
C(2) to ORCP 9 C(4) detail proof of service if notice is by facsimile
communication, email, or electronic service:
C(2) Proof of service by facsimile communication. If service is made by
facsimile communication under section F of this rule, proof of service shall be
made by affidavit or by declaration of the person making service, or by certificate
of an attorney and the person making service shall attach to the affidavit,
declaration, or certificate printed confirmation of receipt of the message generated
by the transmitting technology.
C(3) Proof of service by e-mail. If service is made by e-mail under
section G of this rule, proof of service shall be made by affidavit or by declaration
of the person making service, or by certificate of an attorney, stating either that
the other party has consented to service by e-mail or that he or she received
confirmation that the message and attachment were received by the designated
recipient and specifying the method by which the sender received confirmation.
An automatically generated message indicating that the recipient is out of the
office or is otherwise unavailable cannot support the required certification, nor
can an automatically generated e-mail delivery status notification.
C(4) Proof of service by electronic service. If service is made by
electronic service under section H of this rule, proof of service shall be made by
affidavit or by declaration of the person making service, or by certificate of an
attorney, specifying that service was completed by electronic service.
ORCP 9 C now includes a provision describing proof of service on a party
without a service address: “Service on a party who has appeared without providing
an appropriate address for service shall be by affidavit or by declaration of the
person filing the document, or by certificate of an attorney, that service by filing as
provided in section B of this rule is appropriate.” ORCP 9 C(5).
§ 2.5-6 Waiver of Notice
A person who is “neither incompetent nor a minor” may waive notice by
filing a signed written waiver in the proceeding or by appearance at the hearing.
ORS 111.225. If a guardian, guardian ad litem, or conservator has been appointed
for the person, the fiduciary may waive notice in the same manner. ORS 111.225.
The written waiver may be signed by the lawyer for the person or the fiduciary.
ORS 111.225. See Forms 2-5 and 2-6.
§ 2.5-7 Effect of Failure to Give Notice
A series of decisions by the Oregon courts and one by the United States
Supreme Court demonstrate the consequences of insufficient notice in the probate
context.
Upon the filing of the final account and petition for distribution, ORS
116.093(1) requires that the personal representative give notice to each heir, each
devisee, each creditor, and any “other person known to the personal representative
to have or to claim an interest in the estate being distributed.” Pursuant to the
Oregon Supreme Court’s decision in Matter of DeMary’s Estate, 294 Or 650, 658–
659, 661 P2d 931 (1983), if the personal representative fails to give such notice to
an interested person, the judgment of final distribution may be rendered void as to
that person and may be set aside. The claimant in Matter of DeMary’s Estate had
filed a wrongful death action against the decedent’s estate, which action was
dismissed without prejudice. On remand, the court of appeals concluded that the
personal representative knew that the claimant still had a right against the estate to
refile his action. Waybrant v. Bernstein, 75 Or App 550, 554, 706 P2d 1002
(1985). Because no notice had been given to the claimant, the closure order was
void as to him. The trial court erred in denying the claimant’s equivalent of a
petition to reopen the estate under ORS 116.233.
ORS 113.145 requires that notice be given to interested persons upon the
appointment of the personal representative. In Lawver v. Beesley, 86 Or App 711,
719–720, 740 P2d 1215 (1987), certain heirs of the decedent were not bound by
the decree (now judgment) of final distribution because the personal representative
breached the statutory duty to provide notice under ORS 113.145. Neither actual
notice nor published notice to interested persons cured the defect. The decree was
void as to the omitted heirs.
However, in First Interstate Bank of Oregon, N.A. v. Haynes, 87 Or App
700, 743 P2d 1139 (1987), a lower court denied a creditor-bank’s attempt to
reopen an estate. Although holding that the bank had a “colorable claim” because
the bank was not given notice required under ORS 116.093(1)(c)–(d), which made
the lower court’s denial appealable, the court affirmed on a res judicata theory. In
doing so, the court noted that ORS 116.213 prohibits actions against the personal
representative more than one year after entry of the discharge order. First
Interstate Bank of Oregon, N.A., 87 Or App at 703–704. The court acknowledged
the propriety of proceeding against the residuary legatees.
Next, the United States Supreme Court decided Tulsa Prof’l Collection
Services, Inc. v. Pope, 485 US 478, 487–491, 108 S Ct 1340, 99 L Ed2d 565
(1988), in which a probate “nonclaim” statute was declared unconstitutional. The
Court held that a known creditor of the decedent was entitled to actual notice of the
time limitation for filing a claim, rather than the statutorily prescribed notice by
publication.
In response to the decision in Tulsa Prof’l Collection Services, Inc., the 1989
Oregon Legislature revised Oregon’s laws regarding claims against estates. A
personal representative now has a duty to take reasonable actions to ascertain
claims against an estate and to deliver notice to known claimants in person or by
mail. ORS 115.003. The personal representative and the surety for the personal
representative are liable (as are interested persons, including creditors and
distributees who received assets) to any omitted creditor for the amount that the
omitted creditor would have recovered. ORS 115.004(1).
Service of a complaint on the lawyer for a closed small estate is not
sufficient notice under ORCP 23 C (relation back of amendments to pleadings)
when a personal representative was not appointed for a deceased tortfeasor within
the statutory period of limitations. In Wheeler v. Williams, 136 Or App 1, 3, 900
P2d 1076 (1995), the original complaint named only “Ira O. Williams, deceased,”
as the defendant. The court ruled that an amended complaint based on the
subsequent appointment of a personal representative could not relate back. Under
that rule, the person who must have received notice of the action was the personal
representative of the estate. Wheeler, 136 Or App at 6.
COMMENT: It appears that any failure to give notice by mail or such
other means (in addition to what is statutorily required) to ensure actual
notice will result in an act being void as to the person not notified. The
limitation imposed by ORS 116.233 for reopening an estate is now of
questionable effect in matters beyond the exception included for claims
under ORS 115.004 (recovery for failure to search for and give notice to
claimants of the estate).
The failure to give notice of the appointment of a personal representative to
heirs and devisees under ORS 113.145(1) does not, however, invalidate a court’s
decision in a will contest. The court is not deprived of authority to rule on the
validity of the will. In re Estate of Eddy, 95 Or App 733, 737, 770 P2d 969 (1989).
Will contests are discussed in chapter 15.
Although declining to address whether an affidavit for service by publication
was required to show due diligence under the general probate notice statute (ORS
111.215(1)(c)), the Oregon Supreme Court made this a requirement in a
determination-of-heirship proceeding. In Matter of Riddle’s Estate, 288 Or 687,
607 P2d 1370 (1980), a petitioner presented no affidavit of due diligence, and
neither the husband of the decedent’s sister (who died after the decedent) nor the
sister was ever notified of the proceedings. Matter of Riddle’s Estate, 288 Or at
694–695. The supreme court reversed a court of appeals ruling in favor of the
personal representative based on ORS 111.215(1)(c), by holding that due diligence
was necessary under former ORS 15.170, which dealt with unknown heirs.
Jurisdiction was never obtained over the heirs without notice. Matter of Riddle’s
Estate, 288 Or at 694–695. (ORS 15.170 was repealed with the adoption of the
Oregon Rules of Civil Procedure, but ORCP 7 D(6) imposes a similar obligation.)
See Supplement § 2.5-1 (notice generally) regarding amendments to ORS
116.093.
§ 2.6 HEARINGS
§ 2.6-1 When a Hearing Is Required
Although most estates are administered with no hearings, hearings are
required in the following situations:
(1) In any contested matter, see ORS 113.075;
(2) For authority of the personal representative to sell, mortgage, lease, or
otherwise dispose of property (real or personal) if certain conditions exist, ORS
114.325(2) (see §§10.8-1(a) to 10.8-1(b));
(3) For a petition for an order of support for the surviving spouse or
dependent children, ORS 114.015(4) (see §§6.2-1 to 6.2-4);
(4) After a partial distribution, for an order directing distributees to return
property, ORS 116.043 (see §11.8-1(b)); and
(5) When objections have been filed to a judgment of final distribution,
ORS 116.103 (see §§11.7-1 to 11.7-3).
PRACTICE TIP: Some counties may require an ex parte appearance
before the judge or probate commissioner to obtain an order admitting the
will to probate, appointing the personal representative, and fixing the
amount of bond, if any. In Multnomah County and most other counties, no
hearing is needed for these purposes. If a potential issue exists (e.g.,
regarding the amount of bond), the matter should be discussed initially with
the court staff. Supplementary local rules are found at
www.courts.oregon.gov/rules/pages/slr.aspx.
§ 2.6-2 Conduct of Hearings
The mode of procedure in the probate court is “in the nature of an action not
triable by right to a jury except as otherwise provided by statute.” ORS 111.205.
The probate code has specific provisions relating to proof of documents and
certification (ORS 111.245), translation of documents (ORS 111.255), and the
establishment of wills (ORS 113.055, 113.065). Otherwise, the general rules of
evidence apply.
In a will contest, neither party has a right to a trial by jury. Rantru v. Unger,
73 Or App 680, 683, 700 P2d 272 (1985). See chapter 15.
§ 2.6-2(b) Subpoena Powers
The court has specific statutory authority to order any person to appear and
give testimony by deposition if it is probable that the person:
(1) Has concealed, secreted, or disposed of any property of the decedent;
(2) Has been entrusted with property of the decedent’s estate and fails to
account to the personal representative for the entrusted property;
(3) Has concealed, secreted, or disposed of any writing or document
pertaining to the estate;
(4) Has knowledge or information that is necessary to the administration
of the estate; or
(5) As an officer or agent of a corporation, has refused to allow
examination of the corporation’s books and records that the decedent had the right
to examine.
ORS 114.425(1).
If a person cited as provided above fails to appear or to answer questions
asked, the court may punish the person for contempt. ORS 114.425(2).
§ 2.6-2(c) Summary Determination of Claims
The procedure in a probate court proceeding for the summary determination
of a claim disallowed, in whole or in part, by the personal representative is set forth
in ORS 115.165:
(1) The personal representative must move or plead to the claim as
though the claim were a complaint filed in an action;
(2) The court hears the matter without a jury, after notice to the claimant
and the personal representative;
(3) On the hearing, the court determines the claim in a “summary
manner” and makes an order allowing or disallowing the claim in whole or in part;
and
(4) No appeal may be taken from the order of the court made on the
summary determination.
§ 2.6-3 Stenographic Record
On the motion of a judge or on the request of an interested person, the court
may require a court reporter to attend any hearing and make a stenographic record
of the proceedings. ORS 111.265. No specific provision is made for an electronic
record.
§ 2.7 ORDERS AND JUDGMENTS
§ 2.7-1 Generally
A personal representative must proceed with the administration, settlement,
and distribution of the estate without adjudication, order, judgment, or direction of
the court, except as otherwise provided in the will or the probate code. ORS
114.275.
A personal representative or any interested person, however, may apply to
the court at any time for authority, approval, or instructions on any matter
concerning the administration, settlement, or distribution of the estate. The court
then must instruct the personal representative or rule on the matter. ORS 114.275.
Although an order or a judgment may not be required, the personal representative
may obtain a court order approving the action. Because of the substantial authority
given to the personal representative by ORS 114.305, court orders for authorized
transactions are neither needed nor worthwhile, except in unusual situations or
when the probate code specifically requires them.
COMMENT: Optional orders may be made by the court with or without
a hearing as the court may prescribe. ORS 114.275. If the court requires a
hearing, ORS 111.215 applies. Notice of the hearing must be mailed or
personally delivered to all interested persons within the timeframe set forth
in ORS 111.215. See §2.5-4.
The broad powers granted to the personal representative by ORS 114.305
may be limited by the will or by court order. Those powers can otherwise be
executed by the personal representative as long as the actions are reasonable and
for the benefit of all interested persons. ORS 114.305; see ORS 111.005(19)
(defining interested person).
A personal representative is subject to prudent investor rules (ORS 130.750–
130.775). ORS 114.305(6). The probate code expressly authorizes the personal
representative to sell, mortgage, or otherwise deal with property without court
order unless:
(1) The sale is contrary to the will’s provisions;
(2) The property is specifically devised and the will does not authorize
the sale; or
(3) The personal representative has been required to file a bond, the sale
price of the property to be sold exceeds $5,000, and the bond has not been
increased by an amount equal to the cash to be realized by the sale.
ORS 114.325.
NOTE: The court may waive the requirement of a bond, but only under
certain circumstances. ORS 113.105(4). The lawyer should not attempt to
waive the bond under other circumstances, even if the court is willing to do
so. Such an unauthorized waiver might invalidate the appointment of the
personal representative.
No order or confirmation is then required for the sale of real or personal
property. Even when a bond is required, orders of sale are unnecessary as long as
the bond already posted is sufficient, or the bond is increased to cover the sale
proceeds, or the court has previously made other directions concerning the bond
amount. ORS 113.105, 113.115.
The 2017 Legislature amended ORS 114.325 (the personal representative’s
power to sell, mortgage, lease, and deal with estate property) and ORS 113.105
(bond requirements).
The amendments to ORS 114.325 deleted the explicit provision requiring a
bond when the sale price of the property to be sold exceeds $5,000, but added a
clause making the statute subject to ORS 113.105, which governs bond
requirements.
ORS 114.325 now provides as follows:
(1) Except as provided in subsection (2) of this section, and subject to
ORS 113.105, a personal representative has power to sell, mortgage, lease or
otherwise deal with property of the estate without notice, hearing or court order.
(2) Exercise of the power of sale by the personal representative is
improper, except after notice, hearing and order of the court, if:
(a) The sale is in contravention of the provisions of the will; or
(b) The property is specifically devised and the will does not authorize
its sale.
The 2017 legislation updated the bond requirements in ORS 113.105. The
general rule is that the personal representative may not act until he or she provides
a bond. ORS 113.105(1). The court sets the amount of the bond, which amount
“must be adequate to protect interested persons.” ORS 113.105(1)(b). A bond is
not required in certain circumstances. ORS 113.105(2). The court may waive or
reduce the requirement of a bond as described in ORS 113.105(3) and (4). For
further discussion of the amendments to ORS 113.105, see Supplement § 5.2-6(a)
(necessity of bond; court discretion).
§ 2.7-2 Required and Permissible Orders or Judgments
In a probate proceeding, a court order or judgment is required or may be
appropriate in some situations. See Appendix 2C for circumstances in which court
orders are necessary. See also Appendix 2D.
In the ordinary estate, only three orders or judgments are needed:
(1) A limited judgment admitting the will to probate and appointing the
personal representative and, unless waived by the will, fixing the amount of the
bond, ORS 111.185(1), 111.275(1);
(2) A general judgment, approving the final account and fixing
compensation of the personal representative, ORS 116.113, 18.005(7); and
(3) A supplemental judgment discharging the personal representative,
ORS 116.213; ORS 18.005(17).
In a probate proceeding, the court “may enter a limited judgment only for
the following decisions of the court” (ORS 111.275(1)), and then “only if the court
determines that there is no just reason for delay” (ORS 111.275(2)):
(1) A decision on a petition for appointment or removal of a personal
representative;
(2) A decision in a will contest filed in the probate proceeding;
(3) A decision on an objection to an accounting;
(4) A decision on a request made in the proceeding for a declaratory
judgment under ORS 111.095;
(5) A decision on a request for an award of expenses under ORS 116.183;
and
(6) “Such decisions of the court as may be specified by rules or orders of
the Chief Justice of the Supreme Court under ORS 18.028,” ORS 111.275(1)(f).
The judgment document “need not reflect the court’s determination that
there is no just reason for delay.” ORS 111.275(2); see Interstate Roofing, Inc. v.
Springville Corp., 347 Or 144, 148–156, 218 P3d 113 (2009).
Regarding the second paragraph of the 2012 text, note that “the court may,
for good cause, require a bond notwithstanding any provision in a will that no bond
is required.” ORS 113.105(2)(a).
The 2016 Legislature added a new provision to ORS 111.275(1), allowing
the court in a probate proceeding to enter a limited judgment in a “decision on a
petition filed under ORS 112.238 admitting a writing for probate or otherwise
acknowledging the validity and intent of the writing.” ORS 111.275(1)(f). The
2015 Legislature added ORS 112.238 to create a procedure allowing the court to
admit for probate a writing that does not comply with the formalities of a validly
executed will. For further discussion of ORS 112.238, see Supplement § 8.2-6
(petition to admit noncompliant writing as decedent’s will or a revocation or
alteration of the will).
§ 2.7-3 Orders of Probate Commissioner
The probate commissioner, rather than a judge, may enter orders on
uncontested petitions for:
(1) Appointment of a special administrator;
(2) Probate of a will;
(3) Appointment of a personal representative; and
(4) Setting the amount of the fiduciary’s bond.
ORS 111.185(1).
Unless modified or set aside by a judge within 30 days after entry, the order
of a probate commissioner has the same effect as if made by the judge. ORS
111.185(1), (3).
Orders of Probate Commissioner and Deputy Probate Commissioners (new
title)
ORS 111.185(3) was renumbered ORS 111.185(5). See Supplement § 2.2-
3(c)(3) (powers of probate commissioner) for further discussion on amendments to
the statute.
§ 2.7-4 Effect of Violation of Orders
§ 2.7-4(a) Contempt of Court
Because the probate court has the general legal and equitable powers of a
circuit court (ORS 111.095), it has the power to punish violations of its orders and
judgments with contempt. The probate court has the power to enforce its orders
and judgments by “an execution or warrant.” ORS 111.205(5).
§ 2.7-4(b) Breach of Fiduciary Duty
A personal representative who improperly exercises a power is liable for
breach of fiduciary duty to interested persons for resulting damages or loss. The
exercise of a power in violation of a court order is a breach of duty. The exercise of
a power contrary to a provision in a will may be a breach of duty. ORS 114.395.
See chapter 7 for a discussion of the liabilities of the personal representative.
§ 2.8 PROBATE COSTS; EXPENSES

§ 2.8-1 Publication Costs
The probate code requires that the following notices be published once in
each of three consecutive weeks:
(1) A notice to interested persons on the appointment of the personal
representative (ORS 113.155); and
(2) A notice of the time and place of a hearing when the person to be
notified cannot be ascertained with reasonable diligence (ORS 111.215(1)(c)).
The costs of publication are allowed to the personal representative in the
settlement of the final account. ORS 116.183(1). See §2.8-4(b).
§ 2.8-2 Appraiser’s Fees
The personal representative must file an inventory of estate property
showing estimates of the true cash values of estate properties. ORS 113.165.
The personal representative may employ an independent appraiser to assist
in appraising property “the value of which may be subject to reasonable doubt.”
ORS 113.185(1). The need for a professional appraisal presumably will arise only
when there are problems of valuation for estate tax purposes, for establishing the
basis of the property, or for distribution among the various heirs or devisees.
Appraisers are entitled to reasonable fees and expenses to be paid as an expense of
administration. ORS 113.185(4); see ORS 116.183. See §§2.8-4(a)(1) to 2.8-4(b).
The 2017 Legislature revised the language of ORS 113.165. The inventory
must now show the personal representative’s estimates of “the respective fair
market values as of the date of the death of the decedent of the properties described
in the inventory.” ORS 113.165.
§ 2.8-3 Bond Costs
The personal representative may be required to file a bond. ORS 113.105.
See §§5.2-6(a) to 5.2-6(d) for discussion of the necessity and amount of the bond.
The bond is “for the security and benefit of all interested persons and shall be
conditioned upon the personal representative faithfully performing the duties of the
trust.” ORS 113.105(1).
The costs of the bond are paid by the estate. See §11.4-3.
The 2017 Legislature updated the bond requirements in ORS 113.105. The
general rule is that the personal representative may not act until he or she provides
a bond. ORS 113.105(1). The court sets the amount of the bond, which amount
“must be adequate to protect interested persons.” ORS 113.105(1)(b). A bond is
not required in certain circumstances. ORS 113.105(2). The court may waive or
reduce the requirement of a bond as described in ORS 113.105(3) and (4). For
further discussion of the amendments to ORS 113.105, see Supplement § 5.2-6(a)
§ 2.8-4 Personal Representative’s Compensation and Expenses
§ 2.8-4(a) Personal Representative’s Compensation
§ 2.8-4(a)(1) Amount of Compensation
The personal representative is entitled to receive compensation for services
as provided in ORS 116.173. The compensation is a commission on the whole
estate, as follows:
(1) On the property subject to the jurisdiction of the court, including
income and realized gains:
(a) Seven percent of any sum not exceeding $1,000;
(b) Four percent of all above $1,000 and not exceeding $10,000;
(c) Three percent of all above $10,000 and not exceeding $50,000; and
(d) Two percent of all above $50,000; plus
(2) One percent of nonprobate but taxable property, exclusive of life
insurance proceeds.
ORS 116.173(1). See §§11.6-5(a) to 11.6-5(b).
In addition, the court may allow further compensation “as is just and
reasonable” for any extraordinary and unusual services not ordinarily required of a
personal representative in the discharge of duties. ORS 116.173(2). The probate
code does not explain how to determine when services are extraordinary or
unusual. See In re Matter of Phillips’ Estate, 23 Or App 363, 370, 542 P2d 928
(1975) (“the trial judge concluded that the additional fee was justified by the length
of the proceeding, by the substantial savings effected for the heirs and by the
preservation of the estate due to the personal representative’s necessary
activities”).
In Brown v. Hackney, 228 Or App 441, 447–449, 208 P3d 988 (2009), the
court included the proceeds of a wrongful death action brought by the personal
representative in its calculation of the amount of the personal representative’s fees.
If the estate has more than one personal representative, the fee is not
increased, but must be divided between them as they may agree or as the court may
direct. ORS 116.173(1).
The “appraised value of the estate, as shown in the inventory, is only prima
facie evidence of the value of the estate accounted for and is not conclusive for the
purpose of fixing the [personal representative’s] compensation.” In re Feehely’s
Estate, 182 Or 246, 187 P2d 156 (1947); Kidney Ass’n of Oregon, Inc. v.
Ferguson, 97 Or App 120, 129, 775 P2d 1383 (1989), modified, 100 Or App 523
(1990), rev’d in part on other grounds, 315 Or 135 (1992) (see §2.8-5).
When a testator makes special provision in his or her will for the
compensation of a personal representative, the personal representative is not
entitled to any other compensation for services unless, before appointment, the
personal representative signs and files with the clerk of the court a written
renunciation of the compensation provided by the will. ORS 116.173(3).
PRACTICE TIP: If the will provides for compensation of the personal
representative and the compensation may be less than that provided by
statute, the personal representative may consider signing a renunciation of
the compensation in the will and filing it with the clerk before his or her
appointment. Then, when it is time to determine compensation based on the
work actually done, the distributions, and the relative income and estate tax
considerations, the personal representative would have flexibility, subject to
court determination, to ask for (1) no fee, (2) the statutory fee, or (3) the fee
prescribed in the will.
Approval of extraordinary fees for the personal representative is within the
probate court’s discretion and will be disturbed on appeal only for abuse of that
discretion. Matter of Phillips’ Estate, 23 Or App 363, 370, 542 P2d 928 (1975).
Although recognizing that principle, the Oregon Court of Appeals nevertheless
reduced the personal representative’s extraordinary fee by almost two-thirds in
Matter of Plue’s Estate, 63 Or App 677, 684, 666 P2d 835 (1983). In Matter of
Plue’s Estate, the lawyer had charged less than the personal representative for the
same matter, and the court found nothing in the record to show that the personal
representative’s services were more extraordinary or more valuable than those
rendered by the lawyer.
The 2017 Legislature added a new provision to ORS chapter 113. Under
ORS 113.038, a petition for the appointment of a personal representative may
include a request for the “compensation of the personal representative to be
determined by a different method than as provided in ORS 116.173(3).” If the
court allows the request for a different method of compensation under the statute,
“the personal representative may, at any time prior to or at the time of the filing of
the final account or the statement in lieu of the final account under ORS 116.083,
elect to be compensated as provided in ORS 116.173(3).” ORS 113.038(3). See
Supp § 5.2-2(b) (contents of petition). See also Supp § 11.6-5(a) (personal
representative’s fee).
The 2017 Legislature also added a provision that defines the phrase property
subject to the jurisdiction of the court for purposes of determining the personal
representative’s fee (ORS 116.173(1)), as well as a provision stating that each asset
is to be valued at its highest value for purposes of calculating the fee (ORS
116.173(2)).
ORS 116.173(1) provides as follows:
(1) As used in this section, “property subject to the jurisdiction of the
court” means:
(a) All property owned by the decedent at the time of death that is
subject to administration;
(b) All income received during the course of the administration of the
estate;
(c) All gains realized on the sale or disposition of assets during the
course of the administration of the estate, to the extent that the gain realized on
each asset sold or disposed of exceeds the value of the asset as provided in
subsection (2) of this section; and
(d) All unrealized gains on assets acquired during the course of
administration of the estate.
ORS 116.173(2) now states:
For purposes of this section, each asset shall be valued at its highest value
as reported in the inventory, any amended or supplemental inventory, any interim
account or the final account or statement in lieu of the final account filed under
ORS 116.083, which may be based upon revaluation of the asset to reflect its then
current fair market value.
ORS 116.173(1) was renumbered ORS 116.173(3), which sets forth the
general rule regarding the personal representative’s compensation.
ORS 116.173(2) was renumbered ORS 116.173(4), which allows the court
to allow further compensation to the personal representative “as is just and
reasonable” for any “extraordinary and unusual” services.
ORS 116.173(3) was renumbered ORS 116.173(5), which applies when a
decedent has made special provision in the will for the personal representative’s
compensation. The 2017 Legislature added a new subsection to that provision: “If
the assets of the estate are insufficient to pay in full all expenses or claims of the
estate, the compensation of the personal representative may not exceed the
compensation provided by subsections (3) and (4) of this section.” ORS
116.173(5)(b).
§ 2.8-4(a)(2) Court May Deny Compensation
The court has the power to deny in whole or in part the personal
representative’s request for compensation. ORS 116.123. The court may also
surcharge the personal representative for any loss caused by any breach of
fiduciary duty. ORS 116.123.
In a case in which the personal representative converted certain assets during
administration, the trial court concluded that compensation was properly allowed
because the personal representative’s actions were based on a “mistaken, if
unwarranted belief” and were not done in bad faith. Matter of Steinberg’s Estate,
34 Or App 293, 298, 578 P2d 487 (1978).
In Wall v. Malarkey, 252 Or 261, 262–263, 449 P2d 424 (1969), the court
reversed a lower court’s denial of compensation to an executor who had “impeded
the orderly administration” of the estate because of her conviction that the will she
was administering was invalid. The court said that “[b]efore compensation can
properly be denied the executrix’s disloyalty must manifest itself in some form of
conduct which is detrimental to the administration of the estate in a material way.”
Wall, 252 Or at 263.
§ 2.8-4(b) Expenses
The personal representative is entitled to recover from the estate “all
necessary expenses incurred in the care, management and settlement of the estate,”
including reasonable fees of appraisers, lawyers, and other qualified persons
employed by the personal representative. ORS 116.183(1).
In addition, a personal representative who defends or prosecutes any
proceeding “in good faith and with just cause” is entitled to receive from the estate
necessary expenses and disbursements, including reasonable attorney fees, in the
proceeding. ORS 116.183(2); In Matter of Unger’s Estate, 54 Or App 713, 716–
717, 636 P2d 436 (1981). See §2.8-5 regarding attorney fees.
In Matter of Unger’s Estate, 54 Or App at 716–717, the personal
representative, who was also the sole beneficiary of the will, defended the will
against a claim that the decedent lacked testamentary capacity. Although the
appellate court held that the will was invalid because of lack of testamentary
capacity, the court stated that “a personal representative, whether the sole
beneficiary or not, who defends a will in good faith is entitled to recover expenses
and attorney fees from the estate.” Matter of Unger’s Estate, 54 Or App at 716.
The fact that the decedent lacked testamentary capacity does not imply bad faith on
the part of the personal representative in defending the will. Matter of Unger’s
Estate, 54 Or App at 716–717. To deny the personal representative expenses and
fees of a will contest, the trial court must make a specific finding that the will was
not defended in good faith. Matter of Unger’s Estate, 54 Or App at 716–717.
Upon petition, the probate court may allow a partial award of the personal
representative’s expenses before settlement of the final account, including fees of
appraisers, lawyers, and other qualified persons. ORS 116.183(1). See §11.6-5(c).
In an accounting, the fiduciary must disclose any financial transactions,
including reimbursement of expenses, between the fiduciary and his or her family
or friends. UTCR 9.170. UTCR 9.160 governs the form of accountings. See
chapter 11.
The 2017 Legislature added new provisions to ORS 116.183 regarding
attorney fees in a probate proceeding. See Supp § 2.8-5 (attorney fees).
§ 2.8-5 Attorney Fees
Authority for the compensation of the attorney for the personal
representative is found in ORS 116.183. The statute allows the court to make a
partial award of attorney fees before settlement of the final account. ORS
116.183(1). See §§11.6-6(a) to 11.6-6(b).
NOTE: The provision allowing the court to make a partial award of
fees is permissive only. Few courts will allow interim payments of attorney
fees, except perhaps in large, lengthy probates.
Pursuant to ORS 116.183, the court may award reasonable attorney fees
after considering the following factors:
(1) Customary fees in the community for similar services;
(2) The time spent by the lawyer;
(3) The lawyer’s experience in such matters;
(4) The skill displayed by the lawyer;
(5) The excellence of the result obtained;
(6) Any agreement regarding the fees that may exist between the personal
representative and the lawyer;
(7) The amount of responsibility assumed by the lawyer considering the
total value of the estate; and
(8) Other factors that may be relevant.
PRACTICE TIP: Whether by detailed inclusion in an accounting or by
separate affidavit, the above information must be presented to the court.
Particular emphasis should be given to itemizing the work performed and the
time spent.
A personal representative “may make a valid contract with an attorney to
represent the personal representative in the probate of an estate, but the contract
binds only the personal representative and the attorney. The personal representative
may look to the estate for reimbursement only for the amount of reasonable fees.”
In re Conduct of Coe, 302 Or 553, 562 n 6, 731 P2d 1028 (1987).
COMMENT: Although a lawyer’s contract with the personal
representative is listed as a factor, its weight (at least insofar as justifying a
higher fee than usual) is presumably minimal.
In addition to being charged with fees incurred by the lawyer for the
personal representative, the estate may also be charged with attorney fees incurred
by another party who, at the party’s own expense and not for the party’s sole
benefit, successfully brings an action resulting in an increase in the assets of the
estate. Schaad v. Lorenz, 69 Or App 16, 26, 688 P2d 1342 (1984) (citing Jones v.
Kuhn, 59 Or App 135, 140, 650 P2d 999 (1982)).
Any duty from the personal representative to the lawyer for the estate is
secondary to the personal representative’s obligation to the estate. In a case in
which the personal representative refused to use estate funds to appeal the probate
court’s reduction of requested attorney fees, and no bad faith or fraud existed, the
personal representative had no duty to the lawyer in either contract or tort to pursue
the appeal. Smith v. U.S. Nat. Bank, 47 Or App 967, 976–977, 615 P2d 1119
(1980).
In determining the amount of appropriate attorney fees, a probate court may
consider whether the lawyer for the personal representative breached a fiduciary
duty owed to the client. In Kidney Ass’n of Oregon, Inc. v. Ferguson, 315 Or 135,
144, 843 P2d 442 (1992), the sole beneficiary of an estate objected to the final
accounting, contending that the lawyer should receive no fees from the estate
because the lawyer committed an ethical violation by simultaneously representing
the sole beneficiary and the personal representative in settling a claim against the
estate. The supreme court said that
a breach of fiduciary duty may be the result of a lawyer’s simultaneously
representing two or more clients with a conflict of interest, the consequence of
which could be a reduction of a fee or outright denial of a fee. . . .
. . . But, it is the breach of fiduciary duty owed to a client, rather than a violation
of a disciplinary rule, that may result in a reduction or loss of a fee.
Kidney Ass’n of Oregon, Inc., 315 Or at 144. However, in determining whether a
lawyer breached a fiduciary duty to a client, “the court may consider the standard
of conduct prescribed by the disciplinary rules.” Kidney Ass’n of Oregon, Inc., 315
Or at 144.
In McNeely v. Hiatt, 138 Or App 434, 443, 909 P2d 191, adhered to on
recons., 142 Or App 522 (1996), the plaintiffs, who successfully contested a will,
were not equitably entitled to recover attorney fees, when no facts, statute, or rule
was alleged as a basis for the award under ORCP 68 C(2)(a). On reconsideration,
the court adhered to the denial of attorney fees, noting that courts may award
attorney fees in the absence of a statute or contract when a beneficiary successfully
brings suit to benefit an estate or a trust as a whole. In this case, only the plaintiffs
benefited, and the court held that an award of fees would have been inequitable.
When a lawyer continues to act for a former personal representative or
trustee in a claim for attorney fees against the estate after agreeing to represent the
successor fiduciary, a current conflict of interest exists. Conduct of Morris, 326 Or
493, 503–504, 953 P2d 387 (1998). See Roberts v. Fearey, 162 Or App 546, 555,
986 P2d 690 (1999).
PRACTICE TIP: An unreported case from Polk County (No. 92P4037)
provides interesting and practical judicial commentary on the reasonable
exercise of professional judgment in connection with probate fees. The
personal representative’s lawyers requested fees of $165,427. The court
determined that a fee of only $50,000 was appropriate, and found that the
lawyer’s judgment concerning the expenditure of resources was “sorely
lacking.” See the discussion in Steven W. Moulton, Collecting Fees in
Probate Matters: Remember to Be Reasonable, OSB EST PLAN & ADMIN
SEC NEWSLTR, Oct 1995, at 4–6.
UTCR 9.060(2) provides that attorney fees “requested for a decedent’s estate
must be supported by affidavit in compliance with ORS 116.183.” See §11.6-6(a).
In addition, “[a]ll . . . attorney fee applications and accountings in decedent’s
estates . . . must be served in the manner and on the persons described in ORS
116.093.” UTCR 9.060(4). See also the supplementary local rules (SLRs) adopted
by Oregon counties in accordance with UTCR chapter 9, available at
www.courts.oregon.gov/rules/pages/slr.aspx.
CAVEAT: Lawyers must be aware of the rules and procedures that the
probate judges follow in reviewing and approving requests for fees. For
example, in Multnomah County, requests for attorney fees “must be
accompanied by a statement for attorney fees, filed in the form required by
UTCR 5.080, showing the number of hours expended, the hourly rate
charged, and a designation of title for each person performing work.” SLR
9.095 (Multnomah). In Crook and Jefferson counties, the lawyer for the
personal representative must “maintain time records for twelve (12) months
and, upon request of the Court, shall furnish a copy of that record to the
Court to assist the Court in fixing a reasonable attorney’s fee as provided by
ORS 116.183.” SLR 9.061 (Crook/Jefferson).
“[E]state lawyers who take attorney fees from an estate without obtaining
prior court approval engage in unethical conduct.” In re Altstatt, 321 Or 324, 333,
897 P2d 1164 (1995). “Any such attorney fee that is collected without approval is
unlawful and, hence, an ‘illegal fee,’” receipt of which is unethical conduct under
Oregon RPC 1.5(a). In re Altstatt, 321 Or at 333. In In re Conduct of Weidner, 320
Or 336, 340–341, 883 P2d 1293 (1994), the court also found that a lawyer, while
serving as personal representative, improperly took fees for predeath services when
no formal claim had been filed against the estate.
In affirming a probate court’s decision in Estate of Grove v. Selken, 109 Or
App 668, 677, 820 P2d 895 (1991), the court disallowed payment of legal fees to
the estate’s lawyer for certain work “more properly classified as administrative
work of the personal representative.”
COMMENT: The lawyer in the Estate of Grove case also served as the
personal representative. In Kidney Ass’n of Oregon, Inc. v. Ferguson, 97 Or
App 120, 127–128, 775 P2d 1383 (1989), modified, 100 Or App 523 (1990),
rev’d in part on other grounds, 315 Or App 135 (1992), the court denied
compensation to a lawyer who performed nonlegal work on behalf of the
personal representative. The Oregon Supreme Court ultimately approved the
probate court’s award of attorney fees in that case. Kidney Ass’n of Oregon,
Inc. v. Ferguson, 315 Or 135, 148, 843 P2d 442 (1992). Thus, the two
decisions seem to be inconsistent.
The 2017 Legislature added new provisions to ORS 116.183.
“Before the court awards attorney fees in an amount less than the amount
requested by the personal representative, the court must allow the attorney an
opportunity to submit additional materials supporting the requested amount.” ORS
116.183(2)(b).
The 2017 Legislature also clarified that ORCP 68 does not apply to requests
for attorney fees under ORS 116.183. ORS 116.183(2)(b).
§ 2.9 FINALITY OF ORDERS AND JUDGMENTS; APPEALS

§ 2.9-1 Generally
Determinations, orders, and judgments of the probate court have the same
finality as those of a court of record with general jurisdiction. ORS 111.095. No
distinction in this regard is made for the eastern Oregon counties of Gilliam, Grant,
Harney, Malheur, Sherman, and Wheeler, where the county court sits as the
probate court (ORS 111.055), except that appeals from county courts are treated
differently.
Appeals from a county court sitting in probate are to the circuit court and
then to the court of appeals; they are handled in the manner provided by ORS
5.120 for appeals in judicial proceedings in county courts generally. ORS
111.105(3). Appeals from a circuit court sitting in probate are on the record made
in the probate court and are to the court of appeals. ORS 111.105(2).
Although the probate court can continue to administer an estate while an
appeal is pending, the actions it takes cannot substantively affect the subject of the
appeal. In Matter of Trust of Crockett, 145 Or App 151, 155–156, 929 P2d 314
(1996), the trial court entered an order approving the sale of estate real property.
Because a prior offer to purchase the property was the subject of an appeal, the
trial court lacked jurisdiction to enter the second order.
§ 2.9-2 Finality of Orders of Probate Commissioner
A probate commissioner may make an order on certain uncontested petitions
as described in §2.2-3(c)(3). The order is subject to being modified or set aside by
the judge within 30 days after entry of the order. ORS 111.185(1). If the probate
commissioner’s order is not set aside or modified by the judge, the order has the
same effect as if made by the judge. ORS 111.185(3).
PRACTICE TIP: Because ORS 111.185(1) allows a 30-day period for
the judge to modify or set aside a probate commissioner’s order, it seems
that any interested person who is aggrieved by the order should have the
right during that 30-day period to file written objections to the order, and to
petition the judge to modify it or to set it aside. See ORS 111.235.
“Any matter presented to the probate commissioner may be referred by the
probate commissioner to the judge.” ORS 111.185(2).
Finality of Orders of Probate Commissioner and Deputy Probate
Commissioners (new title)
ORS 111.185 was amended in 2016 and some of its provisions were
renumbered. See Supp § 2.2-3(c)(3) (powers of probate commissioner).
The provision that allows the probate court to set aside or modify an order of
the probate commissioner or deputy probate commissioner within 30 days after
entry of the order or judgment is now set forth in ORS 111.185(3).
Regarding the practice tip in the 2012 text, the 2016 Legislature added a new
provision to ORS 111.185. ORS 111.185(4) now expressly provides that “[a]ny
interested person may object to an order or judgment of a probate commissioner or
deputy probate commissioner within 30 days after the date of the order or
judgment, and the judge of the court may set aside or modify the order or
judgment.”
§ 2.9-3 Finality of Order Admitting Will to Probate
A will is proved and admitted to probate “in common form” when it is
uncontested. See Matter of Ross’ Estate, 25 Or App 191, 196–198, 548 P2d 1001
(1976). Normally, this is done ex parte (by submission or appearance) and by the
use of an affidavit of the attesting witnesses. ORS 113.055(1).
Within the time set forth in ORS 113.075(3), any interested person may
contest the probate of the will or its validity. ORS 113.075(1). If a contest is filed,
the will must be proved “in solemn form,” which means that the facts of the will’s
validity must be proved by testimony and, generally, in the same manner as in an
action tried without a jury. ORS 113.055(4); see Matter of Ross’s Estate, 25 Or
App at 196–198. Will contests are discussed in chapter 15.
Although the 1979 Oregon Legislature amended ORS 111.105 and 111.205
to eliminate procedural differences between legal and equitable remedies, appellate
review in will contests continues to be de novo. Sanders v. U.S. Nat. Bank, 71 Or
App 674, 681–682, 694 P2d 548 (1985). Dictum to the contrary contained in a
footnote in Matter of Summers’ Estate, 49 Or App 5, 8 n 3, 618 P2d 1287 (1980),
is incorrect. Sanders, 71 Or App at 677–782. See §15.2-1(f).
Although a separate contest proceeding normally follows an initial ex parte
“common form” hearing, a consolidation of all issues is permissible when a party
seeks to have a later will admitted after the admission of an earlier will. The
bifurcation of issues should be avoided for purposes of judicial economy and
convenience to the parties. Matter of Ross’s Estate, 25 Or App at 197–198.
A personal representative may move for the original admission of a will in
“solemn form” after giving proper notice. If potential contestants have notice and
an opportunity to be heard, ORS 113.075 gives them no right in a contest
proceeding to litigate issues already determined in the prior hearing. Matter of
Summers’ Estate, 49 Or App at 8–9.
In Matter of Summers’ Estate, 49 Or App at 8, the court also noted that ORS
113.055(4) was amended in 1979 to provide that “[i]n the event of contest of the
will or of probate thereof in solemn form, proof of any facts shall be made in the
same manner as in an action tried without a jury.”
ORS 113.055(4) was renumbered ORS 113.055(5) (“In the event of contest
of the will or of probate of the will in solemn form, proof of any facts shall be
made in the same manner as in an action tried without a jury.”).
NOTE: The 2015 Legislature added ORS 112.238 to Oregon law to create a
intended the writing to constitute (1) “[t]he decedent’s will”; (2) “[a] partial or
complete revocation of the decedent’s will”; or (3) “[a]n addition to or an alteration
of the decedent’s will.” ORS 112.238(1). For further discussion of ORS 112.238,
see Supplement § 8.2-6 (petition to admit noncompliant writing as decedent’s will
or a revocation or alteration of the will).
§ 2.9-4 Finality of Summary Determination of Claim
If a disallowed claim is heard by the probate court in a summary-
determination procedure under ORS 115.145–115.175, the order of that court is
final and no appeal may be taken. ORS 115.165(2)–(3). Except for the rule that
juries are not permitted when the summary-determination alternative is used, the
significant difference between a summary determination and a separate action,
under ORS 115.145(1)(b), is the absence of the right to appeal from the summary
determination. If either party desires to retain appeal rights, the claimant must
commence a separate action against the personal representative, on the claimant’s
own initiative (ORS 115.145(1)(b)) or at the insistence of the personal
representative. ORS 115.155.
§ 2.9-5 Finality of Judgment of Distribution
The judgment of final distribution is “a conclusive determination of the
persons who are the successors in interest to the estate and of the extent and
character of their interest therein,” subject only to the right of appeal (see ORS
111.105) and the power of the court to vacate the judgment. ORS 116.113(4). See
Lothstein v. Fitzpatrick, 171 Or 648, 657–658, 138 P2d 919 (1943). See also
ORCP 71.
For a discussion of void judgments of distribution and cases on the effect of
failure to give proper notice, see §2.5-7.
To the extent that the final account is approved, the personal representative
and surety (if any), subject to the right of appeal and the court’s power to vacate,
are relieved of liability for administration. ORS 116.123.
An appeal from a proceeding in the probate court is in the same manner
provided by law for an appeal from the circuit court. ORS 111.105(2). The absence
of a judgment of final distribution (or other judgment that is appealable under ORS
19.205) deprives the appellate court of jurisdiction.
“An order entered in a probate proceeding is not appealable if it fails to
settle the controversy completely and finally.” Springer v. Gollyhorn, 146 Or App
389, 393, 934 P2d 501 (1997). In the Springer case, the entry of a money judgment
against a personal representative in favor of an heir did not finally settle the rights
and liabilities of parties with an interest in the estate. The judgment had no more
effect than an interim order, and the court dismissed the personal representative’s
appeal.
The 2003 Legislature amended ORS 116.113 to clarify that a court’s
determination of the final distribution is a general judgment, replacing older
language labeling it as a decree. A general judgment can be challenged on appeal.
ORS 18.005(7), 19.205(1). The legislature did not amend the language concerning
the status of orders of partial distribution under ORS 116.013. However, ORS
18.082(2) provides that general judgments incorporate earlier written decisions of
the court that were not considered judgments.
ORS 116.113(4) was renumbered ORS 116.113(3) (“The judgment of final
distribution is a conclusive determination of the persons who are the successors in
interest to the estate and of the extent and character of their interest, subject only to
the right of appeal and the power of the court to vacate the judgment.”).
See Hobbs v. Harrington, 284 Or App 125, 132, 391 P3d 915 (2017)
(discussed in Supplement § 11.7-1), in which the court held that the judgment of
final distribution superseded a petition for partial distribution that was unresolved,
noting that “in the absence of a timely filed objection by a party with standing to
object, the court was not required to consider those issues before entering the
judgment of final distribution.”
§ 2.9-6 Finality of Judgment Discharging Personal Representative
After the filing of receipts or other proof of distribution, the court enters a
supplemental judgment of discharge. ORS 116.213. Except as provided in ORS
115.004 (see §2.5-7), the discharge releases the personal representative from
further duties and bars any action against the personal representative and surety.
However, within one year after entry of the judgment of discharge, the court may
in its discretion permit an action to be brought if the order was taken through fraud
or misrepresentation by the personal representative or surety or through the
mistake, surprise, or excusable neglect of the claimant. ORS 116.213.
COMMENT: The lawyer should carefully examine the one-year bar
after considering the cases cited in §2.5-7.
Even after entry of the order of discharge, the court may order the estate to
be reopened “if other property is discovered, if any necessary act remains
unperformed or for any other proper cause.” ORS 116.233. The court may order
the reopening of an estate only after petition of an interested person and with such
notice as the court may prescribe. ORS 116.233.
The 2003 Legislature clarified that a court’s decision discharging the
personal representative is a supplemental judgment to the general judgment of the
final distribution (see §2.9-5), rather than an order. ORS 116.213. A supplemental
judgment is “a judgment that may be rendered after a general judgment pursuant to
a legal authority.” ORS 18.005(17). Supplemental judgments can also be
challenged on appeal, as provided by ORS 19.205(1).
§ 2.9-7 Effect of Order Reopening Estate
If an estate is reopened, a claim already adjudicated or barred may not be
asserted in the reopened administration. ORS 116.233. See §§11.10-1 to 11.10-4
regarding reopening an estate.
§ 2.9-8 Recovery of Escheated Property
Within 10 years after the death of a decedent whose estate escheated in
whole or in part to the state, or within eight years after the entry of a judgment or
order escheating property of a decedent to the state, a claim may be made for the
property escheated, or for the proceeds of it, by a person who at the time of the
escheat had no actual knowledge of the escheat or who at the time was unable to
prove entitlement to the escheated property. ORS 116.253(1).
The claim must be filed with the Director of the Department of State Lands.
The claim is considered a contested case as provided in ORS 183.310. ORS
116.253(2). The petition must include a declaration under penalty of perjury in the
form required by ORCP 1 E and must include the information set forth in ORS
116.253(2).
In Hitcheva v. Div. of State Lands, 31 Or App 839, 844, 572 P2d 625 (1977),
the decedent’s estate escheated to the state because of an Oregon statute that
prevented an alien heir from inheriting property in Oregon. When the statute was
subsequently ruled unconstitutional, the court reopened the estate on the petition of
the alien heir. However, the court denied the heir’s claim for recovery because she
had participated in the initial proceedings and “had knowledge” of the escheat.
Hitcheva, 31 Or App at 844.
If the petition under ORS 116.253 is filed by a claimant who is “physically
outside the boundaries of the United States,” the petition must include an “unsworn
declaration under ORS 194.800 to 194.835.” ORS 116.253(2).
§ 2.9-9 Judgments and Orders
Some confusion exists regarding ORS 111.275 and limited judgments. ORS
111.275 provides that a probate court may enter a limited judgment only for the
following decisions of the court and then only if there is no just reason for delay:
(1) A decision on a petition for appointment or removal of a personal
representative;
(2) A decision in a will contest;
(3) A decision on an objection to an accounting;
(4) A decision on a request made for a declaratory judgment;
(5) A decision on a request for an award of expenses; and
(6) Such decision as may be specified by rules or orders of the Chief
Justice of the Oregon Supreme Court.
acknowledging the validity and intent of the writing.” ORS 111.275(1)(f). ORS
112.238 (which was added to the probate code in 2015) provides a procedure
allowing the court to admit for probate a writing that does not comply with the
formalities of a validly executed will. For further discussion of ORS 112.238, see
Supplement § 8.2-6 (petition to admit noncompliant writing as decedent’s will or a
revocation or alteration of the will).
FORMS
Form 2-1 Order Transferring Venue

Download MS Word
IN THE __________ COURT OF THE STATE OF OREGON

FOR THE COUNTY OF __________
[Probate Department]
In the Matter of the )

Estate of ) Case No. _____
)
____________________, ) ORDER TRANSFERRING
) VENUE
Deceased. )
On the petition of _______________ for determination of venue, the Court

finds:
1.
On _____________, 20___, ________________ filed a petition in the
probate court of _______________ County for the appointment of
_________________ as personal representative of the estate of
________________, deceased, and on _____________, 20___, the probate court
appointed ______________ as the personal representative.
2.
On _____________, 20___, ________________ filed a petition in the
probate court of _______________ County for the appointment of
_______________ as personal representative of the estate of the same decedent
and that court, on ____________, 20___, appointed _______________ as the
3.
After learning that proceedings for the appointment of a personal
representative for the estate of the same decedent had been commenced in more
than one county, _______________ petitioned this Court for a determination of
venue pursuant to ORS 113.025 and caused due notice to be served on each person
interested in the subject of the petition.
4.
The transfer of administration of this estate to ______________ County is in
the best interest of the above-entitled estate.
IT IS THEREFORE ORDERED that:
5.
All proceedings in _______________ County concerning the administration
of the estate of the above-named decedent are hereby stayed and forever
terminated.
6.
The clerk of this Court will transmit to the clerk of the probate court of
_______________ County a transcript of the proceedings herein, together with all
original papers filed in this proceeding, including this order.
DATED: _______________, 20___.
/s/__________________________
[judge’s name]
Judge
PERSONAL REPRESENTATIVE:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR PERSONAL REPRESENTATIVE:

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§2.3-4(a) to 2.3-4(b). See UTCR 2.010 and UTCR 9.030
for the form of documents, including requirements regarding document title,
spacing, and format.
NOTE: The last page of every order in the probate court must include the
“name, address, telephone number, fax number, e-mail address, and bar number of
the attorney of record.” UTCR 9.030(1). The last page of every order must also
include the name, address, and telephone number of the personal representative.
UTCR 9.030(2). See also UTCR 2.010(7), (12).
this form.
NOTE: Regarding paragraph 6 of Form 2-1 in the 2012 text, ORS 113.025(2)
now reads as follows:
When the court enters an order transferring the proceeding to another
county, the clerk of the court shall notify the court for the other county of the
order, and the court for the other county has exclusive jurisdiction of the
proceeding to the same extent and with like effect as though the proceeding were
in the court on original jurisdiction.
NOTE: See UTCR 2.010 for the form of court documents, including contact
information (UTCR 2.010(7)). For documents filed electronically, see UTCR
chapter 21, including UTCR 21.040 (format of documents to be filed
electronically) and UTCR 21.090 (electronic signatures).
NOTE: UTCR 9.030(1) now provides that “[t]he contact information required
by UTCR 2.010(7) must be typed or printed on the last page of every document
submitted to the court.” (Emphasis added.)
UTCR 9.030(2) now provides that “[t]he name, address, and telephone
number of the guardian, conservator, or personal representative must be typed or
printed on the last page of every proposed order submitted to the court.”
(Emphasis added.)
Form 2-2 Order Establishing Venue Where First Commenced
Download MS Word
IN THE ____________ COURT OF THE STATE OF OREGON


)
____________________, ) ORDER ESTABLISHING
) VENUE WHERE FIRST
Deceased. ) COMMENCED
On the petition of _______________ for determination of venue, the Court

finds:
1.
On ____________, 20___, _______________ filed a petition in this court
for the appointment of _________________ as personal representative of the
above-entitled estate, and on ____________, 20___, this Court appointed
_______________ as personal representative.
2.
On _____________, 20___, _____________ filed a petition in probate court
of _______________ County for the appointment of _______________ as
personal representative for the estate of the same decedent and that court, on
____________, 20___, appointed _______________ as the personal
representative.
3.
After learning that proceedings for appointment of a personal representative
for the estate of the same decedent had been commenced in more than one county,
_______________ petitioned this Court for a determination of venue pursuant to
ORS 113.025 and caused due notice to be served on each person interested in the
subject of that petition.
4.
The administration of the estate of the above-named decedent in this county
is for the best interest of the estate.
IT IS THEREFORE ORDERED that:
5.
(a) All proceedings in _______________ County concerning
administration of the estate of the above-named decedent are forever stayed; and
(b) The clerk of this Court will transmit to the clerk of the probate court
of _______________ County a certified copy of this order.
DATED: _______________, 20___.
/s/__________________________
[judge’s name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§2.3-4(a) to 2.3-4(c). See UTCR 2.010 and UTCR 9.030
NOTE: The last page of every order in the probate court must include the
this form.
COMMENT: See Supplement Form 2-1 (order transferring venue) for
discussion of ORS 113.025(2).
chapter 21, including UTCR 21.040 (format) and UTCR 21.090 (electronic
signatures).
NOTE: For the current wording of UTCR 9.030(1) and (2), see the notes
regarding Supplement Form 2-1.
Form 2-3 Notice of Hearing
Download MS Word
IN THE _____________ COURT OF THE STATE OF OREGON


)
____________________, ) NOTICE OF HEARING
)
Deceased. )
NOTICE IS HEREBY GIVEN that _______________ has filed herein a

[nature of document filed], a copy of which is attached, and that a hearing has been
set thereon on _____________, 20___, at ___ [a.m. / p.m.] in the
_______________ courtroom of this Court, located at _________________.
DATED: _______________, 20___.
/s/__________________________
[petitioner’s name]
Petitioner
PETITIONER:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR PETITIONER:

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §2.5-1. See UTCR 2.010 for the form of documents. See also
UTCR 9.030(1).
NOTE: “All documents must include the author’s name, address, telephone
number, fax number, if any, and, if prepared by an attorney, the name, e-mail
address, and the Bar number of the author and the trial attorney assigned to try the
case.” UTCR 2.010(7).
this form.
signatures).
Form 2-4 Admission of Personal Service
Download MS Word
IN THE _____________ COURT OF THE STATE OF OREGON


)
____________________, ) ACCEPTANCE OF
) PERSONAL SERVICE
Deceased. )
STATE OF __________ )
) ss.
County of __________ )
Service of notice of hearing on [describe petition, report, etc.] is hereby

accepted on _______________, 20___, by receiving a certified copy.
/s/__________________________
SUBSCRIBED AND SWORN TO before me on _____________, 20___.
/s/__________________________
COMMENT: See §2.5.5.

this form.
COMMENT: See Supplement § 2.5-5 regarding proof of notice.
Form 2-5 Waiver of Notice
Download MS Word


)
____________________, ) WAIVER OF NOTICE
)
Deceased. )
The undersigned hereby waives notice of the time and place of hearing on
[describe petition, report, account, etc., as to which notice is waived].
DATED: ________________, 20___.
/s/__________________________
[name of person entitled to notice]
PERSON ENTITLED TO NOTICE:

[name]
[address]
[telephone no.]
NOTE: Only persons entitled to notice can waive notice.

this form.
Form 2-6 Waiver of Notice and Consent to Entry of Order
Download MS Word


)
____________________, ) WAIVER OF NOTICE AND
) CONSENT TO ENTRY OF
Deceased. ) ORDER
The undersigned hereby waives notice of the time and place of hearing on
[describe petition, report, account, etc., for which notice is waived], acknowledges
receipt of a copy of the [petition, report, account, etc.], and consents to the
immediate entry of the order requested therein.
DATED: _________________, 20___.
/s/__________________________
[name of person entitled to notice]
PERSON ENTITLED TO NOTICE:

[name]
[address]
[telephone no.]

this form.
APPENDIXES
Appendix 2A Table of Situations Requiring Petitions
Situation ORS Citation

Any contested question, request for judicial advice, 111.205, 114.275
or application for court order authorizing doubtful
action
Appointment of special administrator 113.005
Appointment of personal representative 113.035
Probate of will 113.035
Establishing foreign will 113.065
Increase or reduction of personal representative’s 113.115
bond (other than on court’s own motion)
Remove ineligible personal representative 113.195(4)
Support for surviving spouse or dependent children 114.015(1),
114.025(1),
114.035
Setting aside whole estate 114.085
Requiring testimony 114.425
Sale, mortgage, lease, or disposal of property when 114.325(2)
(1) sale is in contravention of will, (2) property is
specifically devised and will does not authorize its
sale, or (3) bond has been required and is inadequate
Personal representative fails or declines to sell, 114.335
mortgage, or lease property when cash needed
Discovery of concealed property, 114.425
information
Creditor petitions for order directing 115.185
personal representative to pay claim
allowed or established
Partial distribution 116.013
Return of property partially distributed 116.043
Final distribution 116.083(3)(b)
Dispensing with vouchers 116.083(2)(d)
Distribution to foreign personal 116.163
representative
Partial award of personal representative’s expenses, 116.183(1)
including fees
Personal representative unable to 116.203
distribute property to distributees
Compensation of personal representative 116.173
Recovery of escheated property 116.253
Apportionment of estate and inheritance taxes 116.323
Reopening of estate 116.233
Administration of estate of absentee 117.005

CAVEAT: This table is illustrative only. Each lawyer must depend on his or
this table.
NOTE: ORS 116.083(3)(b) was renumbered ORS 116.083(3)(e) (petition for
a judgment authorizing the personal representative to distribute the estate to the
persons and in the portions specified in the judgment).
NOTE: The proponent of a writing intended to constitute the decedent’s will,
a partial or complete revocation of the will, or an addition or alteration of the will
must file a petition to establish the decedent’s intention with respect to the writing.
ORS 112.238.
NOTE: Under ORS 113.038, a petition for the appointment of a personal
representative may include a request for the “compensation of the personal
representative to be determined by a different method than as provided in ORS
116.173(3).” See Supp § 2.8-4(a)(1) (amount of compensation).
NOTE: A petition may be filed to contest the probate of a will, to challenge
the validity of a will, or to assert an interest in the estate either because the will
alleged in the probate petition is ineffective in whole or in part or because there is a
will other than the one alleged in the probate petition to be the will. ORS
113.075(1). A will contest based on a promise, agreement, or representation by the
decedent to make or revoke a will or devise, to not revoke a will or devise, or to
die intestate can be initiated by a petition or by filing a separate action. ORS
113.075.
NOTE: An interested person seeking the removal of the personal
representative because the personal representative is unqualified, incapable of
discharging duties, neglectful of or unfaithful to the trust, or for other good cause
must file a petition. ORS 113.195(5).
Appendix 2B Table of Notice Requirements
By and to How When ORS

Whom Given Given Given Citation
Notices by Personal Representative
If all heirs and devisees Delivery On appointment 113.045
cannot be identified or or mail of personal
found, notice to estate representative or
administrator appointed by any time after
Director of Department of appointment if it
State Lands under ORS appears that any
113.235 heir or devisee of
decedent cannot
be identified or
found
Notice to court of felony Delivery On conviction 113.092
conviction of person or mail
nominated as personal
representative
Notice to heirs and devisees Delivery Within 30 days 113.145
or mail after appointment
Notice to interested persons Publicatio On appointment 113.155
n
Notice of hearing on venue Various Before hearing 113.025,
determination, to personal methods 111.215
representative in other
proceedings, to probate
court of other county, and
to each person who
petitions for appointment of
the personal representative
Petition for authority to sell, Various Before hearing 114.325(2),
mortgage, lease, or methods 111.215
otherwise dispose of
property if (1) sale is
contrary to will, (2)
property is specifically
devised and will does not
authorize sale, or (3)
required bond of personal
representative is inadequate
Notice to known claimants Delivery Within 30 days 115.003(2)
or mail after expiration
of three-month or
extended period
after appointment
Notice to claimant of Delivery Within 60 days 115.135(1)
disallowance of claim or mail after claim is
presented
Notice to claimant rejecting Delivery Within 30 days 115.155
summary determination of or mail after request for
claim summary
determination
Petition or other matter on Various If by mail, at 111.215,
which court order or methods least 14 days 114.275
judgment is sought; notice before hearing; if
given to each person by delivery, at
interested least 5 days
before hearing;
or if by
publication when
address is
unknown,
publication once
each week for 3
consecutive
weeks, with last
notice at least 10
days before
hearing
Petition for judgment of As court As court 116.013
partial distribution; notice prescribes prescribes
given as court prescribes
Notice of hearing for return Delivery Before hearing 116.043,
of property partially or mail 111.215
distributed; notice given to
all persons interested
Notice of time for Delivery At least 20 days 116.093,
objections to final account or mail before date fixed UTCR
and petition for distribution; in notice 9.060(4)
notice given to each heir,
devisee, unpaid creditor
whose claim is not barred,
and interested person
Petition for partial award of Per court Per court order 116.183(1),
personal representative’s order 116.093,
expenses, including fees UTCR
9.060(4)
Notices by Others
By successor personal Publicatio On appointment 113.225
representative, notice to n
interested persons
By any interested person, Delivery When proceeding 113.087(2)
notice of any proceeding or mail instituted
instituted
By surviving spouse, claim As Within 90 114.600,
for elective share; manner described months after 114.610
of making election and in ORS decedent’s death
notice as described in 114.610
ORS 114.610
By surviving spouse or Delivery 14 days before 114.015,
dependent child, claim for or mail hearing 111.215
support order; notice to
personal representative and
to all persons whose
distributive shares would be
affected
By creditor, notice to Delivery Within 30 days 115.145(1)(a)
personal representative of or mail after notice of
request for summary disallowance
determination of disallowed
claim
By court, notice to claimant Delivery 14 days before 115.165(2),
and personal representative or mail hearing 111.215
of hearing for summary
determination of claim
By any interested person, As court As court 116.233
petition to reopen estate prescribes prescribes
By any interested person, Various Before hearing, 111.215,
petition on which court methods various timelines 114.275
order is sought; notice depending on
given to each person method of notice
interested
By court clerk, notice of Mail and Before hearing 117.015
hearing on petition for delivery; date set by clerk,
administration of estate of publication not less than 30
absentee; notice must be or other days after filing
given to absentee, devisees, means by of petition
and heirs court order
COMMENT: See §§2.5-1 to 2.5-4.

this table.
NOTE: See Supplement § 2.7-1 for discussion of amendments to ORS
114.325 regarding the requirement of a bond.
NOTE: The court may authorize notice by electronic means under ORS
111.215(2).
NOTE: The Department of Human Services and the Oregon Health Authority
may adopt rules allowing for electronic notice to such agencies. ORS 111.215(4).
NOTE: A person designated by the decedent to control use of the decedent’s
genetic material must give written notice to the decedent’s personal representative
that the decedent’s genetic material is available for the purposes of posthumous
conception in order for a posthumously conceived child to inherit from the
decedent under ORS 112.077. Notice must be given within four months of the
personal representative’s appointment. The other conditions in ORS 112.077 must
also be satisfied in order for the posthumously conceived child to inherit.
NOTE: If the proponent of a writing that was not executed in compliance
with ORS 112.235 files a petition with the court for administration of the writing
as the decedent’s will, a partial or complete revocation of the decedent’s will, or an
addition to or alteration of the decedent’s will, the proponent of the writing must
provide notice of such petition to heirs, devisees under prior wills, and persons
interested in the decedent’s estate who would be required to be identified and set
forth in the petition. ORS 112.238.
NOTE: If the petition for appointment of a personal representative requests
that the personal representative’s compensation be determined in a manner other
than as provided in ORS 116.173, notice must be given to the distributees of the
estate, the Department of Human Services, and the Oregon Health Authority. ORS
113.038.
NOTE: A person contesting a will under ORS 113.075 must give notice to
heirs and devisees identified in the petition for probate, and to the Department of
State Lands if notice has been delivered to it under ORS 113.045. If a devisee is a
charitable trust, a public benefit corporation, or a religious organization, notice
must also be given to the Attorney General. ORS 113.075(4).
NOTE: Before appointing someone other than the person named in the will as
personal representative, the court may require the petitioner in a probate to attempt
to notify persons of higher statutory priority than the proposed personal
representative. ORS 113.085(2).
NOTE: If a charitable trust, public benefit corporation, or a religious
organization is a residuary beneficiary of the estate or will receive less than the
amount of the specific devise, notice of the final account and petition for judgment
must also be given to the Attorney General. ORS 116.093(2).
Appendix 2C Table of Judgments and Orders in Probate Court
NOTE: This table was compiled by Philip N. Jones, Duffy Kekel LLP.
Court Action Probate Estates
Decision on a petition for Limited judgment.

appointment of personal ORS 111.275(1)(a). See Comments (1)–(3).
representative. Usually also admits will to probate.
Admitting will to probate. Limited judgment,

if it also appoints a personal representative.
ORS 111.275(1). See Comments (1)–(3).
Decision on a petition for removal Limited judgment, whether granting or

of personal representative. denying removal. ORS 111.275(1)(a). See
Comments (1)–(2).
Decision in a will contest. Limited judgment. ORS 111.275(1)(b). See

Comments (1)–(2).
Declaratory-judgment decisions. Limited judgment. ORS 111.275(1)(d). See

Comments (1)–(2).
Decisions awarding fees and/or Limited judgment. ORS 111.275(1). See

expenses (see below for final Comments (1)–(2).
accountings).
Decision approving an interim Order.

accounting without objection and
without awarding fees or expenses.
Decision on interim accounting Limited judgment. ORS 111.275(1)(c), (e). See

after objection, or awarding fees or Comments (1)–(2).
expenses.
Court Action Probate Estates
Decision on petition for final General judgment approving final account

accounting, approving distribution, and approving final distribution.
and awarding fees and expenses, or ORS 111.275(1) (see Comments (1)–(2)), ORS
after an objection. 116.113, ORS 18.005(7).
Decision on petition for final Order approving final account and general
accounting and approving judgment of final distribution.
distribution without objection, but ORS 116.113, ORS 18.005(7).
not awarding fees or expenses.
Discharging fiduciary after general Supplemental judgment.

judgment on final account. ORS 116.213, ORS 18.005(17).
Additional decisions after entry of Supplemental judgment.

general judgment. ORS 18.005(17).
COMMENTS: See §2.7-2.

(1) ORS 111.275(2) requires the court to determine “that there is no just
reason for delay” before entering a limited judgment under ORS 111.275(1).
However, the limited-judgment document need not reflect that determination. ORS
111.275(2); see Interstate Roofing, Inc. v. Springville Corp., 347 Or 144, 148–156,
218 P3d 113 (2009). The safest practice would be to include that representation in
the petition and then to include that determination in the limited judgment. It is
also not necessary to use the word “adjudged” in a limited judgment. Interstate
Roofing, Inc., 347 Or at 156–164.
(2) ORS 111.275(1) provides that the court “may” enter a limited
judgment in the specified situations. Most courts now require the use of a limited
judgment, even though the use of an order appears to be permissive under the
statute. An order would be appropriate in these situations if there is a reason for
delaying entry of an appealable judgment, such as when a proceeding is close to
being terminated and a general judgment can be used to combine all the rulings of
the court.
(3) The use of the term limited judgment in ORS 111.275 may be
confusing to financial institutions and others dealing with a fiduciary operating
pursuant to an appointment under a limited judgment. To clarify that the fiduciary
has full powers to act as fiduciary, it is suggested that both the caption and the
body of the limited judgment reflect those full powers. For example, the document
appointing a personal representative might be labeled as a “limited judgment
admitting will to probate and appointing personal representative with full powers.”
(4) The provisions summarized in Comments (1)–(3) were enacted by HB
2359 (2005 Or Laws ch 568) and codified as part of ORS chapters 111 (general
provisions), 116 (probate estates), and 125 (protective proceedings). Additional
changes were made by the 2009 Legislature. See 2009 Or Laws ch 50.
(5) ORS 111.205(4) states that the probate court operates through orders
and judgments. ORS 111.275(1) provides that limited judgments may be used only
in certain enumerated situations. For estates, ORS 116.113 states that a general
judgment must be used to direct the distribution of assets. Accordingly, the above
table indicates that an order should be used in all situations in which the statute is
silent as to the type of document to employ. For the same reason, court decisions
should be in the form of orders in situations not described in the above table.
(6) For the definitions of general judgment and limited judgment, see
ORS 18.005. A general judgment is a judgment that disposes of all the remaining
issues (requests for relief) that have not previously been decided by a limited
judgment. ORS 18.005(7). However, a proceeding might result in interim rulings
on various issues, and those interim rulings will be entered as limited judgments if
they dispose of one or more issues (one or more requests for relief), but less than
all the issues. ORS 18.005(13). They will be entered as orders if they do not
dispose of a request for relief. ORS 18.005(13). A limited judgment may not be
used to dispose of a “portion of a claim . . . ; rather, a limited judgment must
dispose of a whole claim or of all claims against a party.” Steele v. Mayoral, 231
Or App 603, 611, 220 P3d 761 (2009).
A supplemental judgment may be entered after the entry of a general
judgment. ORS 18.005(17). A supplemental judgment usually deals with the
discharge of the fiduciary and other matters specifically authorized by statute in
probate, conservatorship, and guardianship proceedings. See ORS 116.213
(discharge of personal representative).
Limited judgments, general judgments, and supplemental judgments are
appealable, assuming that the appealing party preserved the right to appeal by
timely objecting to the entry of the judgment and by filing a notice of appeal within
the applicable time period. ORS 19.205. The time period for appeal is generally 30
days from entry of the judgment. ORS 19.255.
(7) In trust proceedings, a general judgment is usually entered at the
conclusion of the proceeding. However, a proceeding might result in interim
rulings on various issues, which are discussed above. In those situations, ORS
111.275 (which governs probates) does not apply, and ORS 18.005(7)(a) and ORS
18.005(13)(d) do apply. That latter statute authorizes limited judgments only when
a legal authority specifically authorizes the use of a limited judgment. As a result,
limited judgments are available to a lesser degree in trust matters than in probates,
and orders should be used for most interim rulings in trust proceedings.
(8) In wrongful death probates, an order should be used to approve a
settlement and/or an apportionment of the proceeds of the wrongful death action
pursuant to ORS 30.040 and 30.050. After the order is entered and the proceeds
distributed, the lawyer must file receipts with the court and request a general
judgment incorporating the prior order(s), discharging the personal representative,
exonerating the bond (if any), and closing the estate. See ORS 116.083–116.133.
CAVEAT: The above comments only summarize the law. The lawyer must
review the text of the statutes regarding the application of the law to particular
situations. Statutes not cited here may also be relevant.
NOTE: The 2016 Legislature added a new provision to ORS 111.275(1),
allowing the court in a probate proceeding to enter a limited judgment in a
“decision on a petition filed under ORS 112.238 admitting a writing for probate or
otherwise acknowledging the validity and intent of the writing.” ORS
111.275(1)(f). See Supp § 2.7-2 (required and permissible orders or judgments).
NOTE: Any order or judgment made by a probate commissioner or a deputy
probate commissioner may be modified or set aside by the judge of the court. ORS
111.185(3).
Appendix 2D Table of Potential Probate Situations

Opening Estate
Order appointing special administrator (if uncontested, 111.185(1), 113.005
may be made by probate commissioner)
Limited judgment admitting will to probate (may be 111.185(1), 111.225,
made by probate commissioner) 113.125(1)
Limited judgment appointing personal representative and 111.185(1), 111.275,
setting bond (may be made by probate commissioner) 113.105, 113.085
Requiring personal administrator to give bond even 113.105(1)
though waived by will
Increasing or reducing amount of personal 113.115
representative’s bond
Order establishing (or transferring) venue 113.025
Provisions for Spouse, Children

Order support of spouse, dependent children 114.015, 114.085
Order temporary support of spouse, dependent children 114.035
Order modifying or terminating support order 114.045

Granting, reducing, or denying, spouse’s elective share 114.725
(if decedent and surviving spouse were living apart)
Dealing with Property
Sale of property, when court order is required to do so 114.325(2)
Limiting powers of personal representative 114.305
Requiring personal representative to raise cash 114.335
Claims
Requiring payment of allowed claim to creditor 115.185
Inheritance Tax
Apportionment of estate and inheritance taxes 116.323
Compromise of inheritance tax claim 118.350
Accountings
Annual, extending time for 116.083(1)(a)
Requiring at other times 116.083(1)(d)
Waiver of vouchers accompanying account 116.083(2)(d)
Time for hearing objections filed to final account 116.103
General judgment approving final account 116.113, 111.275,
18.005
Setting apart whole estate for support—summary closing 114.085
Partial distribution 116.013
Return of property after partial distribution 116.043
Claim unliquidated at time of distribution 115.085(3)

General judgment of final distribution 116.113, 111.275,
18.005
Abatement of certain specifically devised property 116.133(5)
Denying payment of interest to general pecuniary 116.143(2)
devisee in certain cases
Distribution to foreign personal representative 116.163
Escheat 116.193
Disposition of unclaimed assets 116.203
Supplemental judgment of discharge of personal 116.213
representative
Reopening estate 116.233
Miscellaneous
Fix compensation of personal representative 116.173
Removal of personal representative 113.195
Limited judgment appointing successor personal 113.215, 111.275
representative
Surcharging or denying compensation to personal 116.123
representative
Appointing appraiser 113.185(2)
Changing method or time of notice of hearing 111.215(2)
Discovery of property, writings, or information 114.425
Transferring jurisdiction from county court to circuit 111.115
court
Death of absentee 117.035

this table.
NOTE: ORS 113.105(1) was renumbered ORS 113.105(2). The court “may,
for good cause, require a bond notwithstanding any provision in a will that no bond
is required.” ORS 113.105(2)(a). See Supp § 2.7-2 (required and permissible orders
or judgments). ORS 113.105 also permits the court to waive the bond requirement
in certain instances if requested by the personal representative. ORS 113.105(3).
NOTE: ORS 116.133(5) was renumbered ORS 116.133(4) (abatement of
certain specifically devised property).
NOTE: In addition to ORS 116.173 regarding the personal representative’s
compensation, see ORS 113.038 (a petition for the appointment of a personal
representative to be determined by a different method than as provided in ORS
116.173(3)”). See Supp § 2.8-4(a)(1) (amount of personal representative’s
compensation).
NOTE: See the note in Appendix 2B regarding posthumously conceived
children.
NOTE: The order or judgment of a probate commissioner or deputy probate
commissioner may be modified or set aside. ORS 111.185(3).
NOTE: A special administrator may ask the court to waive the bond
requirement. ORS 113.007.
NOTE: See ORS 113.075 regarding will contests.
NOTE: If the petitioner in a probate proceeding seeks the appointment of
someone other than the person named in the decedent’s will as personal
representative, the court may require the petitioner to attempt to notify individuals
of a higher statutory priority than the proposed personal representative before
appointment. ORS 113.085.
Appendix 2E Table of Time Limitations
Action Required Time Limitation ORS Citation
Present claims before Within four months after 115.005(2)–

being barred first publication of notice (4)
to interested persons, or 30
days after mailing or
delivery of required notice
(whichever is later)
Personal representative Within 60 days after claim 115.135(1)

gives notice of claim presented
disallowance
Personal representative At least 30 days before 115.135(3)

rescinds previous filing of final account
allowance of claim
Claimant files separate Within 30 days after date 115.145(1)

action or files request for of mailing or delivery of
summary determination notice of claim’s
of disallowed claim disallowance
Personal representative Within 30 days after 115.155

rejects summary service of claimant’s
determination of claim, request for summary
demands separate action determination
Claimant must file Within 60 days after 115.155

separate action on claim receipt of notice that
personal representative
rejects request for
summary determination
Closing of estate After expiration of four 114.085

summarily when entire months after first
net estate set aside for publication of notice to
support interested persons
File appeal in tax court to Within 90 days of service 118.171,

inheritance tax by mail of order 305.560,
determination 305.280
Give notice of hearing If by personal delivery, at 111.215(1),

least five days before (2)
hearing; if by mail, at least
14 days before hearing; or
if by publication,
publication once each
week for three consecutive
weeks, with last notice at
least 10 days before
hearing (however, the court
may change any of these
time requirements)
File objections to a On or before date set for 111.235

petition already filed hearing
Modify or set aside order Within 30 days after entry 111.185(1)

of probate commissioner of order
Require testimony of Within 30 days after order 113.055(2)

witness attesting to will, admitting will is made
file petition for
Personal representative Within 30 days after 113.145(4)

files affidavit of giving appointment
notice to heirs, devisees
Personal representative Within 60 days after 113.165

files inventory appointment, unless court
grants longer time
Surviving spouse elects Within nine months after 114.610,

to receive elective share death of spouse 114.600
Contest will Within four months after 113.075(3)

date of delivery or mailing
of information to devisees
and heirs, or within four
months after date of first
publication of notice to
interested persons,
whichever is later
File accountings Within 60 days after 116.083

anniversary date of
appointment, unless court
orders otherwise; within 30
days after removal or
resignation of personal
representative; when estate
is ready for distribution; at
such other times as ordered
by the court
Mail notice of time fixed At least 20 days before 116.093(1)

for filing objections to date fixed in notice
final account and petition
for distribution
File objections to final Within the time fixed in 116.103

account and petition for notice
distribution
Action against personal Within one year after entry 116.213

representative who has of judgment of discharge
been discharged (by permission of probate
court, if judgment was
taken through either (1)
fraud or misrepresentation
of personal representative
or (2) mistake or neglect of
claimant)
Claim for return of Within 10 years after the 116.253(1)

escheated property death of a decedent whose
estate escheated to the
state, or within eight years
after entry of an order or
judgment of escheat
Delivery of personalty of No sooner than three 116.263

nonresident decedent to months after death of
foreign personal nonresident decedent
representative
Absentee’s right to Within five years after 117.075(2)

recover distributed distribution
property or proceeds
from it
COMMENT: This table lists various statutory time limitations and deadlines
that must be observed under the probate code, as discussed in pertinent chapters of
this publication. The code authorizes the court to extend or vary the stated time
period in only some cases.
this table.
PRACTICE TIP: An updated listing of probate time limitations is available on
the website of the OSB’s Professional Liability Fund (view under the probate
category) at www.osbplf.org.
NOTE: Regarding the citations in Appendix 2E of the 2012 book, note the
following:
(1) The citation to ORS 111.185(1) should now be to ORS 111.185(3)
and (4) (modifying or setting aside an order of a probate commissioner or deputy
probate commissioner).
(2) ORS 113.055(1) provides that an affidavit of an attesting witness to a
will may be used instead of the personal presence of the witness in court. ORS
113.055(2) was amended to provide that a motion requesting the court to require
that the witness making the affidavit be brought before the court “must be filed
within 30 days from the date the personal representative first delivers or mails
information under ORS 113.145(1).”
(3) ORS 113.165 was amended to require a personal representative to file
an inventory “[w]ithin 90 days after the date of appointment, unless a longer time
is granted by the court.” The prior version of the statute required the filing of the
inventory within 60 days after appointment.
NOTE: See ORS 112.077 and the note in Appendix 2B regarding the timeline
for notifying the personal representative of potential posthumous use of the
decedent’s genetic material.
NOTE: Persons objecting to a petition filed under ORS 112.238 (admitting a
nonconforming writing to probate) have 20 days after service of notice to object.
ORS 112.238(3).
NOTE: Any interested person may object to an order or judgment of a
probate commissioner or deputy probate commissioner within 30 days of the order
or judgment. ORS 111.185(4).
NOTE: Objections to a petition requesting a method other than as provided in
ORS 116.173 for determining the personal representative’s compensation must be
made within 20 days of receiving notice of the petition. ORS 113.038.
NOTE: ORS 115.005(2)(b) now gives creditors 45 days, rather than 30 days,
from the delivery of the actual notice before claims are barred.
Chapter 3: PREADMINISTRATION PROCEDURES
HOLLY N. MITCHELL, B.A., Lewis & Clark College (1975); J.D., Lewis & Clark Law School
(1984); admitted to the Oregon State Bar in 1984 and the Washington State Bar
Association in 2006; attorney, Duffy Kekel LLP, Portland.
The author made extensive use of the previous chapter material prepared by Kornelia A.
Dornmire and acknowledges her contribution.
§ 3.1 SCOPE OF CHAPTER

This chapter covers matters that require attention after the death of a person,
but before administration. Topics included are counseling of the family, disposition
of remains, collection of documents and information, protection of property, and
preparation for administration.
§ 3.2 ROLE OF LAWYER AS COUNSELOR

The role of a lawyer as family counselor has no greater significance than
when assisting a decedent’s family and friends. The bereaved are frequently in a
state of confusion or emotional shock and face unfamiliar problems, often
aggravated by incorrect or conflicting advice. Whether the lawyer has a close
personal relationship and intimate knowledge of the decedent’s financial affairs, or
whether this is the initial contact with the family, the lawyer can, by patient
explanation, do much to allay the family’s fears and concerns and assist with
matters that require attention.
Counseling may also include determining whether sufficient cash is
available for immediate needs; suggesting the names of accountants, investment
counselors, and other advisers whose assistance may be needed; and helping the
family notify interested persons of the decedent’s death.
Among those to be notified are (1) the next of kin, (2) the post office, (3)
institutions holding funds, (4) partners and associates, (5) parties to contracts and
pending transactions, (6) law enforcement agencies, (7) the Social Security
Administration or the Railroad Retirement Board, (8) the United States Department
of Veterans Affairs, (9) the Public Welfare Division, (10) pension and profit-
sharing trusts, (11) trustees of trusts, and (12) insurance companies. It may be
appropriate to delay notifying some or all of these persons until the personal
representative is appointed.
The lawyer should consider meeting with family members to explain the
general terms of the provisions of a will (if any), the process of administration, and
the wishes and directions of the decedent (if known by the lawyer). Although the
family members may have already read and understood the will, a traditional
“reading of the will” or review of its provisions may be helpful. Being available on
short notice to accommodate the travel plans of the interested parties and for
necessary funeral and burial arrangements is important and will be appreciated by
the family.
NOTE: In Oregon, a surviving registered domestic partner has the
same rights and benefits granted to a surviving spouse under Oregon law.
ORS 106.340. Therefore, references in this chapter to surviving spouses also
include registered domestic partners.
§ 3.3 DISPOSITION OF REMAINS

§ 3.3-1 Anatomical Gifts
In 2007, the Revised Uniform Anatomical Gift Act, ORS 97.951–97.983,
was enacted in Oregon. Section 3.3-1(a) discusses anatomical gifts made before
death, and §3.3-1(b) discusses anatomical gifts made after the decedent’s death.
§ 3.3-1(a) Anatomical Gifts Before Death
During the donor’s lifetime, an anatomical gift to take effect on the donor’s
death may be made for the purpose of transplantation, therapy, research, or
education. ORS 97.955(1). A gift may include the donor’s organs, eyes, and tissue.
See ORS 97.969. An anatomical gift may be made by (1) an adult donor; (2) an
emancipated minor; (3) a minor who is eligible to apply for a driver’s permit; (4)
an agent under a power of attorney for health care or an advance directive (unless
the power of attorney or other record prohibits the agent from making the gift), or
an agent expressly authorized to make an anatomical gift by a signed document;
(5) a parent of the donor, if the donor is an unemancipated minor; or (6) the
donor’s guardian. ORS 97.955(2).
An adult donor may make an anatomical gift (1) by a designation on the
donor’s driver license or identification card; (2) in a will (see ORS 112.225
regarding who may make a will); (3) by an oral or written designation made
during a terminal illness or injury, witnessed by two adults, one of whom is
disinterested; (4) by a donor card or other record signed by the donor; or (5) by
“authorizing that a statement, symbol or designation indicating that the donor has
made an anatomical gift is to be included on a donor registry.” ORS 97.957(1).
Method (5) can be accomplished by registering online at www.donatelifenw.org.
A document creating an anatomical gift is valid if it was executed in
accordance with ORS 97.951–97.982; the laws of the state or country where it was
executed; or “[t]he laws of the state or country where the person making the gift
was domiciled, had a place of residence or was a national at the time the document
of gift was executed.” ORS 97.976(1). If an anatomical gift is valid under the
statute, the laws of Oregon govern the interpretation of the document creating the
gift. ORS 97.976(2).
Except as provided in ORS 97.959(7)–(8) (regarding gifts made by an
unemancipated minor or by an agent or guardian of a donor), an anatomical gift
made under ORS 97.957 may be amended or revoked only by the donor in
accordance with ORS 97.959. ORS 97.959(1). An anatomical gift made by a
designation on a driver license or identification card is not revoked by the
revocation, suspension, expiration, or cancellation of the driver license or
identification card on which the gift was made. ORS 97.957(3).
An anatomical gift made by will may be revoked in the manner generally
provided for the amendment or revocation of wills. ORS 97.959(6); see also ORS
97.959(4). An anatomical gift by will remains effective even though the will is not
offered for probate or is subsequently declared invalid for testamentary purposes.
ORS 97.957(4).
A donor or other authorized person may amend or revoke an anatomical gift
other than one made on a driver license or will as follows:
(1) By a record signed by the donor or the authorized person;
(2) By a record signed by a person acting at the direction of the donor or
authorized person, if the donor or authorized person is physically unable to sign
and the record is witnessed by at least two adults, at least one of whom is
disinterested;
(3) By a later-executed document that amends or revokes a previous gift;
(4) By destruction or cancellation of the document evidencing the gift
with the intent to revoke the gift;
(5) By any form of communication made by the donor during a terminal
illness or injury addressed to at least two adults, at least one of whom is a
disinterested witness; or
(6) By a parent of an unemancipated minor, if the minor dies and the
parent is reasonably available.
ORS 97.959.
An agent or guardian of a donor may amend or revoke an anatomical gift
only if (1) the agent or guardian made the gift under subsection (2)(b) or (2)(d) of
ORS 97.955 or (2) the “power of attorney for health care or other record
appointing the agent expressly authorizes the agent to amend or revoke anatomical
gifts.” ORS 97.959(8).
A donor’s revocation of an anatomical gift “is not a refusal” and does not
prohibit another authorized person from making an anatomical gift of the donor’s
body or body part. ORS 97.963(2). Similarly, a revocation of an anatomical gift by
an authorized person does not prohibit another authorized person from making an
anatomical gift. ORS 97.963(4).
The 2018 Legislature enacted new statutes governing advance directives and
amended existing statutes. See Or Laws 2018, ch 36 (effective June 2, 2018; some
provisions operative January 1, 2019). The new statutes include a form for
appointing a healthcare representative and alternate healthcare representative. Or
Laws 2018, ch 36, § 5 (effective June 2, 2018; operative January 1, 2019).
The 2018 legislation deleted references in ORS 97.955(2)(b) to a “power of
attorney for health care.” Now, that provision provides that an agent of the donor
may make an anatomical gift, unless “the form appointing a health care
representative, as defined in ORS 127.505, or other record prohibits the agent from
making an anatomical gift.” ORS 97.955(2)(b), as amended by Or Laws 2018, ch
36, § 25 (effective June 2, 2018; operative January 1, 2019).
The legislature also amended ORS 97.959(8) accordingly. An agent or
guardian of a donor may amend or revoke an anatomical gift only if (1) the agent
or guardian made the gift under subsection (2)(b) or (2)(d) of ORS 97.955; or (2)
“[t]he form appointing a health care representative, as defined in ORS 127.505, or
other record appointing the agent expressly authorizes the agent to amend or
revoke anatomical gifts.” ORS 97.955(8), as amended by Or Laws 2018, ch 36,
§ 25 (effective June 2, 2018; operative January 1, 2019).
§ 3.3-1(b) Gift at the Time of Donor’s Death
An anatomical gift of a decedent’s body may be made by any member of the
following classes of persons, in the following order of priority, who is “reasonably
available” at the time of the decedent’s death and who has no knowledge of either
a contrary direction given by the decedent or an objection by a person in the same
or a prior class:
(1) An agent of the decedent under a power of attorney for health care or
advance directive;
(2) The spouse of the decedent;
(3) An adult child of the decedent;
(4) A parent of the decedent;
(5) An adult sibling of the decedent;
(6) An adult grandchild of the decedent;
(7) A grandparent of the decedent;
(8) An adult who “exhibited special care and concern for the decedent”;
(9) A guardian of the decedent at the time of death; or
(10) Any other person having the authority to dispose of the decedent’s
body.
ORS 97.965.
An anatomical gift by a person other than the decedent can be made by a
signed document, or by the person’s oral communication that is electronically
recorded or is contemporaneously reduced to a record and signed by the recipient
of the communication. ORS 97.967(1).
If an authorized person makes an anatomical gift of the decedent’s
bodyremains, any member of the same or prior class may revoke or amend the gift,
if the procurement organization, transplant hospital, physician, or technician
removing the body part is notified before removal procedures have begun. ORS
97.967(2)–(3). However, if an anatomical gift was made by the decedent or another
person under ORS 97.957 and the gift was not revoked at the time of the
decedent’s death, the gift is irrevocable and is not subject to the consent,
concurrence, cancellation, or substantial revision of any person. ORS 97.963(1).
If a prospective donor has an advance directive and the terms of the advance
directive conflict with the express or implied terms of a potential anatomical gift
regarding “administration of measures necessary to ensure the medical suitability
of a body part for transplantation, therapy, research or education,” the prospective
donor and his or her attending physician must confer to resolve the conflict. ORS
97.978(2). If the prospective donor is incapable of resolving the conflict, the
conflict must be resolved by the prospective donor’s agent under the advance
directive or, if the agent is not reasonably available, by another person authorized
by law (other than in ORS 97.951–97.982) to make health care decisions for the
prospective donor. ORS 97.978(3).
If an anatomical gift conflicts with any direction regarding the disposition of
the decedent’s remains pursuant to ORS 97.130 (see §3.3-3(a)), the donation of
anatomical gift takes priority if the person making the anatomical gift is of a
priority the same as, or higher than, the person directing disposition of remains.
ORS 97.130(5).
§ 3.3-2 Autopsy and Other Investigation Regarding Cause of Death
An autopsy may be performed to obtain evidence of a criminal act,
malpractice, or other negligence (or the absence of these), or to establish the time
of death. The evidence provided by an autopsy may support an insurance claim by
establishing that the death was accidental, by establishing that the death occurred
within the policy period, or by negating an excluded cause of death.
The medical examiner must investigate all deaths (1) “[a]pparently
homicidal, suicidal or occurring under suspicious or unknown circumstances”; (2)
resulting from unlawful drug use; (3) occurring while in police custody or
incarceration; (4) “[a]pparently accidental or following an injury”; (5) occurring
during or arising from employment; (6) occurring while not under the care of a
physician during the period immediately preceding death; (7) related to disease that
might constitute a threat to public health; or (8) involving the disposal of a human
body in an offensive manner. ORS 146.090.
A medical examiner or district attorney may order an autopsy in any death
requiring investigation. ORS 146.117. When no autopsy is ordered by a medical
examiner or district attorney pursuant to ORS 146.117, an autopsy may be
conducted with the prior written consent of a person within the first applicable
class of the following listed classes:
(1) “The spouse of the decedent”;
(2) “A son or daughter of the decedent 18 years of age or older”;
(3) “Either parent of the decedent”;
(4) “A brother or sister of the decedent 18 years of age or older”;
(5) “A guardian of the decedent at the time of death”;
(6) “A person in the next degree of kindred to the decedent”;
(7) “The personal representative of the estate of the decedent”; or
(8) “The person nominated as the personal representative of the decedent
in the decedent’s last will.”
ORS 97.082(1).
§ 3.3-3 Funeral, Burial, and Cremation
§ 3.3-3(a) Right to Control
Any person of sound mind who is age 18 or older may direct the disposition
of his or her own remains, either by completion of a signed instrument or by
prearrangement with any licensed funeral service practitioner. ORS 97.130(1). If
the decedent’s direction cannot be carried out, either because the parties who are
financially responsible for the disposition lack sufficient funds or because the
disposition would be unlawful, then the direction is void. ORS 97.130(6).
In the absence of actual notice of a contrary direction by the decedent, the
disposition of the decedent’s remains may be determined by a person within the
first applicable listed class among the following listed classes who is available at
the time of death:
(1) “The spouse of the decedent”;
(2) “A son or daughter of the decedent 18 years of age or older”;
(3) “Either parent of the decedent”;
(4) “A brother or sister of the decedent 18 years of age or older”;
(5) “A guardian of the decedent at the time of death”;
(6) “A person in the next degree of kindred to the decedent”;
(7) “The personal representative of the estate of the decedent”;
(8) “The person nominated as the personal representative of the decedent
in the decedent’s last will”; or
(9) “A public health officer.”
ORS 97.130(2).
The decedent or any person authorized under ORS 97.130(2) may delegate
the authority to direct the manner of disposition of the decedent’s remains to any
person who is 18 years of age or older. ORS 97.130(3)(a). The delegation of
authority may be made by completion of either (1) a written instrument in the form
set forth in ORS 97.130(7) or in a form substantially similar to it, see Form 3-1; or
(2) a “written instrument recognized by the Armed Forces of the United States, as
that term is defined in ORS 348.282, if the decedent died while serving in the
Armed Forces of the United States.” ORS 97.130(3). The instrument described in
ORS 97.130(7) requires the signatures of the delegating party and two witnesses. A
duly appointed delegate has the same authority to dispose of the decedent’s
remains as the delegating party. ORS 97.130(3). If a decedent or a decedent’s
designee issues more than one authorization or direction for disposal of the
decedent’s remains, only the most recent is binding. ORS 97.130(4). If the person
who is authorized to direct the manner of disposition of the decedent’s cremated
remains transfers any portion of the cremated remains to another person, “the
recipient of the cremated remains has the authority to direct the manner of
disposition of the cremated remains in the recipient’s possession.” ORS
97.130(10).
If a donation of an anatomical gift conflicts with directions for the
disposition of the decedent’s remains under ORS 97.130, the donation of the
anatomical gift takes priority only if the person making it is of the same or a higher
priority than the person directing the disposition of the remains. ORS 97.130(5).
See §3.3-1(b).
A cemetery authority, crematory operator, or licensed funeral service
practitioner interring or cremating remains pursuant to a written instrument signed
by the decedent or a person described in ORS 97.130(2) has no liability for any
failure to conform to the priority of control of the remains, unless it received two
or more conflicting written instruments before interment or cremation. ORS
97.145.
§ 3.3-3(b) Special Administrator to Take Charge of Remains
If the disposition of the decedent’s remains is required before the
appointment and qualification of a personal representative, the court may appoint a
special administrator to take charge of the remains. ORS 113.005(1). See §§6.1-1
to 6.1-6.
§ 3.3-3(c) Arrangements by Deceased or Others, Inter Vivos
Testamentary or other written instructions by the deceased may provide
valuable guidance. These instructions may not be controlling, however, because
they may be unlawful, too expensive to comply with, or simply impractical.
Obviously, these directions must be discovered promptly, or they are useless. If the
lawyer is consulted about funeral plans before the death of the decedent, the lawyer
should advise against including a dollar limit because of unpredictable factors,
such as inflation, changed customs, and prices varying with locality. For the same
reason, in most cases, a will should not provide too specifically for the type of
casket.
A search should be made for an existing contract with a funeral director
stating an agreed-on price. The price may have been paid in full or in part. Extra
services in addition to those specified are not included in the agreed-on price.
A search should also be made for a deed to a grave lot or a contract for a
grave, crypt, or niche; charges for opening the grave, crypt, or niche may already
have been paid. Other items that may have been similarly provided for are a
marker; lettering on a marker, crypt, or niche; an outer case for a grave; and an urn
for a niche.
Funeral benefit insurance is fairly common and, although the amount may be
inadequate, it may help determine how much to spend. Fraternal societies and
unions frequently have funeral benefits that can usually be readily discovered.
If the decedent or spouse was a veteran, inquiry should be made of the U.S.
Veterans Administration about possible funeral and burial benefits, and whether
there is a right to burial in a national cemetery.
A trust in which the deceased was an actual or contingent beneficiary may
provide that the trustee will defray the cost of the funeral and burial of the
decedent. Occasionally, prior approval of arrangements by the trustee is required.
Other options for inter vivos planning are prearranged funeral plans and
trusts, which are expressly regulated under Oregon law. ORS 97.923–97.949.
Under specific statutory authority, the Secretary of State administers a separate
trust fund, the “Funeral and Cemetery Consumer Protection Trust Fund,” for the
sole purpose of providing restitution to purchasers who have suffered pecuniary
loss arising out of prearrangement sales contracts or preconstruction sales
contracts. ORS 97.945(2).
§ 3.3-3(d) Arrangements with Funeral Director
The funeral director will require written authority for funeral arrangements,
including the authorizing party’s personal agreement to pay for the arrangements.
Upon authorization, the funeral director customarily takes full charge and advises
in all particulars relating to the funeral and burial. The authorization specifies in
detail the services to be rendered or arranged, and the cost of each item, including
removal and preparation of the body; the apparel in which the body is to be
dressed; the casket; the outer case; burial, cremation, or entombment; music;
clergy; opening grave; hearse, limousine, and motorcycle escort; memorial folders;
publication of death and funeral notices; and copies of the death certificate.
Frequently, separate arrangements must be made for burial, etc. The type of casket
ordered usually determines the cost of the funeral; the same services are generally
rendered, and the same facilities of the funeral director are available, regardless of
the agreed-to cost. The cost must, of course, be decided on in light of the resources
of the estate and the surviving relatives. It is possible, under some circumstances,
simply to have a body cremated or buried without embalming, a casket, a funeral,
or other religious or memorial service.
The regulations of Oregon’s Mortuary and Cemetery Board provide that if a
dead human body is to be held longer than 24 hours, it must be either embalmed or
refrigerated until final disposition. OAR 830-030-0010(1). Some religious sects
discourage embalming, but in an area where refrigeration of the body is not
available, embalming may be difficult to avoid. All dead human bodies must be
cremated, interred, or entombed within 10 days after the funeral establishment
takes possession of the remains. OAR 830-030-0010(4). If the human remains will
be held longer than 10 days because of exigent circumstances, the licensee
responsible for those remains must notify the office of the Mortuary and Cemetery
Board. OAR 830-030-0010(4).
If the remains are to be shipped to another locality, the funeral director can
make arrangements and must ensure compliance with state requirements. Most
funeral directors are familiar with the requirements of other states and foreign
governments regarding the release of, and the shipping of, bodies to or from
Oregon.
Arrangements with funeral directors frequently provide for interest after a
specified date, and sometimes for a discount for early payments. (The federal Truth
in Lending Law governs these practices.) If such a saving will be lost by waiting to
pay until the personal representative is appointed and has adequate funds, a relative
may advance the funds and obtain reimbursement later from the estate.
Occasionally, at the time for disposing of the remains, the family might not
know whether the estate will be probated or whether sufficient funds will be
available to pay the expenses. If the assets are insufficient to pay all expenses and
claims in full, the personal representative may pay “[e]xpenses of a plain and
decent funeral and disposition of the remains of the decedent,” with priority over
certain other expenses and claims. ORS 115.125(1)(c).
ORS 115.125(1)(c), cited in the last paragraph of the 2012 text, now simply
provides that if the applicable assets of the estate are insufficient to pay all
expenses and claims in full, the personal representative may pay “[e]xpenses of a
plain and decent funeral,” with priority over certain other expenses and claims.
§ 3.3-3(e) Cremation
In general, the State Mortuary and Cemetery Board regulates cemetery
authorities and licensed funeral service practitioners with respect to cremation. See
OAR 830-030-0040, 830-030-0050. A burial or cremation permit seems to be
required only in cases in which the death must be investigated. ORS 146.121.
If a cemetery authority, crematory operator, or licensed funeral service
practitioner has been authorized to cremate the remains of a decedent pursuant to
ORS 97.130, the authorization must also contain further instructions regarding the
final disposition of the cremated remains. ORS 97.150(1)(a). If no instructions
have been given, the cemetery authority, crematory operator, or licensed funeral
service practitioner must, within 180 days after the cremation, attempt to notify the
person who has the right to direct disposition of the remains. ORS 97.150(1)(b)–
(c). The notice must state that the cemetery authority, crematory operator, or
licensed funeral service practitioner intends to dispose of the cremated remains in
the absence of instructions to the contrary. If authorization is not forthcoming
within 30 days after the date of the notice, the cemetery authority, crematory
operator, or licensed funeral service practitioner “may dispose of the cremated
remains as is legally practicable.” ORS 97.150(1)(d).
Nothing in Oregon law gives a cemetery authority or a licensed funeral
service practitioner the exclusive right to carry out instructions regarding the final
disposition of the decedent’s remains. Thus, a person may be authorized to scatter
the remains at sea or in the air or to deposit them at a particular location. A number
of federal and state environmental and health laws may be broad enough to govern
the scattering of ashes, but the Coast Guard, Environmental Protection Agency,
Federal Aviation Administration, Mortuary and Cemetery Board, Department of
Environmental Quality, State Marine Board, and Mental Health Division appear to
have no current regulations dealing with the final disposition of cremated remains.
Generally, scattering at sea is done beyond the three-mile limit, and scattering of
ashes over a national or state park should be avoided. See
www.cremationsolutions.com/Scattering-Ashes-Laws-Regulations-c108.html.
For laws and regulations regarding scattering ashes, see
www.cremationsolutions.com/information/scattering-ashes/scattering-ashes-laws-
and-regulations.
§ 3.4 COLLECTION OF DOCUMENTS AND INFORMATION

§ 3.4-1 Wills, Codicils, and Trust Agreements
The original will is normally found in the decedent’s safe-deposit box or
home or in the office of the lawyer who drafted it. If the decedent kept the will in
his or her safe-deposit box, and no survivor is authorized to open the box, the
personal representative named in the will, if known, and the personal
representative’s lawyer should contact the institution to arrange a will search. If a
key cannot be located, the box will have to be drilled. The procedures for opening
the safe-deposit box of a decedent who was the sole lessee or last surviving lessee
of the box are found in ORS 708A.655 and 723.844. Subject to ORS 114.537
(regarding small estates), the institution leasing the box must cause or permit the
box to be opened upon being furnished with a certified copy of the death certificate
(or other satisfactory evidence of death) and an affidavit by the requesting person
stating that:
(1) The person believes that the box may contain the decedent’s will, a
trust instrument of which the decedent was a trustor or trustee at the time of the
decedent’s death, or documents pertaining to the disposition of the decedent’s
remains or property of the decedent’s estate;
(2) The individual is an “interested person” (as defined in ORS
708A.655(3) and 723.844(3), discussed below); and
(3) The person wishes to open the box to search for a will or trust
instrument, to obtain documents relating to the disposition of the decedent’s
remains, to inventory the contents of the box, or to remove property of the estate of
the decedent, pursuant to a small estate affidavit filed under ORS 114.515.
ORS 708A.655(2), 723.844(2).
NOTE: The statutes define interested person to include a broad range
of individuals, such as the decedent’s spouse or heir; a person named as
personal representative in a purported will of the decedent; a person who is
authorized to file a small estate affidavit under ORS 114.515; a trustee,
purported trustee, or successor trustee for the decedent; a court-appointed
guardian or conservator for the decedent; an agent with right of access under
a durable power of attorney; a person designated by the decedent in a writing
that is both acceptable to the institution and filed with the institution before
the decedent’s death; or an estate administrator of the Department of State
Lands (if there are no heirs). ORS 723.844(3), 708A.655(3).
The search must be conducted in the presence of at least one employee of
the institution. ORS 708A.655(11), 723.844(11). The scope of the institution’s
duties depends on the purposes of the search. ORS 708A.655(4)–(8), 723.844(4)–
(8).
If the box is opened to search for a will or a trust instrument, the institution
must (1) remove any document that appears to be a will or trust instrument, (2)
make a “true and correct” copy of the document, and (3) deliver the original
instrument to the personal representative or the successor trustee (as the case may
be) or, if such a person is not named in the instrument or cannot be located, retain
the original instrument in the box or deliver any original will to a court with
jurisdiction over the decedent’s estate. ORS 708A.655(4)–(5), 723.844(4)–(5). On
request, the institution may give a copy of the will, trust instrument, or other
document pertaining to the disposition of the remains of the decedent to any
interested person. ORS 708A.655(4)–(5), 723.844(4)–(5).
PRACTICE TIP: If a trustor is concerned about confidentiality, a copy of
the trust should generally not be placed in a safe-deposit box, because the
class of persons who may have access to the safe-deposit box is quite large.
PRACTICE TIP: Notice in a state or county bar publication or listserv
requesting information about the existence of a will for a named individual
is now commonplace.
COMMENT: Retention of an original will by the drafting lawyer is not
as prevalent as in the past. This may be due in part to a fear that in addition
to the duties to maintain the will in safekeeping and to deliver it on the
testator’s death to the named personal representative or to the court, a lawyer
in possession of an original will may have increased duties and
responsibilities with respect to advising a client about changes in the law and
the need to revise the will.
Safe-deposit boxes are no longer frozen by the Oregon Department of
Revenue. Although safe-deposit boxes are an appropriate place to keep original
wills, problems may arise by keeping them there. If a surviving joint tenant or
other person is authorized to enter the box, obtaining the will should not be a
problem, as long as the key can be located. If not, arrangements must be made with
the institution to drill the box. If there is no survivor authorized to open the box,
the personal representative named in the will, if known, and the personal
representative’s lawyer should arrange with the institution to make a will search.
Once again, if a key cannot be located, the box will have to be drilled. A
representative of the institution must be present during a review of the box’s
contents. ORS 708A.655(11), 723.844(11). If a will is found, the institution will
deliver it to the named personal representative. If the safe-deposit box contains
valuable documents, but probate is not necessary and there is no person authorized
to enter the box, the institution will presumably deliver the documents to a person
named in the document, such as a surviving joint tenant. But the institution could
probably require appointment of a personal representative before releasing the
box’s contents. A small estates affidavit or an indemnity agreement might be
satisfactory.
If an affidavit of at least one of the witnesses made at the time of executing
the will or at any time thereafter is not attached to the original will or codicil (ORS
113.055(1)), the witnesses to the will must be located and their affidavits obtained.
The affidavits may be used instead of the personal presence of the witnesses in
court. Under ORS 113.055(3), if no evidence of the attesting witnesses is available,
the court may allow proof of the will by testimony or other evidence that the
signature of either the testator or at least one of the witnesses is genuine.
If the original will cannot be located, the facts and circumstances
surrounding its execution and safekeeping should be investigated. Copies of the
will should be located in case there is a desire to offer a photocopy for probate.
If the original will has been admitted to probate in another jurisdiction, a
certified copy of the will and a certified copy of the order admitting it to probate in
the domiciliary jurisdiction will be required in order to probate the will in Oregon.
ORS 113.065.
The will and all amendments to it should be examined to make sure that they
were properly executed and attested, to determine whether the testator had
testamentary capacity (see ORS 112.225, 112.232), and to determine whether the
will has been revoked in whole or in part (see ORS 112.285, 112.305, 112.315).
See chapter 4 (discussing wills).
NOTE: The 2015 Legislature added ORS 112.238 to Oregon law to
create a procedure allowing the court to admit for probate a writing that does
not comply with the formalities of a validly executed will. For further
discussion of ORS 112.238, see Supplement § 8.2-6 (petition to admit
noncompliant writing as decedent’s will or a revocation or alteration of the
will).
acknowledging the validity and intent of the writing.” ORS 111.275(1)(f).
§ 3.4-2 Other Documents
Review and analysis of many other documents are essential to making
informed decisions regarding the decedent’s affairs. Documents to be located
include:
(1) Cemetery deeds, burial instructions, and donor cards with respect to
anatomical gifts;
(2) Powers of attorney and any documents related to performance of
duties by an attorney-in-fact (even though the authority of the attorney-in-fact
terminates at death, the documents may provide information about the decedent’s
assets);
(3) Deeds, leases, and agreements with respect to real property (to
ascertain how the property is owned, its approximate value, and the interests that
others may have in it);
(4) Stock and bond certificates, brokerage account statements, and any
other documents related to the ownership of securities;
(5) Bank registers, bank account statements, certificates of deposit, letters
of credit, and other banking documents;
(6) Insurance policies, including not only policies insuring the decedent’s
life, but also policies owned by the decedent or for which he or she is the
beneficiary;
(7) Partnership agreements and corporate buy-sell agreements;
(8) Annuity contracts or agreements;
(9) Retirement benefits, including correspondence from employers
explaining options and benefits and company booklets;
(10) Appraisals;
(11) Prenuptial agreements;
(12) Divorce and separation agreements, including property-settlement
agreements;
(13) Income tax returns;
(14) Gift tax returns;
(15) Estate tax returns for deceased family members;
(16) Notes, guaranties, and security agreements; and
(17) Copies of pleadings and other documents in cases in which the
decedent was a litigant.
It is important to review originals or copies of documents rather than lists
prepared by the family or others. Family members often believe that assets are
owned jointly, when they are actually owned by the decedent. A mistake in relating
a serial number or certificate number can cause considerable confusion, delay, and
expense.
Documents evidencing a decedent’s indebtedness are as important as those
representing his or her assets. Thus, copies of mortgages, deeds of trust, leases,
promissory notes, pledge agreements, guaranties, installment sale contracts, and
similar documents must also be reviewed.
§ 3.4-3 Determining Interested Parties
The identity of heirs, devisees, creditors, trustees, personal representatives,
and those who are or may be parties to litigation involving the decedent must be
ascertained. Current addresses and Social Security numbers for the beneficiaries
and those involved in administration should be obtained. Care should be exercised
in determining the heirs. Children of a deceased child or other heir are easily
overlooked, particularly if a divorce is involved. Preparing an informal family tree
can be very beneficial in this regard. Whether pretermitted children exist (ORS
112.405), whether a devise lapses (ORS 112.395), and whether a survivorship
requirement (ORS 112.570–112.590) or a will provision is applicable must be
determined.
The urgency of promptly investigating and preserving evidence of claims
against or on behalf of the estate cannot be overemphasized. Included are claims
for wrongful death, claims for malpractice or bodily injury, claims for damage to
the decedent’s property, insurance claims, potential claims against the estate for
services rendered to the decedent, and will contests. See chapters 9 and 15.
Witnesses should be interviewed, signed statements obtained, and physical
evidence preserved.
§ 3.5 PROTECTION OF PROPERTY
§ 3.5-1 Power of Personal Representative Before Appointment
Pursuant to ORS 114.255, the acts of a personal representative occurring
before appointment have the same effect as those occurring after appointment, and
the personal representative may ratify and accept acts on behalf of the estate done
by others. In Rennie v. Pozzi, 294 Or 334, 343, 656 P2d 934 (1982), the court held
that an action filed by the named personal representative before his appointment
was deemed commenced, even though the statute of limitations had run before the
appointment became valid.
The possibility exists, of course, that someone other than the person
expecting to be appointed will become the personal representative, or that a
particular problem will justify the appointment of a special administrator or some
other form of court blessing.
§ 3.5-2 Special Administrator
If, before the appointment and qualification of a personal representative,
property of a decedent is in danger of loss, injury, or deterioration, or disposition of
the remains of the decedent is required, the court may appoint a special
administrator to take charge of the property or the remains. ORS 113.005(1). See
§§6.1-1 to 6.1-6 for a detailed discussion of special administration.
§ 3.5-3 Safekeeping and Special Arrangements
Action may need to be taken to protect some of the decedent’s property
before a personal representative is appointed. Perishable property may need to be
refrigerated or otherwise protected. Antiques, collectibles, and other valuable items
may need to be stored or guarded to protect them. Certain items, such as valuable
paintings, may need to be stored in a temperature-controlled vault. New door locks
may be appropriate.
Arrangements must be made for pets (provisions are occasionally made in
the will or a trust) and for farm animals. See §3.5-4 (custody of the decedent’s pet).
Rings, other jewelry, and all kinds of indicia of ownership of assets need to
be collected and kept in a safe place.
Newspapers and other deliveries should, in most cases, be stopped and
decisions made concerning utilities. Keeping the heat on may be necessary to avoid
frozen pipes.
Insurance coverage on any real property and on personal property should be
reviewed to make sure that coverage continues after death. Special arrangements
may be necessary if the residence is not occupied. Car insurance can be
troublesome. Assurances should be obtained that either the decedent’s policy or the
driver’s policy, or both, covers anyone operating the vehicle.
Precautions must be taken during the funeral to prevent theft at the
decedent’s home.
§ 3.5-4 Custody of Decedent’s Pet
Immediately on the decedent’s death, a family member of the decedent, a
friend of the decedent, or an animal shelter may take custody of any pet of the
decedent that is worth less than $2,500. The person who takes custody of the pet
may be reimbursed from the estate for the cost of caring for the animal. The person
who takes care of the pet must, on request, deliver the animal to the decedent’s
personal representative or to any heir or devisee entitled to receive possession of
the animal. ORS 114.215(3).
§ 3.5-5 Delivery to Heirs or Devisees
In many instances, the heirs or devisees may wish to divide and take
possession of personal property items before the appointment of the personal
representative. This is particularly true when relatives from out of town have come
for the funeral, but must return to their homes before the opening of the estate. The
statute giving a personal representative the power to act before appointment is not
a solution because, even if a personal representative were appointed, a court order
authorizing partial distribution would be necessary before distribution could be
made. When the assets are clearly sufficient to pay taxes, claims, and
administration expenses, and agreement can be reached among all the interested
parties, division and removal of the property will usually present no problems.
The person taking possession must understand, however, that he or she is
only holding the property in safekeeping pending a court order authorizing
distribution, and that it may be necessary to return the property if creditors or other
heirs or devisees establish a right to the property. The person taking possession
must also understand that it may be necessary to make the property available for
appraisal. In these instances, the person taking possession of the property should
execute a receipt acknowledging custody and agreeing to return the property to the
personal representative if a demand for return is made. Even if it appears
unnecessary for the personal representative to take possession of certain property
(see ORS 114.225), a receipt or statement of custody should be obtained from the
person retaining control. See chapter 1.
In most cases, all the property should be retained until it can be inventoried
and valued. Disputes among interested parties about the division of personal
property can cause some of the most difficult problems of administering an estate.
Those having access to the property must be particularly careful to avoid charges
that they have removed property without authorization.
In determining whether heirs or beneficiaries should take custody of
property, the estate tax regulations with respect to valuation of household and
personal effects should be kept in mind. Treasury Regulation §20.2031-6(a)–(b)
provides that all articles in the same room having a value in excess of $100 should
be itemized, and that articles having marked artistic or intrinsic value in excess of
$3,000 should be appraised. Treasury Regulation §20.2031-6(c) covers disposition
of household effects before IRS investigation. It requires that notice be given to the
district director if distribution or sale of any portion of the household or personal
effects of the decedent will be made in advance of an investigation by an IRS
officer. This procedure is not generally followed, but should be kept in mind when
heirs or beneficiaries take valuable articles into custody.
PRACTICE TIP: If the person signing a custody receipt is not a devisee
of any other property, it may be appropriate for the receipt to include a
waiver of further notice of estate proceedings. This waiver may eliminate the
necessity of obtaining further consent or giving notice to the devisee with
respect to partial distributions and requests for fees and compensation, and
on filing the final account.
Nonetheless, before custody of any property changes hands, an assessment
of the advantages and disadvantages of disclaiming property should be made and
communicated to the potential distributees of the estate. For example, the
decedent’s surviving spouse may wish to disclaim, in whole or part, certain
interests in property so that those interests pass in a way that would allow the
decedent’s estate to take full advantage of the available exemptions from federal
estate and gift taxes and Oregon estate tax. If this type of postmortem tax planning
would be advantageous, a potential disclaimant should ensure that his or her
acceptance of the property or any benefit from it will not inadvertently jeopardize a
future disclaimer of it. See Uniform Disclaimer of Property Interests Act, ORS
105.623–105.649, which is discussed in §§8.3-2(a) to 8.3-2(f).
§ 3.6 PREPARING FOR ADMINISTRATION

§ 3.6-1 Alternatives to Probate
Affidavits of heirship, transfers pursuant to specific statutory authority, and
other methods of avoiding probate should be carefully considered. These matters
are fully discussed in chapter 1. Qualifying estates may be administered under the
small-estates procedures set forth in ORS 114.505–114.560. See chapter 5 for
further discussion.
Although avoiding probate may be possible, it may not be desirable, given
the facts and circumstances of a particular estate. The savings of time and expense
in avoiding probate may be more than offset by the need to determine or cut off
creditors’ claims or to take advantage of income tax or other planning devices.
Obtaining a bond and indemnity agreement or paying a double title insurance
policy premium may equal the cost of probate.
Conversely, if creditors’ claims exceed the value of the assets, the named
personal representative and the beneficiaries may consider abandoning the estate,
leaving the creditors to institute probate proceedings if they determine that it is
advisable.
§ 3.6-2 Special Proceedings
§ 3.6-2(a) Absentees and Missing Persons
Provisions for administering the estate of an absentee are set forth in ORS
117.005–117.095. The statutes eliminated the former requirement that seven years
of unexplained absence must elapse before a person is presumed dead and his or
her estate subject to administration. The law now provides that a petition for the
administration of the estate of an absentee may be filed when (1) “the whereabouts
of the absentee is and has been unknown for a period stated of not less than one
year, and . . . the petitioner has reason to believe and believes the absentee is
dead”; (2) the “death of the absentee at the time, location and in the circumstances
stated in the petition is probable” and “in doubt solely by reason of the failure to
find or identify the remains of the absentee”; or (3) the absentee is presumed dead
under the provisions of ORS 176.740 (regarding a presumption of death for
persons missing after a natural disaster or an act of war, terrorism, or sabotage).
ORS 117.005(3). See chapter 6 for further discussion.
The management of the financial resources of a person who has disappeared
is governed by ORS chapter 125, which deals with protective proceedings. See
ORS 125.005(3) (financially incapable “means a condition in which a person is
unable to manage financial resources of the person effectively for reasons
including . . . disappearance”).
Before initiating a protective proceeding or filing a petition to administer the
estate of an absentee, the lawyer must determine which, if either, of these two
courses to pursue.
§ 3.6-2(b) Small Estates
If a decedent’s estate meets the requirements of ORS 114.515 (including that
the fair-market value of the estate is $275,000 or less), the estate may be
administered under the small-estates procedures set forth in ORS 114.505–
114.560. The cases in which the small-estates procedure can be used and the
procedures to be followed are fully discussed in §§5.3-1 to 5.3-8(d).
§ 3.6-2(c) Wrongful Death
When “the death of a person is caused by the wrongful act or omission of
another,” a duly appointed personal representative of the decedent may maintain an
action against the wrongdoer for the benefit of the decedent’s survivors. ORS
30.020(1). Actions for wrongful death are governed by ORS 30.010–30.100. For
discussion of wrongful death claims and procedures, see §§15.3-1 to 15.3-8.
Damages recovered in an action for wrongful death are not assets of the estate. See
ORS 30.020.
§ 3.6-3 Advice to Interested Parties of Analysis and Recommendations
After collecting and analyzing all of the documents and information relevant
to the decedent’s estate, the lawyer should arrange a meeting with interested
persons to advise them of the lawyer’s findings and recommendations. In
scheduling the meeting, the lawyer should allot enough time to explain the
procedures, problem areas, anticipated costs, and time involved, and to answer any
questions that arise. Meeting with interested persons and giving them adequate
information will go a long way toward establishing a smooth working relationship
with those persons, and will help them understand the importance of the services
that the lawyer is performing.
This is also an appropriate time for the lawyer to determine whom he or she
represents and to give careful consideration to possible conflicts of interest.
§ 3.6-4 Selection of Venue
Administration of a decedent’s estate is proper in the county where the
decedent was domiciled or had a place of abode at the time of death, where
property of the decedent was located at the time of death or is located at the time
the proceeding is commenced, or where the decedent died. ORS 113.015. Venue
may be a particularly important consideration when a wrongful death action will be
commenced. If proceedings are commenced in more than one county, they are
stayed except in the county where first commenced until a final determination is
made regarding the proper venue. A court is authorized to transfer venue if it
determines that a transfer is in the best interest of the estate. ORS 113.025. For
further discussion of venue, see §§2.3-1 to 2.3-4(d).
§ 3.6-5 Filing the Petition
The information that must be included in a petition for the appointment of a
personal representative and for the probate of a will is set forth in ORS 113.035.
See §§5.2-2(a) to 5.2-2(b).
PRACTICE TIP: If the creditworthiness of the proposed personal
representative is in doubt, the lawyer should submit a bond application
before preparing the petition in order to determine whether the nominee is
bondable.
Prompt action to file the petition requesting the appointment of a personal
representative in an intestate situation may be very important. Although ORS
113.085 directs the court to give preference to certain persons in appointing a
personal representative, in some counties, a petitioner is not required to allege that
no other person has a preferential right to be appointed. As a result, the first person
to file will probably be appointed. Once a personal representative is appointed, a
formal hearing may be necessary to have the appointed personal representative
removed and the person with priority appointed. It may take several months to
obtain a hearing date. In the meantime, the appointed personal representative’s
actions are valid. If all persons with a preferential right to appointment are unable
or unwilling to serve, the better practice would be to allege this fact in the petition
for appointment and, if practicable, to obtain and file written declinations to serve.
In Multnomah County and many other counties, the court generally will not
appoint a person with a lower level of priority absent at least these allegations in
the petition.
QUERY: Would an action for damages for the expense of removing a
personal representative be appropriate when the appointment was obtained
with the knowledge that another person was entitled to preference and
planned to petition the court for appointment?
NOTE: The 2017 Legislature added a new provision to ORS chapter
113. Under ORS 113.038, a petition for the appointment of a personal
representative to be determined by a different method than as provided in
ORS 116.173(3).” See Supp § 5.2-2(b) (contents of petition). See
Supplement § 2.8-4(a)(1) and Supplement § 11.6-5(a) regarding the personal
representative’s compensation.
The 2017 Legislature added a new provision to ORS 113.085, which
is cited in the third paragraph of the 2012 text. Before the court appoints a
personal representative under ORS 113.085(1)(b) to (g) (which directs the
court to give preference to certain persons in appointing a personal
representative), “the court may require the petitioner to make a reasonable
attempt to notify persons of higher priority than the proposed personal
representative” under those subsections. ORS 113.085(2).
§ 3.6-6 Information Lists, Checklists, and Calendars
§ 3.6-6(a) Master Information List and Information Checklist
Retaining information that has been collected so that it can be effectively
used in the administration process is essential. A master information list (MIL) and
an information checklist can act as an interview guide, can prompt a list of
questions to ask in obtaining required information, and can provide an organized
way to record that information for future use. See Appendixes 3A and 3B for
examples of such lists. The MIL can be a source for preparing the petition for
appointment of the personal representative, the inventory, federal and Oregon
estate tax returns, and fiduciary income tax returns. The MIL in Appendix 3A
includes general information, asset information, and information regarding
transactions occurring during administration of the estate.
§ 3.6-6(b) Probate Checklist
A probate checklist, such as that set forth in Appendix 3C, may be used in
conjunction with, or apart from, a master information list (see §3.6-6(a)). The
sample probate checklist set forth in Appendix 3C contains general information,
suggestions for action to be taken, and a manual system for keeping track of due
dates and recording actions that have been taken.
FORM
Form 3-1 Appointment of Person to Make Decisions Concerning
Disposition of Remains
Download MS Word
APPOINTMENT OF PERSON TO MAKE DECISIONS

CONCERNING DISPOSITION OF REMAINS
I, ________________, appoint ________________, whose address is
________________ and whose telephone number is (___) _________, as the
person to make all decisions regarding the disposition of my remains upon my
death for my burial or cremation. If ______________ is unable to act, I appoint
________________, whose address is ________________ and whose telephone
number is (___) _________, as my alternate person to make all decisions regarding
the disposition of my remains on my death for my burial or cremation.
It is my intent that this Appointment of Person to Make Decisions
Concerning Disposition of Remains act as, and be accepted as, the written
authorization currently required by ORS 97.130 (or its corresponding future
provisions) or any other provision of Oregon law, authorizing me to name a person
to have authority to dispose of my remains.
DATED: ________________, 20___.
/s/__________________________
[decedent’s name]
DECLARATION OF WITNESSES
We declare that [decedent] is personally known to us, that [he / she] signed
this Appointment of Person to Make Decisions Concerning Disposition of Remains
in our presence, that [he / she] appeared to be of sound mind and not acting under
duress, fraud, or undue influence, and that neither of us is the person so appointed
by this document.
Witnessed By:
/s/__________________________ Date: _________, 20____
[witness’s name]
/s/__________________________ Date: _________, 20____

[witness’s name]
COMMENT: See §3.3-3(a).

this form.
APPENDIXES
Appendix 3A Master Information List
Decedent
1.01 Name
1.02 Other names used by decedent
1.03 Date of birth
1.04 Date of death
1.05 Place of death: address, city, county, state, zip
1.06 Place of domicile at death: address, city, state, zip
1.07 Other counties where decedent’s assets are located
1.08 Social Security number
1.09 Taxpayer identification number
1.10 Date of will
1.11 Name of witness attesting will
1.12 Name of witness attesting will
1.13 Date will admitted to probate
1.14 Date inventory filed
Personal Representative  Testate  Intestate

2.01 Name
2.02 Address
2.03 City, state, zip
2.05 Phone number (w) (h)
2.06 Relationship to decedent
2.07 Surety
2.08 Date appointed
2.09 Date of first publication of notice
2.10 Date of filing of affidavit of mailing or filing information to heirs
and devisees
Surviving Spouse
3.01 Name
3.02 Address
3.06 Birth date
3.07 Citizenship
Child
3.08 Name
3.09 Address
3.13 Birth date
Other children listed on attached sheet Yes No
Other Heirs
3.14 Name
3.15 Address
Other heirs listed on attached sheet  Yes  No
Devisees
3.19 Name
3.20 Address
Other devisees listed on attached sheet  Yes  No
Claiming Successor in Small Estate

3.24 Name of claiming successor in decedent’s small estate
3.25 Address
Parents
3.29 Father
3.30 Address
3.32 Mother
3.33 Address
Creditors or Other Interested Persons

3.35 Name
3.36 Address
3.39 Lawyer
3.40 Others listed on attached sheet  Yes  No
Court Proceedings
4.01 Name
4.02 Address
4.03 Court docket number
4.04 Judge
Probate Lawyer
5.01 Name
5.02 OSB number
5.03 Address
5.06 Fax number
5.07 E-mail
Wrongful Death Action

6.01 Defendant’s name
6.02 Defendant’s insurer
6.03 Docket number for wrongful death suit
6.04 Court where filed
6.05 Lawyers
Assets*
7.01 Cash on hand
7.02 Checking accounts
7.03 Savings accounts
7.04 Money market accounts
7.05 Common stocks
7.06 Preferred stocks
7.07 Closely held corporations
7.08 Federal notes and bonds
7.09 U.S. savings bonds
7.10 Municipal bonds
7.11 Corporate bonds
7.12 Certificates of deposit
7.13 Debit instruments
7.14 Residences
7.15 Other real property
7.16 Household goods and furnishings
7.17 Miscellaneous personal property
7.18 Refunds
7.19 Accrued income
7.20 Miscellaneous property

*List additional items of a category as subnumbers of the category (e.g., additional
savings accounts as 7.031, 7.032).
Liabilities
8.01 Mortgages payable
8.02 Notes payable
8.03 Income taxes payable
8.04 Accrued liabilities
8.05 Other liabilities
Accounting Information
9.01 Distributions of principal
9.02 Distributions of income
10.01 Gains allocable to principal
10.02 Losses allocable to principal
11.01 Administration expenses—principal
11.02 Fees and commissions—principal
11.03 Funeral expenses—principal
11.04 Other expenses—principal
12.01 Dividends
12.02 Interest
12.03 Tax-exempt interest
12.04 Rental income
12.05 Other income
12.06 Gains allocable to income
12.07 Losses allocable to income
13.01 Administrative expenses—income
13.02 Fees and commissions—income
13.03 Interest expense
13.04 Insurance
13.05 Depreciation
13.06 Income tax
13.07 Other taxes
13.08 Other expenses

CAVEAT: This list is illustrative only. Each lawyer must depend on his or her
own legal research, knowledge of the law, and expertise in using or modifying this
list.
Appendix 3B Initial Information Checklist
A. Preliminary Information:
Client’s name
Client’s address
Client’s telephone (home)
Client’s telephone (office)
Client’s cell phone
B. Title, Court, and Numbers:

Estate of
Probate No. Tax ID No.
SS No.
Court
Address of court
C. Personal Representative:
Name
Address
Phone SS No.
Date appointed Bond required
D. Decedent’s Vital Statistics:

Name as it appears on will
Also known as
Residence at time of death
Domicile at death
Year established
Previous residence
Birth date Date of death
Place of death (e.g., name and address of hospital)
Place of birth Date

Decedent’s marital status (circle one):
single married legally separated divorced widowed
Date of decedent’s marriage Place
Date of legal separation or divorce
If widowed, date of spouse’s death
Cause of decedent’s death
Length of decedent’s last illness
E. Decedent’s Spouse:
Spouse’s name
SS No.
Spouse’s residence
Place of spouse’s death
F. Decedent’s Will:
Did decedent leave a will? (check one): Yes  No 
Date
Affidavit of attesting witness? (check one): Yes  No 
Witness’s name/address
Known beneficiaries named in will (state age if minors):
(Attach separate list if not sufficient space)
Name/Address SS No.
G. Heirs:
Heirs at law (state age if minors):
(Attach separate list if not sufficient space)
Name/Address SS No. (if intestate)
H. Petitioner:
Petitioner’s name and address
I. Decedent’s Professional Advisers:

Accountant’s name and address
Stockbroker’s name and address
Trustee’s name and address (inter vivos trust)
Insurance agent’s name and address

J. Safe-Deposit Box Inventory:
Did decedent have access to a safe-deposit box? Yes  No 
If so, contact bank and arrange inventory. (Taxing authorities are not
involved in this process in Oregon.)
K. Property Outside Oregon:

Did decedent own any property in any state or county other than that of last
domicile? Yes  No 
Is ancillary probate required/suggested?
Where?
L. Burial Instructions:
Are any writings of the decedent available, including wills and codicils,
containing burial or cremation instructions or other direction as to the
disposition of remains under Uniform Anatomical Gifts Act? Also check
“organ donation” box on Oregon driver license.
M. Funeral and Burial Arrangements:

Does family need assistance in arranging for funeral, burial, and services?
Where held?
N. Burial Allowance and Other Death Benefits:

Has the mortuary undertaken to apply for Social Security or other burial
allowances? ________ If unknown, contact mortuary to coordinate this.
Determine responsibility among lawyers, surviving spouse, and immediate
family to make application for Social Security, veterans, or employee death
benefits.
Responsibility as follows:
O. Perishable Property:
Does the estate consist of any perishable property, pets needing care, etc.?
If arrangements have been made, what are they?
P. Emergencies or Immediate Problems:

Any payments due on installment obligations?
What?
Any other critical dates or action dates?

What?
Q. Check E-mail Accounts:

Determine automatic payments.
Determine passwords.
Identify financial accounts with paperless statements.
R. Need for Special Administrator:

Does an emergency exist with respect to any estate assets (such as
decedent’s business, pending closings, perishable assets, etc.)?
S. Immediate Need for Funds:

Does the surviving spouse or other successor have immediate funds from bank
accounts in which the deceased has an interest?
Any need for spousal support?
Partial distribution?
Set aside the entire estate?
T. Status of Residence:
Are decedent’s residence and contents secure?
Consider arrangements for visiting the residence and arranging for:
______ Stopping or forwarding mail
______ Stopping newspapers
______ Changing locks
______ Safekeeping valuables
______ Lawn care
______ Lighting at night
______ Person to contact for security system
U. Status of Casualty Insurance:

Are the house and all other real or personal property belonging to the estate
adequately insured in the event of fire, theft, loss, or natural disaster?
Is it necessary to change the insured’s name to the name of the person occupying
the house?
V. Status of Automobile:
Is the decedent’s automobile jointly owned?
If no surviving joint tenant, secure automobile and see that keys are in the hands
of an insured person
Determine whether insurance is current and whether it terminated at decedent’s
death
W. Status of Investments:
Any land sale contract installments due?
Asset purchase payments due?
Any options in existence?
Due date or critical option dates:
X. Status of Business:
Did decedent own a business? ______________ If yes, find out name,
address, and phone number of person to contact as to:
Adequacy of provisions to run the business:
Y. Status of Income Tax Returns:

If before April 15, have all prior individual income tax returns been filed?
__________________ If not, consider requesting extension of time to file.
Z. Alteration of Testamentary Plan:

Consider disclaimer.
Has spouse been advised of elective share?

list.
Appendix 3C Probate Checklist
Our File No. ____________

Estate of Taxpayer I.D.
Court County Probate No.
Soc. Sec. No. Date of Death Birth Date
Decedent’s Last Address

Name of Spouse Soc. Sec. No.
Personal Representative Title
Address
Tax-Exempt No. Date of Appointment Bond Required
PREAPPOINTMENT
Conflicts check
Obtain custody of will, all codicils, and existing trust agreements
Review instructions re: funeral, burial, and anatomical gifts
Preliminary determination of value of assets and solvency of estate
Obtain names, addresses, ages, and Social Security numbers of
heirs and devisees
Protect decedent’s property
Determine whether probate is necessary. Consider small estates
affidavit, indemnity agreement, bond, title insurance risk premium,
and community character of assets (ORS 112.705– 112.775)
Consider new will for surviving spouse
Engagement letter and fee arrangement
Due Date of
Date Filing of APPOINTMENT
Other
Action
Consider disclaimer
Special administrator if needed
Venue (ORS 113.015)
Petition for probate or administration
Renunciation of compensation provided by will
If no known heirs, mail copy of petition to Department of
State Lands
Affidavits of subscribing witnesses
Limited judgment admitting will and appointing personal
representative
Bond or order freezing assets
Letters testamentary or administration issued
File designation of lawyer
NOTICE
Deliver or mail information to devisees, heirs, and other
interested persons
Affidavit of delivery of mailing
Publication of notice: First pub.
Affidavit of publication
Mail notice of fiduciary relationship
Four months after date of first pub.
Make diligent search for claimants
Notice to claimants
Make and file affidavit of compliance (ORS 115.003(4))
MISCELLANEOUS
Open estate bank accounts as appropriate
Obtain consents to collect insurance proceeds and 712
forms
Transfer securities to street name or name of personal
representative
Explanatory letter to distributees with request for Social
Security number
Investigate V.A., Soc. Sec., and pension benefits
Obtain certified copy of death certificate
Search letter to banks
Obtain date and place of decedent’s marriage and divorce
and date domicile established
Apply for taxpayer identification number
Apply for Social Security number for decedent (Rev Rul
64-113, 1964-1 CB 483)
Widow’s property tax exemption (ORS 307.250)
Waiver of compensation (within 6 months from date of
appointment)
Insurance: First ______ Other ______
Estimate cash requirements
Select fiscal year
Is principal and income accounting required?
Consider IRC §303 redemption
Optional adjustment to basis of partnership property (IRC
§754)
INVENTORY
Discovery (ORS 114.425)
Employ appraisers if necessary
File inventory
Pay appraiser’s compensation
SUPPORT OF SPOUSE AND CHILDREN
Petition for support or to set apart and close estate
Service on personal representative
Answer of personal representative
Notice to interested parties
Proof of notice
Order for temporary support
Order for support
General judgment setting apart whole estate and closing
estate
CLAIMS
Allowance of disallowance
Notice and filing of disallowed claims
Notify claimant to commence separate action
SALE OF PROPERTY
Petition for sale (if required)
Notice of interested parties
Proof of service
Order authorizing sale
Increase bond if necessary
OREGON ESTATE TAX
Return due
Determine domicile
Check whether return is due in another state Consider
Oregon QTIP or OSMP Election
Consider disclaimer
Extension of time to pay (ORS 118.225)
Determine proper apportionment
Consider request for Oregon estate tax release
ESTATE AND GST TAX
Due date
Determine domicile
Consider disclaimer
IRC §2032A election
QTIP election
Election re: administration expenses
Extension of time to pay (IRC §§6161, 6166)
Extension of time to file (IRC §6081)
Request prompt audit
Determine proper apportionment
Closing letter
Apply for discharge of executor from personal liability
(IRC §2204)
INCOME TAX
Amend quarterly estimated tax payments by surviving
spouse
Consider E bond interest election (IRC §454)
Decedent’s final U.S. and Oregon returns
First fiduciary returns
Apply for and file certificate of release
Request prompt assessment of U.S. returns (IRC
§6501(d))
File final returns
PARTIAL DISTRIBUTION
Petition for partial distribution and notice if required
Order authorizing
Petition for return of property
Notice to interested parties
Proof of notice
Order to return property
ACCOUNTING AND DISTRIBUTION
First annual account
Verified statement in lieu of final account
Allocation of income
Final account and application for compensation
Consider distribution to conservator or custodian (ORS
126.822)
Consider consent of distributees
Notice of time for filing objections to heirs or devisees
and to known unpaid creditors
Proof of mailing notice
Date set for hearing objections
Decree of final distribution
Check interest on pecuniary devises (ORS 116.143)
CLOSING
Pay expenses and distribute assets
Supplemental account if needed
Furnish basis of all property to recipients
Receipts
Supplemental judgment of discharge
Record copies of decree and discharge in other counties
Notice of termination of fiduciary relationship filed
Vouchers retrieved
COMMENT: See §3.6-6(b).

list.
PRACTICE TIP: Another probate checklist is available on the website of the
OSB’s Professional Liability Fund. See www.osbplf.org/practice-
management/forms.html (view under the “probate” category).
Chapter 4: INTESTATE SUCCESSION, WILLS, AND COMMUNITY
PROPERTY
MELINDA LEAVER ROY, B.A., Wheaton College (1989); J.D., University of Florida (1993);
member of the Oregon State Bar since 1994; attorney, Churchill Leonard Lawyers,
Salem.
The author wishes to acknowledge and thank the many persons who assisted with the preparation
of this chapter, including the former author of this chapter, James T. Kulla, and the author’s law
clerk, Emilee A. Provost.
ERIC J. WIELAND, B.B.A., University of Portland (2000); M.A.T., University of Portland
(2002); J.D., University of Missouri School of Law (2005); LL.M., University of
Washington School of Law (2006); admitted to the Missouri Bar in 2005 and the Oregon
State Bar in 2006; partner, Samuels Yoelin Kantor LLP, Portland.
§ 4.1 INTESTATE SUCCESSION

§ 4.1-1 Property Passing by Intestate Succession
Any part of the “net estate” of a decedent not effectively disposed of by
will passes by intestate succession, as provided in ORS 112.025–112.055. ORS
112.015. The term net estate is defined in ORS 111.005(23) as “the real and
personal property of a decedent, except property used for the support of the
surviving spouse and children and for the payment of expenses of administration,
funeral expenses, claims and taxes.” The portion of a decedent’s net estate that is
subject to intestate succession is referred to as the net intestate estate. ORS
112.015; see ORS 111.005(24).
If a decedent dies intestate as to all or any of his or her property, the
inclusion of a disinheritance clause in the decedent’s will does not operate to
prevent the distribution of the decedent’s net intestate estate to the decedent’s
intestate heirs. In McClain v. Hardy, 184 Or App 448, 450, 56 P3d 501 (2002),
the decedent specifically provided in her will that, with the exception of a few
items of personal property, nothing was to be distributed to her daughter. Instead,
the will provided that the decedent’s net estate was to be distributed to the
decedent’s husband, who had predeceased the decedent. The Oregon Court of
Appeals held that the disinheritance clause in the decedent’s will did not operate
to prevent the decedent’s daughter from taking the decedent’s net estate pursuant
to the intestate succession rules of ORS 112.025–112.055. McClain, 184 Or App
at 454.
NOTE: The general rules of intestate succession do not apply in the
situations covered by the following statutes:
(1) ORS 112.047 provides for the forfeiture of a parent’s share of
property passing by intestate succession if the parent “willfully deserted” the
decedent child or neglected the child “without just and sufficient cause to
provide proper care and maintenance,” ORS 112.047(1)–(2) (see §4.1-2(c));
and
(2) ORS 112.465 prohibits a “slayer” or an “abuser” of a decedent
from inheriting from the decedent (see §4.1-3(g)).
The 2015 Legislature added the following provision to ORS 112.015:
A decedent by will may expressly exclude or limit the right of an individual or
class to succeed to property of the decedent passing by intestate succession. If that
individual or a member of that class survives the decedent, the share of the
decedent’s intestate estate to which that individual or class would have succeeded
passes as if that individual or each member of that class had disclaimed that
individual’s or member’s intestate share.
ORS 112.015(2).
§ 4.1-2 Rules of Intestate Succession
§ 4.1-2(a) Surviving Spouse
§ 4.1-2(a)(1) Surviving Spouse Defined
The 1993, 1995, and 1999 Legislatures all passed legislation concerning
the definition of the term spouse for purposes of intestate succession.
The 1993 Legislature defined the term spouse as the person who was
legally married to the decedent at the time of the decedent’s death or, if the
decedent was not legally married at the time of his or her death, any person with
whom the decedent lived for at least 10 years, if that person and the decedent
represented themselves and conducted their affairs as husband and wife. Former
ORS 112.017(2).
The 1993 Legislature’s definition of spouse applied only to decedents who
died on or after September 15, 1992. Additionally, if a decedent died before
November 4, 1993, this definition of spouse did not apply if estate proceedings
were commenced and an order of final distribution was entered pursuant to ORS
116.113 before November 4, 1993. 1993 Or Laws ch 598, §5.
The 1995 Legislature repealed subsection (2) of former ORS 112.017,
which defined the term spouse to include any person with whom the decedent
lived for at least 10 years as husband and wife. In its place, the legislature enacted
a provision that defined the term spouse to mean any person with whom the
decedent cohabited for a period of at least 10 years if:
(1) The period of cohabitation ended not earlier than two years before
the decedent’s death;
(2) Both the decedent and the person were capable of entering into a
valid contract of marriage under ORS chapter 106;
(3) During the 10-year period of cohabitation, the decedent and the
person mutually assumed marital rights, duties, and obligations;
(4) During the 10-year period of cohabitation, the decedent and the
person held themselves out as husband and wife and acquired a uniform and
general reputation as husband and wife;
(5) During at least the last two years of the 10-year period of
cohabitation, the decedent and the person were domiciled in Oregon; and
(6) Neither the decedent nor the person was legally married to another
person at the time of the decedent’s death. Former ORS 112.017(2).
The 1995 amendments to former ORS 112.017(2) applied to the estates of
all decedents who died on or after September 9, 1995. Regarding the estates of
decedents who died before September 9, 1995, and on or after September 15,
1992, the 1993 Legislature’s version of ORS 112.017(2) was applied unless the
decedent died before November 4, 1993, and estate proceedings were commenced
and an order of final distribution was entered before November 4, 1993. 1995 Or
Laws ch 235, §2.
The 1999 Legislature repealed ORS 112.017. The repeal of former ORS
112.017 applies to the estates of all decedents who die on or after January 1,
2000.
CAVEAT: Even though Oregon no longer recognizes the rights of a so-
called common-law spouse for purposes of intestate succession, a person
who is a common-law spouse under the laws of another state may constitute
a “spouse” for purposes of ORS 112.025–112.045. In addition, pursuant to
ORS 106.340(1), a surviving “domestic partner” (as defined by ORS
106.310) will have the same intestate inheritance rights as a surviving
spouse.
§ 4.1-2(a)(2) Surviving Spouse’s Share, with No Issue Surviving
If there is no surviving issue, ORS 112.035 leaves all of the net intestate
estate of the decedent to the surviving spouse.
NOTE: This diagram and the diagrams in the following sections indicate what
part of the intestate estate each heir takes. Heirs with an X through their name are
deceased.

Surviving Spouse’s Share, if Decedent Leaves No Descendant (new title)
Many of the statutes in ORS chapter 112, including ORS 112.035, now refer
to “descendants” rather than “issue.”
ORS 111.005(9) defines the term descendant as “a person who is descended
from a specific ancestor and includes an adopted child and the adopted child’s
descendants.” ORS 111.005(9)(a). The statute further provides that “[w]hen used
to refer to persons who take by intestate succession, ‘descendant’ does not include
a person who is the descendant of a living descendant.” ORS 111.005(9)(b).
The term issue is no longer the preferred term under Oregon law and,
instead, the term descendant or descendants is used in its place. The term issue is
defined as “a descendant or descendants.” ORS 111.005(22).
§ 4.1-2(a)(3) Surviving Spouse’s Share, with Issue Surviving
If the decedent leaves a surviving spouse and issue, and if all of the
decedent’s surviving issue are also issue of the surviving spouse, the surviving
spouse inherits the entire net intestate estate. ORS 112.025(1).
If the decedent leaves a surviving spouse and issue, and if one or more of
the surviving issue are not the issue of the surviving spouse, the surviving spouse
inherits one-half of the net intestate estate. ORS 112.025(2).
Surviving Spouse’s Share, if Decedent Leaves Descendants (new title)
ORS 112.025 now refers to “descendants” rather than “issue.” See Supp
§ 4.1-2(a)(2) (descendant defined).
§ 4.1-2(b) Issue’s Share
§ 4.1-2(b)(1) Issue’s Share, with Spouse Surviving
If the decedent’s spouse survives and all of the decedent’s issue are also
issue of the surviving spouse, the issue take no part of the net intestate estate.
ORS 112.025(1).
If the decedent’s spouse survives, and if one or more of the decedent’s
surviving issue are not issue of the surviving spouse, then all of the decedent’s
issue take one-half of the net intestate estate. ORS 112.025(2).
Descendant’s Share, with Spouse Surviving (new title)
§ 4.1-2(b)(2) Issue’s Share, with No Spouse Surviving
If a spouse does not survive the decedent, the decedent’s issue take all of
the net intestate estate. ORS 112.045(1).
Surviving Issue; No Surviving Spouse

Descendant’s Share, with No Spouse Surviving (new title)
§ 4.1-2(b)(3) Distribution Method to Issue
If the decedent’s issue “are all of the same degree of kinship to the
decedent,” they take equally. But if the issue are of unequal degree, the issue of
more remote degree take by representation. ORS 112.045(1). See diagram in
§4.1-2(b)(2).
Taking by representation is explained in ORS 112.065 as follows:
“Representation” means the method of determining the passing of the net
intestate estate when the distributees are of unequal degrees of kinship to the
decedent. It is accomplished as follows: The estate shall be divided into as many
shares as there are surviving heirs of the nearest degree of kinship and deceased
persons of the same degree who left issue who survive the decedent, each
surviving heir of the nearest degree receiving one share and the share of each
deceased person of the same degree being divided among the issue of the
deceased person in the same manner.
This calculation is similar to, but slightly different than, per stirpes
distribution, which divides the estate at every degree of kinship, regardless of
whether any persons survive at that level.
Distribution Method to Descendants (new title)
ORS 112.045(1) now provides that the decedent’s descendants take by
representation as described in ORS 112.065. ORS 112.065 now provides as
follows:
“Representation” means the method of determining the passing of the net
intestate estate when the distributees are of different generations in relation to the
decedent. Representation is accomplished as follows:
(1) If a distributive share of a wholly or partially intestate estate passes
by representation to a person’s descendants, the share is divided into as many
equal shares as there are:
(a) Surviving descendants in the generation nearest to the person that
contains one or more surviving descendants; and
(b) Deceased descendants, in the generation nearest to the person that
contains one or more surviving descendants, who left surviving descendants, if
any.
(2) Each share created for a surviving descendant in the nearest
generation is distributed to that descendant. Each share created for a deceased
descendant is distributed to the descendants of the deceased descendant by
representation as described in this section.
§ 4.1-2(c) Parent’s Share
If there is no surviving spouse and no surviving issue, the decedent’s
surviving parent or parents take the net intestate estate. ORS 112.045(2).
No Spouse; No Issue; Two Parents Surviving
No Spouse; No Issue; One Parent Surviving
The 2005 Legislature enacted a statute that provides for the forfeiture of a
parent’s share of property passing by intestate succession, if the parent “willfully
deserted” the decedent child or neglected the child “without just and sufficient
cause to provide proper care and maintenance.” ORS 112.047(1)–(2).
If the decedent was an adult when he or she died, the statute applies if the
parent willfully deserted or neglected the decedent “for the 10-year period
immediately preceding the date on which the decedent became an adult.” ORS
112.047(1).
If the decedent was a minor when he or she died, the statute applies if the
parent willfully deserted or neglected the decedent child for the life of the
decedent or “for the 10-year period immediately preceding the date on which the
decedent died.” ORS 112.047(2).
If the statute applies, property that would pass by intestate succession
under ORS 112.045 from the estate of a decedent to a parent of the decedent
“shall pass and be vested as if the parent had predeceased the decedent.” ORS
112.047(1)–(2).
For purposes of subsections (1) and (2) of ORS 112.047, the court “may
disregard incidental visitations, communications and contributions in determining
whether a parent willfully deserted the decedent or neglected without just and
sufficient cause to provide proper care and maintenance for the decedent.” ORS
112.047(3). Furthermore, in determining the requisite desertion or neglect, the
court “may consider whether a custodial parent or other custodian attempted,
without good cause, to prevent or to impede contact between the decedent and the
parent whose intestate share would be forfeited” under the statute. ORS
112.047(4).
The intestate share of a parent of a decedent may be forfeited under the
statute only pursuant to a court order entered after the filing of a petition under
ORS 112.049. A petition to commence probate filed under ORS 113.035 may not
request the forfeiture of the intestate share of a parent of a decedent under the
statute. ORS 112.047(5).
The provisions of subsections (1) and (2) of former ORS 112.047 are now
combined in ORS 112.047(1).
Subsections (3), (4), and (5) of ORS 112.047 were renumbered subsections
(2), (3), and (4) respectively.
§ 4.1-2(d) Parent’s Issue’s Share
If there is no surviving issue, spouse, or parent, the decedent’s estate passes
to the decedent’s brothers and sisters and to the issue of any deceased brother or
sister by right of representation. ORS 112.045(3).
No Surviving Spouse, Issue, or Parent
If there is no surviving brother or sister of the decedent, the issue of

deceased brothers and sisters take equally if all are of the same degree of kinship to
the decedent. But if they are of unequal degree, those of more remote degree take
by representation. ORS 112.045(3).
No Surviving Spouse, Issue, Parent, Brother, or Sister

Parent’s Descendant’s Share (new title)
ORS 112.045(3) was amended in 2015 and 2016. The statute now provides
that “[i]f there is no surviving descendant or parent,” the decedent’s estate passes
“equally to the brothers and sisters of the decedent and by representation as
described in ORS 112.065 to the descendants of any deceased brother or sister of
the decedent.” Furthermore, “[i]f there is no surviving brother or sister, the
descendants of brothers and sisters take equally if they are all of the same
generation in relation to the decedent, but if of different generations, then those of
later generations take by representation as described in ORS 112.065.”
§ 4.1-2(e) Grandparents’ and Their Issue’s Share
Grandparents and issue of deceased grandparents take only if there is no
surviving issue, spouse, parent, brother, sister, or issue of a deceased brother or
sister. It is clear, then, that all issue of the decedent’s parents must be exhausted
before grandparents or their issue take. ORS 112.045(4).
If there is at least one surviving grandparent, the issue of any deceased
grandparent take by representation. ORS 112.045(4). Each surviving paternal and
maternal grandparent takes an undivided one-quarter share of the net intestate
estate. If any grandparent is deceased, his or her issue take by representation the
undivided one-quarter share of the deceased grandparent. Thus, a surviving
paternal grandfather inherits a one-quarter share, and the issue of the paternal
grandfather’s deceased wife inherit another one-quarter share. If both maternal
grandparents are deceased, their issue take by representation the other undivided
one-half share.
If no grandparents survive, the issue of the deceased grandparents, both
maternal and paternal, take equally if they are of the same degree of kinship to
the decedent. If they are of unequal degree of kinship, then the issue of more
remote degree take by representation. ORS 112.045(4). Thus, if all four
grandparents are deceased, leaving two uncles on the paternal side and the
children of a deceased aunt on the maternal side, each surviving uncle inherits an
undivided one-third share of the net intestate estate, and the issue of the deceased
aunt inherit the other one-third share and take it by representation. See the fourth
diagram below.
There is no limitation on inheritance by lineal descendants of the intestate’s
grandparents. ORS 112.045 and 112.055 exclude more remote relatives claiming
through great-grandparents.
If, at the time of taking, surviving grandparents are married to each other,
they take real property as tenants by the entirety and personal property as joint
owners with the right of survivorship. ORS 112.045(5).
Grandparents Survive
Paternal Grandparents Do Not Survive;

Maternal Grandparents Survive
One Grandparent Survives
All Grandparents Deceased

Grandparents’ and Their Descendant’s Share (new title)
ORS 112.045(4) now provides as follows:
(a) If there is no surviving descendant, parent or descendant of a
parent, equally to the grandparents of the decedent and by representation as
described in ORS 112.065 to the descendants of any deceased grandparent of the
decedent who left descendants surviving at the time of the decedent’s death. If
one or more grandparents of the decedent do not survive the decedent, the
descendants of each of the deceased grandparents take equally if they are all of
the same generation in relation to the decedent, but if of different generations,
then those of later generations take by representation as described in ORS
112.065.
(b) If there is no surviving grandparent, the descendants of
grandparents take equally if they are all of the same generation in relation to the
decedent, but if of different generations, then those of later generations take by
representation as described in ORS 112.065.
§ 4.1-2(f) Persons Related Through Two Lines
“A person who is related to the decedent through two lines of relationship
is entitled to only a single share based on the relationship which would entitle the
person to the larger share.” ORS 112.115.
The clear intent of the statute is that only one intestate share may be
inherited. For example, under the provision for inheritance by issue of
grandparents on both the maternal side and the paternal side, the marriage of
cousins might otherwise entitle their issue to inherit from both sets of
grandparents.
Inheritance Through Two Lines of Relationship
NOTE: The fractions in parentheses indicate the share that would have
been received but for the intermarriage of Cousins B and C. The fractions
below each box indicate the share actually received.
The three maternal cousins (Cousins C, D, and E) would have each
received a one-fifteenth share, until the two cousins’ (B and C) marriage joined
the lines and caused the issue of that marriage to share the larger (one-tenth)
portion coming through Cousin B.
Except for the rule stated, the children of the married cousins would have
inherited the one-tenth interest of one parent and the one-fifteenth interest of the
other parent, thus giving them a larger interest than the children of the other
cousins. To carry out the rule, the one-fifteenth interests of Cousins D and E are
increased to include the one-fifteenth interest (originally to go to Cousin C) that
would otherwise be inherited by the children of the cousins’ marriage.
PRACTICE TIP: It is crucial for a person to make a will if he or she
wants to remember a living great-grandparent, a second cousin (a descendant
of the great-grandparents), or others who are not otherwise entitled to inherit
under the laws of intestate succession.
§ 4.1-2(g) Escheat Estates; Missing Persons
The circumstances under which all or any part of an estate will escheat to
the state of Oregon are set forth in ORS 112.055, which was significantly
amended in 2003.
If a devisee is not identified or cannot be found, the share of that devisee
escheats to the state of Oregon. ORS 112.055(2). See §5.2-3.
COMMENT: Presumably, the share of any such devisee will escheat
only if applicable antilapse rules fail to give the property to someone else.
See §4.2-7(h) for a discussion of the antilapse statute.
The statute also provides that if a person entitled to take under ORS
112.025–112.045 (i.e., a person who is an intestate heir) cannot be identified or
found, the intestate heir’s share will escheat to the state of Oregon. Escheat of an
intestate heir’s share can thus occur even if other intestate heirs can be found.
ORS 112.055(2).
PRACTICE TIP: Because the results from the application of this statute
might not conform to the testator’s wishes, the drafter should always
specifically state those wishes in the testator’s will. Resorting to the
statutory presumptions is not a good practice.
The 2003 Legislature also created presumptions regarding missing persons.
ORS 112.058. “After diligent search and inquiry appropriate to the
circumstances” (ORS 112.058(1)(b)), the following presumptions apply in a
proceeding to determine whether a missing person has died:
(1) A missing person whose death cannot be proved by any other means
is presumed to live to 100 years of age, ORS 112.058(1)(b)(A);
(2) A missing person who was exposed to a specific peril when he or she
became missing is presumed deceased if “it is reasonable to expect from the
nature of the peril that proof of death would be impractical,” ORS
112.058(1)(b)(B);
(3) A missing person whose absence is unexplained is presumed
deceased if “the character and habits of the person are inconsistent with a
voluntary absence for the time that the person has been missing,” ORS
112.058(1)(b)(C); and
(4) A missing person known to have been alive who has not been seen or
heard from for seven years is presumed deceased if (a) “the person has been
absent from his or her usual residence,” (b) “the absence is unexplained,” (c)
“there are other persons who would have been likely to have heard from the
missing person during that period were the missing person alive,” and (d) “those
other persons have not heard from the missing person,” ORS 112.058(1)(b)(D).
A missing person who is presumed dead under any of the above
presumptions is also presumed to have had two children in addition to any known
issue, unless the presumption of death arises by reason of the application of
subsection (B) or (C) of ORS 112.058(1)(b) (see presumptions (2) and (3) above).
ORS 112.058(2). These two presumed children have rights as intestate takers and,
if they cannot be found, their share of the estate is subject to escheat.
If a devisee or an intestate heir is not identified or found, the estate
administrator of the Department of State Lands may (1) take custody of the estate
property; (2) incur and recover certain specified expenses on behalf of the estate;
(3) have access to the records of the decedent that are not confidential or
privileged by statute; (4) have access to the property of the decedent; and (5) sell
perishable property of the estate. ORS 113.242(1)–(2). The Department of State
Lands will also have the same preference that the missing devisee or intestate heir
would have had for the purpose of appointment as a personal representative,
contesting a will of the decedent, and receiving information concerning the estate.
ORS 112.055(3).
For further discussion of escheat, see §5.2-3.
ORS 112.055(1) now provides that an estate will escheat to the State of
Oregon “[i]f, after diligent search and inquiry that is appropriate to the
circumstances, taking into account the value of the decedent’s estate,” no person
takes under ORS 112.025 to 112.045.
§ 4.1-3 Rules Governing Heirs
§ 4.1-3(a) Time of Determining Relationship; After-Born Heirs
The relationships existing at the time of the decedent’s death govern the
passing of the net intestate estate. However, a posthumous child (one conceived
before the death of the decedent and born alive thereafter) inherits as though he or
she were alive at the time of the decedent’s death. ORS 112.075. See LaDu v.
Oregon Clinic, P.C., 165 Or App 687, 692, 998 P2d 733 (2000) (“although the
probate code is silent as to the distribution of the estate of a stillborn fetus, it
clearly indicates that a stillborn fetus is incapable of inheriting by intestate
succession”). A posthumous child might be a child of the decedent, or might be
the child of an intestate heir.
The 2015 Legislature repealed ORS 112.075 and enacted ORS 112.077 in its
stead. Like former ORS 112.075, ORS 112.077 provides that a posthumous child
(one conceived before the death of the decedent and born alive thereafter) inherits
as though he or she were alive at the time of the decedent’s death.
Furthermore, ORS 112.077 updates probate law to include provisions
relating to when a child “conceived from the genetic material of a decedent who
died before the transfer of the decedent’s genetic material into a person’s body” is
entitled to an interest in the decedent’s estate. ORS 112.077(4). See Supp § 4.2-
7(j)(after-born and after-adopted children: pretermitted children).
§ 4.1-3(b) Uniform Simultaneous Death Act
When the disposition of property depends on whether a specified person
survives the death of another person, Oregon’s Uniform Simultaneous Death Act
(USDA), ORS 112.570–112.590, creates a presumption that the specified person
died before the other person. ORS 112.572. This presumption may, however, be
rebutted, and is subject to certain exceptions. ORS 112.572, 112.586.
NOTE: The 1999 Legislature amended Oregon’s USDA by repealing
former ORS 112.575–112.645 and replacing those statutes with ORS
112.570–112.590.
The presumption under the USDA may be rebutted if “it is established by
clear and convincing evidence that the specified person survived the other person
by at least 120 hours.” ORS 112.572. In the absence of contradicting evidence,
the time of death set forth in a certified or authenticated death certificate or
government agency report constitutes conclusive proof of the time of death. ORS
112.582(2)(a), (5).
A person whose death is not otherwise established under ORS 112.582, but
who has been absent for a continuous period of five years, is presumed to be
deceased if the person made no contact with another person during that five-year
period, and the person’s absence “cannot be satisfactorily explained after diligent
search or inquiry.” ORS 112.582(4). A person presumed deceased under ORS
112.582(4) is presumed to have died at the end of the five-year period unless “it
is proved by a preponderance of the evidence that death occurred at a different
time.” ORS 112.582(4).
Except as provided in ORS 112.586, ORS 112.580 describes the devolution
of property held by two or more co-owners:
(1) If two co-owners hold property with right of survivorship (e.g., as
joint tenants or tenants by the entirety, see ORS 112.570(1)) and both co-owners
die, half of the property passes as if one co-owner had survived the second co-
owner by 120 hours or more, and half of the property passes as if the second co-
owner had survived the first co-owner by 120 hours or more, “unless it is
established by clear and convincing evidence that one of two co-owners survived
the other co-owner by at least 120 hours” (in which event the survivorship
property passes to the heirs or devisees of the co-owner who survived the other
by at least 120 hours), ORS 112.580(1); and
(2) If more than two co-owners hold the property and “it is not
established by clear and convincing evidence that at least one of the co-owners
survived the others by at least 120 hours, the property passes in the proportion
that one bears to the whole number of co-owners,” ORS 112.580(2).
However, the survivorship rules of ORS 112.570–112.590 do not apply if:
(1) A “governing instrument” contains a simultaneous-death clause or
expressly provides that a person is required or not required to survive the death of
another person, ORS 112.586(2)–(4); or
(2) Application of the statute would result in (a) the escheat of an intestate
estate, (b) the possible invalidity of an interest under the rule against perpetuities,
or (c) there are multiple governing instruments and the application of the
survivorship rules “would result in an unintended failure or duplication of a
disposition,” ORS 112.586(1), (5)–(6).
NOTE: The term governing instrument means (1) a deed: (2) a will; (3)
a transfer on death deed under ORS 93.948–93.979 (see §1.5-9); (4) a trust;
(5) an insurance or annuity policy with a payable-on-death designation; (6) a
pension, profit-sharing, retirement, or similar benefit plan; (7) an instrument
creating or exercising a power of appointment or a power of attorney; or (8)
any other similar instrument. ORS 112.570(2).
Unless a payor or other third party has received written notice of a claim
under ORS 112.588(2), “the payor or other third party is not liable for making a
payment to, transferring property to, or conferring any other benefit on a person
who appears to be entitled to the payment, property or benefit under a good faith
reading of a governing instrument.” ORS 112.588(1). However, the third party is
liable for a payment, transfer, or other benefit conveyed after receiving such a
notice. ORS 112.588(1).
ORS 112.588(2) establishes procedures for providing a payor or other third
party with written notice of a claim that a person is not entitled to receive
payment, property, or other benefit by reason of the survivorship rules set forth in
ORS 112.570–112.590. On receipt of such notice, the payor or other third party
may deposit the disputed money or property with any court conducting probate
proceedings for one of the decedents’ estates or, if probate proceedings have not
been commenced, with the probate court in the county in which one of the
decedents resided. ORS 112.588(3).
If a person who has no notice of a claim under ORS 112.588 purchases
property for value or receives payment, property, or other benefit in full or partial
satisfaction of a legally enforceable obligation, the person is not liable to another
person with a claim to the payment, property, or benefit by reason of the operation
of the survivorship rules set forth in ORS 112.570–112.590. ORS 112.590(1). Such
a person need not return the payment, property, or other benefit. ORS 112.590(1).
A person who receives payment, property, or other benefit to which the
person is not entitled by reason of the survivorship rules must return the payment,
property, or other benefit if:
(1) The person was aware of a claim to the payment, property, or other
benefit under the survivorship rules at the time the purchase, payment, or delivery
was made; or
(2) The person received the payment, property, or other benefit “for no
value.”
ORS 112.590(2).
A person who receives any payment, property or other benefit to which
the person is not entitled because any part of ORS 112.570 to 112.590 is
preempted by federal law must return the payment, property or other benefit if the
person received the payment, property or other benefit for no value.
ORS 112.590(3).
Any person who is required to, but who fails to, return any payment,
property, or other benefit under ORS 112.590 is personally liable to a person with
a right to the property under the survivorship rules established under ORS
112.570–112.590, or with a right to the property by reason of federal preemption
of all or part of the survivorship rules. ORS 112.590(4).
§ 4.1-3(c) Persons of the Half-Blood
“Persons of the half blood inherit the same share that they would inherit if
they were of the whole blood.” ORS 112.095.
§ 4.1-3(d) Adopted Persons
The law relating to the status of adopted persons provides that inheritance
rights are derived from the adoptive parents, rather than from the natural parents.
These inheritance rights are set forth explicitly in ORS 112.175–112.195.
NOTE: The statutes treat an adopted person as “the natural child of the
adoptive parents” and apply “for all purposes of intestate succession.” ORS
112.175(1)–(2). The phrase all purposes of intestate succession is statutorily
defined as “succession by, through or from a person, both lineal and
collateral.” ORS 111.005(5). This wording gives the adopted person a status
for purposes of inheritance from adoptive relatives, and gives the adoptive
relatives a status for purposes of inheritance from the adopted person. It also
gives any children of the adopted person the right to inherit from the
adoptive relatives.
The statute denies rights of intestate succession from and by the natural
relatives of an adopted child, except as follows:
(1) If a natural parent of a child marries or remarries and the child is
adopted by the stepparent, the child will “continue also to be treated, for all
purposes of intestate succession, as the child of the natural parent who is the
spouse of the adoptive parent,” ORS 112.175(2)(a); and
(2) If a natural parent of a child dies, the other natural parent remarries,
and the child is adopted by the stepparent, the child will “continue also to be
treated, for all purposes of intestate succession by any person through the
deceased natural parent, as the child of the deceased natural parent,” ORS
112.175(2)(b).
The entire Oregon probate code applies to adopted persons who are
adopted in this state or elsewhere. ORS 112.175(3).
A child adopted more than once is treated as the child of the parents who
most recently adopted the child; the child ceases to be treated as the child of his
or her previous adoptive parents, except that the adopted child continues to be
treated as the child of his or her natural parent or previous adoptive parent in the
situations described in ORS 112.175(2), discussed above. ORS 112.185.
Unless a contrary intent is expressed in the instrument, all references in a
will or other instrument to a person or member of a class described generically in
relation to a particular person as children, issue, descendants, heirs, or other
relatives include any person who “would be treated as so related for all purposes of
intestate succession.” ORS 112.195. However, an adopted person so included must
have been adopted as a minor or must have been adopted after having been a
member of the household of the adoptive parent while a minor. ORS 112.195.
ORS 111.015(1) provides that a will is construed based on the law in effect
on the date of execution, unless the will expresses a contrary intent. Before 1947,
adopted persons did not inherit in Oregon. See 1947 Or Laws ch 562.
The 2015 and 2016 Legislatures changed the terminology used in the
statutes relating to the inheritance rights of adopted persons, but did not alter the
substance of those statutes. For example, the statutes now refer to treating an
adopted child as the “biological child” of the adoptive parents (rather the “natural”
child of them) “for all purposes of intestate succession,” except in certain described
circumstances.
Although ORS 111.005 no longer includes a definition for the phrase all
purposes of intestate succession, the statute now includes a definition of the term
descendant, which means “a person who is descended from a specific ancestor and
includes an adopted child and the adopted child’s descendants.”
ORS 112.175(1) now provides as follows:
An adopted person, the descendants and kindred of the adopted person
shall take by intestate succession from the adoptive parents, their descendants and
kindred, and the adoptive parents, their descendants and kindred shall take by
intestate succession from the adopted person, the descendants and kindred of the
adopted person, as though the adopted person were the biological child of the
adoptive parents.
An adopted person “cease[s] to be treated as the child of any person other
than the adopted person’s adoptive parents for all purposes of intestate succession
except in the following circumstances”:
(a) If a person is adopted by a stepparent or a domestic partner of a
parent in a domestic partnership registered under ORS 106.300 to 106.340 or
under a similar law in another state, the adopted person shall continue also to be
treated, for all purposes of intestate succession, as the child of the parent who is
the spouse of, or other domestic partner in the domestic partnership with, the
adoptive parent.
(b) If a parent of a person dies, and the other parent of the person
marries or enters into a domestic partnership registered under ORS 106.300 to
106.340 or under a similar law in another state, and the person is adopted by a
stepparent or the other domestic partner, the adopted person shall continue also to
be treated, for all purposes of intestate succession, as the child of the deceased
parent.
ORS 112.175(2).
§ 4.1-3(e) Succession When Parents Not Married
Pursuant to ORS 112.105, the right of inheritance extends to and from
children born out of wedlock, as described in ORS 109.060, which gives such
children the same legal status as those born in wedlock.
For purposes of intestate succession, before the relationship of father and
child and other relationships dependent on the establishment of paternity can be
given effect under ORS 112.105(1):
(1) The paternity of the child must have been established under ORS
109.070 during the lifetime of the child, ORS 112.105(2)(a); or
(2) The father must have acknowledged himself to be the father, in
writing, signed by him during the lifetime of the child, ORS 112.105(2)(b).
Thus, if paternity of the child is to be established under ORS 109.070, it
must be established during the lifetime of the child and not afterwards.
The 2017 Legislature amended ORS 112.105 to replace the term husband
with the term spouse and to replace the term paternity with the term parentage.
Thus, for purposes of establishing “parentage,” the statute now extends to same-
sex spouses of birth mothers.
For purposes of intestate succession, “before the relationship of parent and
child and other relationships dependent upon the establishment of parentage” will
be given effect under ORS 109.060(1), (1) the child’s parentage must have been
established under ORS 109.065 during the child’s lifetime; and (2) the parent
“must have acknowledged being the parent of the child in writing, signed by the
parent during the lifetime of the child.” ORS 112.105(2).
The 2017 Legislature enacted ORS 109.065 regarding establishing
parentage:
(1) Parentage may be established between a person and a child by:
(a) The person having given birth to the child;
(b) An unrebutted presumption of parentage under ORS 109.070;
(c) An adjudication of the person’s maternity or paternity;
(d) Adoption of the child by the person;
(e) An effective acknowledgement of paternity by the man under ORS
109.070 or pursuant to the laws of another state, unless the acknowledgement has
been rescinded or successfully challenged;
(f) Establishment of paternity by an administrative order issued
pursuant to ORS chapter 416;
(g) Filiation proceedings; or
(h) Parentage being established or declared by another provision of
law.
(2) A person is the mother of a child to whom the person gives birth.
§ 4.1-3(f) Advancements
If a person dies intestate as to all of his or her estate, a lifetime transfer by
the decedent to an heir is treated as an advancement against the heir’s share of the
estate, if (1) the decedent declared, in writing, that the transfer was an
advancement, or (2) the heir acknowledged, in writing, that the transfer was an
advancement. ORS 112.135. See §8.1-3.
The property advanced is to be valued as of (1) the time the heir “came into
possession or enjoyment of the property,” or (2) the date of the decedent’s death,
whichever occurs first. ORS 112.135.
If the value of the advancement exceeds the value of the heir’s share of the
estate, the heir is not required to refund the difference to the estate. ORS
112.145(1).
If the value of the advancement is less than the value of the heir’s share of
the estate, the heir is entitled to receive “such additional amount as will give the
heir the heir’s share of the estate.” ORS 112.145(1).
If the recipient of the property advanced fails to survive the decedent, the
amount of the advancement is “taken into account in computing the share of the
issue of the recipient, whether or not the issue take by representation.” ORS
112.155.
The 2016 Legislature added new provisions to ORS 112.135 regarding
advancements. The statue now applies if a person dies intestate as to all or part of
his or her estate. ORS 112.135(1).
If a person dies intestate as to all or part of his or her estate, a lifetime
transfer by the decedent to an heir is treated as an advancement against the heir’s
share of the estate, if (1) the decedent declared, in writing, that the transfer was an
advancement; or (2) the heir acknowledged, in writing, that the transfer was an
advancement. ORS 112.135(1)(a).
The property advanced is to be valued as of the time the heir “came into
possession or enjoyment of the property,” or the date of the decedent’s death,
whichever occurs first, “unless otherwise directed in the decedent’s writing.” ORS
112.135(1)(b).
Except as provided in ORS 112.385 (nonademption of specific devises),
property that a testator gives during his or her lifetime to a devisee “is treated as an
advancement of the devisee’s share in whole or in part” if
(1) “[t]he will provides for deduction of the gift”;
(2) “[t]he testator declared in writing that the gift is in satisfaction of the
devise or that its value is to be deducted from the value of the devise”; or
(3) “[t]he devisee acknowledges in writing, before or after the testator’s
death, that the gift was made in satisfaction of the devise or that its value was to be
deducted from the value of the devise.”
ORS 112.135(2)(a).
For purposes of applying the gift against the devisee’s share of the testate
estate, “the property advanced must be valued as of the time the devisee came into
possession or enjoyment of the property or as of the time of the testator’s death,
whichever occurs first, unless otherwise directed in the testator’s will or a writing
described in [ORS 112.135(2)(a)(B)].” ORS 112.135(2)(b).
“Property not subject to probate administration, the transfer of which is
intended by the decedent to take effect on death,” is treated as “an advancement
against the heir’s share of the estate or the devisee’s devise under the will if
declared in writing by the decedent, or acknowledged in writing by the heir or
devisee, to be an advancement.” ORS 112.135(3)(a). Examples of such transfers
“include but are not limited to beneficiary designation, right of survivorship and
transfer on death deed or transfer on death designation.” ORS 112.135(3)(a). The
property transferred under this provision “must be valued as of the time of the
decedent’s death, unless otherwise directed in the testator’s will or in a writing by
the decedent.” ORS 112.135(3)(b).
If the value of the advancement exceeds the value of the heir’s or devisee’s
share of the estate, the heir or devisee is not required to refund the difference to the
estate. ORS 112.145(1).
If the value of the advancement is less than the value of the heir’s or
devisee’s share of the estate, the heir or devisee is entitled to receive “such
additional amount as will give the heir or devisee the heir’s or devisee’s share of
the estate.” ORS 112.145(1).
descendants of the recipient, whether or not the descendants take by
representation.” ORS 112.155.
Although the property advanced is not a part of the estate, the advancement
is added to the value of the estate “for the purpose of determining the shares of the
heirs or devisees.” ORS 112.145(2). That sum is then “divided among the heirs or
devisees according to the laws of intestate succession or the testator’s will and the
advancement then deducted from the share of the heir or devisee to whom the
advancement was made.” ORS 112.145(2).
descendants of the recipient, whether or not the descendants take by
representation.” ORS 112.155.
§ 4.1-3(g) Effect of Homicide or Abuse on Inheritance
ORS 112.465 prohibits a “slayer” or an “abuser” of a decedent from
inheriting from the decedent as follows:
(1) Property that would have passed by reason of the death of a
decedent to a person who was a slayer or an abuser of the decedent, whether by
intestate succession, by will, by transfer on death deed or by trust, passes and
vests as if the slayer or abuser had predeceased the decedent.
(2) Property that would have passed by reason of the death of an heir
or devisee of a decedent to a person who was the slayer or abuser of the decedent,
whether by intestate succession, by will, by transfer on death deed or by trust,
passes and vests as if the slayer or abuser had predeceased the decedent unless the
heir or devisee specifically provides otherwise in a will or other instrument
executed after the death of the decedent.
NOTE: The 2011 Legislature amended subsections (1) and (2) of ORS
112.465 to prohibit slayers and abusers from inheriting by a transfer on
death deed. 2011 Or Laws ch 212, §26. For further discussion of transfer on
death deeds, see §1.5-9.
For purposes of ORS 112.455–112.555, a slayer is “a person who, with
felonious intent, takes or procures the taking of the life of a decedent.” ORS
112.455(3). “A final judgment of conviction of felonious and intentional killing is
conclusive for purposes of ORS 112.455 to 112.555.” ORS 112.555. Without
such a conviction, the probate court may determine by a preponderance of the
evidence whether a killing was felonious and intentional for purposes of ORS
112.455–112.555. ORS 112.555. See §§8.1-4(a) to 8.1-4(c).
ORS 112.455–112.555 apply to an abuser “only if the decedent dies within
five years after the abuser is convicted of a felony by reason of conduct that
constitutes physical abuse of the decedent, as described in ORS 124.105, or
financial abuse of the decedent, as described in ORS 124.110.” ORS 112.457; see
ORS 112.455(1), (2)(b).
Although neither a slayer nor an abuser may receive his or her intestate
share from the person who was slain or abused, the slayer or abuser’s issue, or
other persons taking through the slayer or abuser, take that share as if the slayer
or abuser had predeceased the decedent.
The 2015 Legislature made a couple of relatively minor changes to
subsection (1) of ORS 112.465, which now provides as follows:
Property that would have passed by reason of the death of a decedent to a
person who was a slayer or an abuser of the decedent, whether by intestate
succession, by will, by transfer on death deed, by trust, or otherwise, passes on
death and vests as if the slayer or abuser had predeceased the decedent.
ORS 112.465(1) (new language italicized).
The 2015 Legislature also added a clause to the first sentence of ORS
112.555: “After any right to appeal has been exhausted, a final judgment of
conviction of felonious and intentional killing is conclusive for purposes of ORS
112.455 to 112.555.” ORS 112.555 (new language italicized).
§ 4.2 WILLS
§ 4.2-1 Who May Make a Will
Any person who is 18 years of age or older or who has been lawfully
married, and who is of sound mind, may make a will. ORS 112.225.
Marriage is “a civil contract entered into in person by males at least 17
years of age and females at least 17 years of age, who are otherwise capable, and
solemnized in accordance with ORS 106.150.” ORS 106.010.
As required by ORS 112.225, a person must be of sound mind to make a
will. The requirements for testamentary capacity are well settled and have been
stated by the Oregon Court of Appeals in Golden v. Stephan, 5 Or App 547, 550,
485 P2d 1108 (1971), as follows:
(1) The person must be able to understand the nature of the act in which
the person is engaged, that is, the execution of a will;
(2) The person must know the nature and extent of his or her property;
(3) The person must know, without prompting, the claims, if any, of
those who are, should be, or might be the natural objects of the person’s bounty;
and
(4) The person must be cognizant of the scope and reach of the
provisions of the document.
Whether a testator has testamentary capacity is determined at the precise
moment that he or she executes a will. See, e.g., Perry v. Adams, 112 Or App 77,
81, 827 P2d 930 (1992); Matter of Unger’s Estate, 47 Or App 951, 955, 615 P2d
1115 (1980).
A will is not executed until all of the requirements of ORS 112.235, which
are discussed in §4.2-3(a), have been satisfied. Perry, 112 Or App at 81. In other
words, a will is not executed when the testator signs the will unless that act is
done in the presence of witnesses, and the witnesses then sign the will before the
testator loses testamentary capacity. Perry, 112 Or App at 81–82.
“The testimony of subscribing witnesses, aided by the presumption of
competency which accompanies a will that has been duly executed, carries great
weight in the determination of [a] decedent’s testamentary capacity.” Matter of
Unger’s Estate, 47 Or App at 955; see also Bigej v. Boyer, 108 Or App 663, 669,
817 P2d 760 (1991).
PRACTICE TIP: In light of the above rule, the lawyer should take care
in choosing subscribing witnesses when the capacity of the testator might be
questioned later. In Bigej, 108 Or App at 669, the Oregon Court of Appeals
discounted the testimony of the subscribing witness (the lawyer who drafted
the will), because he had only minimal contact with the testator and was not
familiar with her mental or medical condition. Similarly, in Matter of
Unger’s Estate, 47 Or App at 955–958, the Oregon Court of Appeals
discounted the testimony of the subscribing witnesses (the lawyer who
drafted the will and his secretary), and relied on the testimony of medical
experts who had extended contact with the testator before and after she
signed the will.
PRACTICE TIP: When questions exist regarding a person’s
testamentary capacity, the lawyer preparing the will should, before the
execution of the will, consult with any family members, friends, and health
care professionals who have had an opportunity to interact with and to
observe the person on a continuing basis regarding the person’s testamentary
capacity. It may also be advisable to videotape the execution of the will or
the testimony of the subscribing witnesses, but that technique could backfire.
Another way to prepare for a potential will contest is to obtain affidavits of
long-time friends of the decedent who have no stake in the inheritance, and
who can attest to the testator’s mental acuity on or near the day of signing.
The 2015 Legislature amended ORS 112.225 as follows (new language
italicized): “Any person who is 18 years of age or older or who has been lawfully
married or who has been emancipated in accordance with ORS 419B.550 to
419B.558, and who is of sound mind, may make a will.
The 2007 Oregon Legislature enacted the Oregon Family Fairness Act (ORS
106.300 to 106.340), recognizing “domestic partnerships” for same-sex couples,
which gives same-sex couples the same rights, benefits, and obligations enjoyed by
married couples under state law. But see Geiger v. Kitzhaber, 994 F Supp 2d 1128,
1144 (D Or 2014), stay den, 2014 WL 2566885 (9th Cir 2014), stay den, 134 S Ct
2722 (2014), app dismissed, 2014 WL 8628611 (9th Cir 2014), cert den, 135 S Ct
1860 (2015) (although the “state created domestic partnerships to “ensure[e] more
equal treatment of gays and lesbians and their families,” see ORS 106.305(6), the
state “also recognized domestic partnerships are not equal to civil marriage,” see
ORS 106.305(7)). In Geiger, 994 F Supp 2d at 1133, the United States District
Court for the District of Oregon ruled that “[b]ecause Oregon’s marriage laws
discriminate on the basis of sexual orientation without a rational relationship to any
legitimate government interest, the laws violate the Equal Protection Clause of the
Fourteenth Amendment to the United States Constitution.” However, ORS 106.010
still provides that “[m]arriage is a civil contract entered into in person by males at
least 17 years of age and females at least 17 years of age, who are otherwise
capable, and solemnized in accordance with ORS 106.150.”
not comply with the formalities of a validly executed will. For further
discussion of ORS 112.238, see Supplement § 4.2-2(a) (intention of testator
expressed in will as controlling) and Supplement § 8.2-6 (petition to admit
noncompliant writing as decedent’s will or a revocation or alteration of the
will).
The 2016 Legislature added a new provision to ORS 111.275(1),
allowing the court in a probate proceeding to enter a limited judgment in a
“decision on a petition filed under ORS 112.238 admitting a writing for
probate or otherwise acknowledging the validity and intent of the writing.”
ORS 111.275(1)(f).
§ 4.2-2 Effect of Testator’s Intent and Local Law
§ 4.2-2(a) Intention of Testator Expressed in Will as Controlling
The intention of a testator as expressed in his or her will controls the legal
effect of the testator’s dispositions. ORS 112.227. The rules of construction
expressed in ORS 112.227, 112.230 (see §4.2-2(b)), and 112.410 (effect of general
disposition or residuary clause on testator’s power of appointment) apply unless a
contrary intention is indicated by the will. ORS 112.227. If a provision in a will
disposing of property is ambiguous, the courts may interpret the will so as to
resolve the ambiguity. McClain v. Hardy, 184 Or App 448, 453, 56 P3d 501
(2002). Conversely, if a provision in a will disposing of property is unambiguous,
the inclusion of a dispute-resolution provision in the will that gives the personal
representative the authority to resolve disputes arising out of the distribution of the
estate does not trump the court’s authority to enforce the unambiguous intent of the
testator. Roley v. Sammons, 215 Or App 401, 408, 170 P3d 1067 (2007).
with the formalities of a validly executed will.
The statute allows the proponent of the writing to establish “by clear and
convincing evidence that the decedent intended the writing to constitute
ORS 112.238(1).
See Supp § 5.2-2(b) (contents of petition).
For further discussion of ORS 112.238, see Supplement § 8.2-6 (petition to
admit noncompliant writing as decedent’s will or a revocation or alteration of the
will).
§ 4.2-2(b) Local Law of State Selected by Testator Controlling Unless
Against Public Policy
The meaning and legal effect of a disposition in a will are determined by
the local law of the state selected by the testator unless the application of that law
is contrary to Oregon’s public policy. ORS 112.230. The construction of a will is
governed by the law in effect on the date of its execution, unless the will
expresses a contrary intent. 4 PAGE ON WILLS §30.27, at 208–209 (William J.
Bowe & Douglas H. Parker eds., 2004) (citation not verified by publisher).
§ 4.2-2(c) Uniform International Wills Act
The Uniform International Wills Act (UIWA), which appears in ORS
112.232, prescribes the requirements that must be met in order for a will to
qualify as an international will in terms of format and formalities of execution.
The validity of an international will that complies with the requirements of the
UIWA is not affected by the location of assets, or by the nationality, domicile, or
residence of the testator. ORS 112.232(2)(a). However, a statutory certificate
must be attached to the will, and the certificate must be signed by an “authorized
person” (which includes certain members of the diplomatic and consular service
of the United States as well as Oregon lawyers). ORS 112.232(1)(b), (5), (9).
A will executed in compliance with the UIWA is deemed to have complied
with the formalities of ORS 112.235. ORS 112.235(4). A will is lawfully
executed if it complies with the UIWA. ORS 112.255(2).
§ 4.2-3 Execution of a Will
§ 4.2-3(a) Formalities, Signing, and Attestation
A will must be in writing, signed by the testator or by some other person at
the testator’s direction and in his or her presence, and attested by two or more
competent witnesses. ORS 112.235.
Any person who, at the testator’s direction, signs the name of the testator
on the will must also sign his or her own name on the will and write on the will
that he or she signed the name of the testator at the testator’s direction. ORS
112.235(2). The person who signs the testator’s name need not be a witness to the
will. ORS 112.235(1)(b).
The statute also permits the testator to acknowledge, in the presence of
each of the witnesses, the signature previously made on the will by the testator or
at the testator’s direction. ORS 112.235(1)(c). In Kirkeby v. Covenant House, 157
Or App 309, 313, 970 P2d 241 (1998), the decedent acknowledged her previously
made signature on her will to a witness during a telephone conversation. After the
telephone conversation, a representative of the decedent delivered the decedent’s
will to the witnesses to sign. The Oregon Court of Appeals held that the
decedent’s telephonic acknowledgment of her signature did not satisfy the “in the
presence” requirement of ORS 112.235(1)(c), because the decedent’s will was
not before the witnesses at the time of the acknowledgment. Kirkeby, 157 Or App
at 319–320. The court reasoned that without having the decedent’s will in front of
them, the witnesses could not have known whether the instrument that was later
presented to them was, in fact, the instrument that contained the signature that the
decedent had previously acknowledged, or whether the decedent had actually
signed the instrument at the time she stated in her acknowledgment. Kirkeby, 157
Or App at 320.
At least two witnesses must either see the testator sign the will or hear the
testator acknowledge the signature on the will. ORS 112.235(3)(a)–(b); see
Kirkeby, 157 Or App 319–320 (“to satisfy the ‘in the presence’ requirement of
ORS 112.235(1)(c), the will, bearing the signature that the testator acknowledges,
must be before the witness at the time of the acknowledgment”). Publication by
the testator is not required. Each witness must attest the will by signing his or her
name to it. ORS 112.235(3)(c).
In Perry v. Adams, 112 Or App 77, 827 P2d 930 (1992), the Oregon Court
of Appeals held that the execution of a will is not complete until all of the
formalities of execution set forth in ORS 112.235 are satisfied. Thus,
testamentary capacity may not be determined when a testator signs a will unless
that act is done in the presence of witnesses, and the witnesses then attest the will.
Perry, 112 Or App at 82. It therefore follows that, although ORS 112.235 does
not require witnesses to sign a will at the time and place it is signed by the testator,
witnesses must sign the will before the testator loses testamentary capacity or dies.
See Perry, 112 Or App at 82; Rogers v. Rogers, 71 Or App 133, 136, 691 P2d
114 (1984) (the requirements of execution were not satisfied when a witness
attested the will 11 months after the testator died).
Note that the 2015 Legislature added ORS 112.238 to Oregon law to create a
with the formalities of a validly executed will as set forth in ORS 112.235. See
Supp § 8.2-6 (petition to admit noncompliant writing as decedent’s will or a
revocation or alteration of the will).
The legislature also amended ORS 112.235 to provide that “[e]xcept as
provided in ORS 112.238,” a will must be in writing and must be executed in
accordance with the formalities described below.
NOTE: The 2015 Legislature clarified that the term writing as used in
ORS 112.235 “does not include an electronic record, document or image.”
ORS 112.235(4).
First, “[t]he testator, in the presence of each of the witnesses,” must either
(1) “[s]ign the will,” (2) “[d]irect one of the witnesses or some other person to sign
the name of the testator and the signer’s own name on the will,” or (3)
“[a]cknowledge the signature previously made on the will by the testator or at the
testator’s direction.” ORS 112.235(1)(a)(A)–(C).
Second, at least two witnesses must each
(1) “[s]ee the testator sign the will”;
(2) “[h]ear the testator acknowledge the signature on the will”; or
(3) “[h]ear or observe the testator direct some other person to sign the
name of the testator.”
ORS 112.235(1)(b)(A)(i)–(iii).
Third, at least two witnesses must each “[a]ttest the will by signing the
witness’ name to the will within a reasonable time before the testator’s death.”
ORS 112.235(1)(b)(B).
The 2015 Legislature also enacted a new provision: “The signature by a
witness on an affidavit executed contemporaneously with execution of a will is
considered a signature by the witness on the will in compliance with [ORS
112.235(1)(b)(A)(iii)] if necessary to prove the will was duly executed in
compliance with this section.” ORS 112.235(2).
The statutes cited in the third and fourth paragraphs of the 2012 text were
renumbered ORS 112.235(1)(a)(C) and ORS 112.235(3)(a) to (3)(b), respectively.
§ 4.2-3(b) Witness as a Beneficiary
An interested person may serve as an attesting witness without invalidating
the will. An interested witness is one to whom a personal and beneficial interest
in the estate is devised. ORS 112.245.
§ 4.2-3(c) Validity of Execution of a Will
A will is lawfully executed if it is:
(1) In writing;
(2) Signed by, or at the direction of, the testator; and
(3) Otherwise executed in accordance with the law of (a) this state at the
time of execution or at the time of the testator’s death, (b) the domicile of the
testator at the time of execution or at the time of the testator’s death, or (c) the
place of execution at the time of execution. ORS 112.255(1).
Furthermore, a will is lawfully executed if it complies with the Uniform
International Wills Act. ORS 112.255(2). See §4.2-2(c).
§ 4.2-4 Testamentary Additions to Trusts
Under the Uniform Testamentary Additions to Trusts Act, ORS 112.265, a
devise may be made by a will to a trustee of a trust if (1) the trust “is established
or will be established by the testator, or by the testator and some other person or
persons, or by some other person or persons”; (2) the trust “is identified in the
testator’s will”; and (3) the terms of the trust “are set forth in a written
instrument, other than a will, executed before, concurrently with, or after the
execution of the testator’s will, or in the valid last will of a person who has
predeceased the testator.” ORS 112.265(1).
The trust may be funded during the testator’s lifetime or upon the testator’s
death by the testator’s devise to the trustee. ORS 112.265(2). Thus, the trust need
not be funded during the testator’s lifetime and may acquire assets solely from a
testamentary devise. All property devised to such a trust will be administered and
disposed of in accordance with the provisions of the trust instrument, including
any amendments made to it before or after the death of the testator. ORS
112.265(4)(b).
§ 4.2-5 Contracts to Make a Will
Pursuant to ORS 112.270(1), “[a] contract to make a will or devise, or not
to revoke a will or devise, or to die intestate, executed after January 1, 1974,”
may be established only by:
(1) “Provisions of a will stating material provisions of the contract”;
(2) “An express reference in a will to a contract and extrinsic evidence
proving the terms of the contract”; or
(3) “A writing signed by the decedent evidencing the contract.”
“The execution of a joint will or mutual wills does not create a presumption
of a contract not to revoke the will or wills.” ORS 112.270(2).
ORS 112.270 applies only to wills executed after January 1, 1974. ORS
112.270(1). For wills executed before 1974, no specific guidelines establish what
is required to show the existence of such a contract; however, it has been held
that when a person seeks specific performance of a contract to make mutual wills,
and the contract was entered into before the effective date of ORS 112.270, the
person seeking specific performance must show that it is much more probable
than not that the parties to the alleged contract manifested the essential mutual
assent. See Willbanks v. Goodwin, 300 Or 181, 202, 709 P2d 213 (1985);
DeLaMater v. DeLaMater, 69 Or App 40, 44, 688 P2d 1350 (1984).
In Krueger’s Estate v. Ropp, 282 Or 473, 478 & n 2, 579 P2d 847 (1978),
the court noted ORS 112.270, but did not apply the statute in determining
whether an oral contract existed. The court stated that an “oral contract to devise
or bequeath property must be proved by clear, concise, and convincing evidence.”
Krueger’s Estate, 282 Or at 478. In Lawrence v. Ladd, 280 Or 181, 188 n 11, 570
P2d 638 (1977), the court noted the applicability of ORS 112.270 but, because
the statute was not raised as a bar by the defendant, the court did not apply it. See
Richardson v. Richardson, 58 Or App 338, 648 P2d 377 (1982).
The procedures for contesting a will are set forth in ORS 113.075. See
§§15.2-1(a) to 15.2-2(g). If the will contest involves a contract to make a will, the
action must be commenced by the filing of a separate action, outside the probate
court, to enable either party to demand a jury trial. ORS 113.075(2).
A petition for the probate of a will must name any person known to the
petitioner as having a potential interest in the estate that arises out of a contract to
make a will or devise. ORS 113.035(8)(c). Furthermore, the personal
representative must deliver to any such person a copy of the information required
to be given to the devisees and heirs of the estate. ORS 113.145(1). If, during the
administration of the estate, the personal representative receives actual
knowledge that a person has a potential interest in that estate, based on a contract
to make a will or devise, the personal representative must make reasonable efforts
to ascertain the name and address of the person and notify that person of the
probate proceedings. ORS 113.145(5). See §2.5-1.
The 2017 Legislature added provisions to ORS 113.075 requiring a person
who files a will contest to give notice of the action to heirs, devisees, and certain
other persons. ORS 113.075(4).
ORS 112.238(1).
will).
§ 4.2-5(a) Contract Law Governs
In general, contracts to make a will or not to revoke a will are governed by
the principles of contract law, and not by the principles of probate law. Florey v.
Meeker, 194 Or 257, 280, 240 P2d 1177 (1952); see ORS 112.270. Therefore, once
a contract has been established, the law of contracts governs its interpretation and
application. Florey, 194 Or at 280–281. See CONTRACT LAW IN OREGON (Oregon
CLE 2003 & Supp 2008) (discussing principles of contract law). Thus, a contract
to make a will, or not to revoke a will, will be binding if the parties are competent
to contract with one another, and if there is no fraud, undue influence, duress, or
mistake. Matter of Marriage of Ellinwood, 59 Or App 536, 539, 651 P2d 190
(1982). In addition, the fairness of the contract will usually be determined as of the
date of the contract. Matter of Marriage of Ellinwood, 59 Or App at 539.
An action for breach of a contract to make a will may be brought during the
life of the promisor. Dickie v. Dickie, 95 Or App 310, 314 & n 5, 769 P2d 225
(1989) (“when the promisor in a contract to devise specified real property sells it
instead, the promisee may sue for breach of contract”).
§ 4.2-5(b) Statute of Limitations
As stated in §4.2-5(a), the principles of contract law govern the
interpretation and application of a contract to make a will or not to revoke a will.
See ORS 112.270. The statute of limitations for contracts is generally six years.
See ORS 12.080. In the past, the statute of limitations did not begin to run until
the death of the promisor-testator. Catching v. Lashway, 84 Or App 602, 606, 735
P2d 13 (1987); Schaad v. Lorenz, 69 Or App 16, 26, 688 P2d 1342 (1984). The
reasoning for the rule was that the will is an ambulatory document, and therefore,
the promisor-testator is able to perform the contract until his or her death. Schomp
v. Brown, 215 Or 714, 723, 335 P2d 847, decision clarified on denial of reh’g,
215 Or 714 (1959). It could also be argued that the promisee may or may not
have known of the conveyance and, in the case of a third-party beneficiary of a
contract to make a will, may not even have known of the existence of the
contract, or of the will, until after the death of the promisor-testator.
For estates of decedents dying after July 1, 1992, an action to contest a
will, including a will contest based on a contract to make a will or not to revoke a
will, must be commenced before the later of:
(1) “Four months after the date of delivery or mailing of the information
described in ORS 113.145 [information to devisees, heirs, and interested persons]
if that information was required to be delivered or mailed to the person on whose
behalf the petition is filed,” ORS 113.075(3)(a); or
(2) “Four months after the first publication of notice to interested
persons if the person on whose behalf the petition is filed was not required to be
named in the petition as an interested person,” ORS 113.075(3).
A will contest must be commenced by the filing of a petition in the probate
proceeding, “except that [a will contest based on a contract to make a will] may be
commenced by the filing of a separate action in any court of competent
jurisdiction.” ORS 113.075(2).
A cause of action based on a decedent’s promise that he or she would make
or revoke a will or devise, or not revoke a will or devise, or die intestate may not
be presented as a claim under ORS chapter 115 (claims against estates). ORS
113.075(4).
ORS 113.075(4), cited in the last paragraph of the 2012 text, was
renumbered ORS 113.075(5).
§ 4.2-5(c) Problems of Proof
Contracts to make a will or not to revoke a will may take numerous forms,
including the following:
(1) A contemporaneous written agreement embodying the contract that
may appear as part of a joint or mutual will or as a separate written agreement,
Ricks v. Brown, 15 Or App 160, 515 P2d 206 (1973);
(2) A separate agreement regarding wills in the form of a reconciliation
agreement or a divorce settlement, see Matter of Marriage of Ellinwood, 59 Or
App 536, 651 P2d 190 (1982);
(3) An oral agreement asserted by a party to the agreement or a third-
party beneficiary to establish that mutual wills were executed pursuant to a
contract, Parker v. Richards, 43 Or App 455, 602 P2d 1154 (1979); Woelke v.
Calfee, 45 Or App 459, 608 P2d 606 (1980);
(4) A claim to a will based on services performed for the decedent,
Musselman v. Mitchell, 46 Or App 299, 305–306, 611 P2d 675 (1980); Krueger’s
Estate v. Ropp, 282 Or 473, 579 P2d 847 (1978); and
(5) Actual contractual language contained within a joint or mutual will
that can support a binding and enforceable contract, Shea v. Begley, 94 Or App
554, 766 P2d 418 (1988); Schaad v. Lorenz, 69 Or App 16, 19–20, 688 P2d 1342
(1984).
NOTE: Some of these methods of proof, such as those in items (3) and
(4) above, may be barred by the provisions of ORS 112.270(1) (procedures
for establishing a contract to make a will or devise, or not to revoke a will or
devise).
In cases in which a contemporaneous written agreement embodying the
contract appears as part of a joint or mutual will, or exists as a separate written
agreement, Oregon courts have enforced the will as if it were a contract, although
the courts have held that a subsequent will is entitled to probate. In this latter
situation, the promisee’s remedy lies in a separate suit in equity to impose a
constructive trust on the assets, rather than a will contest. Catching v. Lashway,
84 Or App 602, 606, 735 P2d 13 (1987); Ankeny v. Lieuallen, 169 Or 206, 218,
113 P2d 1113, 127 P2d 735 (1942).
When two parties enter into a joint and mutual will, and then one of the
parties dies, the surviving party is typically free to revoke that joint and mutual
will. However, if it can be established that the joint and mutual will is contractual
in nature, the surviving party is not free to repudiate the underlying contract.
Schaad, 69 Or App at 21.
In Catching, 84 Or App at 605 (citations omitted, emphasis added), the
Oregon Court of Appeals discussed problems of proof that arise in many cases
regarding contracts to make or not to revoke wills, and stated:
Plaintiffs acknowledge that they must prove the existence of a contract to
make a will by clear and convincing evidence. . . . The mere existence of a joint
will or mutual reciprocal wills is not sufficient to prove that there was a contract
to make those wills. On the other hand, the existence of mutual wills, coupled
with extrinsic evidence of an oral agreement between the testators, has led the
Supreme Court to decide that there was a contract to make the wills.
In the absence of either a separate written document or contractual
language in the will, the extrinsic evidence adduced to support the claim of an
existing contract to make a will must be strong. Because a contract to make a will
is generally covered by the same principles of law that apply to other types of
contracts, extrinsic evidence is admissible to show that the will was only part of
the agreement between the testators. The question of whether a contract exists
depends on the particular facts of each case.
In DeLaMater v. DeLaMater, 69 Or App 40, 688 P2d 1350 (1984), a
husband and wife had executed joint and mutual wills, and both parties were
aware of the mutual testamentary provisions at the time of execution. The court
held that those facts alone did not establish the existence of a contract to make a
will. DeLaMater, 69 Or App at 43–46. The court cited BERTEL M. SPARKS,
CONTRACTS TO MAKE WILLS 27–28 (1956), for the rule that a contract not to
revoke a will is not established by the fact that the parties had agreed to make
mutual wills. DeLaMater, 69 Or App at 46 n 3.
The fact that such wills are usually executed as a result of a common
intention does not in any way mean that they were executed pursuant to a contract
between the parties regarding the making of such wills. Their execution does not
give rise to a presumption or inference that they were made pursuant to a
contract. Am. Nat. Red Cross v. Wilson, 274 Or 237, 240, 545 P2d 883 (1976).
However, a joint and mutual will that contains specific contractual
language within its four corners will generally be held to be an enforceable and
binding contract. Shea, 94 Or App at 557–558; Schaad, 69 Or App at 19–21.
In Baker v. Mohr By & Through Adams, 111 Or App 592, 596, 826 P2d
111 (1992), the Oregon Court of Appeals held that the requirement in ORS
112.270(1)(c) that a contract to make a will or devise be both in writing and
signed by the decedent did not bar a claim to enforce a contract to make a will
that “was in writing and signed by the decedent but was subsequently destroyed
or concealed by the person seeking to evade its provisions.”
Thus, contracts to make or not to revoke wills may take numerous forms,
and the problems of proof that need to be addressed depend on the form by which
the contract has arisen.
See Supplement § 4.2-5 (contracts to make a will) regarding ORS 112.238.
See also Supp § 8.2-6 (petition to admit noncompliant writing as decedent’s will or
a revocation or alteration of the will).
§ 4.2-6 Revoking or Altering a Will
§ 4.2-6(a) Governing Statutes Are Exclusive
Pursuant to ORS 112.275, a will may be altered or revoked only as
provided in ORS 112.285–112.315, which are discussed in §§4.2-6(b) to 4.2-6(f).
As amended in 2015, ORS 112.275 now provides that “[a] will may be
revoked or altered only as provided in ORS 112.238, 112.260 or 112.285 to
112.315.”
Both ORS 112.238 and ORS 112.260 were enacted in 2015. ORS 112.238,
which sets forth an exception to will formalities, is discussed in Supplement § 4.2-5
(exception to will-execution formalities). ORS 112.260 relates to a reference in a
will to a statement or list disposing of certain effects.
§ 4.2-6(b) Express Revocation or Alteration
A will may be revoked or altered by another will. ORS 112.285(1).
A will may be revoked by being “burned, torn, canceled, obliterated or
destroyed, with the intent and purpose of the testator of revoking the will, by the
testator, or by another person at the direction of the testator and in the presence of
the testator.” ORS 112.285(2). The injury or destruction by a person other than
the testator at the direction and in the presence of the testator must be proved by
at least two witnesses. ORS 112.285(2).
The same degree of mental capacity is required to revoke a will as is
required to execute one. Wood v. Bettis, 130 Or App 140, 143, 880 P2d 961
(1994). See §4.2-1, for a discussion of testamentary capacity. In Wood, 130 Or
App at 143–146, for example, the Oregon Court of Appeals held that the testator
lacked the testamentary capacity to revoke his will when he tore it up because at
that time the testator did not understand the value and extent of his property, the
natural objects of his bounty, or the nature of the business in which he was
engaged.
The 2015 Legislature added a new provision to ORS 112.285 regarding a
partial revocation of a will:
A partial revocation of a provision in a will by one or more physical acts
as described in [ORS 112.285(2)] is not a valid revocation. One or more physical
acts that affect one or more provisions of a will but not the entirety of the will are
not effective to revoke those provisions, but clear and convincing evidence may
show that the testator intended by the physical act or acts to revoke the entirety of
the will.
ORS 112.285(3).
§ 4.2-6(c) Revival of Revoked or Invalid Will
If a will or a part of a will has been revoked or is invalid, it may be revived
by “re-execution of the will or by the execution of another will in which the
revoked or invalid will or part thereof is incorporated by reference.” ORS
112.295.
Under the doctrine of “dependent relevant revocation,” a court can probate
a will that was revoked by a testator through the execution of a subsequent will if
the subsequent will is later declared to be invalid, and if the court determines that
the testator did not intend to die intestate. Kirkeby v. Covenant House, 157 Or
App 309, 314–315, 970 P2d 241 (1998).
If a testator destroys a valid will, his or her prior will is not revived.
Instead, the person then has no valid will. ORS 112.295.
§ 4.2-6(d) Revocation by Marriage
The law regarding the revocation of a will by marriage has changed over
the years. Before 1965, a will was automatically revoked on the subsequent
marriage of the testator, regardless of the intent of the testator. The law was
amended in 1965 to provide that the subsequent marriage of the testator revokes
his or her will, unless the will expressly declared the intention of the testator that
it should not be revoked by a subsequent marriage. ORS 112.305, enacted in
1969 and currently in effect, goes further than the 1965 amendment in giving
effect to the actual intention of the testator.
Under ORS 112.305, the subsequent marriage of the testator revokes a will
only if the spouse of that subsequent marriage survives the testator. Thus, if after
making a will, the testator marries and the spouse of that marriage predeceases
the testator, the will of the testator will not be deemed to have been revoked by
the subsequent marriage. However, if the spouse of the subsequent marriage
survives the testator, the marriage is deemed to revoke the testator’s will, unless
the will expresses a contrary intent, the will was drafted under circumstances
indicating that it was in contemplation of the marriage, or an antenuptial
agreement between the testator and his or her spouse dealt with the decedent’s
estate.
Unless an exception to ORS 112.305 applies, a subsequent marriage of the
testator will revoke the testator’s will and the surviving spouse is entitled to an
intestate share of the decedent’s estate, notwithstanding that the surviving spouse
did not bring any property into the marriage, or that the marriage lasted only for a
short period of time, or even that divorce proceedings are pending. In Stevenson
v. U.S. Nat. Bank of Oregon, 72 Or App 39, 41, 695 P2d 77 (1985), the testator
and his fiancee entered into a prenuptial agreement, which provided that the
parties could dispose of their respective properties as they wished, and that,
“should the marriage be terminated by death or dissolution, each party would retain
the property owned by the party prior to the marriage.” They were married the
next day. Ten months later, the wife sued the testator for divorce. While the
divorce was pending, the testator executed a will leaving all his property to his
children. The testator and the spouse then entered into a property-settlement
agreement that specifically superseded the prenuptial agreement. Ten months after
the divorce, the parties remarried and a short time thereafter the testator filed a
petition for divorce. Shortly after the petition was filed, the testator was killed and
his will was entered into probate. The court ruled that neither of the exceptions
under ORS 112.305 applied because the will did not evidence an intent that it was
not to be revoked by the marriage, and the prenuptial agreement of the testator and
his spouse had been superseded by the property-settlement agreement.
Accordingly, the testator had no valid will at the time of his death, and the
surviving spouse was entitled to an intestate share of the decedent’s net estate.
The 2015 Legislature added a new provision to ORS 112.305. The testator’s
subsequent marriage revokes a will if the testator is survived by a spouse, unless
“[t]he testator executed the will after entering into a registered domestic
partnership under ORS 106.300 to 106.340 or a similar law in another state and the
testator subsequently marries the domestic partner.” ORS 112.305(3).
§ 4.2-6(e) Revocation by Dissolution or Annulment of Marriage
Unless a will evidences a different intent of the testator, the divorce or
annulment of the testator’s marriage after the execution of the will “revokes all
provisions in the will in favor of the former spouse of the testator and any
provision [in the will] naming the former spouse as executor, and the effect of the
will is the same as though the former spouse did not survive the testator.” ORS
112.315.
Before the effective date of ORS 112.315 (which was enacted in 1969), the
dissolution or annulment of the testator’s marriage subsequent to the execution of
a will resulted in the revocation of the entire will in the absence of an expression
in the will of the testator’s intention that the will would not be deemed to have
been so revoked.
The 2017 Legislature made a minor change to ORS 112.315, substituting the
term personal representative for the term executor.
§ 4.2-6(f) Executory Contract of Sale of Devised Property Not a
Revocation
An executory contract of sale made by a testator to convey property
devised in a previously made will does not revoke the previous devise. Instead,
the property passes by the devise, “subject to the same remedies on the agreement
. . . against devisees as might be had against the heirs of the testator if the
property had descended to them.” ORS 112.325.
In the absence of a statute like ORS 112.325, the proceeds of the sale of
devised real property sold on contract would go to those entitled to the testator’s
personal property and not to the testator’s devisee. See In re Pape’s Estate, 135
Or 650, 652–653, 297 P 845 (1931). The statute protects the devisee’s interest in
the proceeds of the contract covering the devised real property.
ORS 112.325 is limited in its applicability to devised real property that is
sold under an executory contract of sale subsequent to the making of the will. If the
testator contracts to sell real property that has not been devised by his or her will,
the statute does not apply. Instead, under the doctrine of equitable conversion, the
proceeds of sale will go to those entitled to the testator’s personal property.
In like manner, if the sale of devised property is not by contract, but is
effected by a conveyance with a purchase money mortgage back to the grantor,
ORS 112.325 does not apply. Instead, ORS 112.385(4), as modified by the
testator’s will, would determine the devisee’s entitlement to any of the payments
on the mortgage.
A testator who, at the time of making a will, recognizes the possibility that
he or she may be entering into a contract to sell specifically devised property
should be aware that unless the will provides differently, the devisee will take the
property subject to the contract, and in effect the devise will be the equivalent of
the vendor’s beneficial interest in the contract.
Although ORS 112.325 refers generally to “property” and not exclusively to
real property, thereby being applicable under the definition of property in ORS
111.005(27) to both real property and personal property, the statute has no
significant effect on the descent of the vendor’s interest in devised personal
property sold pursuant to a contract, because the doctrine of equitable conversion
applies exclusively to real property.
The 2015 Legislature repealed ORS 112.325. However, ORS 112.385 was
amended to add that specific devises will not fail or be extinguished by the
“encumbrance . . . or change in form of the property specifically devised.”
§ 4.2-7 Effect of Will Provisions
§ 4.2-7(a) Will Governs Disposition of Estate
ORS 112.415 is designed to create certainty that, except as otherwise
expressly provided by law, no person is entitled to take any portion of the estate
of a testator disposed of by the will other than as provided in the will. Statutes
expressly providing otherwise include the antilapse statute (ORS 112.395), the
pretermitted child statute (ORS 112.405), the statutes governing elective rights of
a surviving spouse (ORS 114.600–114.725), and other comparable laws of a
specific nature.
NOTE: Effective January 1, 2011, the 2009 Legislature substantially
revised Oregon’s laws regarding a surviving spouse’s elective share,
repealing former ORS 114.105–114.165 and enacting ORS 114.600–
114.725. The 2011 Legislature made technical corrections to the statutes.
See 2011 Or Laws ch 305. These corrections apply to the surviving spouses
of all decedents who die on or after June 9, 2011. For further discussion of
the elective share of the surviving spouse, see §§8.2-5(a) to 8.2-5(i)(2).
ORS 112.238(1).
See Supp § 8.2-6 (petition to admit noncompliant writing as decedent’s will
§ 4.2-7(b) Devise Passes All Interests of Testator
A devise of property passes the testator’s entire interest in the property at
the time of the testator’s death, unless the will evidences a different intent. ORS
112.355. Consistent with ORS 114.205, this statute applies without distinction
between real property and personal property.
§ 4.2-7(c) Encumbrance or Disposition of Devised Property
Pursuant to ORS 112.335, “[a]n encumbrance or disposition of property by
a testator after the testator makes a will does not affect the operation of the will
upon a remaining interest therein that is subject to the disposal of the testator at
the time of the death of the testator.”
The primary purpose of ORS 112.335 is to eliminate any inference that an
alteration in the nature of the estate or interest held by the testator constitutes a
revocation of the devise. For a definition of the rather limited extent to which the
devisee of property encumbered by the testator either before or after the testator
makes a will is entitled to exoneration out of other assets of the estate, see ORS
115.255.
The following testamentary provision tends to duplicate the statute:
In the event that any property or interest in property passing under this will is
encumbered by a mortgage or a lien or is pledged to secure any obligation, it is
my intention that such indebtedness will not be charged to or paid from my estate,
but that the devisee will take such property or interest in property subject to all
encumbrances existing at the time of my death.
To abrogate the effect of the statute, the following testamentary direction
might be used:
In the event that any property or interest in property passing under this will is
encumbered at the time of my death by a mortgage or a lien or is pledged to
secure any obligation, I direct my executor to pay and discharge as soon after my
death as may be practicable such loan, obligation, lien, or charge with interest and
penalties, if any, out of the general assets and at the expense of my estate,
regardless of whether or not I am or my estate is liable for the payment thereof.
The Oregon Supreme Court has held that, absent a clear expression of
intent to the contrary in a will or otherwise, the decedent’s estate is not liable for
contribution to a surviving joint tenant toward debt secured by real property that
passes to the surviving joint owner and obligor by right of survivorship. Bonner
v. Arnold, 296 Or 259, 265, 676 P2d 290 (1984).
PRACTICE TIP: If the testator has an interest in real property securing
a debt that is held as joint tenants with the right of survivorship, and the
testator wants the estate to be liable, in whole or in part, for the debt, the will
should specifically provide for contribution by the estate.
The 2015 Legislature repealed ORS 112.325. However, ORS 112.385 was
amended to add that specific devises will not fail or be extinguished by the
“encumbrance . . . or change in form of the property specifically devised.”
§ 4.2-7(d) Devise of a Life Estate
“A devise of property to any person for the term of the life of the person,
and after the death of the person to the children or heirs of the person, vests an
estate or interest for life only in the devisee and remainder in the children or
heirs.” ORS 112.345.
The purpose of ORS 112.345 was to abolish, and to some extent enlarge,
the ancient Rule in Shelley’s Case. See Wolfe v. Shelley, 1 Co Rep 93b, 76 Eng
Rep 206 (CP) (1579–1581), discussed at http://legal-dictionary.thefreedictionary
.com/Rule+in+Shelley’s+Case. The statute has the effect of abolishing the Rule in
Shelley’s Case as to wills, but not as to deeds.
The 2015 Legislature amended ORS 112.345, which now provides as
follows: “A devise of property to any person for the term of the life of the person,
and after the death of the person to the heirs of the person, vests an estate or
interest for life only in the devisee and remainder in the heirs.”
§ 4.2-7(e) Property Acquired After Making Will
“Any property acquired by the testator after the making of a will passes
thereby, and in like manner as if title thereto were vested in the testator at the
time of making the will, unless the intent expressed in the will is clear and
explicit to the contrary.” ORS 112.365.
The statute is designed to make clear that after-acquired property can pass
by will. It applies with equal force to real property and personal property.
The following testamentary provision is in keeping with the statute:
I give and devise to my son, Jacob, all real property that I may own at the time of
my death.
The 2015 Legislature changed the wording of ORS 112.365, but did not alter
the substance of the statute.
§ 4.2-7(f) Direction to Pay Debts, Taxes, and Other Charges
Most wills contain general testamentary directions to pay debts, charges,
taxes, and administration expenses. Varying interpretations of such directions
have been arrived at by the authorities in response to specific problems.
ORS 115.255–115.275 set forth rules for paying encumbrances on devised
property, and ORS 116.303–116.383 deal with the apportionment of estate taxes.
All of these statutes are conditioned on the fact that the will does not provide
otherwise.
A common form of testamentary direction for payment of debts and other
charges follows:
I direct my personal representative to pay from my estate all my just debts, the
expenses of my last illness, funeral, and final interment, and the expenses of
administration of my estate.
This language would not be considered a direction of exoneration from
encumbrances or against apportionment of estate taxes. If exoneration from
encumbrances is desired by the testator, the will should specifically state so. The
following is an example of a provision for exoneration from encumbrances:
I give and devise to my son, Jacob, all real property that I may own at the time of
my death. If any of this real property is subject to encumbrances of any kind,
whether voluntary or involuntary, I direct my personal representative to pay and
fully satisfy such encumbrances from my estate.
If the testator also desires that death taxes be paid from the residue of the
estate without apportionment, the will should specifically state so, for example:
I direct my personal representative to pay from my estate all inheritance, estate,
transfer, and succession taxes that become payable by reason of my death, and I
authorize my personal representative to contest or compromise any claims for
such taxes. I further direct that all such taxes will be paid without apportionment
thereof and without withholding or collecting any part thereof from any
beneficiary under my will or under any life insurance of mine that may be subject
to such tax or from the surviving owner of any property owned jointly with me, it
being my intention that all such taxes will be paid from my estate as an expense of
administration.
§ 4.2-7(g) Nonademption of Specific Devises
Rules for nonademption of specific devises are set forth in ORS 112.385.
At common law, what was known as the doctrine of ademption by
extinction applied without regard to the testator’s intent. Under this doctrine, if
real or personal property was specifically given by will to a named person, and
the property was destroyed or sold between the time of execution of the will and
the testator’s death, the devise or bequest failed. The reasoning behind the failure
of the devise or bequest was that there was no property in the estate to satisfy the
specific gift.
ORS 112.385 changes the common law. It is specific in its approach to the
many situations covered under the statute. It avoids the adoption of a broad
approach that would abolish the doctrine of ademption by extinction entirely, and
it is intended to carry out the normal intent of the testator.
§ 4.2-7(h) Devises to Testator’s Issue; Antilapse
At common law, a devise or bequest to a person who predeceased the
testator would lapse in the absence of a special provision in the will preventing it.
ORS 112.395 changes the common law. Under the statute, when property is
devised to any person who is related to the testator by blood or adoption, and that
person dies before the testator and leaves lineal descendants, the descendants take
by representation the property that the devisee would have taken if the devisee
had survived the testator, unless otherwise provided in the testator’s will. The
statute covers a devisee under a class gift if the devisee’s death occurred after the
execution of the will.
Although the language of the statute is of a mandatory nature, a testator
using appropriate words can prevent the statute from operating. For example, the
testator can provide for a substitute devise, such as the one below, in the event
that the devisee predeceases the testator, or the testator can simply provide that in
such event, the devise will lapse:
I devise to my brother, John Doe, the sum of $5,000. If my brother does not
survive me, the foregoing devise to him will lapse, and in lieu thereof I devise the
sum of $5,000 to Mary Doe, wife of my brother, John Doe.
If the foregoing will provision had not specified otherwise, and if the
brother had predeceased the testator, and had been survived by descendants, those
descendants would take the $5,000 bequest by representation under the antilapse
statute. Because the brother is related to the testator by blood or adoption, ORS
112.395 would apply. In this example, mention of what would happen if the
brother’s wife failed to survive the testator has been omitted intentionally,
because she is not related to the testator by blood or adoption, and if she failed to
survive, whether or not she was survived by descendants, the bequest to her
would lapse.
The following provision is another example that may slightly alter the
effect of the statute:
I devise to my brother, John Doe, the sum of $5,000. If my brother does not
survive me, the foregoing devise to him will lapse and in lieu thereof I devise the
sum of $5,000 in equal shares to the children of my brother, John Doe, who are
living at the time of my death.
The antilapse statute is an example of a statute intended to carry out the
assumed desire of the testator. As always, the drafter of the will should use specific
language that carries out the actual intent of the testator, rather than relying on the
statute.
§ 4.2-7(i) Effect of Failure of Devise
Except as provided in the antilapse statute (ORS 112.395; see §4.2-7(h)),
which is concerned exclusively with devises to persons who are related by blood
or adoption to the testator, ORS 112.400(1) declares that “[i]f a devise other than a
residuary devise fails for any reason, it becomes a part of the residue.” Regarding
the residue, if there are two or more residuary devisees and the share of one of
them fails, that share “passes to the other residuary devisee or to other residuary
devisees in proportion to their interests in the residue.” ORS 112.400(2).
PRACTICE TIP: As always, the lawyer should determine the wishes of
the testator and, if the results flowing from application of this statute do not
conform with those wishes, the lawyer must take care in expressing the
testator’s wishes in the will.
§ 4.2-7(j) After-Born and After-Adopted Children: Pretermitted
Children
A pretermitted child is a child of a testator who (1) is born or adopted after
the execution of the testator’s will, (2) is neither provided for in the will nor in
any way mentioned in it, and (3) survives the testator. ORS 112.405(1).
Under ORS 112.405, if the will makes no provision for a child who is
living at the time of the execution of the will, that child does not qualify as a
pretermitted child. The statute further specifies that if the testator made no
provision for children who were living when the testator executed the will, it is
reasonable to assume that the testator had no desire to provide for after-born
children. ORS 112.405(2).
Conversely, if the testator provided for children who were living when the
testator executed the will, it is assumed that the testator also wanted to provide
for after-born and after-adopted children. ORS 112.405(3). The share to which
the pretermitted child is entitled in this instance is computed in accordance with
the formula set forth in ORS 112.405(3)(b).
If the testator had no children living when the testator made the will, a
pretermitted child would “take a share of the estate as though the testator had died
intestate.” ORS 112.405(4). As always, the lawyer should address such a
possibility in the will, rather than allow the statute to control.
The 2015 Legislature amended ORS 112.405(1) to provide that a
“pretermitted child” includes a child of a testator “who is conceived as described in
ORS 112.077(3) or (4), after the execution of the will of the testator, who is neither
provided for in the will nor in any way mentioned in the will and who survives the
testator.” See the discussion below regarding ORS 112.077.
The legislature also amended ORS 112.405(4), adding an “unless” clause.
The statute now provides as follows:
If a testator has no child living when the testator executes a will, a
pretermitted child shall take a share of the estate as though the testator had died
intestate, unless the will devised all or substantially all of the estate to the other
parent of the pretermitted child and that other parent survives the testator and is
entitled to take under the will.
ORS 112.077 was enacted in 2015, updating probate law to include
provisions relating to when a child “conceived from the genetic material of a
decedent who died before the transfer of the decedent’s genetic material into a
person’s body” is not entitled to an interest in the decedent’s estate. ORS
112.077(4). The statute provides as follows:
(1) For purposes of this section, an embryo that exists outside a
person’s body is not considered to be conceived until the embryo is implanted
into a person’s body.
(2) Except as provided in subsections (3) and (4) of this section, the
relationships existing at the time of the death of a decedent govern the passing of
the decedent’s estate.
(3) A person conceived before the death of the decedent and born alive
thereafter inherits as though the person was a child of the decedent and alive at
the time of the death of the decedent.
(4) A child conceived from the genetic material of a decedent who
died before the transfer of the decedent’s genetic material into a person’s body is
not entitled to an interest in the decedent’s estate unless:
(a) The decedent’s will or trust provided for posthumously conceived
children; and
(b) The following conditions are satisfied:
(A) The decedent, in a writing signed by the decedent and dated,
specified that the decedent’s genetic material may be used for the posthumous
conception of a child of the decedent, and the person designated by the decedent
to control use of the decedent’s genetic material gives written notice to the
personal representative of the decedent's estate, within four months of the date of
the appointment of the personal representative, that the decedent’s genetic
material is available for the purpose of posthumous conception; and
(B) The child using the decedent’s genetic material is in utero
within two years after the date of the decedent’s death.
§ 4.2-7(k) Effect of General Disposition or Residuary Clause on
Testator’s Power of Appointment
A general residuary clause in a will or a will making general disposition of
all of the testator’s property does not exercise a power of appointment held by the
testator, unless specific reference is made to the power in the will or there is some
other indication of intention in the will to include the property subject to the
power. ORS 112.410.
§ 4.2-8 Disposition of Wills
§ 4.2-8(a) Exclusive Manner of Disposing of Wills
ORS 112.800–112.830 set forth the exclusive manner for disposing of a
will.
Any person having custody of a will has a duty to maintain custody of the
will and may not destroy or discard the will, disclose its contents to any person[,]
or deliver the will to any person except as authorized by the testator or as
permitted by ORS 112.800 to 112.830.
ORS 112.805(1). See §§4.2-8(b) to 4.2-8(e).
§ 4.2-8(b) Duties of Custodian of Will
ORS 112.810 describes the duties of the custodian of a will. Any person
having custody of a will:
(1) Must deliver the will to the testator on the testator’s demand, unless
the person is a lawyer and is entitled to retain the will pursuant to ORS 87.430
(possessory lien);
(2) May at any time deliver the will to the testator;
(3) Must deliver the will to the testator’s conservator upon the
conservator’s demand;
(4) Upon demand from the attorney-in-fact, must deliver the will to “an
attorney-in-fact acting under a durable power of attorney signed by the testator
expressly authorizing the attorney-in-fact to demand custody of the will”;
(5) May deliver the will to “any lawyer licensed to practice law in
Oregon willing to accept delivery of the will if the person does not know or
cannot ascertain, upon diligent inquiry, the address of the testator”; or
(6) Must, within 30 days after receiving information that the testator is
deceased, deliver the will to a court with jurisdiction over the testator’s estate or
to a personal representative named in the will.
ORS 112.810(1).
Oregon law sets forth a procedure for gaining access to the safe-deposit
box of a decedent for the purpose of obtaining the decedent’s will. See ORS
112.810(2). After receiving a certified copy of the decedent’s death certificate
and a statutorily prescribed affidavit, a financial institution, trust company,
savings association, or credit union must deliver the decedent’s original will to
the decedent’s personal representative. ORS 708A.655(2)–(5), 723.844(2)–(5).
NOTE: The 2011 Legislature amended ORS 708A.655 and 723.844 to
set forth a procedure to authorize financial institutions to release the contents
of a safe-deposit box to the affiant of a small-estate affidavit. See ORS
114.537.
For further discussion of the procedure to transfer the contents of a safe
deposit box, see §3.4-1.
If the decedent’s will fails to name a personal representative or if the
financial institution, despite reasonable efforts, cannot determine the location of
the personal representative, the institution may either retain the will or deliver it
to a court having jurisdiction of the decedent’s estate. ORS 708A.655(4),
723.844(4).
§ 4.2-8(c) Procedure for Destruction of 40-Year-Old Will
A lawyer who has custody of a will may destroy the will in accordance
with ORS 112.820, if (1) the lawyer is licensed in Oregon, (2) the will is at least
40 years old, (3) the testator’s address is unknown and cannot be found after
diligent inquiry, and (4) the will is not subject to a contract to make a will or
devise or not to revoke a will or devise. ORS 112.815.
A lawyer who is authorized to destroy a will under ORS 112.815 may
proceed under ORS 112.820 as follows:
(1) The lawyer must first publish a notice in a newspaper in the county
of the testator’s last-known address, if any—otherwise in the county of the
lawyer’s principal place of business; the notice must state the name of the
testator, the date of the will, and the intent of the lawyer to destroy the will if the
testator does not contact the lawyer within 90 days after the date of the notice,
ORS 112.820(1)(a);
(2) If the testator fails to contact the lawyer within 90 days after the date
of the notice, the lawyer may destroy the will, ORS 112.820(1)(b);
(3) Within 30 days after destruction of the will, the lawyer must file with
the probate court in the county where the notice was published an affidavit that
states the information required by the statute, ORS 112.820(1)(c); and
(4) The lawyer must pay the required fee for filing the affidavit, ORS
112.820(1)(d); see ORS 21.145.
PRACTICE TIP: The 2011 Legislature amended ORS 112.820(1) to
increase the court filing fee for the affidavit required by the statute from $17
to $105. The lawyer should take into account the amount of this fee before
agreeing to store an original will for a client or to accept original will files
from a retiring lawyer or the estate of a deceased lawyer, as authorized by
ORS 112.810(1)(e).
A will may be destroyed by a lawyer, without notice to any person or court,
if the will has not been admitted to probate within 40 years after the death of the
testator. ORS 112.820(2).
§ 4.2-8(d) Liability for Destruction of Will
A person who violates any provision of the statutes governing the
disposition of a will (ORS 112.800–112.830; see §§4.2-8(a) to 4.2-8(c)) is “liable
to any person injured by such violation for any damages sustained thereby.” ORS
112.825. A lawyer who destroys a will in accordance with ORS 112.800–112.830
is not liable to the testator or any other person for its destruction or disposal. ORS
112.825.
§ 4.2-8(e) Court May Order Delivery of Will
The court with jurisdiction over the decedent’s estate may order a person to
deliver the decedent’s will to the court. ORS 112.830.
§ 4.2-9 Elective Share of Surviving Spouse
For estate planning purposes, a lawyer must be cognizant of the fact that if
a decedent is domiciled in this state at the time of death and dies with a valid will,
the surviving spouse has a right to an elective share.
Effective January 1, 2011, the 2009 Legislature repealed Oregon’s former
elective share laws (former ORS 114.105–114.165), and replaced them with ORS
114.600–114.725. These statutes represent a major revision to Oregon’s elective
share law. The 2011 Legislature made technical corrections to the 2009 law (see
2011 Or Laws ch 305), which apply to the surviving spouses of all decedents who
die on or after June 9, 2011.
For further discussion of the elective share of the surviving spouse, see
§§8.2-5(a) to 8.2-5(i)(2).
§ 4.3 UNIFORM DISPOSITION OF COMMUNITY PROPERTY RIGHTS

AT DEATH ACT
In 1973, the legislature passed the Uniform Disposition of Community
Property Rights at Death Act, ORS 112.705–112.775. See §§4.3-1 to 4.3-5.
§ 4.3-1 Property Subject to Uniform Act
The Uniform Disposition of Community Property Rights at Death Act (the
“Uniform Act”) applies to the disposition at death of all community property
acquired by a married person, including (1) all property that was acquired as or
became community property under the laws of another jurisdiction; (2) all
property (including Oregon real property), or the proportionate part of it, that was
acquired with the income of or proceeds from community property; and (3) all
property that is otherwise traceable to community property. ORS 112.715.
The following rebuttable presumptions apply in determining whether the
Uniform Act applies to specific property:
(1) Property acquired during marriage by a spouse while domiciled in a
community-property state is rebuttably presumed to be subject to the Uniform
Act, ORS 112.725(1); and
(2) Real property located in Oregon, and any personal property acquired
by a married person while domiciled in a noncommunity-property state, are not
subject to the Uniform Act, if title to the property “was taken in a form which
created rights of survivorship.” ORS 112.725(2).
§ 4.3-2 Effect of Uniform Act on Decedent’s Estate
§ 4.3-2(a) Distribution and Disposition of Community Property
Upon the death of a married person, one-half of the community property to
which the Uniform Disposition of Community Property Rights at Death Act
applies is the property of the surviving spouse and is not subject to testamentary
disposition by the decedent or distribution under Oregon’s laws of intestate
succession. ORS 112.735.
The other half of the property is subject to testamentary disposition (or
intestate succession distribution), unless it is held under a limitation imposed by
law that would prevent such disposition. ORS 112.775(3).
The decedent’s half of the property is not subject to the surviving spouse’s
right to elect against the will. ORS 112.735.
§ 4.3-2(b) Perfection of Title to Community Property
If the title to any property to which the Uniform Disposition of Community
Property Rights at Death Act (the “Uniform Act”) applies was held by the
decedent at the time of death (see §4.3-1), “title of the surviving spouse may be
perfected by an order of the probate court or by execution of an instrument by the
personal representative or the heirs or devisees of the decedent with the approval
of the court.” ORS 112.745.
Neither the court nor the personal representative has a duty to discover
whether any of the decedent’s property is subject to the Uniform Act, unless a
written demand is made by the spouse or a successor in interest. ORS 112.745.
Similarly, the personal representative has no duty to discover whether any of the
survivor’s property is subject to the Uniform Act, except on written demand by
an heir, devisee, or creditor of the decedent, but the personal representative may
institute an action to perfect title to the decedent’s half of such property. ORS
112.755.
§ 4.3-3 Rights of Third Parties to Community Property
“Uniform Act”) protects third persons in their dealings with community property
on the basis of its apparent title. If a surviving spouse has apparent title to
property to which the Uniform Act applies, a purchaser for value or a lender
taking a security interest in the property takes his or her interest in the property
free of any rights of the personal representative, an heir, or a devisee. ORS
112.765(1).
If the personal representative, an heir, or a devisee has apparent title, a
purchaser for value or a lender taking a security interest takes his or her interest
free of any rights of the surviving spouse. ORS 112.765(2).
The Uniform Act does not define rights of creditors with respect to
property to which the Uniform Act applies. ORS 112.775(1).
§ 4.3-4 Right to Sever Interests in Community Property
The Uniform Disposition of Community Property Rights at Death Act does
not affect the right of married persons to sever or alter their community-property
interests. ORS 112.775.
§ 4.3-5 Effect of Uniform Act
“Uniform Act”) can have a major impact on the disposition of property at death.
Accordingly, a lawyer should review ORS 112.705–112.775 whenever the
decedent has lived at any time during marriage in a community-property
jurisdiction. That review is particularly important because the person interested in
a determination of community-property status has the responsibility for asserting
the claim by making a written demand on the personal representative. See ORS
112.745, 112.755. Absent such demand by the surviving spouse, the successor in
interest to the surviving spouse, or an heir, devisee, or creditor of the decedent,
neither the personal representative nor the court has any duty to discover or to
attempt to discover whether any of the decedent’s property qualifies under the
Uniform Act. See §4.3-2(b).
As of August, 2012, no Oregon appellate cases have been found found
construing, applying, or explaining the Uniform Act.
PRACTICE TIP: Caution is the byword when working with clients who
own community-property assets, or who have moved to Oregon from a
community-property state. At last count, 10 states have a form of co-
ownership of property known as community property. These states are
Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas,
Washington, and Wisconsin. Oregon is surrounded by four of these states.
Accordingly, a lawyer cannot rely entirely on the rebuttable presumption in
ORS 112.725(2), which provides that real property located in Oregon “acquired
by a married person while domiciled in a jurisdiction under whose laws property
could not then be acquired as community property, title to which was taken in a
form which created rights of survivorship,” is presumed not to be property to
which the Uniform Act applies. First, the presumption is rebuttable, and second,
the authors of the Uniform Act, in their prefatory notes, state that severance or
alteration of community-property interests, which is allowed by the Uniform Act
(see ORS 112.775(2)), should follow the procedures provided in the law of the
community-property state. See http://uniformlaws.org.
For instance, under Idaho law, “neither the husband nor wife may sell,
convey or encumber the community real estate unless the other joins in executing
the sale agreement, deed or other instrument of conveyance by which the real
estate is sold, conveyed or encumbered.” IDAHO CODE ANN §32-912; see Lowry v.
Ireland Bank, 779 P2d 22, 27 (Idaho 1989) (“community real property can be
validly encumbered only if both spouses join in executing the instrument of
encumbrance”). In Texas, community property “is subject to the joint
management, control, and disposition of the spouses, unless the spouses provide
otherwise by power of attorney in writing or other agreement.” TEX FAM CODE
ANN §3.102 (Vernon 2011); see Muller v. Evans, 516 SW2d 923 (Tex 1974).
The Multnomah County probate court ruled several years ago that the law
of the community-property state controlled on this type of issue, and that the
property, even though converted to joint tenancy with right of survivorship,
remains community property until severed or altered as required by the law of the
state where the parties were domiciled when they acquired their assets.
PRACTICE TIP: Estate planning lawyers with clients who have moved
to Oregon from community-property states must be aware of all of the
requirements for the alteration of community-property interests.
Chapter 5: INITIATING PROBATE AND SMALL-ESTATE
PROCEEDINGS
LISA N. BERTALAN, B.A., University of Colorado, (1987); J.D., University of Oregon School of
Law (1991); member of the Oregon State Bar since 1991; partner, Hendrix Brinich &
Bertalan LLP, Bend.
The author acknowledges the contribution of J. Anthony Giacomini for his work on the prior
edition of this chapter.

This chapter discusses (1) procedures for initiating Oregon probate, (2) the
issues surrounding initial probate estate administration, and (3) the probate of a
decedent’s property by a small-estate affidavit, including the transfer of property
pursuant to the affidavit.
The probate portion of this chapter includes discussions on petitions for the
appointment of a personal representative and the probate of a will; initial estate
administration; escheat; proving wills in common form (including a will with
missing witnesses, a foreign will, and an international will); probate in solemn
form; the personal representative’s qualifications; limited judgment appointing the
personal representative; bond requirements; letters testamentary or letters of
administration; notices of the personal representative’s appointment to heirs,
devisees, and other interested persons; grounds and procedure for removal of the
personal representative; and the appointment, letters, powers, and publication of
notice to interested persons by a successor personal representative.
Forms referred to in the text appear at the end of the chapter. Because
keeping track of the required filings is critical, this chapter also includes a checklist
as Form 5-1 (Initiating Probate: Critical Dates Checklist) and a sample letter to the
personal representative as Form 5-2.
Several probate forms are available on the Professional Liability Fund’s
website at www.osbplf.org/practice-management/forms.html: Master Probate
Checklist for Managing Open Probate Files (rev Jan 2018); Probate Checklist (rev
Jan 2018); Probate Quick Reference Form for File (rev Jan 2018); Probate Time
Limitations (rev Jan 2018).
§ 5.2 REGULAR PROBATE
§ 5.2-1 Jurisdiction and Venue
§ 5.2-1(a) Probate Jurisdiction
Probate jurisdiction is vested in the circuit courts, except in the following
counties: Gilliam, Grant, Harney, Malheur, Sherman, and Wheeler. In these
counties, probate jurisdiction is vested in the county courts. ORS 111.055,
111.075. See §§2.2-1 to 2.2-3(c)(4) for further discussion of probate jurisdiction.
PRACTICE TIP: If the estate will be probated in a county in which the
county court has probate jurisdiction, a lawyer who anticipates questions of
law involving the estate should consider transferring the proceedings to a
circuit court. The procedure is set forth in ORS 111.115.
The 2017 Legislature amended the definition of the term estate to provide
that an estate includes “tangible and intangible personal property of a decedent
domiciled in Oregon, wherever the property is situated.” ORS 111.005(15)(b).
ORS 111.085(2) makes distributees of an estate administered in Oregon
subject to the jurisdiction of Oregon courts regarding any matter involving the
distributee’s interest in the estate. By accepting a distribution from an estate, the
distributee personally submits to the court’s jurisdiction. However, there may still
be other methods of obtaining jurisdiction over a distributee, and those methods are
not precluded by ORS 111.085(2). ORS 111.085(3).
§ 5.2-1(b) Venue
Venue for a probate proceeding is appropriate in any county where (1) the
decedent was domiciled, (2) the decedent had a place of abode at death, (3) the
decedent had real or personal property in the county at the time of death, (4) the
decedent had real or personal property in the county at the time of the initiation of
probate, or (5) the decedent died. ORS 113.015(1). See §§2.3-1 to 2.3-3 for further
discussion of venue, including filing in a county other than those counties specified
in ORS 113.015(1).
PRACTICE TIP: The above options allow flexibility in choosing the
forum for probate. For instance, venue is proper in a county where property
existed at the time of initiating the probate. Because personal property can
be moved after the owner’s death, probate may take place in a county most
convenient and cost-effective for the personal representative. Regardless of
the forum selected, the person initiating probate should consider publishing
notice to interested persons not only in the forum county, but also in
additional counties where the notice would most likely notify potential
creditors or other interested persons of the decedent’s death. See Tulsa Prof’l
Collection Services, Inc. v. Pope, 485 US 478, 108 S Ct 1340, 99 L Ed2d
565 (1988). See also ORS 115.003 and chapter 9 for further discussion of
the personal representative’s duty to search diligently for creditors, and
when mailing of a direct notice to a creditor is required.
§ 5.2-2 Petition
A petition commences probate proceedings. ORS 113.035.
Any interested person may file a petition in the court with jurisdiction and
venue for the appointment of a personal representative for either an intestate estate
(the decedent died without a will) or a testate estate (the decedent died with a will).
ORS 113.035. See Forms 5-3, 5-4.
The term interested person is statutorily defined, and the definition must be
carefully observed. It includes an heir, a devisee, a child, a spouse, a creditor, or
any other person having a property right or claim against the decedent’s estate. The
term also includes fiduciaries representing the interested person. ORS 111.005(19).
See §2.4-3. Other persons should not file a petition; doing so may invalidate the
appointment.
No notice of hearing on the petition is required unless the estate will escheat
or the probate is initiated in solemn form. See §5.2-3, regarding escheat, and §5.2-
4(g), regarding probating a will in solemn form.
§ 5.2-2(b) Contents of Petition
The probate code does not set forth any particular form of petition for the
appointment of a personal representative and for the probate of a will, but it does
specify the information that a petition must include. ORS 113.035, 113.135; see
also UTCR 2.010(7), UTCR 9.030; ORS 111.205; ORCP 1 E. Also, ORS 111.205
requires that the “proceedings shall be in writing.” See also UTCR 2.010(3) (all
documents must be printed or typed). Furthermore, UTCR 2.010 sets forth other
rules regarding the format of documents, and both UTCR 2.010(7) and UTCR
9.030 require that certain information about the attorney be included in documents
filed in a proceeding.
Pursuant to ORS 113.035, a petition must include the following information:
(1) The decedent’s name, age, domicile, post office address, date and
place of death, and Social Security number or taxpayer identification number;
NOTE: Although ORS 113.035(1) requires that a petition for the
appointment of a personal representative and for the probate of a will
include the decedent’s Social Security number, UTCR 2.100(1)(a) sets forth
procedures “to identify and segregate protected personal information when
submitting a document to a court in a case and to request the information be
kept from inspection by the general public.” The procedures to identify and
segregate protected personal information that already exists in a case file are
set forth in UTCR 2.110.
(2) Whether the decedent died testate or intestate;
(3) The facts relied on to establish venue;
(4) The name and post office address of the person nominated as personal
representative, and the facts showing that the person is qualified to act;
(5) The names, relationship to the decedent, and post office addresses of
the decedent’s heirs, and the ages of any minor heirs;
(6) A statement that “reasonable efforts have been made to identify and
locate all heirs of the decedent”; also, if the petitioner “knows of any actual or
possible omissions from the list of heirs, the petition must include a statement
indicating that there are omissions from the information relating to heirs”;
(7) If the decedent died testate, the names and post office addresses of the
decedent’s devisees, and the ages of any who are minors;
(8) The name and post office address of any person asserting an interest
in the estate, or on whose behalf an interest has been asserted, based on a
contention that (a) the will alleged in the petition “is ineffective in whole or part”;
(b) “[t]here exists a will that has not been alleged in the petition to be the will of
the decedent”; or (c) the decedent “agreed, promised or represented that the
decedent would make or revoke a will or devise, or not revoke a will or devise, or
die intestate”;
(9) The name and post office address of any person asserting an interest
in the estate, or on whose behalf an interest has been asserted, “based on a
contention that a parent of the decedent willfully deserted the decedent or
neglected without just and sufficient cause to provide proper care and maintenance
for the decedent, as provided by ORS 112.047” (see §§8.4-1, 8.1-4(a) to 8.1-4(c));
(10) Whether the original will is in the court’s possession or accompanies
the petition; otherwise, the petition must state the contents of the will and indicate
that it is lost, destroyed, or otherwise unavailable, and that it was not revoked
(unless the petition is for probate of a foreign will and an authenticated copy of the
foreign will accompanies the petition); and
(11) A statement of the extent and nature of the estate’s assets, to enable
the court to set the amount of the personal representative’s bond.
In addition, the petition must include a declaration under penalty of perjury
in the form required by ORCP 1 E, made by at least one of the persons making the
petition. ORS 111.205. The declaration must appear in prominent letters
immediately above the signature of the declarant. ORCP 1 E.
Also, the last page of the petition must include the name, address, telephone
number, fax number, e-mail address, and Oregon State Bar number of the lawyer
of record. UTCR 9.030(1); see also UTCR 2.010(7).
PRACTICE TIP: A petition for the appointment of a personal
representative to administer an intestate estate is essentially the same as a
petition for the appointment of a personal representative and probate of a
testate estate. See ORS 113.035. However, the two petitions are slightly
different. Each petition must state whether the decedent died testate or
intestate. ORS 113.035(2). If the decedent died testate, the petition must list
the names and addresses of the devisees named in the will. ORS 113.035(7).
If the decedent died intestate, the petition must request that the court appoint
the appropriate personal representative under ORS 113.085(1). See §§5.2-3,
5.2-5(a) to 5.2-5(b). Furthermore, in an intestate estate, a bond is normally
required and will not be waived unless the exceptions listed in ORS 113.105
are met. See §5.2-6(a).
PRACTICE TIP: ORS 113.135 and UTCR 2.010 and UTCR 9.030 are
interrelated, but the statute is not as broad as the UTCR rules. To ensure
compliance with the law, the petitioner should check the current rules and
statutes and avoid relying on preprinted forms.
Regarding item (1) in the 2012 text, ORS 113.035(1) no longer requires that
a petition for the appointment of a personal representative and for the probate of a
will include the decedent’s Social Security number.
UTCR 9.030(1), cited in the paragraph preceding the first practice tip in the
2012 text, now provides that “[t]he “contact information required by UTCR
2.010(7) must be typed or printed on the last page of every document submitted to
the court.” UTCR 2.010(7) provides that “[a]ll documents must include the
author’s court contact information under UTCR 1.110(1) and, if prepared by an
attorney, the name, email address, and the Bar number of the author and the trial
attorney assigned to try the case.”
UTCR 1.110(1) defines court contact information as follows:
“Court contact information” means the following information about a person
submitting a document: the person’s name, a mailing address, a telephone
number, and an email address and a facsimile transmission number, if any,
sufficient to enable the court to communicate with the person and to enable any
other party to the case to serve the person under UTCR 2.080(1). Court contact
information can be other than the person’s actual address or telephone or fax
number, such as a post office box or message number, provided that the court and
adverse parties can contact the person with that information.
NOTE: See UTCR chapter 21 (filing and service by electronic means),
including UTCR 21.040 (format of documents to be filed electronically) and
UTCR 21.090 (electronic signatures). A document submitted electronically
must comply with the requirements of UTCR 2.010 “except as to any
requirement that a document bear a physical signature when filed.” UTCR
21.040(4).
The 2017 Legislature enacted ORS 113.038, which allows a petition for the
appointment of a personal representative under ORS 113.035 to include “a request
for the compensation of the personal representative to be determined by a different
method than as provided in ORS 116.173(3).” The petition “must set forth specific
facts showing that the compensation calculated under ORS 116.173(3) would be
inadequate to compensate the personal representative for the reasonable value of
the personal representative’s services.” ORS 113.038(1). The court may grant the
request if it finds that the statutory compensation would be inadequate. ORS
113.038(1).
If the petition includes a request for a different method of compensation
under ORS 113.038,
(1) the petitioner must give notice and a copy of the petition to the
distributees of the estate, the Department of Human Services (DHS), and the
Oregon Health Authority (OHA), allowing them 20 days for filing objections to the
petition (unless the court allows a different time); and
(2) the court may not enter a judgment appointing the personal
representative until it “has held a hearing on the petition including the request or
the time for filing objections to the petition has expired without an objection being
filed.”
ORS 113.038(2).
If the court allows the request for a different method of compensation under
ORS 113.038, “the personal representative may, at any time prior to or at the time
of the filing of the final account or the statement in lieu of the final account under
ORS 116.083, elect to be compensated as provided in ORS 116.173(3).” ORS
113.038(3).
If DHS, the OHA, or a distributee fails to object to the request for a different
method of compensation under ORS 113.038, they are not precluded “from
objecting to the amount of the personal representative’s compensation set forth in
the final account filed under ORS 116.083 on the basis that the compensation
exceeds the reasonable value of the services actually provided by the personal
representative.” ORS 113.038(4).
See Supplement § 5.2-4(h) (contested will) regarding the admission of a
noncompliant writing as the decedent’s will or codicil.
§ 5.2-3 Escheat
If no known person takes by descent, the intestate estate escheats to the state
of Oregon. ORS 112.055(1).
If a devisee or a person entitled to a share of the estate under ORS 112.025–
112.035 (share of surviving spouse) or ORS 112.045 (share of a person other than
a surviving spouse) cannot be identified or found, then that person’s share of the
estate escheats to the state of Oregon. ORS 112.055(2). Provisions for dealing with
the person’s share of the estate are set forth in ORS 112.055(3).
If the estate is to escheat to the state, the personal representative must deliver
or mail to an estate administrator of the Department of State Lands (DSL) a copy
of the petition filed under ORS 113.235 and a copy of any last will of the decedent.
The personal representative must also file proof of the delivery or mailing with the
court. ORS 113.045(1). See ORS 111.218 (proof of mailing or other delivery).
After appointment, if the personal representative cannot identify or find all heirs
and devisees of the decedent, the personal representative must so notify the DSL.
ORS 113.045(2).
If it appears at the onset of probate administration that the decedent died
wholly intestate and without heirs, the court must appoint the DSL as the personal
representative of the estate. The attorney general represents the DSL in the
intestate proceedings. ORS 113.085(2). But see ORS 113.085(3) (when the estate
is insolvent, the court, with the DSL’s written authorization, may appoint another
person to administer the estate). Otherwise, the court may enter an order of escheat
at any time after the expiration of four months after the date of first publication of
notice to interested persons, if “it appears . . . that there is no known person to take
by descent.” ORS 116.193. Thereafter, the net estate is distributed to the DSL
without further proceedings and the estate is summarily closed. ORS 116.193.
NOTE: For a discussion of statutory presumptions that apply in a
proceeding to determine whether a missing person has died, see §4.1-2(g).
See ORS 116.253 regarding the recovery of escheated property.
ORS 112.055(1) now provides that an intestate estate escheats to the State of
Oregon if, “after diligent search and inquiry that is appropriate to the
circumstances, taking into account the value of the decedent’s estate, no known
person takes under ORS 112.025 to 112.045” by intestate succession.
ORS 113.085(3) was renumbered ORS 113.085(4) (when the estate is
insolvent, the court, with the DSL’s written authorization, may appoint another
person to administer the estate).
§ 5.2-4 Proof of Will
§ 5.2-4(a) Affidavit of Attesting Witness
The probate code permits proof of a will ex parte by the affidavit of an
attesting witness made at any time. ORS 113.055(1). This procedure is historically
referred to as probate in common form, as distinguished from probate in solemn
form. Interested persons are protected under ORS 113.145 and 113.055(2), which
require the giving of notice of the probate and allow interested persons 30 days to
seek the affiant’s testimony or deposition. See §5.2-4(c), regarding the testimony
of attesting witnesses, and §5.2-4(g), regarding probate in solemn form. If the
petition involves the assertion of an invalid will, another will, or the right to
receive pursuant to an agreement, notice of such allegations must be given to the
devisees and heirs. ORS 113.035(8).
PRACTICE TIP: In the usual case, the probate judge or probate
commissioner will receive only the petition for the probate of the will, the
affidavits of witnesses (which generally contain only conclusions), the will,
and the form of the limited judgment admitting the will to probate. This
procedure commences the administration of the estate and, in almost every
case, is adequate.
See Form 5-5; see also Forms 5-3, 5-4.
See Supplement § 5.2-4(h) regarding ORS 112.238.
The 2015 Legislature added to ORS 112.235 a provision allowing a witness
to a testator’s will to attest the will “by signing the witness’ name to the will within
a reasonable time before the testator’s death.” ORS 112.235(1)(b)(B). Thus, it
appears that a witness is not required to sign the will contemporaneously with the
testator’s execution of the will. In addition, ORS 112.235(2) provides the
“signature by a witness on an affidavit executed contemporaneously with
execution of a will is considered a signature by the witness on the will.” The 2015
changes to ORS 112.235 apply only to “decedent’s dying and wills and writings
executed after the effective date of this 2015 Act” (January 1, 2016). Or Laws
2015, ch 387, § 36.
COMMENT: Curiously, the effective date of the legislation appears only
in the 2015 Act, but was not codified in the statute.
§ 5.2-4(b) Self-Proving Will
The probate code provides that affidavits of attesting witnesses to a will may
be made at the time the will is executed or any time thereafter. ORS 113.055. If the
attesting witnesses’ affidavits were made at the time of the will’s execution, and if
the affidavits are attached to the will as part of the will, the will is self-proving in
an ex parte proof-of-will hearing.
§ 5.2-4(c) Testimony of Attesting Witness
Within 30 days after a limited judgment admitting a will to probate is made,
an interested person may file a motion for the taking of a subscribing witness’s
testimony. The court may require that the witness be brought before the court. If
the witness is outside the reach of a subpoena, the court may order that the
witness’s deposition be taken. ORS 113.055(2).
PRACTICE TIP: The extent of proof required is not specified in ORS
113.055(2). The degree of proof in a contest of a will or probate in solemn
form is specified in ORS 113.055(4). Provisions regarding contesting a will
are set forth in ORS 113.075. Looking at these probate code provisions
together suggests that an interested person’s resort to ORS 113.055(2) is not
a will contest and requires only testimony establishing the facts set forth in
the witness’s affidavits, such as the witness’s qualification; that the testator
signed the will in the presence of each witness, or directed some person to
sign for him or her, or acknowledged a signature previously made; and that
the witnesses were requested to attest the will by signing their names in the
testator’s presence. See ORS 112.235. However, the cautious personal
representative may want to offer all evidence as specified in ORS
113.055(4) if ORS 113.055(2) is invoked within the time for a will contest
set forth in ORS 113.075(3).
ORS 113.055(2) now provides that “within 30 days from the date the
personal representative first delivers or mails information under ORS 113.145(1),”
an interested person may file a motion for the taking of a subscribing witness’s
testimony.
§ 5.2-4(d) Missing Witness
The affidavit or testimony of only one of the attesting witnesses is necessary
to prove a will. ORS 113.055(1). If this evidence is unavailable, the court may
allow proof of the will by testimony or other evidence that the signature of the
testator, or at least one of the witnesses, is genuine. ORS 113.055(3).
Under ORS 112.245, an interested person (one who is devised a personal
and beneficial interest in the estate) is permitted to be a witness to a will.
Presumably, the affidavit or testimony of an heir, devisee, or other interested
person may be used to attest to the genuineness of a testator’s or witness’s
signature.
COMMENT: A useful research tool to determine who can be a witness
to prove the execution of a will is the case In re Warren’s Estate, 138 Or
283, 4 P2d 635 (1931).
See Form 5-6.
PRACTICE TIP: Although ORS 112.245 allows an interested person to
be a witness to a will, caution dictates that witnesses to a will be
disinterested persons.
§ 5.2-4(e) Foreign Will
A foreign will that operates on property in Oregon may be presented for
probate in this state in a petition filed by an interested person in the same manner
as in the probate of a will of a domiciliary. ORS 113.065. The petitioner must file a
certified copy of both the will and the order admitting the will to probate in the
foreign jurisdiction. The petition must contain the jurisdictional and other statutory
facts required by the probate code or the rules. ORS 113.065(1).
A foreign will may be contested for any cause that would be grounds for
rejection of a will of a testator who died domiciled in this state. ORS 113.065(2).
See §§6.6-1(a) to 6.6-6, regarding ancillary administration.
§ 5.2-4(f) International Will
An international will is valid as to form and formalities of execution if it
complies with the requirements of the Uniform International Wills Act, set forth in
ORS 112.232. ORS 112.232(2). Among other requirements, the will offered into
probate must be accompanied by a certificate in the form specified by ORS
112.232(5). See §4.2-2(c).
§ 5.2-4(g) Probate in Solemn Form
Probate in solemn form, which is taken from the old English practice,
requires the same proof as in an action tried without a jury. ORS 113.055(4). See
§2.9-3. “Proceedings in ‘solemn form’ . . . require that all ‘interested persons’ be
notified and allowed to appear in order to assert whatever position they may have
with regard to the propounded will.” Matter of Ross’ Estate, 25 Or App 191, 196,
548 P2d 1001 (1976). An important difference between probate in common form
and probate in solemn form is that “the latter constitutes an adversary proceeding
in which parties in interest opposed to the will have an opportunity to contest its
validity, while in the former contestants are neither notified nor permitted to
appear.” Matter of Ross’ Estate, 25 Or App at 196. Thus, interested parties have
the right to cross-examine the attesting witnesses and to introduce evidence
attacking the validity of the will before the will is admitted to probate. All
statements in the petition for probate must be proved, including the testamentary
capacity of the testator and the execution and attestation of the will. See 1
NICHOLAS JAUREGUY & WILLIAM E. LOVE, OREGON PROBATE LAW AND PRACTICE
§462 (1958).
Probate in solemn form can be initiated by the petitioner or by an interested
person. If the petitioner initiates probate in solemn form, the petitioner must obtain
a hearing date for presenting the will, give the decedent’s heirs and devisees notice
of that hearing, and file an affidavit of the giving of the notice. See JAUREGUY &
LOVE, supra.
PRACTICE TIP: An interested person who desires to contest the validity
of a will that has not yet been presented for probate may initiate the will
contest by commencing a probate in solemn form. This procedure sets the
stage for evidence attacking the will to be presented in the same manner as
in an action tried without a jury. See ORS 113.055(4).
§ 5.2-4(h) Contested Will
“Any interested person may contest the probate of a will or the validity of
the will or assert an interest in the estate” for the reasons and within the time limits
set forth in ORS 113.075, ORS 113.075(1), (3).
If a will is contested, proof of any facts must be made in the same manner as
in an action tried without a jury. ORS 113.055(4). See §§15.2-1(a) to 15.2-2(g),
regarding will contests.
with the formalities of a validly executed will. See Or Laws 2015, ch 387, § 29.
(1) the decedent’s will;
(2) “[a] partial or complete revocation of the decedent’s will; or
(3) “[a]n addition to or an alteration of the decedent’s will.
ORS 112.238(1).
The petition process, as well as the consequences of a successful petition,
are set forth in ORS 112.238(2), (3), and (4). For further discussion of ORS
112.238, see Supplement § 8.2-6 (petition to admit noncompliant writing as
decedent’s will or a revocation or alteration of the will).
NOTE: As enacted in 2015, ORS 112.238 applies only to “decedents
dying and wills and writings executed after the effective date of this
[legislation],” which was January 1, 2016. Or Laws 2015, ch 387, § 36.
COMMENT: The effective date of this 2015 legislation appears only in
the 2015 Act, but was not codified in the statute itself. As codified, ORS
112.238 includes no limitation on its applicability to wills or writings
executed before, on, or after the effective date of the 2015 Act. The lawyer
must look to section 36 of the 2015 Act to find the limitations.
Two months after the effective date of the 2015 Act, the legislature
amended ORS 112.238(2), (3) and (4). The amendments changed the
petition process and the consequences of a successful petition. See Or Laws
2016, ch 42, § 17. The 2016 legislation became operative on March 14,
2016, applying only to “estates of decedents dying after the operative date.”
Or Laws 2016, ch 42, § 25(2).
CAVEAT: The absence of language in ORS 112.238 limiting the relief
to certain wills or writings is misleading.
Section 36 of the 2015 Act designates provisions of the 2015 Act that
apply to “decedents dying and wills and writings executed after [January 1,
2016].” Designated provisions include sections 27 to 30 of the 2016 Act
(including ORS 112.238, representing codified section 29), 25 sections of
ORS chapter 112 that are amended, and six sections of ORS chapter 112 that
are repealed.
Section 36 is uncodified and is not referenced in the Oregon Revised
Statutes. The lawyer must read section 36 of the 2015 Act to become aware
of the limitations on applicability for the additions, amendments, and repeals
of sections of ORS chapter 112. This piece of legislation means that repealed
sections of the Oregon Revised Statutes remain in full force and effect with
respect to decedents dying and wills and writings executed before January 1,
2016. The repealed sections can no longer be found in the current volumes
of the Oregon Revised Statutes. Nevertheless, the sections remain applicable
to decedents dying, and wills and writings executed before, January 1, 2016.
Section 25(2) of the 2016 Act expressly limits section 17 of the 2016
Act (i.e., ORS 112.238) to estates of decedents dying after March 14, 2016.
The 2016 Act appears to be an attempt to address some of the confusion
caused by the 2015 Act.
The lawyer must read both the 2015 Act and the 2016 Act to
determine whether any writing that a client seeks to excuse from will
formalities, or a writing that a client opposes, is eligible for relief from will
formalities. A review of published ORS sections codifying the Acts will not
be informative.
§ 5.2-5 Appointment of Personal Representative
§ 5.2-5(a) Preference in Appointing Personal Representative
Upon the filing of a petition, the court must appoint a “qualified person it
finds suitable” as the personal representative of the estate, giving preference to the
persons listed in ORS 113.085(1), in the order set forth in the statute. ORS
113.085(1). Thus, the court has some discretion in appointing a personal
representative, except in an escheat estate. See Wharff v. Rohrback, 152 Or App
68, 73–74, 952 P2d 87 (1998). ORS 113.085(1) sets forth the following order of
preference:
(1) The executor named in the will;
(2) The decedent’s surviving spouse or the nominee of the surviving
spouse;
(3) The decedent’s nearest of kin or that kin’s nominee;
(4) The Director of the Department of Human Services, the Director of
the Oregon Health Authority, or “an attorney approved under ORS 113.086, if the
decedent received public assistance as defined in ORS 411.010 or received care at
an institution described in ORS 179.321(1) or (2) and it appears that the assistance
or the cost of care may be recovered from the estate of the decedent”;
(5) The Department of Veterans Affairs, if the decedent was a protected
person, and the department joined in the petition for appointment; or
(6) Any other person qualifying.
If the decedent died “wholly intestate and without known heirs,” the
Department of State Lands (DSL) must be appointed as personal representative.
ORS 113.085(2). But see ORS 113.085(3) (when the estate is insolvent, the court,
with the DSL’s written authorization, may appoint another person to administer the
estate). See §5.2-3, regarding an escheat estate.
PRACTICE TIP: The lawyer should check the county’s supplemental
local rules, which may require the petition to allege that the proposed
personal representative has ORS 113.085 preference to be appointed. See
Forms 5-3, 5-4.
The 2017 Legislature modified the preferences for appointment of a personal
representative. ORS 113.085(1) now sets forth the following order of preference:
(1) the personal representative named in the will;
(2) the decedent’s surviving spouse or the surviving spouse’s nominee,
but only if the surviving spouse “is a distributee of the estate”;
(3) a person who would be entitled to the decedent’s property under
intestate succession, but only if the person “is a distributee of the estate”;
(4) “[a]ny other distributee of the estate”;
(5) the Director of Human Services or the Director of the Oregon Health
Authority, or an attorney approved under ORS 113.086, “if the decedent received
public assistance as defined in ORS 411.010, received medical assistance as
defined in ORS 414.025 or received care at an institution described in ORS
179.321(1) and it appears that the assistance or the cost of care may be recovered
from the estate of the decedent”;
(6) the Department of Veterans’ Affairs, “if the decedent was a protected
person under ORS 406.050(10) and the department has joined in the petition for
such appointment”;
(7) “[a]ny other person.”
NOTE: The term distributee means “a person entitled to any property
of a decedent under the will of the decedent or under intestate succession.”
ORS 111.005(13).
The 2017 Legislature added a new provision to ORS 113.085: Before the
court appoints a personal representative under items (2) to (7) above, the court
“may require the petitioner to make a reasonable attempt to notify persons of
higher priority than the proposed personal representative.”
PRACTICE TIP: To avoid delay in the appointment of a lower-priority
personal representative, the lawyer should consider obtaining the written
consent of higher-priority nominees and filing the same with the petition.
§ 5.2-5(b) Disqualification of Personal Representative
The grounds for which a person may be disqualified from serving as
personal representative are set forth in ORS 113.092 and 113.095.
A person nominated as personal representative who has been convicted of a
felony must inform the court of the conviction. ORS 113.092(1). The conviction
will not disqualify the nominee unless (1) the court finds that “the facts underlying
the conviction are substantially similar to facts which would constitute grounds for
removal” of the person as personal representative under ORS 113.195(2); and (2)
the court “has reasonable grounds to believe that such person will be unfaithful to
or neglectful of the trust.” ORS 113.092(1). A person’s failure to inform the court
of the felony conviction may disqualify him or her from serving as personal
representative, or may constitute grounds for removal as personal representative.
ORS 113.092(2).
Under ORS 113.095, the following persons are disqualified from serving as
personal representative:
(1) An incompetent;
(2) A minor;
(3) A person suspended for misconduct or disbarred from the practice of
law, during the period of suspension or disbarment;
(4) A person who has resigned from the Oregon State Bar when charges
of professional misconduct are pending, or when disciplinary proceedings are
pending against the person, until the person is reinstated; and
(5) A licensed funeral service practitioner, unless the decedent was a
relative of such practitioner or was a partner, employee, or employer of the
practitioner petitioning for appointment as personal representative.
The 2017 Legislature amended ORS 113.095(1). Instead of providing that an
“incompetent” is disqualified from serving as personal representative, the statute
now states that “[i]ncapacitated or financially incapable” persons, “as those terms
are defined in ORS 125.005,” are disqualified from serving as personal
representative.
§ 5.2-5(c) Nonresident Personal Representative
Nonresidents of Oregon are not disqualified from acting as personal
representatives. Anyone who accepts appointment as personal representative
submits to the personal jurisdiction of the court. ORS 113.087.
§ 5.2-5(d) Limited Judgment
If the court determines that “there is no just reason for delay,” the court in a
probate proceeding may enter a limited judgment for a “decision on a petition for
appointment or removal of a personal representative.” ORS 111.275(1)(a), (2).
“The judgment document need not reflect the court’s determination that there is no
just reason for delay.” ORS 111.275(2).
See Form 5-7, which is used for a testate estate, and Form 5-8, which is used
for an intestate estate. Further, all such limited judgments must comply with UTCR
2.010 and UTCR 9.030.
PRACTICE TIP: Petitions and limited judgments “not requiring a court
appearance may be mailed to the trial court administrator, with self-
addressed stamped envelopes or postcards for responses.” UTCR 9.010.
PRACTICE TIP: If the bond requirements are known before the ex parte
hearing, that amount can be filled in before presenting the limited judgment
to the court. Otherwise, the amount of bond and the form of surety can be
filled in after the court’s ruling at the hearing.
with the formalities of a validly executed will. See Supp § 5.2-4(h) (contested
will).
Accordingly, ORS 111.275 also allows the court in a probate proceeding to
enter a limited judgment on a “decision on a petition filed under ORS 112.238
admitting a writing for probate or otherwise acknowledging the validity and intent
of the writing.” ORS 111.275(1)(f).
UTCR 9.010 now provides that “[e]xcept for a document that is
electronically filed, any petition, motion, order or judgment not requiring a court
appearance may be mailed to the trial court administrator, with a self-addressed
stamped envelope or postcard for response.” See UTCR 21.040 for the format of
documents to be filed electronically.
§ 5.2-6 Bond
§ 5.2-6(a) Necessity of Bond; Court Discretion
The personal representative must file a bond unless (1) the will waives the
bond requirement; or (2) the personal representative is (a) the sole heir or devisee,
(b) the Department of State Lands, (c) the Department of Veterans Affairs, (d) the
Director of Human Services, (e) the Director of the Oregon Health Authority, (f)
an attorney approved under ORS 113.086, or (g) a trust company. ORS 113.105,
709.240. See Form 5-9.
Note, however, that the court has discretionary authority with respect to the
bond. The probate court has discretion to require a bond, even if the will provides
that no bond is required. ORS 113.105(1).
The court also has discretion to waive the bond requirement if all the
devisees and heirs known to the court agree, in writing, that the requirement be
waived, and their signed agreement waiving bond is filed with the court at the time
the petition for appointment of the personal representative is filed. ORS
113.105(4). See Forms 5-3, 5-4.
The court also has discretion to increase or reduce the amount of the bond,
or to require a new bond as the circumstances dictate. ORS 113.115. See §5.2-6(c).
CAVEAT: The lawyer should not seek a waiver of the bond under other
circumstances. To do so might invalidate the appointment of the personal
representative.
PRACTICE TIP: The lawyer should check the county’s supplemental
local rules regarding bond requirements. For example, in Multnomah
County, if the probate court is not satisfied that the creditors will be paid, the
court may require the personal representative of an intestate estate to post a
bond—even if the personal representative is the sole heir or devisee of the
estate. SLR 9.065 (Multnomah County).
The 2017 Legislature updated bonding requirements for personal
representatives.
Except as provided in ORS 113.105(2) to (4), the personal representative
must provide a bond “executed by a surety qualified under ORCP 82 D to G.” ORS
113.105(1)(a). The amount of the bond set by the court “must be adequate to
protect interested persons.” ORS 113.105(1)(b).
The statute provides that a bond is not required if (1) the will provides that
no bond is required; (2) the personal representative is “the sole heir or devisee”; or
(3) the personal representative is “the Department of State Lands, the Department
of Veterans’ Affairs, the Director of Human Services, the Director of the Oregon
Health Authority or an attorney approved under ORS 113.086.” ORS 113.105(2).
However, the statute also provides that the court “may, for good cause,” require a
bond in these situations. ORS 113.105(2).
Upon the personal representative’s request, the court may waive the
requirement of a bond if the request (1) “states the reasons why the waiver is
requested” and (2) “describes the known creditors of the estate.” ORS 113.105(3).
The court may waive or reduce the requirement of a bond to the extent that
(1) “[t]he personal representative provides written confirmation from a financial
institution that property of the estate is held by the financial institution subject to
withdrawal only on order of the court”; or (2) “[t]he court restricts the sale,
encumbrance or other disposition of property of the estate without prior court
approval.” ORS 113.105(4).
ORS 113.105 does not “affect[] ORS 709.240, relating to a trust company
acting as personal representative.” ORS 113.105(5).
NOTE: See ORS 113.005(2)(a) and ORS 113.007, enacted by the 2017
Legislature, regarding bond requirements and the waiver of a bond for a
special administrator.
§ 5.2-6(b) Amount of Bond
The probate code offers no particular formula for determining the amount of
the personal representative’s bond. The amount must “be adequate to protect
interested persons,” but, in any event, it may not be less than $1,000. ORS
113.105(2). See Form 5-9.
In setting the amount of the bond, the court must consider (1) the nature,
liquidity, and value of the estate’s assets; (2) anticipated income during
administration; and (3) the probable indebtedness and taxes. ORS 113.105(2).
The 2017 Legislature amended ORS 113.105 to delete the requirement that
bond must be at least $1,000. The amount of the bond set by the court “must be
adequate to protect interested persons.” ORS 113.105(1)(b). See Supp § 5.2-6(a)
UTCR 9.020 provides that a supporting affidavit, signed by the “personal
representative or attorney of record, must be filed if there is a request for approval
of a surety bond in an amount less than the aggregate value of the property in the
estate as disclosed by the petition.” The rule further states that this requirement
“may be satisfied by a statement in the petition for appointment.”
§ 5.2-6(c) Increasing, Decreasing, or Requiring New Bond
The court, in its discretion, may increase or reduce the amount of the bond,
or require a new bond as the circumstances dictate. ORS 113.115.
If a request is made to approve a surety bond in an amount less than the
aggregate value of the property in the estate, as disclosed by the petition for
appointment, a supporting affidavit, signed by the personal representative,
guardian, conservator, or lawyer of record, must be filed. This requirement may be
satisfied by an appropriate statement in the petition. UTCR 9.020.
The bond may need to be increased if the personal representative intends to
exercise the power to sell estate property under ORS 114.325, the sale price of the
property to be sold exceeds $5,000, and the amount of the personal representative’s
bond has not been increased by the amount of cash to be realized on the sale. ORS
114.325(2)(c).
PRACTICE TIP: If a major asset of the estate will not be sold or
exchanged immediately, the court may permit reduction of the amount of the
bond by issuing an order restricting the personal representative’s authority to
deal with or alienate property until such time as a need arises to transfer the
asset. A request for such an order should be included in the petition for
probate if it is to be truly cost-effective. An example of such language
follows: “No real property may be sold, conveyed, hypothecated, or leased
for a term greater than five years without further order of the Court.”
PRACTICE TIP: The lawyer should obtain a bond for the amount
needed and file it with the petition in order to expedite the personal
representative’s appointment. Bonds in a form acceptable for filing with the
court are usually prepared by the selected commercial surety company.
However, commercial surety companies seem increasingly reluctant to issue
bonds for personal representatives because of poor credit history. Therefore,
the lawyer should make certain in advance that the personal representative
can qualify for a bond. If the personal representative cannot obtain a bond, a
personal surety bond may be necessary. A personal surety bond acceptable
to the court must be by one or more sufficient personal sureties approved by
the court. A personal surety must be a resident of this state. ORS 113.105.
Most likely, the personal representative’s lawyer will then need to prepare
the bond. See Form 5-9.
The 2017 Legislature amended ORS 114.325 (cited in the third paragraph of
the 2012 text). The amendments to ORS 114.325 deleted the explicit provision
regarding increasing a bond when the sale price of the property to be sold exceeds
$5,000, but added a clause making the statute subject to ORS 113.105, which
governs bond requirements. See Supp § 5.2-6(a) (necessity of bond). The court sets
the amount of the bond, which amount “must be adequate to protect interested
persons.” ORS 113.105(1)(b). If a bond is required, it must be “executed by a
surety qualified under ORCP 82 D to G.” ORS 113.105(1)(a).
ORS 114.325 now provides as follows:
(1) Except as provided in subsection (2) of this section, and subject to
ORS 113.105, a personal representative has power to sell, mortgage, lease or
otherwise deal with property of the estate without notice, hearing or court order.
(2) Exercise of the power of sale by the personal representative is
improper, except after notice, hearing and order of the court, if:
(a) The sale is in contravention of the provisions of the will; or
(b) The property is specifically devised and the will does not authorize
its sale.
§ 5.2-6(d) Court Approval of Bond
Court approval of the personal representative’s bond is necessary. ORS
113.105. Neither the probate code nor the Uniform Trial Court Rules specify any
particular form of the court’s approval of the bond.
PRACTICE TIP: The bond should include language for court approval.
Form 5-9 contains a court-approval provision and a place for the judge’s
signature.
§ 5.2-7 Letters Testamentary or Letters of Administration
After the personal representative is appointed and the required bond (if any)
is filed with the court, the court must issue letters testamentary or letters of
administration to the personal representative. ORS 113.125.
Letters testamentary are issued when the decedent dies testate. See the form
in ORS 113.125(2). Letters of administration are issued when the decedent dies
intestate. See the form in ORS 113.125(3).
“The duties and powers of a personal representative commence upon the
issuance of letters.” ORS 114.255. See §§10.2-2 to 10.2-3.
COMMENT: Letters are the personal representative’s basis of authority
to execute the powers conferred by law. Their purpose is to give to the
personal representative authentic evidence of authority. Some persons with
whom the personal representative may have occasion to deal may want to
see the letters. 2 NICHOLAS JAUREGUY & WILLIAM E. LOVE, OREGON
PROBATE LAW AND PRACTICE §588 (1958) (citation not verified by
publisher).
The 2017 Legislature amended ORS 113.125 to delete the words executor
and administrator in favor of the term personal representative in both Letters
Testamentary (testate estate) and Letters of Administration (intestate estate). This
change thus clarifies that in either a testate or intestate probate, the fiduciary
appointed is a personal representative.
§ 5.2-8 Notices
Upon appointment, a personal representative must give notice of the
proceeding to the decedent’s heirs, the decedent’s devisees, and interested persons
as specified by the probate code. See ORS 113.145, 113.155. In addition, the
personal representative must give the Oregon Department of Human Services and
the Oregon Health Authority the same notice, plus a copy of the decedent’s death
certificate. ORS 113.145(6).
NOTE: Notice to the Oregon Department of Human Services
constitutes notice to the Oregon Health Authority. OAR 943-001-0020(2)(e);
see also OAR 407-043-0010(4)(h)(A).
If the personal representative has not identified and found all of the
decedent’s heirs and devisees, the personal representative must deliver or mail a
copy of the petition and a copy of the decedent’s will (if any) to an estate
administrator of the Department of State Lands. ORS 113.045(1). This
responsibility continues throughout the probate proceeding. ORS 113.045(2).
Therefore, if at any time after appointment the personal representative cannot
identify and find an heir or devisee, the personal representative must give notice of
that fact to an estate administrator at the Department of State Lands. In either
instance, the personal representative must file proof of such delivery or mailing
with the court. ORS 113.045(1)–(2). See ORS 111.218(1); see also §2.5-5.
For further discussion of notice, including the manner of giving notice, proof
of notice, and waiver of notice, see §§2.5-1 to 2.5-7 and §§7.3-1(a) to 7.3-3(b). See
also Forms 5-10 to 5-16.
NOTE: Before the court will approve the final account, the personal
representative must file proof that the heirs, devisees, and interested persons
received notice of the opportunity to file objections to the account. ORS
116.093. See §2.5-5 (proof of notice). When the probate code allows notice
by publication (see ORS 111.215(1)(c) and 113.155), proof of publication
may be made by an affidavit or a declaration of an employee of the
newspaper publishing the notice. ORCP 7 F(2)(b); ORS 111.218(2). In most
instances, the newspaper automatically sends to counsel the required
affidavit. Local practice may require the personal representative’s lawyer to
prepare the affidavit. See Form 5-16.
PRACTICE TIP: Within 30 days after appointment, the personal
representative must file proof of service by mail or delivery of information
to the persons described in ORS 113.035, the Oregon Department of Human
Services, and the Oregon Health Authority. ORS 113.145(1), (4), (6). Such
proof should be filed as soon as the notice is given, rather than at the end of
the 30-day period, because under ORS 113.075(3) any “interested person,” a
term much broader than an heir or a devisee (see ORS 111.005(12), (18),
(19)), can contest a will for up to four months after the date of delivery or
mailing of the information described in ORS 113.145, or four months after
the first publication of notice to interested persons, whichever is later. The
casual practice of filing proof of mailing or delivering information to
persons entitled to notice and proof of publication at the time of filing the
final account and petition for a judgment of distribution is extremely ill-
advised. This practice could delay the final account an additional four
months in order to allow time for possible will contests under ORS 113.075.
For this reason, both Form 5-10 and Form 5-11 include wording from ORS
113.075.
The 2017 Legislature amended ORS 116.093, which is cited in the second
note of the 2012 text. Before the court will approve the final account, the personal
representative must file proof that he or she mailed notice of the opportunity to file
objections to certain persons. ORS 116.093(2) now provides that the personal
representative must mail that notice to the Attorney General if a charitable trust, a
public benefit corporation, or a religious organization is a residuary beneficiary of
the estate or if either of the three will receive less under the judgment than the
amount of a specific devise to it.
§ 5.2-9 Removal of Personal Representative
§ 5.2-9(a) Grounds for Removal
The probate code provides for both mandatory and discretionary removal of
the personal representative.
The court must remove the personal representative if the personal
representative ceases to be qualified or becomes incapable of discharging his or her
duties. ORS 113.195(1).
The court, in its discretion, may remove the personal representative when he
or she has been unfaithful to, or neglectful of, the trust, or has failed to inform the
court of a past felony conviction. ORS 113.195(2)–(3). See Roley v. Sammons, 215
Or App 401, 412, 170 P3d 1067 (2007) (“removal is justified . . . when past
conduct of the personal representative shows unfaithfulness or neglect of the trust
or, under the equitable authority of the court, when the personal interests of the
personal representative conflict with a substantial and legitimate interest of a
beneficiary of the estate”); Holst v. Purdy, 117 Or App 307, 844 P2d 229 (1992).
The following sources describe some of the grounds for removal: Dave R.
Bonelli, Annot, Delay of Executor or Administrator in Filing Inventory, Account,
or Other Report, or in Completing Administration and Distribution of Estate, as
Ground for Removal, 33 ALR4TH 708 (1984) (supplemented periodically); Wanda
Ellen Wakefield, Annot, Adverse Interest or Position as Disqualification for
Appointment of Administrator, Executor, or Other Personal Representative, 11
ALR4TH 638 (1982) (supplemented periodically). See also 5 WEST’S OREGON
DIGEST, EXECUTORS AND ADMINISTRATORS key 35(1) (1956); 2 NICHOLAS
JAUREGUY & WILLIAM E. LOVE, OREGON PROBATE LAW AND PRACTICE §593
(1958) (citation not verified by publisher).
The procedure for removing a personal representative is discussed in §5.2-
9(b).
In addition to the grounds for removing a personal representative that are
described in the 2012 text, ORS 113.195 now provides that the court may remove
the personal representative for “other good cause shown.” ORS 113.195(4).
§ 5.2-9(b) Procedure for Removal
“When grounds for removal of a personal representative appear to exist [(see
§5.2-9(a))], the court, on its own motion or on the petition of any interested person,
shall order the personal representative to appear and show cause why the personal
representative should not be removed.” ORS 113.195(4). A copy of the order to
show cause and a copy of the petition (if any) must be served upon both the
personal representative and the surety. ORS 113.195(4).
§ 5.2-10 Successor Personal Representative
§ 5.2-10(a) Appointment of Successor
“When a personal representative dies, is removed by the court, or resigns
and the resignation is accepted by the court,” the court must appoint a successor
personal representative only if the former personal representative was the sole or
last surviving personal representative, and administration of the estate has not been
completed. ORS 113.215(1). Otherwise, the appointment of a successor personal
representative is discretionary with the court. ORS 113.215(1).
§ 5.2-10(b) Letters of Administration/Testamentary
If a proven will is later set aside, the letters testamentary or the letters of
administration must be revoked and new letters of administration issued to a
successor personal representative. ORS 113.215(2). If a will is proved after letters
of administration have been issued, letters testamentary are then issued to a
successor personal representative. ORS 113.215(3).
§ 5.2-10(c) Powers of Successor
The successor personal representative “has all the rights and powers of the
predecessor,” including the powers conferred by the will, unless the powers
conferred by the will were clearly personal to the predecessor. ORS 113.215(4).
See chapter 7.
§ 5.2-10(d) Publication of Notice to Interested Persons
“If the personal representative dies, is removed by the court or resigns after
the notice to interested persons required by ORS 113.155 has been published but
before the expiration of four months from the date of first publication, the
successor personal representative” must publish notice to interested persons as if
the successor were the original personal representative. ORS 113.225. The new
notice must contain all the information required in the original notice and, in
addition, must state (1) that the original personal representative died, was removed
by the court, or resigned; (2) the date of death, removal, or resignation; and (3) the
date of appointment of the successor personal representative. The republished
notice must also state that claims against the estate must be presented to the
successor personal representative within four months after the date of the first
publication of the republished notice, or they may be barred. ORS 113.225(1). See
Form 5-15.
“[I]f the original personal representative dies, is removed by the court, or
resigns after the expiration of four months from the date of the first publication of
the [original] notice,” then the successor personal representative need not publish a
new notice. ORS 113.225(2).
§ 5.3 PROBATE OF SMALL ESTATES

§ 5.3-1 Generally
The probate code provides a procedure for transferring personal property
and real property, within specified monetary limits, to those who claim the right to
succession to the property by means of an affidavit filed with the probate clerk.
ORS 114.505–114.560. This procedure provides an economical and time-saving
approach for settling estates with minimum assets. If a decedent’s assets that would
otherwise be subject to a regular probate are within the monetary limits of the
probate code (see §5.3-2), the affidavit procedure avoids the necessity of
proceeding through the full probate process to transfer the decedent’s assets to
their proper recipients. However, the code does not preclude appointing a personal
representative for property that meets the monetary limits of property qualifying
for the small-estate affidavit procedure, if the personal representative’s
appointment is sought within four months after the affidavit filing. See ORS
114.555.
PRACTICE TIP: The small-estate affidavit is often useful when the
decedent owned substantial nonprobate property and also owned either a
minimal amount of personal property or some real property that was not
owned in a nonprobate form. The purpose of the small-estates procedure is
to expedite transfers of the decedent’s property to beneficiaries in lieu of
formal probate administration.
§ 5.3-2 Estates Qualifying for Small-Estates Procedure
An estate qualifies for the small-estate procedure only if:
(1) The fair-market value of the estate is $275,000 or less;
(2) Not more than $75,000 of that fair-market value is attributable to
personal property; and
(3) Not more than $200,000 of that fair-market value is attributable to real
property.
ORS 114.515(2).
Estate means the decedent’s property that is subject to administration in
Oregon. ORS 114.505(3).
CAVEAT: If a person who is eligible to file a small-estate affidavit “is
aware that the decedent was the sole lessee or the last surviving lessee of a
safe deposit box at the time of the decedent’s death,” the person may not file
a small-estate affidavit until after an inventory of the box has been taken
under ORS 708A.655. ORS 114.537(1). The person must consider the
contents of the box in determining whether the decedent’s estate is within
the limits prescribed by ORS 114.515(2). If the person then files a small-
estate affidavit, the value of the contents of the box must be stated in the
affidavit.
If, after filing the affidavit, the person becomes aware that “the
decedent was the sole lessee or the last surviving lessee of a safe deposit box
at the time of the decedent’s death,” the person must promptly request an
inventory of the box under ORS 708A.655. ORS 114.537(2). After
consideration of the value of the contents of the box, the person must file an
amended affidavit under ORS 114.515 if the decedent’s estate remains
within the limits prescribed by ORS 114.515(2). However, if the decedent’s
estate then exceeds the limits prescribed by the statute, the person must file
notice with the court that the decedent’s estate is no longer subject to the
small-estates procedure. ORS 114.537(2).
§ 5.3-3 Small-Estate Affidavit
§ 5.3-3(a) Contents of Affidavit
A small-estate affidavit filed under ORS 114.515 must:
(1) State the decedent’s name, age, domicile, post office address, and
Social Security number, ORS 114.525(1) (see UTCR 2.100–2.110 regarding
segregating personal information from a document submitted to the court);
(2) State the date and place of the decedent’s death, ORS 114.525(2);
NOTE: A certified copy of the death certificate must be attached to the
affidavit. ORS 114.525(2).
(3) Describe and state the fair-market value of all property to which the
affidavit is to apply, including a legal description of any real property, ORS
114.525(3);
(4) State the value of the contents of any safe-deposit box, if the affiant
“is aware that the decedent was the sole lessee or the last surviving lessee of a safe
deposit box at the time of the decedent’s death,” ORS 114.537(1) (see the caveat in
§5.3-2);
(5) State that no application or petition for the appointment of a personal
representative has been granted in Oregon, ORS 114.525(4);
(6) State whether the decedent died testate or intestate, ORS 114.525(5);
NOTE: If the decedent died testate, the original will must be attached
to the affidavit. ORS 114.525(5).
(7) List all the decedent’s heirs and the last address of each heir known to
the affiant, and state that a copy of the affidavit showing the date of filing and a
copy of the will, if any, will be delivered to each heir or mailed to the heir at his or
her last-known address, ORS 114.525(6);
(8) If the decedent died testate (a) list the devisees of the decedent and
each devisee’s last address known to the affiant, and (b) state that a copy of the
will and a copy of the affidavit showing the date of filing will be delivered to each
devisee or mailed to the devisee at his or her last-known address, ORS 114.525(7);
(9) State the interest in the property described in the affidavit to which
each heir or devisee is entitled, and the interest, if any, that will escheat, ORS
114.525(8);
(10) State that reasonable efforts have been made to ascertain creditors of
the estate, ORS 114.525(9);
(11) List any expenses of, and claims against, the estate that remain unpaid
or on account of which the affiant or any other person is entitled to reimbursement
from the estate, including the known or estimated amounts thereof and the
creditors’ names and addresses as known to the affiant, and state that a copy of the
affidavit showing the date of filing will be delivered to each creditor who has not
been paid in full, or mailed to the creditor at its last-known address, ORS
114.525(9);
(12) List separately the name and address of each person known to the
affiant to assert a claim against the estate that the affiant disputes, and the known
or estimated amount of the claim, and state that a copy of the affidavit showing the
filing date will be delivered to each such person or mailed to the person at his or
her last-known address, ORS 114.525(10);
(13) State that a copy of the affidavit showing the filing date will be mailed
or delivered to the Oregon Department of Human Services and the Oregon Health
Authority, ORS 114.525(11);
NOTE: By administrative rule, notice to the Oregon Department of
Human Services constitutes notice to the Oregon Health Authority. OAR
943-001-0020(2)(e); see also OAR 407-043-0010(4)(h)(A).
PRACTICE TIP: The address of the Department of Human Services is:
Oregon Department of Human Services, Estate Administration Unit, PO Box
14021, Salem OR 97309-5024.
(14) State that claims against the estate that are not listed in the affidavit,
or that are in amounts larger than those listed in the affidavit, may be barred unless
(a) a claim is presented to the affiant, within four months of the filing of the
affidavit, at the address stated in the affidavit for presentment of claims, or (b) a
personal representative of the estate is appointed within four months after the filing
of the affidavit, ORS 114.525(12); and
(15) If the affidavit lists one or more claims that the affiant disputes, state
that any such claim may be barred unless (a) a petition for summary determination
is filed within four months of the filing of the affidavit, or (b) a personal
representative of the estate is appointed within four months after the filing of the
affidavit, ORS 114.525(13).
NOTE: Any error or omission in an affidavit filed under ORS 114.515
“may be corrected by filing an amended affidavit within four months after
the filing of the affidavit.” ORS 114.515(7).
PRACTICE TIP: Although the statute is silent on this issue, errors or
omissions in an affidavit discovered after the four-month period will require
the filing of a petition to reopen the estate and the appointment of a personal
representative under ORS 116.233. See §§11.10-1 to 11.10-4.
NOTE: ORS 114.515 also allows the filing of a supplemental affidavit
to include property not described in the original affidavit. ORS 114.515(8).
However, a supplemental affidavit may not be filed if inclusion of the
additional property would disqualify the estate from the small-estates
procedure. ORS 114.515(8); see ORS 114.515(2) (discussed in §5.3-2).
Furthermore, if the property is discovered after the estate has been closed,
the estate will need to be reopened. See §§11.10-1(a)(1) to 11.10-1(a)(3).
PRACTICE TIP: Because the names and addresses of agencies tend to
change, the lawyer should verify the agency’s title and address before
preparing and filing a small-estate affidavit. The telephone number for the
Estate Administration Unit is 800-826-5675 (toll-free in Oregon).
In item (11) of the 2012 text, ORS 114.525(9) was renumbered ORS
114.525(10).
114.525(11).
114.525(12).
114.525(13).
§ 5.3-3(b) Who May File
The probate code provides that any of the following persons may file a
small-estate affidavit (see Forms 5-17, 5-18):
(1) “One or more of the claiming successors of the decedent,” ORS
114.515(1)(a);
NOTE: See ORS 114.505(2) for the definition of claiming successors.
A creditor may be a claiming successor. ORS 114.505(2)(c). See §5.3-7.
(2) “If the decedent died testate, any person named as personal
representative in the decedent’s will,” ORS 114.515(1)(b);
(3) If the decedent received certain public assistance or received care at
an institution described in ORS 179.010, and “it appears that the assistance or the
cost of the care may be recovered from the estate of the decedent,” the Director of
Human Services, the Director of the Oregon Health Authority, or a lawyer
approved by either director under ORS 114.517 or 114.515(1)(c); or
(4) If the decedent died intestate and without heirs, and the estate appears
to be insolvent, a creditor of the estate who has requested and received
authorization to file a small-estate affidavit from an estate administrator of the
Department of State Lands, ORS 114.520(1).
NOTE: Both the creditor’s request and the estate administrator’s
permission must be in writing. ORS 114.520(2).
Within 30 days after receiving the request, the estate administrator
must either authorize the creditor, in writing, to file an affidavit, or inform
the creditor that the Department of State Lands will file an affidavit as
claiming successor. ORS 114.520(2)(a)–(b). However, before reaching its
decision, the estate administrator must investigate the estate’s assets and
liabilities and find that “it appears . . . that the estate is insolvent.” ORS
114.520(1)–(2).
A creditor who is authorized to file a small-estate affidavit must note
at the top of the affidavit that it is being filed by a creditor of the estate and
attach to it the estate administrator’s written authorization to file the
PRACTICE TIP: If the small estate involves title to real property, getting
all claiming successors to join in the affidavit simplifies securing title
insurance later on, because the record will show that all of the claiming
successors participated in the small-estate procedures. However, the probate
code does not require that all of the decedent’s claiming successors join in
the affidavit.
Regarding item (3) in the 2012 text, the statute now provides that the
Director of Human Services, the Director of the Oregon Health Authority, or an
attorney approved under ORS 114.517 may file a small-estate affidavit if the
decedent “received public assistance as defined in ORS 411.010, received medical
assistance as defined in ORS 414.025 or received care at an institution as defined
in ORS 179.010, and it appears that the assistance or the cost of care may be
recovered from the estate of the decedent.” ORS 114.515(1)(c).
§ 5.3-3(c) When and Where the Affidavit May Be Filed
The affidavit cannot be filed earlier than 30 days after the death of the
decedent. ORS 114.515(3).
CAVEAT: If the person filing the small-estate affidavit “is aware that
the decedent was the sole lessee or the last surviving lessee of a safe deposit
box at the time of the decedent’s death,” the person may not file the affidavit
until after an inventory of the box has been taken. ORS 114.537(1). See
§5.3-2.
The affidavit may be filed with the clerk of the probate court of any county
where (1) the decedent had a domicile, (2) the decedent had “a place of abode” at
the time of death, (3) the decedent had real or personal property at the time of
death, (4) the decedent had real or personal property at the time the proceeding is
commenced, or (5) the decedent died. ORS 114.515(1), 113.015. See Forms 5-17,
5-18.
§ 5.3-4 Transfers of Property Pursuant to Affidavit
After filing a small-estate affidavit (see §§5.3-3(a) to 5.3-3(c)), the affiant is
authorized to “take control of the property of the estate coming into the possession
of the affiant.” ORS 114.545(1)(a). See §5.3-4(a), regarding personal property, and
§5.3-4(b), regarding real property.
No sooner than 10 days after filing a small-estate affidavit (see §5.3-3(a)),
the affiant may deliver a certified copy of the affidavit to “any person who was
indebted to the decedent or who has possession of personal property belonging to
the estate.” ORS 114.535(1). See §5.3-4(a), regarding the transfer of personal
property.
The affiant may convey any of the estate property (real or personal) before
the expiration of the four-month period stated in ORS 114.555 (see §5.3-8(b)) if
(1) “each heir or devisee succeeding to the interest conveyed joins in the
conveyance,” and (2) any net proceeds of the sale will become a part of the estate.
ORS 114.545(1)(f). See §5.3-5, regarding the affiant’s duty to pay certain expenses
and claims. See also §5.3-6, regarding a conveyance to a good-faith purchaser.
If no personal representative is appointed within four months after the filing
of a small-estate affidavit, ORS 114.555 provides that
the interest of the decedent in all of the property described in the affidavit is
transferred to the person or persons shown by the affidavit to be entitled thereto,
and any other claims against the property are barred, except:
(1) As provided in ORS 114.540, 114.545 and 114.550; and
(2) For the purposes of a surviving spouse’s claim for an elective share
in the manner provided by ORS 114.600 to 114.725.
ORS 114.545(1)(f) was renumbered ORS 114.545(1)(g).
§ 5.3-4(a) Transfers of Personal Property
If a certified copy of the affidavit is delivered to a person indebted to the
decedent or in possession of the decedent’s personal property (see §§5.3-3(a) to
5.3-4), that person must “pay, transfer, deliver, provide access to and allow
possession of the personal property to the affiant,” as provided in ORS 114.535.
ORS 114.535(1).
Subject to ORS 114.537 (regarding safe-deposit boxes; see §5.3-2), if a copy
of the affidavit is delivered to a person who controls access to personal property
belonging to the decedent’s estate, “including personal property held in a safe
deposit box for which the decedent was the sole lessee or the last surviving lessee,”
the person must (1) give the affiant access to the property, and (2) allow the affiant
to take possession of it. ORS 114.535(2).
Subject to ORS 114.537, if a copy of an affidavit is delivered to a person
who has received property of the decedent under ORS 446.616 (an interest in a
manufactured structure), ORS 708A.430 or 723.466 (a deposit in a financial
institution or a credit union), ORS 803.094 (an interest in a vehicle), or a similar
statute providing for the transfer of property of an estate that is not being probated,
the person must “pay, transfer, deliver, provide access to or allow possession of the
property to the affiant if the person would be required to pay, transfer, deliver,
provide access to or allow possession of the property to a personal representative
of the estate.” ORS 114.535(3).
A transfer agent of any corporate security registered in the decedent’s name
must change the registered ownership on the corporation’s books to the person
entitled to the security on the presentation of a certified copy of the affidavit. ORS
114.535(5).
Any person who
pays, transfers, delivers, provides access to or allows possession of property of a
decedent in the manner provided by [ORS 114.535] is discharged and released
from any liability or responsibility for the property in the same manner and with
the same effect as if the property had been transferred, delivered or paid to a
personal representative of the estate of the decedent.
ORS 114.535(4).
If a person to whom an affidavit is delivered refuses to relinquish any
personal property as required by the statute, “the property may be recovered or
payment, delivery, transfer of or access to the property may be compelled upon
proof of the transferee’s entitlement in a proceeding brought for the purpose by or
on behalf of the transferee.” ORS 114.535(6).
PRACTICE TIP: The small-estate affidavit may be unnecessary if the
personal property to be transferred consists of a deposit of $25,000 or less in
a financial institution or credit union (ORS 708A.430, 723.466), title to a
motor vehicle (ORS 803.094), or a pet (ORS 114.215(3)). Transfers of these
items may occur as indicated by the above-mentioned sections.
§ 5.3-4(b) Transfers of Real Property
If real property is involved in a small-estate proceeding, the affiant must
“cause to be recorded in the deed records of any county in which real property
belonging to the decedent is situated an affiant or claiming successor’s deed
executed in the manner required by ORS chapter 93.” ORS 114.545(3).
PRACTICE TIP: When dealing with real property, the lawyer who
considers the small-estate affidavit and procedure appropriate should consult
with a title company to learn the kind of proof or documentation the title
company requires to insure title and the amount of any additional premium
the title company may charge.
PRACTICE TIP: If there are several heirs or devisees of real property,
they should all join in the affidavit or the signing of the deed. See ORS
114.545(1)(f).
PRACTICE TIP: If an heir or a devisee desires to sell an interest in the
real property to another heir or devisee, the lawyer should obtain a quitclaim
deed from the selling heir or devisee contemporaneously with the signing of
the affidavit.
ORS 114.545(3) was renumbered ORS 114.545(5). That provision now
provides as follows:
After the expiration of the period established in subsection (1)(b) of this
section [30 days after filing the affidavit], the affiant shall cause to be recorded in
the deed records of any county in which real property belonging to the decedent is
situated an affiant or claiming successor’s deed conveying the property to persons
entitled to the property, executed in the manner required by ORS chapter 93.
§ 5.3-5 Duties and Powers of Affiant
The probate code specifies the duties of a person who files a small-estate
affidavit. Pursuant to ORS 114.545, the affiant:
(1) Must take control of the property coming into the affiant’s possession;
(2) Must, within 30 days after filing the affidavit, mail, deliver, or record
“each instrument which the affidavit states will be mailed, delivered or recorded”;
(3) Must pay or reimburse any person who has paid certain expenses and
claims, including (a) expenses of administration listed in the affidavit, (b) expenses
of a funeral and disposition of the decedent’s remains as listed in the affidavit, (c)
claims listed in the affidavit as undisputed, (d) allowed claims presented to the
affiant within four months after the affidavit was filed (see ORS 114.540), and (e)
claims that the probate court has directed the affiant to pay;
NOTE: The expenses and claims must be paid from and to the extent of
the property of the estate, and must be paid in the order of priority set forth
in ORS 115.125. ORS 114.545(1)(c)–(d). See §5.3-7, regarding claims of
creditors.
(4) May (as allowed by the statute) transfer or sell any vehicle that is part
of the estate; and
(5) May (as allowed by the statute) convey any real or personal property
that is part of the estate if “each heir or devisee succeeding to the interest conveyed
joins in the conveyance” and any proceeds become part of the assets subject to the
small-estate affidavit.
PRACTICE TIP: The affiant’s duties and powers parallel, in abbreviated
form, those of a personal representative. Therefore, if the heirs or devisees
are different from the affiant, that is, if not all of the heirs or devisees join in
the affidavit, the affiant must take care to deal with the decedent’s property
in a fiduciary manner. In such a situation, the lawyer should caution the
affiant to keep records and provide reports, similar to those in a regular
probate, directly to at least those heirs or devisees who do not join in the
affidavit.
The 2015 Legislature added several provisions to ORS 114.545, and
renumbered subsections (c) and (d) of ORS 114.545 as subsections (d) and (e),
respectively.
ORS 114.545(1)(c) allows the affiant to open one or more deposit accounts
in a financial institution with the decedent’s funds, “upon which the affiant may
withdraw funds by means of checks, drafts or negotiable orders of withdrawal or
otherwise for the payment of claims and expenses described in [ORS
114.545(1)(d)].”
NOTE: A financial institution that opens a deposit account for an
affiant pursuant to ORS 114.545(1)(c) “is not liable to any other person for
opening the account or accounts or for permitting the affiant to withdraw
funds from the account or accounts by means of checks, drafts, negotiable
orders of withdrawal or otherwise.” ORS 114.545(7). Furthermore, the
financial institution “is not required to ensure that the funds of the decedent
that are paid out by the affiant are properly applied.” ORS 114.545(7).
ORS 114.545(2) provides that
when an heir or devisee entitled to succeed to a conveyance fails or refuses to join
in the conveyance as required by [ORS 114.545(1)(g)], an affiant approved under
ORS 114.517 [i.e., the Director of Human Services or the Director of the Oregon
Health Authority or either’s designated representative, or an attorney serving as
the affiant if pre-approved in writing by the agency] may convey any real or
personal property that is part of the estate at any time to a third party for a
valuable consideration.
ORS 114.545(3) provides that property conveyed by an affiant under ORS
114.545 “is subject to liens and encumbrances against the decedent or the estate of
the decedent but is not subject to rights of creditors of the decedent or liens or
encumbrances against the heirs or devisees of the decedent.” The statute further
provides that “[t]he filing and allowance of a claim in a proceeding under ORS
114.505 to 114.560 does not make the claimant a secured creditor.” ORS
114.545(3).
§ 5.3-6 Purchaser of Small-Estate Property
The affiant may sell the decedent’s interest in real property or personal
property before the expiration of the four-month period following the filing of the
small-estate affidavit, if each heir or devisee joins in the conveyance, the grantee of
the conveyance is a purchaser in good faith and for a valuable consideration, and
the proceeds of the sale (“net of the reasonable expenses of sale and any debt
secured as of the date of the decedent’s death by a duly perfected lien on the
property”) become a part of the estate subject to ORS 114.505–114.560. ORS
114.545(1)(f). If these conditions are met, “the purchaser has no duty with respect
to application of the consideration paid for the conveyance.” ORS 114.545(1)(f). If
no personal representative is appointed within four months after the filing of the
affidavit, the heir or devisee succeeding to the decedent’s interest in the property
can convey that interest free of any interest of any claiming successor. ORS
114.545(1)(f).
NOTE: “If the property is a manufactured structure as defined in ORS
446.561, the affiant must assign interest in the structure as provided in ORS
446.616.” ORS 114.545(1)(f).
See ORS 114.545(2), which is discussed in Supplement § 5.3-5 (duties and
powers of affiant).
§ 5.3-7 Creditors
The statutes governing the small-estates procedure protect creditors by,
among other things, allowing them to (1) file a small-estate affidavit (see §5.3-
3(b)), (2) present claims against the estate, and (3) file a petition for summary
review of administration of an estate. ORS 114.505(2)(c), 114.515(1)(a),
114.540(3), 114.545(1)(c)–(d), 114.550.
“Any creditor of the estate entitled to payment or reimbursement from the
estate under ORS 114.545(1)(c) who has not been paid or reimbursed the full
amount owed such creditor within 60 days after the date of the decedent’s death”
may file a small-estate affidavit. ORS 114.505(1)(c), 114.515.
A creditor may present a claim to the affiant within four months after the
affidavit (or an amended or supplemental affidavit) was filed. Each claim
presented must (1) be in writing; (2) describe the nature and amount of the claim, if
ascertainable; and (3) state the names and addresses of the claimant and the
claimant’s lawyer, if any. ORS 114.540(1), 115.005.
A claim presented to the affiant is considered allowed as presented unless,
within 60 days after the presentment date, the affiant mails or delivers a notice of
disallowance of the claim, in whole or in part, to the claimant and any lawyer for
the claimant. A notice of disallowance of a claim must inform the claimant that the
claim has been disallowed, in whole or in part, and that, to the extent disallowed,
the claim will be barred unless the claimant proceeds as specified in the code or a
personal representative is appointed within four months after the filing of the
If the affiant disallows a timely claim presented by a creditor of the estate,
the creditor “may within 30 days after the date of mailing or delivery of the notice
of disallowance file with the probate court a petition for summary determination of
the claim by the court.” ORS 114.540(3).
An unpaid creditor whose claim is listed in the affidavit as disputed may
“within four months after the filing of the affidavit file with the probate court a
petition for summary determination of the creditor’s claim by the court.” ORS
114.540(3).
Once the creditor petitions for a summary determination, the court will hear
the matter without a jury, after notice to the creditor and the affiant. Any interested
person may be heard in the proceeding. The claim may be proved as provided in
ORS 115.195(2). ORS 114.540(3). Upon the hearing, the court will determine the
claim in a summary manner, and must order that the claim be allowed or
disallowed in whole or in part. If the court allows the claim in whole or in part, the
order must
direct the affiant, to the extent of property of the estate allocable to the payment of
the claim pursuant to ORS 115.125, or any claiming successor to whom payment,
delivery or transfer has been made under ORS 114.505 to 114.560 as a person
entitled thereto as disclosed in the affidavit, to the extent of the value of the
property received, to pay to the creditor the amount so allowed.
ORS 114.540(3).
No appeal may be taken from the court order made on a summary
determination. ORS 114.540(3).
If the person who filed the small-estate affidavit fails to pay the expenses
and claims of the estate as described in §5.3-5, then any person who received
property pursuant to the affidavit procedure is “personally answerable and
accountable” to (1) creditors of the estate to the extent of the value of the property
received (to the extent that the creditors are entitled to payment pursuant to the
code), and (2) any later-appointed personal representative of the decedent’s estate.
ORS 114.545(2).
If an amended or supplemental affidavit is filed, a claim against the estate
must be filed within four months after the filing of the amended or supplemental
affidavit. ORS 114.515(7)–(8). Each claim presented to the affiant must include
the information required by ORS 115.025. ORS 114.540(1).
Subsections (1)(c), (1)(d), and (2) of ORS 114.545 were renumbered
subsections (1)(d), (1)(e), and (4) respectively.
ORS 114.540 is effectively amended by the 2017 Legislature’s amendments
to ORS 115.005. ORS 115.005(1)(a) now provides the method by which a claimant
must present a claim and clarifies that the sole act of filing a claim with the court
does not constitute presentation to the personal representative.
§ 5.3-8 Liability of Heirs and Devisees Who Receive Decedent’s Property
§ 5.3-8(a) Liability to Creditors
Any heir or devisee who received payment, delivery, or transfer of the
decedent’s property pursuant to a small-estate affidavit is “personally answerable
and accountable” to the decedent’s creditors who present their claims to the affiant
within four months after the filing of the affidavit. ORS 114.545(2)(a). The
liability of such a person is limited to the value of the property received. ORS
114.545(2)(a).
ORS 114.545(2)(a) was renumbered ORS 114.545(4)(a).
The 2015 Legislature added a new provision to ORS 114.545. ORS
114.545(3) provides as follows:
Property conveyed by an affiant under this section is subject to liens and
encumbrances against the decedent or the estate of the decedent but is not subject
to rights of creditors of the decedent or liens or encumbrances against the heirs or
devisees of the decedent. The filing and allowance of a claim in a proceeding
under ORS 114.505 to 114.560 does not make the claimant a secured creditor.
QUERY: In light of this new provision, does a bankruptcy trustee have
a right to intervene on behalf of an heir’s or a devisee’s prospective
inheritance? Does the affiant have a duty to send notice of the probate filing
to the bankruptcy trustee of an heir or devisee who is in bankruptcy?
§ 5.3-8(b) Liability to Personal Representative
If a personal representative of the decedent’s estate is appointed within four
months after the filing of a small-estate affidavit, then the personal representative
is entitled to take control of the decedent’s property and proceed with probating the
estate. See ORS 114.545(2)(b), 114.555. The administration of the estate through
the probate court then takes precedence over the previous affidavit filing.
The appointment of a personal representative makes the heirs and devisees
participating in the small-estate affidavit proceeding “personally answerable and
accountable” to the personal representative. ORS 114.545(2)(b).
COMMENT: If a personal representative is appointed later than four
months after the filing of the affidavit, it is unclear whether that personal
representative would have an enforceable right to take control of the
decedent’s property transferred to the heirs or devisees, or whether the
personal representative could only administer the unpaid claims against the
recipient or recipients of the decedent’s property.
ORS 114.545(2)(b) was renumbered ORS 114.545(4)(b).
§ 5.3-8(c) Liability to Omitted Heirs and Devisees
The probate code does not specifically address the consequences of omitting
an heir or a devisee in a small-estate affidavit.
COMMENT: The code does not change the law of intestate succession
nor testate distribution. Instead, by reference to “heirs” and “devisees” in
ORS 114.505(2), the code preserves the law. It would seem that an omitted
heir or devisee would be entitled to whatever relief is available to an heir or
a devisee who is the victim of estate chicanery. Although ORS 114.555
states that “any other claims against the property are barred,” this would not
seem to apply to an omitted heir or devisee, because the statute does not
expressly state an intent to bar an heir or a devisee. ORS 114.555 seems to
be directed more to creditors than to heirs or devisees.
§ 5.3-8(d) Bar of Claims Against the Property
If a personal representative is not appointed within four months after the
filing of a small-estate affidavit, the decedent’s interest in all of the property
described in the affidavit is transferred to the person shown in the affidavit to be
entitled to it, and all other claims against the property are barred, except as
provided in ORS 114.540 (procedure for claims and summary determination), ORS
114.545 (liability of a person who receives estate property), ORS 114.550
(summary review of administration of the estate), and ORS 114.600–114.725
(surviving spouse’s claim for an elective share). ORS 114.555.
An “affiant or any claiming successor of the estate who has not been paid
the full amount owed such claiming successor may, within two years after the
filing of an affidavit under ORS 114.515, file with the probate court a petition for
summary review of administration of the estate.” ORS 114.550. A creditor cannot
file this petition if the creditor received a copy of the small-estate affidavit within
30 days after the affidavit was filed, the creditor was shown as a disputed creditor
in the affidavit, and the creditor had not filed a petition for summary determination
under ORS 114.540. ORS 114.550.
A person who files a petition for summary determination under ORS
114.540 or a petition for summary review of administration of an estate under ORS
114.550 must pay the filing fee established under ORS 21.135. ORS 114.552(1).
See Givan v. State by & through Dept. of Human Servs., 289 Or App 125,
135, 410 P3d 311 (2017) (the court “construe[d] ORS 114.555 to mean that, if
someone files an affidavit as authorized by ORS 114.515, and the court does not
appoint a personal representative within four months, then all claims must be
resolved and property distributed in the manner provided in ORS 114.555”).
FORMS
Form 5-1 Initiating Probate: Critical Dates Checklist

Download MS Word
Estate of
Court Case No.
Date of Death
Tax ID #
Due Date Item Date Filed

REGULAR PROBATE
PROCEEDINGS
Petition for appointment of
personal representative
Bond (if required)
Order appointing personal
representative
After appointment (or if Letters issued
bond required, after bond
approved); see ORS
113.125, 113.105
Within 30 days of Notice to heirs/devisees
appointment; see ORS
113.145(4)
Affidavit of mailing
Within 30 days of Mailing notice and death
appointment; see ORS certificate to Department of
113.145(6) Human Services
Due Date Item Date Filed
Upon appointment (after Send notice to interested persons
letters issued by court); see to newspaper for publication
ORS 113.155
On receipt; see ORS File proof of publication of
113.155(4) notice to interested persons
Within nine months after Any petition for spouse’s
decedent’s death (ORS elective share must be filed
114.610(1)(c))
State law (see ORS 105.623– Disclaimer
105.649); federal law, nine
months (see IRC §2518)
File five months after Proof of compliance with ORS
appointment; see ORS 115.003(1)–(2) with checklist of
115.003(4) actions taken and copies of any
notice delivered or mailed
SMALL-ESTATE
PROCEEDING
No earlier than 30 days after Small-estate affidavit
decedent’s death (ORS
114.515)
Four months after filing of Transfer property to claiming
affidavit; ORS 114.555; see successors
ORS 114.545(1)(e)–(f)
COMMENT: See §5.1.

CAVEAT: This checklist is illustrative only. Each lawyer must depend on his
or her own legal research, knowledge of the law, and expertise in using or
modifying this checklist.
See Supplement § 5.1 regarding forms available at the Professional Liability
Fund’s website.
Form 5-2 Letter to Personal Representative
Download MS Word
_______________, 20____
[personal representative’s name]

[address]
Dear _________:
Again, please let me express my sympathy to you on the death of
______________. I hope the service we provide will make the estate-
administration process as easy as possible for you.
Before we can begin assisting you in the administration of [decedent’s
name]’s estate, we need the following: the original will (if any); a certified copy of
the death certificate; and the names, addresses, ages, and Social Security numbers
of all heirs and devisees, if any (beneficiaries). We can begin preparing the petition
as soon as we receive this information.
So that you will have an idea of what probating [decedent’s name]’s estate
involves, this letter outlines the steps required by the court and the taxing
authorities concerning administering the estate, and your responsibilities as
Probate begins with filing a petition with the probate court. We will prepare
the petition for your signature. The petition requests [both] your appointment as
personal representative [and admission of the will to probate]. Within a day or two
after the petition is filed, the judge will sign an order approving the petition [and
bond]. Then the court clerk will issue letters [testamentary / of administration]
(Letters) certifying your appointment as personal representative.
The Letters show you are authorized to deal with all facets of the estate, such
as collecting insurance proceeds, collecting debts owed the estate, establishing an
estate bank account, paying creditors’ claims, signing releases, listing real property
for sale, transferring bank accounts, and any other duties that become necessary as
a result of your appointment as personal representative.
Immediately after Letters are issued to you, you must publish a notice to
interested persons in [name of newspaper] stating your appointment as personal
representative and requiring all persons having claims against the estate to present
them to you. This puts creditors on notice that they have four months within which
to file claims against the estate for payment of their accounts.
The publishing of notice to interested persons does not cut off claims of
known creditors. To accomplish that, you must completely review the financial
records and affairs of [decedent’s name] and ascertain the identity and address of
each person either having or potentially asserting a claim against the estate.
Enclosed is a Creditor Search Checklist as a guide in performing this duty. If you
know of a creditor and the creditor does not file a claim in response to the
published notice to interested persons, you must take the initiative to see that the
creditor is satisfied either by payment or settlement. In short, you cannot “wait out
the time” and then try to assert a defense of “nonclaim.”
Next, we will prepare notices for all heirs and beneficiaries advising them
that you have been appointed personal representative and informing them how to
obtain information about the estate. Both this notice to heirs and the published
notice for creditors are required by law.
An inventory of the estate assets must be filed within 60 days after your
appointment as personal representative. The estate assets will consist of all
property owned individually by [decedent’s name].
You, as personal representative, must arrange for preparation of various
income, fiduciary, and estate tax returns, both federal and state. To assist you in
meeting this responsibility, we suggest you use the services of [decedent’s name]’s
certified public accountant, public accountant, or tax preparer, if any. Otherwise,
we recommend you retain those services and follow the timelines given by the
professional you hire. Bear in mind that regardless of other tax due dates, estate tax
returns are due nine months after death.
If the probate proceeding is not completed within a year, you must file
annual accountings for each year. Each annual accounting must report all receipts
and disbursements and the disposition of estate property during the period covered
by the annual accounting. This accounting must also describe estate assets
remaining under your control as personal representative. It may also seek partial
payment of your personal representative’s fees and expenses, as well as partial
payment of our attorney fees and related expenses. Although the annual accounting
does not require court approval at that time, any request for personal representative
fees or attorney fees requires court approval before payment.
Once the creditors and all taxes have been paid, the estate will be ready for
distribution.
Before distribution can be made, however, you must file a final accounting
with the court reporting all receipts and disbursements and the disposition of estate
property during the probate (including those reported in the annual accountings, if
any), and a description of estate assets available for distribution. This accounting
must also detail your personal representative’s fees and our attorney fees, which
must be approved by the court.
The final accounting includes a petition for a judgment of distribution of the
estate assets to the beneficiaries, and a request that you be authorized to pay
attorney fees and costs, accountant fees, if any, and your personal representative
fee and costs. After the judge approves the accounting, authorizing payment of fees
and costs, and directing distribution, distributions will be made. We will assist you
in making distribution to the beneficiaries and securing receipts from each
distributee for filing with the court.
Once all receipts are filed, we usually prepare a petition to the court for an
order discharging you as personal representative and closing the estate.
If you have any questions at any time during the administration of this
probate, please do not hesitate to call me.
Very truly yours,
/s/__________________________
[lawyer’s name]
COMMENT: See §5.1.

CAVEAT: This sample letter is illustrative only. Each lawyer must depend on
his or her own legal research, knowledge of the law, and expertise in using or
modifying this letter.
NOTE: ORS 113.035(1) no longer requires that a petition for the appointment
of a personal representative and for the probate of a will include the decedent’s
Social Security number.
PRACTICE TIP: In light of newly enacted ORS 112.238 (discussed in § 5.2-
4(h)), the second paragraph of the letter should include a statement regarding the
personal representative’s receipt of any writing showing the decedent’s intent that
the writing was to be the decedent’s will, a partial or complete revocation of the
decedent’s will, or an addition to or an alteration of the decedent’s will. Then the
lawyer can determine whether to file the writing with the court and undertake the
procedure outlined under ORS 112.238(2) to (4). The lawyer should keep in mind,
however, that the standard of proof under ORS 112.238(1) is “clear and
convincing” and that the applicability of the statute is confusing. See Supp § 5.2-
4(h) (contested will).
Form 5-3 Petition for Probate of Will and Appointment of Personal
Representative
Download MS Word


____________________, )
) ORS 21.170
Deceased. )
) PETITION FOR PROBATE
) OF WILL AND
) APPOINTMENT OF
) PERSONAL
) REPRESENTATIVE
)
) VALUE OF ESTATE IS
) NOT MORE THAN
) $_________
____________________, petitioner, alleges:

1.
The following information is given with regard to the decedent:
(a) Name:
(b) Birth Date:
(c) Domicile:
(d) Post Office Address:
(e) Date of Death:
(f) Place of Death:
(g) Social Security No.:
2.
The decedent died testate. The will [as ratified and modified by the (number)
codicil] of the decedent and the proof of [its / their] due execution are presented to
the Court herewith. [See the second note below.] There is no just reason for delay
in entering a limited judgment for appointment of a personal representative. [See
ORS 113.035(10) regarding submission of a copy of the decedent’s will if the
original will is lost or destroyed, but not revoked.]
3.
Venue is established in _______________ County, Oregon, in that, at the
time of the decedent’s death, [set forth one or more of grounds specified in ORS
113.015].
4.
______________, whose post office address is _______________ and
whose telephone number is _______________, is nominated as personal
representative [set forth one or more of grounds specified in ORS 113.085, e.g.,
under the will of the decedent]. _________ is qualified to act as personal
representative and is not disqualified to serve as personal representative under the
provisions of ORS 113.095. The decedent’s will waives any bond requirement and
specifies that no bond will be required of any personal representative of the
decedent’s will. [See the first Note below.]
5.
Petitioner has made reasonable efforts to identify and locate all the
decedent’s heirs; their names, relationship to the decedent, and post office
addresses are as follows:
6.
The names and post office addresses of the devisees of the decedent are as
follows:
NAME ADDRESS
[See the second Note below.]

7.
As far as is known to petitioner, the nature, extent, liquidity, and apparent
value of assets of this estate subject to probate are [real / personal] property with an
aggregate value of not less than $__________ [nor more than $________].
8.
The personal representative has employed __________________, whose
post office address is ____________________, and whose telephone number is
__________, as lawyer(s) to represent the personal representative in the
administration of this estate.
9.
Petitioner does not know of any person who asserts an interest in the estate
under subsection (8) or (9) of ORS 113.035, nor does petitioner know of any
person on whose behalf such an interest has been asserted. [See the second Note
below.]
WHEREFORE,
10.
Petitioner prays for a limited judgment:
(a) Declaring this will to be the last will and testament of the decedent
and admitting the same to probate [see the second Note below]; and
(b) Appointing__________________ as personal representative to serve
without bond.
DATED: _______________, 20___.
I HEREBY DECLARE THAT THE ABOVE STATEMENT IS TRUE TO
THE BEST OF MY KNOWLEDGE AND BELIEF, AND THAT I
UNDERSTAND IT IS MADE FOR USE AS EVIDENCE IN COURT AND IS
SUBJECT TO PENALTY FOR PERJURY.
/s/__________________________
Petitioner
PETITIONER:
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§5.2-2(a) to 5.2-2(b). See also, e.g., §§5.2-4(a), 5.2-5(a),

5.2-6(a).
NOTE: If a bond is not waived by the will, but waiver or reduction is
appropriate, paragraphs 4 and 9 can be revised to fit these facts as suggested
below:
Waiver: Delete the last sentence of paragraph 4 and substitute the
following language: “The decedent’s will does not waive bond. No bond is
necessary because the personal representative is the sole beneficiary of the
estate and there are no known creditors. It is in the best interests of those
interested in this estate that the personal representative’s bond be waived by
order of this court to minimize administration costs.” No changes are needed
in paragraph 9.
Reduction, if the bond amount is set but it is less than the aggregate
value of the assets set forth in the petition: Delete the last sentence of
paragraph 4 and substitute the following language: “The decedent’s will
does not waive bond. The personal representative’s bond should be set at
$________ by order of this court to reduce administration costs. The bond
amount is less than the aggregate value contained in this petition. The lesser
amount is requested because there are no known creditors having claims
exceeding $_______ in the aggregate and the estate is liquid.” Paragraph
10(b) should also be revised by deleting “. . . to serve without bond” and
substituting “. . . and fixing the amount of bond at $_______ issued by a
surety company authorized to transact surety business in the state of
Oregon.”
NOTE: If any person is asserting an interest in the estate based on a
contention described in subsection (8) or (9) or ORS 113.035 (e.g., the will is
ineffective, see §5.2-2(b)), the petition must be revised accordingly. ORS
113.035(8)–(9) requires the petition to include the name and post office address of
any person asserting such an interest.
NOTE: If a devisee is not entitled to receive the devise, paragraph 6 should
explain why the devise failed (e.g., [devisee’s name] predeceased the decedent on
[date of death] and that devisee’s devise failed or that devisee wrongfully killed the
decedent on [date]).
NOTE: See §5.2-2(b) regarding segregating protected personal information,
such as a Social Security number, from a document submitted to a court.
COMMENT: See UTCR 2.010 and UTCR 9.030 for the form of documents,
including requirements regarding document title, spacing, and format. See also
ORS 111.205. Also, check for any relevant supplementary local rules.
NOTE: The last page of every petition in the probate court must include the
the attorney of record.” UTCR 9.030(1). See also UTCR 2.010(7), which requires
that all documents include the author’s name, address, telephone number, and fax
number (if any).
this form.
NOTE: ORS 113.105(2) now provides that the court “may, for good cause,”
require a bond even if the will waives the bond requirement. See Supp § 5.2-6(a)
NOTE: For the form of court documents, see Supplement § 5.2-2(b)
(discussing UTCR 2.010(7), UTCR 9.030, and UTCR 1.110). For documents filed
electronically, see UTCR chapter 21, including UTCR 21.040 (format of
documents to be filed electronically) and UTCR 21.090 (electronic signatures).
NOTE: If the petition seeks to admit a writing of the decedent that was not
executed in compliance with ORS 112.235 as the will, a codicil, or a revocation of
either, the petition or an affidavit attached to the petition should include
information to support the decedent’s intent that the writing is the decedent’s will,
codicil, or a revocation of either. The proponent of the writing must establish the
decedent’s intent by “clear and convincing” evidence. ORS 112.238(1). See Supp
§ 5.2-4(h) (contested will).
Form 5-4 Petition for Administration of Intestate Estate and
Appointment of Personal Representative
Download MS Word


____________________, )
) ORS 21.170
Deceased. )
) PETITION FOR
) ADMINISTRATION OF
) INTESTATE ESTATE
) AND APPOINTMENT OF
) PERSONAL
) REPRESENTATIVE
)
) VALUE OF ESTATE IS
) NOT MORE THAN
) $________
____________________, petitioner, alleges:

1.
(a) Name:
(b) Birth Date:
(c) Domicile:
(e) Date of Death:
(f) Place of Death:
(g) Social Security No.:
2.
The decedent died intestate. There is no just reason for delay in entering a
limited judgment for appointment of a personal representative.
3.
Venue is established in _______________ County, Oregon, in that, at the
time of the decedent’s death, [set forth one or more of grounds specified in ORS
113.015].
4.
Petitioner nominates _______________, whose post office address is
________________, and whose telephone number is ____________, as personal
representative. _________is qualified to act as personal representative and is not
disqualified to serve as personal representative under the provisions of ORS
113.095. Petitioner has preference to serve pursuant to ORS 113.085 because
______________________.
Petitioner requests that the bond of the personal representative be set at
$_________by a surety company authorized to transact surety business in the state
of Oregon to minimize costs of administration. [See the Note below.]
5.
Petitioner has made reasonable efforts to identify and locate all the
decedent’s heirs; each heir’s name, relationship to the decedent, and post office
address are as follows:
6.
As far as is known to petitioner, the nature, extent, liquidity, and apparent
value of assets of this estate subject to probate are [real / personal] property with an
aggregate value of not less than $__________.
7.
The personal representative has employed __________________, whose
address is ___________________, and whose telephone number is
_______________, as lawyer to represent the personal representative in the
administration of this estate.
8.
Petitioner does not know of any person who asserts an interest in the estate
under subsection (8) or (9) of ORS 113.035, nor does petitioner know of any
person on whose behalf such an interest has been asserted.
WHEREFORE,
9.
Petitioner prays for a limited judgment:
(a) Admitting this estate to administration; and
(b) Appointing _______________ as personal representative and fixing
the amount of bond at $_______ issued by a surety company authorized to transact
surety business in the state of Oregon [see the Note below].
DATED: _______________, 20___.
I HEREBY DECLARE THAT THE ABOVE STATEMENT IS TRUE TO
THE BEST OF MY KNOWLEDGE AND BELIEF, AND THAT I
UNDERSTAND IT IS MADE FOR USE AS EVIDENCE IN COURT AND IS
SUBJECT TO PENALTY FOR PERJURY.
/s/__________________________
[address]
[telephone no.]
[fax no.]
Petitioner
/s/__________________________
[lawyer’s name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
Of Attorneys for Petitioner
COMMENT: See §§5.2-2(a) to 5.2-2(b). See also, e.g., §§5.2-4(a), 5.2-5(a),

5.2-6(a). See UTCR 2.010 and UTCR 9.030 for the form of documents, including
requirements regarding document title, spacing, and format. See also ORS
111.205.
NOTE: The facts may support either bond waiver or bond reduction.
Paragraphs 4 and 9 can be revised to fit these facts. The following are suggested
revisions of these paragraphs:
Waiver: Delete the last sentence in paragraph 4 and substitute the
following sentence: “No bond is necessary because the personal
representative is the sole beneficiary of the estate and there are no known
creditors.” Delete from paragraph 9 “. . . fixing the amount of bond at
$________ issued by a surety company authorized to transact business in the
State of Oregon” and substitute “. . . bond to be waived.”
Reduction: Add to paragraph 4: “The bond amount is less than the
aggregate value contained in this petition. The lesser bond amount is just and
in the best interests of those interested in the estate because there are no
known creditors having claims exceeding $______ in the aggregate and the
estate is liquid.” Paragraph 9 remains unchanged.
NOTE: See §5.2-2(b) regarding segregating protected personal information,
such as a Social Security number, from a document submitted to a court.
number (if any). Also, check for any relevant supplementary local rules.
this form.
NOTE: ORS 113.105(2) now provides that the court “may, for good cause,”
require a bond even if the will waives the bond requirement. See Supp § 5.2-6(a)
NOTE: See Supplement § 5.2-2(b) (contents of petition) for the form of court
documents. For documents filed electronically, see UTCR chapter 21, including
UTCR 21.040 (format of documents to be filed electronically) and UTCR 21.090
(electronic signatures).
Form 5-5 Affidavit of Attesting Witness to Will
Download MS Word
AFFIDAVIT OF ATTESTING WITNESS TO WILL
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, make the following statements:

On the date of the will of ____________________, of which a photocopy is
attached hereto, ____________________ signed the will in my presence and
declared it to be [his / her] will, whereupon, at [his / her] request and in [his / her]
presence I attested the will by signing my name thereto.
To the best of my knowledge and belief, the testator was at that time over
the age of 18 years and of sound mind.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
SUBSCRIBED AND SWORN TO before me on __________, 20___.
/s/__________________________

NOTE: See UTCR 2.010 and UTCR 9.030 and check for any relevant
supplementary local rules.
this form.
NOTE: See UTCR 2.010 for the form of court documents. For documents
filed electronically, see UTCR chapter 21, including UTCR 21.040 (format of
Form 5-6 Affidavit of Witness to Signature of Testator or Witness
Download MS Word
AFFIDAVIT OF WITNESS TO SIGNATURE OF

TESTATOR OR WITNESS
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, make the following statements:

[Here set forth in some detail your acquaintance with the person whose
signature you undertake to prove.]
I have examined the will of ____________________, to which this affidavit
is attached [or, the will of ____________________, of which a photocopy is
attached hereto], dated ____________________.
I am well acquainted with the signature of ________________.
The signature on the will is genuine.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
SUBSCRIBED AND SWORN TO before me on ___________, 20___.
/s/__________________________
COMMENT: See §5.2-4(d).
this form.
Form 5-7 Limited Judgment Admitting Will to Probate and
Appointing Personal Representative
Download MS Word


____________________, )
) LIMITED JUDGMENT
Deceased. ) ADMITTING WILL
) TO PROBATE AND
) APPOINTING PERSONAL
) REPRESENTATIVE WITH
) FULL POWERS
The Court accepts the petition of __________ for the probate of the will [, as
modified by codicil(s),] of the above-named decedent. There is no just reason for
delay in entering judgment.
IT IS THEREFORE ORDERED AND ADJUDGED that:
(a) The will dated _______________, 20___ [, as modified by codicil(s),]
is hereby admitted to probate;
(b) __________ is appointed as personal representative of the estate with
full powers; and
(c) The personal representative is not required to file a bond, and letters
testamentary will be issued forthwith to the personal representative in the manner
provided by law.
DATED: _______________, 20___.
/s/__________________________
[judge’s name]
Judge
PERSONAL
REPRESENTATIVE:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR PERSONAL

REPRESENTATIVE:
[lawyer’s name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §5.2-5(d). See UTCR 2.010 and UTCR 9.030 for the form of
documents.
case.” UTCR 2.010(7). See also UTCR 2.010(12).
this form.
If the probate petition sought the admission of a writing under ORS 112.238
(see Supp § 5.2-4(h)) and the court admits the writing, the court must prepare
written findings of fact in support of the determination and enter a limited
judgment that admits the writing for probate or otherwise acknowledges the
validity and intent of the writing. ORS 112.238(4).
Form 5-8 Limited Judgment for Administration of Intestate Estate
and Appointment of Personal Representative
Download MS Word


____________________, )
) LIMITED JUDGMENT
Deceased. ) FOR ADMINISTRATION
) OF INTESTATE ESTATE
) AND APPOINTMENT OF
) PERSONAL
) REPRESENTATIVE WITH
) FULL POWERS
On petition of __________ for administration of the above-named decedent,

the Court finds the allegations of the petition to be true. There is no just reason for
delay in entering judgment.
IT IS THEREFORE ORDERED AND ADJUDGED that:
(a) The estate is admitted to administration.
(b) ____________________ is appointed as personal representative of the
estate with full powers; and
(c) The bond of the personal representative is fixed in the amount of
$__________ to be issued by a surety company authorized to transact surety
business in the state of Oregon, and letters of administration will be issued
forthwith to the personal representative in the manner provided by law.
DATED: _______________, 20___.
/s/__________________________
[judge’s name]
Judge
PERSONAL
REPRESENTATIVE:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR PERSONAL

REPRESENTATIVE:
[lawyer’s name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §5.2-5(d). See UTCR 2.010 for the form of documents. See
also UTCR 9.030 and check for any relevant supplementary local rules.
case.” UTCR 2.010(7). See also UTCR 2.010(12).
this form.
Form 5-9 Personal Surety Bond
Download MS Word


____________________, )
) PERSONAL SURETY
Deceased. ) BOND
We, ____________________, as personal representative and principal, and

____________________, as surety, do hereby undertake, jointly and severally, that
we will pay to all interested persons in the above estate a sum not exceeding
$_________.
If the personal representative faithfully performs all duties as personal
representative, this bond will be void; otherwise, it will remain in full force and
effect.
DATED: _______________, 20___.
/s/__________________________
[name of personal representative
and principal]
[address ]
[telephone no.]
[fax no.]
/s/__________________________
[surety’s name]
[address ]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, being first duly sworn on oath say: I am a

resident of the state of Oregon; I am worth the sum of not less than $1,000 over
and above all my debts and liabilities, and exclusive of property exempt from
execution.
/s/__________________________
[surety]
/s/__________________________
APPROVED: _______________, 20___.

/s/__________________________
[judge’s name]
Judge
COMMENT: See §§5.2-6(a) to 5.2-6(d).

this form.
NOTE: The 2017 Legislature amended ORS 113.105 to delete the
requirement that bond must be at least $1,000. The bond must now be executed by
a surety qualified under ORCP 82 D to 82 G. See Supp § 5.2-6(b) (amount of
bond).
See also Supplement § 5.2-6(a) regarding bond requirements and the waiver
of bond for a special administrator under ORS 113.005(2)(a) and ORS 113.007.
Form 5-10 Information to Heirs and Devisees (Testate Estate)
Download MS Word


____________________, )
) INFORMATION TO
Deceased. ) HEIRS AND DEVISEES
TO: HEIRS AND DEVISEES of the above-named decedent:

[names and addresses of heirs and/or devisees]
The following information is given to you as an heir or devisee of the above-

named decedent, who died on __________, 20___, in _________ County, Oregon.
Estate proceedings in the decedent’s estate, bearing the clerk’s file number
__________, have been commenced and are now pending in the above-entitled
Court wherein the decedent’s will has been admitted to probate. On __________,
20___, __________ was duly appointed and is now serving as personal
representative of the estate.
Your rights may be affected by this proceeding; additional information may
be obtained from the records of the Court, the personal representative, or the
lawyer for the personal representative. The names, addresses, and contact
information of the personal representative and the lawyer for the personal
representative are as follows:
Personal Representative:
[name]
[address]
[telephone no.]
Lawyer for the Personal Representative:
[lawyer’s name]
[address]
[telephone no.]
Under Oregon law, when a will has been admitted to probate, any interested
person may contest the probate of the will or the validity of the will or assert an
interest in the will for any reason specified in ORS 113.075(1), but such an action
must be commenced within four months after the date of delivery or mailing of the
information described in ORS 113.145, or four months after the first publication of
notice to interested persons, whichever is later. If you contemplate asserting any of
the rights described in this paragraph, those rights may be barred unless you
proceed as provided in ORS 113.075 within the specified time period.
Respectfully,
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See ORS 113.145. See also §5.2-8.

NOTE: If any person is likely to assert an interest in the estate for any of the
reasons described in subsection (8) or (9) of ORS 113.035, this notice should
include the statement about that claimant required by ORS 113.145(1)(g)–(h).
NOTE: The personal representative must also send a copy of this notice to the
Oregon Department of Human Services and the Oregon Health Authority, plus a
copy of the decedent’s death certificate. See Form 5-13.
this form.
Form 5-11 Information to Heirs (Intestate Estate)
Download MS Word


____________________, )
) INFORMATION TO
Deceased. ) HEIRS
TO: THE HEIRS of the above-named decedent:

[names and addresses of heirs]
The following information is given to you as an heir of the above-named

decedent, who died at _______ on __________, 20___, in [place of death].
Estate proceedings in the decedent’s estate, bearing the clerk’s file number
__________, have been commenced and are now pending in the above-entitled
Court. On __________, 20___, the undersigned was duly appointed and is now
serving as personal representative of the estate. So far as known, the decedent left
no will and none has been proved in the proceedings. Your rights may be affected
by this proceeding; additional information may be obtained from the records of the
Court, the undersigned personal representative, or the lawyer for the personal
representative. The names, addresses, and contact information of the personal
representative and the lawyer for the personal representative are as follows:
Personal Representative:
[name]
[address]
[telephone no.]
Lawyer for the Personal Representative:

[lawyer’s name]
[address]
[telephone no.]
ORS 113.075 provides that any person may assert an interest in the estate for
the reason that there exists a will that has not been alleged in the petition or that the
decedent agreed, promised, or represented that the decedent would make a will or
devise. Such an action must be commenced before the later of four months after
the date of delivery or mailing of the information described in ORS 113.145, or
four months after the first publication of notice to interested persons. If you
contemplate asserting any of the rights described in this paragraph, those rights
may be barred unless you proceed as provided in ORS 113.075 within the specified
time period.
Respectfully,
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: If there is any person likely to assert an interest in the estate for any
of the reasons described in subsection (8) or (9) of ORS 113.035, be sure to include
the statement about that claimant required by ORS 113.145(1)(g).
NOTE: The personal representative must also send a copy of this notice to the
Oregon Department of Human Services, plus a copy of the decedent’s death
certificate. See Form 5-13.
this form.
Form 5-12 Affidavit of Proof of Mailing or Delivery of Information to
Heirs and Devisees
Download MS Word


____________________, )
) AFFIDAVIT OF PROOF
Deceased. ) OF MAILING OR
) DELIVERY OF
) INFORMATION TO
) HEIRS AND DEVISEES
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, depose and say that:

I am the personal representative of the estate of the above-named decedent;
on the appointment of the personal representative, I delivered or mailed to each of
the following named persons the information required by ORS 113.145 in the
above-entitled estate; a true copy of the information so delivered or mailed is
attached hereto and made a part hereof.
The information was delivered by me as set forth below, to each of the
following named persons, personally and in person:
NAME DATE OF DELIVERY
[The information was mailed on _______________, 20___, to each of the
following named persons:
NAME DATE OF DELIVERY]
Each such information was contained in a separate sealed envelope with

postage thereon fully prepaid, one addressed to each of the persons at the address
as it appears in the petition filed herein for the appointment of a personal
representative.
/s/__________________________
[address]
[telephone no.]
[fax no.]
/s/__________________________
COMMENT: See §5.2-8. See also ORS 111.218 and ORCP 9 C (proof of
mailing or other delivery).
this form.
Form 5-13 Affidavit of Mailing Information to Oregon Department of
Human Services
Download MS Word


____________________, )
) AFFIDAVIT OF MAILING
Deceased. ) INFORMATION TO
) OREGON DEPARTMENT
) OF HUMAN SERVICES
STATE OF __________ )
) ss.
County of __________ )
I, ___________, being duly sworn, depose and say that:

I am the lawyer for the personal representative of the above estate; on the
appointment of the personal representative, I mailed a true copy of Information to
Heirs and Devisees (Testate Estate / Intestate Estate) and the decedent’s death
certificate, as required by ORS 113.145, to the Department of Human Services and
the Oregon Health Authority to the following addresses:
Oregon Department of Human Services
PO Box 14021
Salem, OR 97309-5024
Salem, OR 97301-1097
The Information was mailed on __________, 20___.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
SUBSCRIBED AND SWORN TO before me on ____________, 20___.
/s/__________________________
NOTE: Adapt the form for testate or intestate estate.

COMMENT: See §5.2-8; see also §2.5-5. See ORS 111.218 and ORCP 9 C
(proof of mailing or other delivery).
this form.
Form 5-14 Waiver of Notice of Information
Download MS Word


____________________, )
) WAIVER OF NOTICE OF
Deceased. ) INFORMATION
The undersigned hereby waives notice of the information required by ORS

113.145(1) to be given by the personal representative to the undersigned.
DATED: _______________, 20___.
/s/________________________
STATE OF __________ )
) ss.
County of __________ )
____________________, being duly sworn, depose and say: I am the

undersigned in the above-entitled waiver of notice of information and the
foregoing waiver of notice of information is true as I verily believe.
/s/__________________________
[name]
[address]
[telephone no.]
[fax no.]
/s/__________________________
COMMENT: See §5.2-8; see also §2.5-5. See ORS 111.218 and ORCP 9 C
(proof of mailing or other delivery).
this form.
Form 5-15 Notice to Interested Persons
Download MS Word


____________________, )
) NOTICE TO INTERESTED
Deceased. ) PERSONS
NOTICE IS HEREBY GIVEN that the undersigned has been appointed

personal representative. All persons having claims against the estate are required to
present them, with vouchers attached, to the undersigned personal representative at
[address], within four months after the date of first publication of this notice, or the
claims may be barred.
All persons whose rights may be affected by the proceedings may obtain
additional information from the records of the Court, the personal representative,
or the lawyers for the personal representative, _________________________.
Dated and first published on ______________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]
[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
Attention: Legal Advertising

Please publish the above notice once each week for three successive weeks
and insert the date of first publication in the notice where required.
Please call and confirm dates of publication.
Very truly yours,
/s/__________________________
[name]
COMMENT: See §§5.2-8, 5.2-10(d).

this form.
Form 5-16 Affidavit of Publication
Download MS Word
AFFIDAVIT OF PUBLICATION
STATE OF __________ )
) ss.
County of __________ )
I, ________________, being first duly sworn, depose and say that I am the
principal clerk of the publisher of the ________________, a newspaper of general
circulation, as defined by ORS chapter 193, printed and published at
___________________ in the aforesaid county and state; that the
___________________, a printed copy of which is hereto annexed, was published
in the entire issue of said newspaper for three insertions in the following issues:
________________________.
/s/__________________________
[clerk’s name]
/s/__________________________
COMMENT: See §5.2-8. Proof of notice by publication must be made in the

form required by ORCP 7 F. ORS 111.218(2). ORCP 7 F(2)(b) provides that proof
of publication may be made by an affidavit or a declaration of an employee of the
newspaper publishing the notice.
this form.
Form 5-17 Affidavit of Claiming Successor of Small Estate (Testate
Estate)
Download MS Word


____________________, )
) AFFIDAVIT OF
Deceased. ) CLAIMING SUCCESSOR
) OF SMALL ESTATE
) (TESTATE ESTATE)
STATE OF __________ )
) ss.
County of __________ )
____________________, being first duly sworn, say:

I am a claiming successor, as defined in ORS 114.505(2), to a portion of the
decedent’s estate. I am hereinafter referred to as “affiant.” This affidavit is
hereinafter referred to as “affidavit.” This affidavit is made pursuant to ORS
114.505–114.560.
1.
(a) Name:
(b) Age:
(c) Domicile:
(e) Social Security No.:
2.
The decedent died on __________, 20___, at ______; a certified copy of the
decedent’s death certificate is attached as Exhibit 1.
3.
The decedent’s property subject to administration in Oregon consists of the
following:
(a) Real property and value thereof: [describe in full as shown on last
deed in mesne chain of title and set value opposite]; and
(b) Personal property and fair-market value thereof: [describe each item
and set value opposite]. [See the caveat in §5.3-2 regarding the contents of a safe-
deposit box.]
4.
No application or petition for the appointment of a personal representative
has been granted in Oregon.
5.
The decedent died testate; the decedent’s will is attached as Exhibit 2. [See
ORS 113.035(10) regarding submission of a copy of the decedent’s will if the
original will is lost or destroyed, but not revoked.]
6.
The decedent’s heirs, each heir’s relationship to the decedent, and each
heir’s last address known to the affiant are as follows:
A copy of the will, and this affidavit showing the date of filing, will be
delivered or mailed to each heir at the heir’s last-known address.
7.
The decedent’s devisees and each devisee’s last address known to the affiant
are as follows:
NAME ADDRESS
A copy of the will, and a copy of this affidavit showing the date of filing,
will be delivered or mailed to each devisee at the devisee’s last-known address.
8.
The interest in the decedent’s property described in this affidavit to which
each devisee is entitled is:
NAME INTEREST
9.
Reasonable efforts have been made to ascertain each creditor of the estate.
The expenses of and claims against the estate remaining unpaid or on account of
which the affiant or any other person is entitled to reimbursement from the estate,
including any known or estimated amount thereof, and the name and address of
each creditor, as known to the affiant, are:
[Name, address, description of expense or claim, and known or estimated
amount of it]
A copy of the affidavit showing the date of filing will be delivered to each
creditor who has not been paid in full or mailed to the creditor at its last-known
address.
10.
The name and address of each person known to the affiant to assert a claim
against the estate that the affiant disputes and the last-known or estimated amount
thereof are as follows:
[Name, address, and known or estimated amount]
A copy of the affidavit showing the date of filing will be delivered to each of
the above, or mailed to each person at his or her last-known address.
11.
A copy of this affidavit showing the date of filing will be mailed or
delivered to the Oregon Department of Human Services and the Oregon Health
Authority by depositing the copy of the affidavit in the United States Postal
Service in a sealed envelope, with postage prepaid, to the following addresses:
PO Box 14021
Salem, OR 97309-5024
Salem, OR 97301-1097
12.
Claims against the estate not listed in this affidavit, or in amounts larger than
those listed in this affidavit, may be barred unless (a) a claim is presented to the
affiant within four months of the filing of this affidavit at the address set forth in
this affidavit, or (b) a personal representative of the estate is appointed within the
time allowed under ORS 114.555.
13.
Any listed claim that the affiant disputes may be barred unless (a) a petition
for summary determination is filed within four months of the filing of this
affidavit, or (b) a personal representative of the estate is appointed within the time
allowed under ORS 114.555.
14.
The address for the purposes of presenting a claim to the affiant is:
______________________________________________________
_____________________________________________________.
15.
Any noun or verb used in this affidavit is to be construed as either singular
or plural as the context requires.
16.
Exhibits 1 and 2 attached to this affidavit are each hereby made a part of this
affidavit as though fully set forth at the place where reference to the exhibit is
made.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
/s/__________________________
[Repeat for each additional claiming successor]
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, join in this affidavit.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]

/s/__________________________
COMMENT: See §§5.3-3(a) to 5.3-3(c).

NOTE: See UTCR 2.100–2.110 regarding segregating protected personal
information, such as a Social Security number, from a document submitted to a
court.
this form.
NOTE: ORS 114.525 no longer requires a small-estate affidavit to include the
decedent’s Social Security number.
Form 5-18 Affidavit of Claiming Successor of Small Estate (Intestate
Estate)
Download MS Word


____________________, )
) AFFIDAVIT OF
Deceased. ) CLAIMING SUCCESSOR
) OF SMALL ESTATE
) (INTESTATE ESTATE)
STATE OF __________ )
) ss.
County of __________ )
____________, being first duly sworn, say:

I am a claiming successor, as defined in ORS 114.505(2), to a portion of the
decedent’s estate. I am hereinafter referred to as “affiant.” This affidavit is
hereinafter referred to as “affidavit.” This affidavit is made pursuant to ORS
114.505–114.560.
1.
(a) Name:
(b) Age:
(c) Domicile:
(e) Social Security No.:
2.
The decedent died on ___________, 20___, at [place]; a certified copy of
the decedent’s death certificate is attached as Exhibit 1.
3.
The decedent’s property subject to administration in Oregon consists of the
following:
(a) Real property and value thereof: [describe in full as shown on last
deed in mesne chain of title and set value opposite]; and
(b) Personal property and fair-market value thereof: [describe each item
and set value opposite]. [See the caveat in §5.3-2 regarding the contents of a safe-
deposit box.]
4.
No application or petition for the appointment of a personal representative
has been granted in Oregon.
5.
The decedent died intestate.
6.
The decedent’s heirs, each heir’s relationship to the decedent, and each
heir’s last address known to the affiant are as follows:
A copy of this affidavit showing the date of filing will be delivered or

mailed to each heir at the heir’s last-known address.
7.
The interest in the decedent’s property described in this affidavit to which
each heir is entitled is:
NAME INTEREST
8.
Reasonable efforts have been made to ascertain each creditor of the estate.
The expense of and claim against the estate remaining unpaid or on account of
which the affiant or any other person is entitled to reimbursement from the estate,
including any known or estimated amount thereof, and the name and address of
each creditor, as known to the affiant, are:
[Name, address, description of expense or claim, and known or estimated
amount of it]
A copy of the affidavit showing the date of filing will be delivered to each
creditor who has not been paid in full or mailed to the creditor at its last-known
address.
9.
The name and address of each person known to the affiant to assert a claim
against the estate that the affiant disputes and the last-known or estimated amount
thereof are as follows:
[Name, address, and known or estimated amount]
A copy of the affidavit showing the date of filing will be delivered to each of
the above or mailed to each person at his or her last-known address.
10.
A copy of this affidavit showing the date of filing will be mailed or
delivered to the Oregon Department of Human Services and the Oregon Health
Authority by depositing the copy of the affidavit in the United States Postal
Service in a sealed envelope, with postage prepaid, to the following addresses:
PO Box 14021
Salem, OR 97309-5024
Salem, OR 97301-1097
11.
Claims against the estate not listed in this affidavit, or in amounts larger than
those listed in this affidavit, may be barred unless (a) a claim is presented to the
affiant within four months of the filing of this affidavit at the address set forth in
this affidavit, or (b) a personal representative of the estate is appointed within the
time allowed under ORS 114.555.
12.
Any listed claim that the affiant disputes may be barred unless (a) a petition
for summary determination is filed within four months of the filing of this
affidavit, or (b) a personal representative of the estate is appointed within the time
allowed under ORS 114.555.
13.
The address for the purposes of presenting a claim to the affiant is:
______________.
14.
Any noun or verb used in this affidavit shall be construed as either singular
or plural as the context requires.
15.
Exhibit 1 attached to this affidavit is hereby made a part of this affidavit as
though fully set forth at the place where reference to the exhibit is made.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
SUBSCRIBED AND SWORN TO before me on ____________, 20____.

/s/__________________________
[Repeat for each additional claiming successor]
STATE OF __________ )
) ss.
County of __________ )
I, _________________, join in this affidavit.
/s/__________________________
[affiant’s name]
[address]
[telephone no.]
[fax no.]
SUBSCRIBED AND SWORN TO before me on _____________, 20____.
/s/__________________________
COMMENT: See §§5.3-3(a) to 5.3-3(c).

NOTE: See UTCR 2.100–2.110 regarding segregating protected personal
information, such as a Social Security number, from a document submitted to a
court.
this form.
NOTE: ORS 114.525 no longer requires a small-estate affidavit to include the
decedent’s Social Security number.
Chapter 6: SPECIAL CONSIDERATIONS
LESLIE SUTTON, B.S., University of Washington (1998); J.D., Lewis & Clark Law School
(2004); member of the Oregon State Bar since 2010 and the Washington State Bar
Association since 2005; policy analyst, Oregon Council on Development Disabilities,
Salem.
JANICE E. HATTON, B.A., The College of Idaho (1987); J.D., University of Oregon School of
Law (1990); admitted to the Oregon State Bar in 1991; owner, Luvaas Cobb, P.C.,
Eugene.
The authors acknowledge the contributions of Stuart B. Allen, Tara Hendison, C. Craig Heath,
and Scott McGraw for their work on the prior versions of this chapter.
§ 6.1 SPECIAL ADMINISTRATION

§ 6.1-1 General Purpose
The purpose of the appointment of a special administrator is to preserve the
assets of a decedent’s estate until the assets can be delivered to the person fully
authorized to handle their administration. 31 AM JUR2D Executors and
Administrators §1051 (2011). See ORS 113.005(1). The appointment of a special
administrator is limited to situations in which the appointment of a personal
representative has been impossible or untimely, and an emergency exists regarding
the preservation of estate assets. By its very nature, such an appointment is limited
in scope to assets of the estate that are in danger, and only pending the appointment
of a personal representative. 31 AM JUR2D Executors and Administrators §1054
(2011). See Forms 6-1, 6-2.
Probate is significantly an ex parte practice. The lawyer should review
UTCR 5.060 (stipulated and ex parte matters). A motion for an ex parte order must
contain the term ex parte in the caption and must be accompanied by the proposed
order. UTCR 5.060(2).
UTCR 5.060(2) was renumbered UTCR 5.060(3) (stipulated and ex parte
matters).
The court may also appoint a special administrator if, before the
appointment and qualification of a personal representative, disposition of the
decedent’s remains is required. ORS 113.005(1). See § 6.1-3 (grounds for
appointment).
UTCR 5.060(1) allows a judicial district to adopt a local rule regarding
specific “ex parte matters for which the documents must be presented
conventionally as defined in UTCR 21.010 and may not be electronically filed.”
Supplementary Local Rule 2.501 is reserved for judicial districts to adopt a local
rule for that purpose.
In addition, ORS 111.185 (as amended in 2016) provides that to the extent
authorized by rule or order made under ORS 111.175, a probate commissioner or
deputy probate commissioner may act upon uncontested petitions for appointment
of special administrators. ORS 111.185(1)(a).
§ 6.1-2 Jurisdiction
The court with probate jurisdiction may appoint a special administrator to
preserve estate assets. ORS 113.005(1). See Forms 6-1, 6-2.
§ 6.1-3 Grounds for Appointment
The statute governing the appointment of special administrators is ORS
113.005. Under the statute, the court may appoint a special administrator only if,
before the appointment of a personal representative:
(1) The decedent’s property is in danger of loss, injury, or deterioration;
or
(2) Disposition of the decedent’s remains is required.
ORS 113.005(1).
The statute contemplates an emergency requiring the immediate attention of
a person authorized to act, and a reason why a personal representative cannot be
appointed in time to act. A special administrator may be appointed only for the
emergency situations contemplated by the statute. Dibble v. Meyer, 203 Or 541,
544–545, 278 P2d 901 (1955) (a special administrator could not be appointed to
continue an annulment suit).
Situations appropriate for the appointment of a special administrator include
the following:
(1) Perishable goods need to be sold or protected, and the personal
representative is not immediately available; or
(2) The decedent’s remains require disposition and no one authorized by
ORS 97.130(2) is able and willing to take the necessary action.
NOTE: Although ORS 113.005(1) authorizes the appointment of a
special administrator for the purpose of disposing of the decedent’s remains,
the 1997 Legislature amended ORS 97.130 to remove the special
administrator from the list of persons who may direct disposition of the
decedent’s remains. See §3.3-3(a). The personal representative is now on the
list. ORS 97.130(2)(g). However, it seems apparent that if no one authorized
in ORS 97.130 is available, a special administrator may be appointed.
§ 6.1-4 Qualifications for Appointment
ORS 113.005 does not specify any qualifications for a special administrator.
The statute requires only that the special administrator file a bond in an amount set
by the court and conditioned on the special administrator’s faithful performance of
the duties of the trust. ORS 113.005(2).
Because the appointment of a special administrator is an emergency
proceeding, the statutory preferences in ORS 113.085 for appointing a personal
representative need not be considered. Likewise, ORS 113.095, listing persons
who are not qualified to act as personal representatives, does not apply to the
appointment of a special administrator. See ORS 111.005(26).
PRACTICE TIP: It would be imprudent to propose as special
administrator someone who is not qualified to act as a personal
representative under the provisions of ORS 113.095, even though the
restrictions of this statute do not apply to the appointment of a special
administrator.
The 2017 Legislature amended ORS 113.005, updating bonding
requirements for special administrators. Except as provided in ORS 113.007
(enacted in 2017), the special administrator
may not act, and letters may not be issued to the special administrator, until the
special administrator provides a bond to the clerk of the court. The bond must be
for the security and benefit of all interested persons and must be conditioned upon
the special administrator faithfully performing the duties of the position. The bond
must be executed by a surety qualified under ORCP 82 D to G.
ORS 113.005(2)(a).
The amount of the bond set by the court “must be adequate to protect
interested persons.” ORS 113.005(2)(b). The statute now provides that the court
must consider the following factors in setting the amount of the bond:
(1) “[t]he nature, liquidity and apparent value of the property subject to
administration”;
(2) “[t]he anticipated income during administration”; and
(3) “[t]he probable indebtedness and taxes.”
ORS 113.005(2)(b).
The 2017 Legislature also added a new statute setting forth an exception to
the bond requirement for special administrators. ORS 113.007(1) provides that a
special administrator ‘is not required to provide a bond to the court under ORS
113.005(2) if a will provides that no bond is required”; however, the statute further
provides that “the court may, for good cause, require a bond notwithstanding any
provision in a will that no bond is required.”
Upon the special administrator’s request, the court may waive the
requested”; and (2) “describes the known creditors of the estate, if the special
administrator will administer property of the estate.” ORS 113.007(2).
Upon the special administrator’s request, “the court may waive or reduce the
requirement of a bond if the court orders the special administrator to provide
written confirmation from a financial institution that property of the estate is held
by the financial institution subject to withdrawal only on order of the court.” ORS
113.007(3).
§ 6.1-5 Powers and Limitations of Special Administrator
The powers of the special administrator are enumerated in ORS 113.005(3).
The special administrator may:
(1) Incur expenses for the funeral, burial, or other disposition of the
decedent’s remains in a manner suitable to the decedent’s condition in life;
(2) Incur expenses for the protection of the property of the estate; and
(3) Sell perishable property of the estate, whether or not listed in the
petition, if necessary to prevent loss to the estate.
ORS 113.005(4) prohibits the special administrator from:
(1) Approving or rejecting claims of creditors;
(2) Paying claims or expenses of administration; or
(3) Taking possession of estate assets other than those in danger of loss,
injury, or deterioration.
Historically, special administrators have not been given authority over real
property because it is not likely to dissipate. 31 AM JUR2D Executors and
Administrators §1054 (2011).
The special administrator’s powers end when the personal representative is
appointed and qualified. ORS 113.005(5). See 31 AM JUR2D, supra, §1056.
The 2017 Legislature amended ORS 113.005(3). The statute now provides
that the court may authorize the special administrator to
(1) “[a]rrange for and incur expenses for the funeral of the decedent”;
(2) “[i]ncur expenses for the protection of property of the estate”; and
(3) “[a]dminister property of the estate.”
ORS 113.005(3).
§ 6.1-6 Accounting and Compensation
Within 30 days of the issuance of letters testamentary to a personal
representative, a special administrator must file an account with the court and
deliver to the personal representative the assets of the estate that are in the
possession of the special administrator. ORS 113.005(5). The accounting should be
filed with the court and service made on the personal representative with a time set
for filing objections. If the personal representative objects to the accounting, the
court hears the objections. The court examines the accounting whether or not
objections are made. ORS 113.005(5).
Because the special administrator does not have the power to pay claims or
expenses of the estate, he or she should request approval for the payment of the
fees and expenses as part of the accounting. If approved by the court, the
compensation of the special administrator and the expenses properly incurred,
including attorney fees, are paid as expenses of administration. ORS 113.005(6).
PRACTICE TIP: In the initial petition, the lawyer may wish to request
that the special administrator’s fees and costs be paid, upon court approval,
from assets of the estate. This practice should avoid any argument over
compensation once the personal representative is named and the special
administrator is removed. In addition, in the initial petition, the lawyer may
wish to ask the court to authorize a particular form of accounting of the
special administrator. Confirming the form of accounting ahead of time may
prevent unnecessarily lengthy accountings, costs, and fees.
When accounting, the lawyer should be sure to comply with UTCR 9.050–
9.060, UTCR 9.160, UTCR 9.180–9.190, unless the court directs otherwise. See
chapter 11.
The special administrator’s duty to account to the personal representative
also applies within 30 days after the issuance of letters of administration to a
personal representative. ORS 113.005(5).
§ 6.2 SUPPORT OF SURVIVING SPOUSE AND DEPENDENT

CHILDREN DURING ADMINISTRATION
§ 6.2-1 Generally
The probate court has broad discretion in ordering support from a decedent’s
estate for the decedent’s surviving spouse and dependent children. Generally,
support has priority over inheritances, devises, claims, and expenses of
administration, and support is not charged against the distributive share of the
person receiving it. ORS 114.075. See §§7.5-1(a) to 7.5-3. This priority is limited
in the case of an insolvent estate. ORS 114.065. See §§6.2-4, 6.4-1 to 6.4-2.
A related benefit available to the surviving spouse and dependent children is
the right to occupy the decedent’s principal place of abode for one year after the
decedent’s death. ORS 114.005. For further discussion, see §§7.5-1(a) to 7.5-3.
See §§6.3-1 to 6.3-3 regarding setting aside the whole estate for support of
the spouse and dependent children.
The 2017 Legislature amended ORS 114.005. Among the amendments, the
statute now provides that “[f]or good cause shown, the court may waive or alter”
the right of the decedent’s spouse and dependent children to occupy the decedent’s
principal dwelling for one year after the decedent’s death.
The statute also provides that the “dwelling is subject to the rights of persons
having a security interest” in it. ORS 114.005(2)(e).
§ 6.2-2 Procedure for Obtaining Support
The procedure for obtaining support is outlined in ORS 114.015–114.035.
The petition for support may be filed by or on behalf of the surviving spouse or
any dependent child. ORS 114.015(1). The personal representative may submit the
petition. ORS 114.015(2).
The petition should include, at least, the following:
(1) A description of property, other than property of the estate, available
for the support of the surviving spouse and dependent children;
(2) An estimate of the expenses anticipated for their support; and
(3) If the petitioner is the personal representative, statements of the nature
and estimated value of the property of the estate and of the nature and estimated
amount of claims, taxes, and expenses of administration. ORS 114.025.
The petition must be served on the personal representative unless he or she is
the petitioner. ORS 114.015(2). Unless the court orders otherwise, notice must be
given to all of the persons whose distributive shares may be diminished if the
petition is granted. ORS 114.015(3).
NOTE: Creditors are not entitled to notice of the hearing and are taken
into consideration only if solvency of the estate becomes an issue. See ORS
114.015(3), 114.065.
If the personal representative is not the petitioner, the personal representative
must file an answer. The answer must include the statements described in item (3)
above. ORS 114.025(2).
A hearing may be held no sooner than five days after notice is personally
served, or 14 days after notice is mailed. ORS 111.215(1)(a)–(b).
See Forms 6-3 to 6-6. See also Forms 6-7 to 6-8 regarding setting aside the
whole estate for support of the spouse and dependent children.
§ 6.2-3 Nature and Extent of Support
The court “shall make necessary and reasonable provision from the estate of
a decedent for the support of the spouse and dependent children of the decedent.”
ORS 114.015. See ORS 114.025. In a case predating the current probate code, the
court held that support is not limited to mere subsistence and does not require the
recipients to liquidate their assets before requesting and receiving support. In re
Booth’s Estate, 220 Or 534, 550–551, 349 P2d 840 (1960).
NOTE: A list of considerations for the court in support determinations
can be found in J. C. Vance, Annot, Amount of Allowance from Decedent’s
Estate for Widow & Family Where Not Fixed by Statute, 1963 WL 13600
(1963) (originally published in 1963 in 90 ALR2d 687, but frequently
updated with new cases). These considerations include the value, size,
condition, and solvency of the estate, as well as the social position and
manner of living of the surviving spouse. See §7.5-2(b).
The form of support ordered by the court may consist of any one or more of
the following: (1) transfer of title to personal property, (2) transfer of title to real
property, or (3) periodic payments of money during administration of the estate for
up to two years after the decedent’s death. ORS 114.055(1). See §6.2-4 regarding
limitations on insolvent estates.
See Form 6-6.
§ 6.2-4 Limitations on Support
If the court determines that the estate will be insolvent after provision is
made for the support of the surviving spouse and dependent children, the order of
support may not exceed one-half of the estimated value of the property of the
estate. Any periodic payments ordered as support may not continue for more than
one year after the date of the decedent’s death. ORS 114.065. See §§6.3-1 to 6.3-3.
§ 6.3 SETTING ASIDE THE WHOLE ESTATE
§ 6.3-1 General Purpose
The purpose of summary closure is to speed up the closure of an estate when
the entire net estate is necessary for the support of the decedent’s spouse and
dependent children. ORS 114.085. The procedure recognizes the burden placed on
persons who were fully dependent on the decedent before the decedent’s death.
The procedure applies in favor of the surviving spouse and dependent
children of the deceased, not merely minor children, and permits the whole net
estate to be set aside, if needed, for their reasonable support. ORS 114.085. The
support amount is not limited by the statute, except by what the court deems
reasonable and necessary.
Support in a summary closure differs from support allowed during
administration. In particular, support for purposes of summary closure is secondary
to claims of creditors and expenses of administration. However, because summary
closure is a determination of support, the procedural guidelines of ORS 114.015
must be followed. See Forms 6-7 and 6-8. A complete discussion of these
requirements can be found in §6.2-2.
§ 6.3-2 Statutory Provisions for Setting Aside the Whole Estate
The basis for terminating administration and setting aside the whole estate
for the surviving spouse and dependent children is set forth in ORS 114.085. After
the expiration of four months following the date of the first publication of notice to
interested persons, the surviving spouse may file a petition requesting summary
closure. See ORS 114.015–114.025. The only issue appears to be whether, after
payment of the claims, taxes, and expenses of the estate, the balance of the estate
should be set aside for support of the surviving spouse and dependent children. If
the court finds that the set-aside is necessary, the estate can be summarily closed
and no further proceeding is needed. ORS 114.085. See Forms 6-7 and 6-8.
COMMENT: The court should not allow the summary-closure statute to
be used to defeat the decedent’s testamentary plan unless compelling reasons
are evident. The potential for inequities exists, especially in a subsequent-
marriage situation.
§ 6.3-3 Procedure for Summary Closure
ORS 114.085 is devoid of any procedural language regarding setting aside
the whole estate for support of the spouse and dependent children. However,
because the issue is one of support for the surviving spouse and dependent
children, it is reasonable to look to ORS 114.015–114.025 for the requirements of
the petition for setting aside the entire estate. The petition should include the
following:
(1) A listing of the claims, taxes, and expenses of the estate and a
statement that they have been, or can be, paid;
(2) Facts showing the need to set aside the entire net estate for the support
of the spouse or dependent children;
(3) A list of the property available from the estate to provide for the
support requested and authorizing delivery;
(4) Other property available to the spouse and dependent children;
(5) Authorization for payment of the personal representative and attorney
fees; and
(6) A time for hearing objections to the set-aside.
NOTE: Because creditors of the estate have priority in this case, it
appears that the issue of notice to unknown creditors is relevant. The
petitioner should be advised to file an affidavit outlining the steps taken to
discover the decedent’s creditors. See ORS 115.003.
§ 6.4 INSOLVENT ESTATES

§ 6.4-1 Insolvent Estate Defined
An estate is insolvent when claims, taxes, and expenses of administration
exceed the value of the estate assets.
§ 6.4-2 Limitations
If the court determines that the estate will be insolvent after provision is
made for the support of the spouse and children, support is limited to one-half of
the estimated value of the estate, and payments of support may not continue for
more than one year after the decedent’s death. ORS 114.065. This period is in
contrast to a solvent estate, in which support may be ordered for up to two years.
ORS 114.055(1)(c).
NOTE: ORS 115.125(1)(a) and 114.025(1) refer to spouse and
“children,” while ORS 114.005, 114.015, 114.035, and 114.085 refer to
spouse and “dependent children.” There appears to be no reason for this
inconsistency, and the above statutes should probably be read as if they
referred only to dependent children. However, the term dependent children
is not limited to minor children of the decedent, but likely includes children
who are poor and unable to maintain themselves. See ORS 109.010.
§ 6.5 ESTATES OF ABSENTEES

§ 6.5-1 Generally
Absentees should be distinguished from incapacitated persons, whose estates
are covered by ORS chapter 125. The procedure to be followed for administration
of estates of absentees is found in ORS chapter 117. The term absentee is not
defined by the probate code. However, ORS 117.005 requires the petitioner to
allege certain information in addition to what is required under ORS 113.035 (see
§5.2-2(b)). The petitioner must state:
(1) Whether or not the absentee was an Oregon resident when last heard
from;
(2) The absentee’s address at his or her last-known domicile; and
(3)(a) That, to the petitioner’s best knowledge and after diligent search, the
absentee’s whereabouts “is and has been unknown for a period stated of not less
than one year, and that the petitioner has reason to believe and believes the
absentee is dead”; or (b) that the absentee’s death “at the time, location and in the
circumstances stated in the petition is probable, and that the fact of death is in
doubt solely because of the failure to find or identify the remains of the absentee”;
or (c) that the absentee’s death is presumed as the result of a particular disaster,
natural or otherwise (see ORS 176.740).
ORS 117.005.
NOTE: ORS 117.005–117.095, relating to the administration of estates
of absentees, also apply to nonresident absentees owning property within
Oregon.
§ 6.5-2 Statutory Procedure
A date for hearing a petition filed under ORS 117.005 must be set not fewer
than 30 days after the petition is filed, unless the court sets an earlier date. ORS
117.015(1). A copy of the notice of the hearing must be sent to (1) the absentee at
his or her last-known address by registered mail or by certified mail with return
receipt and (2) the heirs and devisees by ordinary mail. ORS 117.015(1). The court
may order that additional notice of the hearing be given by publication or other
means. ORS 117.015(2).
The court may appoint a guardian ad litem to appear for the absentee. The
court may direct either the petitioner or the guardian ad litem to use additional
methods in searching for the absentee. ORS 117.025.
Once the court has determined that the absentee has died, the court enters an
order and grants letters testamentary or letters of administration, depending on the
court’s determination of whether the absentee died testate or intestate. ORS
117.035. The estate then proceeds as provided for the estates of other decedents.
ORS 117.055. See chapter 5.
If it is later proved that the absentee is alive, letters previously granted by the
court are revoked. Acts of the personal representative before revocation of letters
are valid, but after revocation the personal representative has no power to act
further, except to pay claims allowed and proved. The personal representative has
30 days after letters testamentary are revoked to file an account, and to turn over
the estate assets to the absentee or to the absentee’s designated agent. ORS
117.065.
If the personal representative already sold or distributed property of an
absentee, the absentee’s rights are limited. The absentee has no rights in the
property sold, but only to the proceeds realized from the sale, or as much of the
proceeds as remain in the personal representative’s possession when the estate is
closed. ORS 117.075(1). Additionally, for a period of five years after distribution
of the estate, the absentee has the right to recover from the distributees any of the
estate or proceeds of the estate that remain in their possession. The absentee has no
right of recovery, however, from purchasers of property sold by the distributees.
ORS 117.075(2).
NOTE: ORS 117.095 provides that the costs and expenses of granting
letters and their revocation will be borne by the estate. However, if the
petition is rejected, the petitioner is liable for the costs, expenses, and
charges.
§ 6.6 ANCILLARY ADMINISTRATION

§ 6.6-1 Preliminary Considerations
§ 6.6-1(a) Purpose
The purpose of an ancillary administration is to administer property located
in Oregon when the principal administration is in a foreign jurisdiction. The
proceeding in Oregon may be necessary to enable heirs, devisees, or creditors to
realize on estate assets or to clear title to real property located in Oregon.
§ 6.6-1(b) Necessity for Ancillary Administration
Ancillary administration is generally required when the nonresident
decedent owned real property in Oregon. It may also be necessary for items of
personal property when the items have not been turned over to a foreign personal
representative under ORS 116.263.
Ancillary administration is not appropriate for intangible personal property
having no fixed situs in the state. In the case of such intangible assets, the situs of
the property is the decedent’s domicile. See W. v. White, 307 Or 296, 300, 766 P2d
383 (1988) (a promissory note evidencing a debt owing to a nondomiciliary
testator had its situs in the testator’s domicile, even though the note was secured by
a trust deed on real property in Oregon; thus, the note did not constitute property in
Oregon on which jurisdiction to probate the nondomiciliary’s will could be
founded).
§ 6.6-1(c) Nonprobate Administration of Real Property of
Nonresident Decedent
Title to real property held by a nonresident decedent, as a tenant by the
entirety or jointly with the right of survivorship, does not require ancillary
administration. Title may be cleared by recording a death certificate in the county
where the property is located.
Nonsurvivorship real property interests of the nonresident decedent will
generally require ancillary administration to determine heirship and to cut off
claims of creditors.
It may be possible to negotiate with title companies to insure title to real
property without probate. Title insurance can usually be acquired through the use
of an affidavit of heirship, including a statement that the decedent’s debts, taxes,
and expenses have been paid in full. Title companies traditionally charge an
additional fee for insuring titles transferred through affidavits, rather than through
the probate process.
§ 6.6-1(d) Nonprobate Administration of Personal Property of
Nonresident Decedent
§ 6.6-1(d)(1) Release to Foreign Personal Representative
Any person who is indebted to the nonresident decedent’s estate or who
holds personal property belonging to the estate may pay the debt or deliver the
property to the foreign personal representative. ORS 116.263. The payment or
delivery can be made three months or more after the death of the nonresident
decedent, on an affidavit of the foreign personal representative stating:
(1) The date of the death of the nonresident decedent;
(2) That no local administration or application therefor is pending in
Oregon; and
(3) That the foreign personal representative is entitled to payment or
delivery.
ORS 116.263(1).
Payment or delivery made in good faith on the basis of the affidavit
discharges the debtor or person in possession of the property. ORS 116.263(2).
Payment or delivery may not be made if the debtor or the person in possession of
the nonresident decedent’s property has been notified by a resident creditor that the
payment or delivery should not be made. ORS 116.263(3).
As stated in the 2012 text, upon an affidavit of the foreign personal
representative of a nonresident decedent, a person who is indebted to the estate of
the nonresident decedent or who has possession of personal property belonging to
that estate may pay the debt or deliver the property to the foreign personal
representative as provided in ORS 116.263. The statute now requires that the
affidavit of the foreign personal representative be accompanied by proof of the
foreign personal representative’s authority.
§ 6.6-1(d)(2) Release of Bank Accounts
Bank accounts of a nonresident decedent held in a survivorship account may
be withdrawn by the surviving depositor at any time. Financial institutions will
most likely require the beneficiary to provide a death certificate and to prove
identity before the bank releases accounts in which the decedent held title as
trustee or accounts with a payable-on-death designation.
If the deposit is $25,000 or less and the decedent’s total deposits in Oregon
do not exceed that sum, a bank account in the name of the nonresident decedent
alone may be (but is not required to be) released:
(1) To the surviving spouse;
(2) If there is no surviving spouse, to the Oregon Health Authority (OHA)
or the Department of Human Services (DHS) on demand of the OHA or the DHS
no fewer than 46 days and no more than 75 days from the date of the depositor’s
death when there is a preferred claim under ORS 411.708, 411.795, 416.350;
(3) If there is no surviving spouse and no claim by the OHA or the DHS,
to the depositor’s surviving children who are 18 years of age or older;
(4) If there is no surviving spouse, no OHA or DHS claim, and no
surviving children, to the depositor’s surviving parents; or
(5) If there are none of the above, to the depositor’s surviving siblings
who are 18 years of age or older.
ORS 708A.430(1).
Provisions similar to those in ORS 708A.430 also apply to a decedent’s
deposits held by mutual savings banks and credit unions. See ORS 716.024,
723.466. See also §1.6-1(e).
As stated in the 2012 text, ORS 708A.430 allows a bank (or other insured
institution) to release a deceased depositor’s funds to certain persons in a certain
order of priority if the deposit is $25,000 or less and the decedent’s total deposits
in Oregon do not exceed that sum.
The bank may release the funds only after receiving an affidavit as provided
in ORS 708A.430(3) “from a person that claims the deposit, or a declaration from
the Department of Human Services or the Oregon Health Authority as provided in
[ORS 708A.430(4)].” ORS 708A.430(1).
The statute now provides that the bank may not release the funds on deposit
under ORS 708A.430(1)(c) (depositor’s surviving children who are 18 years of age
or older), ORS 708A.430(1)(d) (depositor’s surviving parents), or ORS
708A.430(1)(e) (surviving siblings who are 18 years of age or older) earlier than
46 days after the depositor’s death. ORS 708A.430(2)(a). Furthermore, the bank
may not release the funds on deposit under those provisions “earlier than 76 days
after the death of the depositor unless the financial institution obtains prior verbal
or written authorization from the Oregon Health Authority or its designated
representative and the Department of Human Services or its designated
representative.” ORS 708A.430(2)(b).
An affidavit or declaration submitted under ORS 708A.430 must:
(a) State where and when the depositor died;
(b) State that the total deposits of the deceased depositor in all financial
institutions in Oregon do not exceed $25,000;
(c) Show the relationship of the affiant or declarant to the deceased depositor;
and
(d) Embody a promise to pay the expenses of last sickness, funeral expenses
and just debts of the deceased depositor out of the deposit to the full extent of the
deposit if necessary, in the order of priority prescribed by ORS 115.125, and to
distribute any remaining moneys to the persons that are entitled to the moneys by
law.
ORS 708A.430(3).
§ 6.6-2 Procedure
As in most states, Oregon has no statutory provisions specifically outlining a
procedure for estates needing ancillary administration. The procedures continue to
be governed by the statutes pertaining to domiciliary estates.
§ 6.6-3 Establishing a Foreign Will
A foreign will that may operate on property in Oregon may be admitted to
probate in Oregon on petition, “by filing a certified copy of the will and a certified
copy of the order admitting the will to probate or evidencing its establishment in
the jurisdiction where the testator died domiciled.” ORS 113.065(1).
If a nonresident decedent’s will was not probated in the jurisdiction where
the testator died domiciled, the original will can be offered for probate in Oregon
in the same manner as a resident’s will. If the original will has been filed in a
foreign jurisdiction, a copy of the nonresident decedent’s will is acceptable when
certified by the clerk of the court where the will was filed. ORS 111.245.
§ 6.6-4 Title to and Possession of Property
As is the case with respect to a resident decedent, the title to the decedent’s
property vests in the heirs or devisees, subject to the support of the surviving
spouse and children, the rights of creditors, the right of the surviving spouse to
elect against the will, administration, and sale by the personal representative. ORS
114.215(1). Once appointed, the ancillary personal representative becomes entitled
to possession of all of the decedent’s estate. ORS 114.225. The ancillary personal
representative of a deceased contract vendor has the right to convey title to real
property in Oregon to a contract vendee. ORS 114.333.
§ 6.6-5 Claims Against the Estate
All creditors of the estate may file claims regardless of their domicile. All of
the claims filed in the ancillary estate proceeding are subject to the same priority
for payment as claims in a resident proceeding. See ORS 115.125. The ancillary
personal representative should see that all of the claims are paid before distributing
the estate.
§ 6.6-6 Distribution
When the administration of an estate in Oregon has been completed and the
estate is ready for distribution,
the court, upon application by the personal representative, may authorize the
delivery to the personal representative of an estate of a decedent pending in a
foreign jurisdiction of such property as the court finds appropriate for the payment
of debts, taxes or other charges or for distribution to the distributees of the estate
in the foreign jurisdiction.
ORS 116.163.
Alternatively, the court can adjudge distribution directly to the heirs or
devisees of the estate as determined under Oregon statutes. ORS 116.113. See
chapter 11.
In determining whether to petition for distribution of the assets to the
personal representative of the domiciliary jurisdiction or to petition for distribution
to the heirs and devisees in accordance with Oregon statutes, the following
considerations are relevant:
(1) Whether the law covering the distributee’s share is the same in both
jurisdictions;
(2) The need to construe the will or to determine the amount due to a
distributee;
(3) The testator’s intent;
(4) The likelihood of avoiding delay or circuitousness of procedure;
(5) Whether all of the interested persons appear in the ancillary
administration;
(6) Whether the interested parties have consented to distribution in the
ancillary jurisdiction;
(7) The location of the asset; and
(8) The competency of the domiciliary representative.
See Thomas Kay Woolen Mill Co. v. Sprague, 259 F 338 (D Or 1919); see also 31
Am Jur2d Executors and Administrators §1092 (2011).
§ 6.7 TAXES REGARDING NONRESIDENT DECEDENTS

An out-of-state fiduciary should be aware of the possibility of an Oregon
estate tax owed by the estate under ORS chapter 118. The tax is based on
worldwide assets, not just Oregon assets. See chapter 14.
§ 6.7-1 Settlement of Disputes Regarding Domicile
When the Oregon Department of Revenue (DOR) and a taxing official of
another state disagree over a decedent’s domicile for the purpose of estate taxes or
each claim’s taxing authority over the same property, the DOR may negotiate and
enter into an agreement with the other state’s official and the executor regarding
the payment of estate taxes, interest, and penalties. ORS 118.540. The DOR may
also enter into binding arbitration or into a compromise agreement with the other
state’s official and the executor addressing the disputed liability for estate taxes.
ORS 118.540.
§ 6.7-2 Payment of Inheritance Tax by Foreign Personal Representative
A foreign personal representative must pay any estate tax due to the state of
Oregon. Any assignment or transfer of stock or obligations by the foreign personal
representative is invalid unless the Oregon tax is paid before the transfer. ORS
118.310.
§ 6.7-3 Recovery of Foreign Death Taxes
A foreign personal representative or other person required to pay a death tax
due to the United States or any other state may institute an action in an Oregon
court to recover the proportionate amount of the tax due from any beneficiary
domiciled in Oregon or who owns property in Oregon subject to attachment. ORS
116.373.
FORMS
Form 6-1 Petition for Appointment of Special Administrator

Download MS Word


____________________, )
) PETITION FOR
Deceased. ) APPOINTMENT OF
) SPECIAL
) ADMINISTRATOR
_______________, petitioner, alleges:

1.
The decedent died on or about _______________, 20___.
2.
The decedent, at the time of death, was a resident of Oregon and left an
estate in Oregon requiring administration.
3.
To the knowledge of the petitioner, no personal representative has been
appointed and qualified. The reason for special administration is as follows:
4.
Property of the decedent is in danger of loss, injury, or deterioration as
follows: [specify the property requiring administration, as far as known, and the
danger of loss, injury, or deterioration to which it is subject].
Petitioner, pursuant to ORS 113.005, requests the appointment of
_______________ as special administrator of the above estate.
DATED: _______________, 20____.
I hereby declare that the above statement is true to the best of my
knowledge and belief, and that I understand it is made for use as evidence in
court and is subject to penalty for perjury.
/s/__________________________
[address]
[telephone no.]
[fax no.]
Submitted by:
[lawyer’s name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§6.1-1 to 6.1-3. It appears that this petition can be filed and
the order entered without notice to interested parties. See ORS 113.005. See UTCR
2.010 for the form of documents, including requirements regarding document
title, spacing, and format. See also ORS 111.205.
case.” UTCR 2.010(7).
COMMENT: Although UTCR 9.030 does not expressly apply to a petition for
the appointment of a special administrator, the lawyer should consider it as
applicable by implication.
this form.
NOTE: See Supplement § 5.2-2(b) (contents of petition) for the form of court
documents. See also UTCR chapter 21 (filing and service by electronic means),
including UTCR 21.040 (format of documents to be filed electronically) and
UTCR 21.090 (electronic signatures). A document submitted electronically must
comply with the requirements of UTCR 2.010 “except as to any requirement that a
document bear a physical signature when filed.” UTCR 21.040(4).
NOTE: For updated bonding requirements for special administrators, see
Supplement § 6.1-4 (qualifications for appointment).
Form 6-2 Order Appointing Special Administrator
Download MS Word


____________________, )
) ORDER APPOINTING
Deceased. ) SPECIAL
) ADMINISTRATOR
Upon the petition of __________ for appointment of a special administrator,

the Court finds that special administration is required [to preserve the property of
the decedent from loss, injury, or deterioration / to dispose of the remains of the
decedent].
IT IS ORDERED that __________ is appointed special administrator upon
filing a bond in the amount of $________.
DATED: _______________, 20____.
/s/__________________________
[judge’s name]
Judge
COMMENT: See §§6.1-1 to 6.1-3. See also ORS 113.005. See UTCR 2.010
spacing, and format. See also UTCR 9.030.
case.” UTCR 2.010(7). See also UTCR 2.010(12), UTCR 9.030(1)–(2).
this form.
NOTE: For updated bonding requirements for special administrators, see
Supplement § 6.1-4 (qualifications for appointment).
electronically) and UTCR 21.090 (electronic signatures). A document submitted
electronically must comply with the requirements of UTCR 2.010 “except as to
any requirement that a document bear a physical signature when filed.” UTCR
21.040(4).
Form 6-3 Petition for Order Awarding Support
Download MS Word


____________________, )
) PETITION FOR ORDER
Deceased. ) AWARDING SUPPORT
____________________, petitioner, alleges [see note below]:

1.
Petitioner is the surviving spouse of the decedent. The dependent children of
petitioner and decedent, who are now in the care and custody of the petitioner, are:
Name Age
2.
[Under the provisions of the decedent’s will,] [Property / property] of the
estate is [inherited by / devised to] petitioner and petitioner’s children as follows:
3.
Property other than property of this estate is available for the support of the
petitioner and the decedent’s children as follows:
[For example:
(a) A Social Security annuity payable to petitioner at the present rate of
$__________ per month;
(b) A checking account formerly in the joint names of petitioner and the
decedent as joint tenants with right of survivorship in the sum of $__________;
(c) Earnings of petitioner at the present rate of $__________ per month;
and
(d) Residence real property formerly owned by the decedent and
petitioner as tenants by the entirety, described as: _______________ of the
reasonable net value of $__________.]
4.
Petitioner anticipates that payment of the following estimated expenses will
be required for the support of the petitioner and the decedent’s dependent children:
[For example:
(a) $__________ per month for food;
(b) $__________ per month for housing, including mortgage payments of
$__________ per month, including taxes and insurance, on the residence formerly
owned by petitioner as tenant by the entirety with the decedent; and
(c) The sum of $__________ to cover the expenses of petitioner’s son
during the 2012–2013 academic year while enrolled as a student at
____________________ University.]
5.
It is necessary and reasonable that the following provisions for the support
of the petitioner and the petitioner’s dependent children be made from this estate:
[For example:
(a) Title to decedent’s 2000 Ford 4-door automobile be transferred to the
petitioner;
(b) The sum of $________ per month, commencing _________, 20___,
be paid to the petitioner during the administration of the estate until the distribution
of the estate, but for not more than two years after the date of the decedent’s death;
and
(c) The sum of $__________ be paid to the petitioner to cover the
expenses of the petitioner’s son during the 2012–2013 academic year at
_____________ University.]
6.
Pending the hearing on this petition, it is reasonably necessary for the
welfare of the petitioner and the dependent children of the decedent that the sum of
$__________ be paid to petitioner. [See ORS 114.035.]
7.
The persons whose distributive shares of the estate may be diminished by
granting this petition are:
Name Address
WHEREFORE,
8.
Petitioner prays for an order:
(a) Awarding the petitioner the sum of $__________ as temporary
support pending hearing on this petition and authorizing and directing the personal
representative to pay such sum to petitioner forthwith;
(b) Directing service of this petition on the personal representative and
that notice of hearing be given to the personal representative and to the persons
named in paragraph 7 above; and
(c) After hearing, awarding to the petitioner and the dependent children
of the decedent necessary and reasonable support from this estate, as set forth
above, plus such additional amounts as to the court may deem just and reasonable.
DATED: _______________, 20____.
/s/__________________________
[address]
[telephone no.]
[fax no.]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §6.2-2. See also ORS 114.015, 114.025. See UTCR 2.010
and UTCR 9.030 for the form of documents, including requirements regarding
document title, spacing, and format. See also ORS 111.205.
NOTE: The petition may be made by or on behalf of the spouse or any
dependent child. If the petitioner is the personal representative, the petition must
also include, as far as is known, a statement of the nature and estimated amount of
the claims, taxes, and expenses of administration. If the petitioner is the personal
representative, the petitioner need not serve the petition and notice of hearing on
him- or herself and need not file an answer to the petition.
number (if any).
this form.
information (UTCR 2.010(7)). See Supplement § 5.2-2(b) (contents of petition)
regarding contact information that must be typed or printed on the last page of
every document submitted to the court pursuant to the Uniform Trial Court Rules.
For documents filed electronically, see UTCR chapter 21, including UTCR
21.040 (format of documents to be filed electronically) and UTCR 21.090
(electronic signatures). A document submitted electronically must comply with the
requirements of UTCR 2.010 “except as to any requirement that a document bear a
physical signature when filed.” UTCR 21.040(4).
submitted to the court.”
Form 6-4 Answer of Personal Representative to Petition for Support
Download MS Word


____________________, )
) ANSWER OF PERSONAL
Deceased. ) REPRESENTATIVE TO
) PETITION FOR SUPPORT
The personal representative answers as follows to the petition filed herein

for an order awarding support to the surviving spouse and the dependent children
of the decedent as follows:
1.
As far as known, the nature and estimated value of the property of the estate
are as follows:
REAL PROPERTY PERSONAL PROPERTY
2.
As far as is known, the estimated amount of the claims, taxes, and expenses
of administration is as follows:
_____________________________________________________.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
[Verification]
COMMENT: See §6.2-2. See also ORS 114.025(2). See UTCR 2.010 for the
form of documents, including requirements regarding document title, spacing, and
format. See also UTCR 9.030.
case.” UTCR 2.010(7).
this form.
21.040(4).
Form 6-5 Order Awarding Temporary Support and Setting Time for
Hearing
Download MS Word


____________________, )
) ORDER AWARDING
Deceased. ) TEMPORARY SUPPORT
) AND SETTING TIME FOR
) HEARING
A petition has been filed for an order awarding support to the surviving
spouse and dependent children of the decedent. Based on the petition, the Court
finds that the sum of $__________ is reasonably necessary for the welfare of the
decedent’s surviving spouse and the dependent children pending hearing on the
petition.
Accordingly, IT IS ORDERED that:
(a) The personal representative pay forthwith to ____________, the
decedent’s surviving spouse, the sum of $__________;
(b) The hearing on the petition be held on _______________, 20___, at
__________ ___.m. in the courtroom of this Court at the ____________ County
Courthouse in ____________________, Oregon.
(c) A copy of the petition and notice of hearing thereon be served on the
personal representative and that notice of the hearing also shall be given to the
following persons whose distributive shares of the estate may be diminished by
granting the petition:
Name Address
DATED:____________________, 20___.
/s/__________________________
[judge’s name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §6.2-2. See also ORS 114.035. See UTCR 2.010 and UTCR
9.030 for the form of documents.
NOTE: “The name, address, telephone number, fax number, e-mail address,
and bar number of the attorney of record must be typed or printed on the last page
of every . . . order.” UTCR 9.030(1). The last page of every order must also
this form.
21.040(4).
submitted to the court.” [Emphasis added.] UTCR 9.030(2) now provides that
“[t]he name, address, and telephone number of the guardian, conservator, or
personal representative must be typed or printed on the last page of every proposed
order submitted to the court.” [Emphasis added.]
Form 6-6 Order Awarding Support to Spouse and Dependent
Children of Decedent
Download MS Word


____________________, )
) ORDER AWARDING
Deceased. ) SUPPORT TO SPOUSE
) AND DEPENDENT
) CHILDREN OF
) DECEDENT
On petition of ____________________, the decedent’s surviving spouse,

and after hearing thereon, the Court finds:
1.
Proof has been filed of giving notice of the hearing on the petition to the
personal representative and to all persons whose distributive shares of the estate
may be diminished by granting the petition.
2.
The personal representative has filed an answer to the petition, setting forth,
as far as known, a statement of the nature and estimated value of the property of
the estate, and the nature and estimated amount of the claims, taxes, and expenses
of administration.
3.
The estate is solvent.
4.
The Court having considered the property available for the support of the
decedent’s surviving spouse and the dependent children other than property of the
estate, and property of the estate [inherited by / devised to] the spouse and
children, it is
ORDERED:
5.
[All prior provision for temporary support is terminated.]
6.
The personal representative is authorized and directed to make the following
provision for support of the spouse and the dependent children of the decedent:
[For example:
(a) Transfer title to the decedent’s 2000 Ford 4-door automobile to
petitioner;
(b) Pay to the petitioner the sum of $__________ per month,
commencing at the decedent’s date of death during the administration of the estate
until the distribution of the estate but not more than two years after the decedent’s
date of death; and
(c) Title to the following real property is vested in __________________,
surviving spouse of the decedent:
Name Address
DATED:____________________, 20___.
/s/__________________________
[judge’s name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§6.2-2 to 6.2-3. See also ORS 114.055. See UTCR 2.010
and UTCR 9.030 for the form of documents.
NOTE: In the probate court, the last page of every petition, motion, and order
must include the “name, address, telephone number, fax number, e-mail address,
and bar number of the attorney of record.” UTCR 9.030(1). The last page of every
order must also include the name, address, and telephone number of the personal
representative. UTCR 9.030(2). See also UTCR 2.010(7), (12).
this form.
21.040(4).
submitted to the court.” [Emphasis added.] UTCR 9.030(2) now provides that
“[t]he name, address, and telephone number of the guardian, conservator, or
personal representative must be typed or printed on the last page of every proposed
order submitted to the court.” (Emphasis added.)
Form 6-7 Petition for Order Setting Aside Whole Estate for Support
and Terminating Administration
Download MS Word


____________________, )
Deceased. ) SETTING ASIDE WHOLE
) ESTATE FOR SUPPORT
) AND PETITION FOR
) GENERAL JUDGMENT
) OF FINAL
) DISTRIBUTION AND
) SUMMARILY CLOSING
) ESTATE
____________________, personal representative, alleges:

1.
____________________ is the surviving spouse of the decedent. The
dependent children of the decedent who are now in the care and custody of
petitioner are:
Name Age
2.
[Under the provisions of the decedent’s will,] [The / the] [entire] estate is
[inherited by / devised to] ___________________ and [his / her] children. [See
note below.]
3.
More than four months have expired since the date of the first publication of
notice to interested persons.
4.
The personal representative has been informed by the surviving spouse that
property other than property of this estate is available for [his / her] support of the
decedent’s children as follows:
[For example:
(a) A Social Security annuity payable to __________________ at the
present rate of $__________ per month;
(b) A checking account formerly in the joint names of ______________
and decedent as joint tenants with right of survivorship with a current balance of
$__________; and
(c) Residence real property formerly owned by the decedent and
_____________________________ as tenants by the entirety, described as:
__________________ of the reasonable net value of $__________.]
5.
Petitioner has been informed by _________________ that [he / she]
anticipates that payment of the following estimated expenses will be required for
[his / her] support and the support of the decedent’s children:
[For example:
(a) $__________ per month for housing, including mortgage payments;
and
(b) $__________ per month (including taxes and insurance) on residence
formerly owned as tenant by the entirety with the decedent.]
6.
On _______________, 20___, an order was entered awarding support for
the decedent’s surviving spouse and children as follows:
__________________________________________________________.
7.
As far as is known, the nature and estimated value of the property of the
estate now on hand are: __________________________________.
8.
The nature and estimated amount of the claims, taxes, and expenses of
administration still unsatisfied are: _____________________
__________________________________________________________.
9.
All Oregon income, estate, and personal property taxes, if any, due from this
estate or on account of this decedent have been paid and appropriate releases are
filed herewith.
10.
The personal representative has waived any fee for [his / her] services. A
reasonable fee for the services of the personal representative’s attorney is the sum
of $__________.
11.
Support of the decedent’s spouse and the dependent children requires that
the whole remaining estate, after payment of claims, taxes, and administration
expenses, be set aside for such support.
WHEREFORE,
12.
Petitioner prays for an order and general judgment as follows:
(a) Directing the payment of all of the remaining claims, taxes, and
expenses of administration as set forth above;
(b) Directing the personal representative to set aside to _____________
for [his / her] support and the dependent children all of the remaining assets of the
estate and directing the personal representative to distribute the remaining assets of
the estate to ___________; and
(c) Upon filing receipts therefor, closing the estate and discharging the
DATED:____________________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: In paragraph 2, insert appropriate language to indicate devolution of

property if a testate estate.
COMMENT: See §§6.3-1 to 6.3-3, 6.2-2. See also ORS 114.085. See UTCR
2.010 and UTCR 9.030 for the form of documents, including requirements
regarding document title, spacing, and format. See also UTCR 5.080 (statement
for attorney fees, costs, and disbursements), UTCR 9.060 (fees in estates).
and bar number of the attorney of record.” UTCR 9.030(1). See also UTCR
2.010(7), which requires that all documents include the author’s name, address,
telephone number, and fax number (if any).
this form.
NOTE: See Supplement § 5.2-2(b) (contents of petition) regarding contact
information that must be typed or printed on the last page of every document
submitted to the court pursuant to the Uniform Trial Court Rules. For documents
documents to be filed electronically) and UTCR 21.090 (electronic signatures). A
document submitted electronically must comply with the requirements of UTCR
2.010 “except as to any requirement that a document bear a physical signature
when filed.” UTCR 21.040(4).
Form 6-8 General Judgment Setting Aside Whole Estate
Download MS Word


____________________, )
) ORDER SETTING
Deceased. ) ASIDE WHOLE ESTATE
) FOR SUPPORT OF
) SPOUSE AND
) DEPENDENT CHILDREN
) OF DECEDENT;
) GENERAL JUDGMENT
) OF FINAL
) DISTRIBUTION AND
) SUMMARILY CLOSING
) ESTATE
The personal representative having filed a petition setting aside the whole
estate for support of the spouse and the dependent children of the decedent
pursuant to ORS 114.085, and it appearing that notice has been provided to the
persons entitled thereto, and the time for filing objections has expired and no
objections have been filed herein, the Court finds:
1.
__________ is the surviving spouse of the above decedent. The dependent
children of __________ and the decedent who are now in the care and custody of
__________ are:
Name Age
2.
[Under the provisions of the decedent’s will,] [The / the] [entire] estate is
[inherited by / devised to] __________ and the children. [See note below.]
3.
More than four months have expired since the date of the first publication of
notice to interested persons.
4.
All Oregon income, estate, and personal property taxes, if any, due from this
estate or on account of this decedent have been paid, and appropriate releases have
been filed herein.
5.
The personal representative has waived any fee for services. A reasonable
fee for the services of the personal representative’s attorney is the sum of
$__________.
6.
The estate is solvent.
7.
Reasonable provision for support of the decedent’s surviving spouse and
dependent children warrants that the whole estate remaining after payment of the
claims, taxes, and expenses of administration be set aside for such support.
THEREFORE,
8.
IT IS ORDERED AND ADJUDGED as follows:
(a) Attorney’s fees for the personal representative are approved in the
amount of $_______, and the personal representative is directed to pay the fee and
all of the other claims, taxes, and expenses of administration still unsatisfied;
(b) The remaining assets of the estate after such payment are set aside and
vested in __________ for [his / her] support and the dependent children; the
personal representative is directed to distribute such assets to __________; and
(c) Upon filing receipts therefor or other evidence satisfactory to the
Court that distribution has been made, this estate shall be closed and the personal
representative shall be discharged.
DATED: _______________, 20____.
/s/__________________________
[judge’s name]
Judge
NOTE: In paragraph 2, insert appropriate language to indicate devolution of

property if a testate estate.
COMMENT: See §§6.3-1 to 6.3-3, 6.2-2. See also ORS 114.085. See UTCR
regarding document title, spacing, and format. See also UTCR 5.080 (statement
for attorney fees, costs, and disbursements), UTCR 9.060 (fees in estates).
this form.
21.040(4).
Chapter 7: INITIAL RESPONSIBILITIES AND LIABILITIES OF
PERSONAL REPRESENTATIVE
WILLIAM D. BREWER, B.S., Willamette University (1971); J.D. (magna cum laude), Lewis &
Clark Law School (1985); member of the Oregon State Bar since 1985; partner, Hershner
Hunter, LLP, Eugene.
NICHOLAS M. FROST, B.A., University of Michigan (2003); J.D., University of Michigan Law
School (2006); admitted to the Illinois State Bar Association in 2006 and the Oregon
State Bar in 2010; partner, Hershner Hunter, LLP, Eugene.
The authors gratefully recognize the work of David N. Andrews, who collaborated on the
previous edition of this chapter.
§ 7.1 LAWYER’S INSTRUCTIONS TO PERSONAL REPRESENTATIVE

§ 7.1-1 Personal Representative Is the Client
“Under Oregon law, a lawyer for a personal representative represents the
personal representative and not the estate or the beneficiaries as such.” OSB
Legal Ethics Op No 2005-62. See also OSB Legal Ethics Op No 2005-119. The
lawyer is employed to assist the personal representative in the administration of
the estate, and “to perform acts of administration . . . on behalf of the personal
representative.” ORS 114.305(18). See also ORS 113.135.
The same rule applies to lawyers representing trustees. “[W]hen an
attorney undertakes to represent a fiduciary, he or she represents only the
fiduciary and does not, at the same time, maintain an attorney-client relationship
with those to whom the fiduciary-client owes a duty.” Roberts v. Fearey, 162 Or
App 546, 553, 986 P2d 690 (1999). The lawyer may represent the personal
representative in his or her fiduciary capacity and in his or her individual capacity
as a beneficiary, even if the personal representative’s interest as a beneficiary is
in conflict with the interests of other beneficiaries. OSB Legal Ethics Op No
2005-119. Idaho and Washington have reached similar conclusions. See THE
ETHICAL OREGON LAWYER §5.6 (Oregon CLE 2006).
A lawyer representing the personal representative may also represent one
or more beneficiaries, if doing so does not create a current client conflict under
Oregon RPC 1.7. See OSB Legal Ethics Op No 2005-119, n 2.
PRACTICE TIP: A lawyer should be careful not to blur the lines of
representation by accidentally appearing to represent estate or trust
beneficiaries other than the fiduciary. See Roberts, 162 Or App at 553.
Blurring the lines of representation can be a problem if beneficiaries call the
personal representative’s lawyer with questions about the estate. The lawyer
should advise the beneficiaries in the first written communication about the
estate that the lawyer represents the personal representative, and not the
beneficiaries or the estate itself. Reminders may be necessary if beneficiaries
appear not to understand.
PRACTICE TIP: The Oregon State Bar Professional Liability Fund has
dealt with claims arising from lawyers who work with personal
representatives who allowed their personal goals as beneficiaries to interfere
with their duty to the estate. Lawyers should remind the personal
representative of his or her fiduciary duties in that situation.
In Reynolds v. Schrock, 341 Or 338, 340, 142 P3d 1062 (2006), the Oregon
Supreme Court held that a lawyer may not be held jointly liable with a client for
the client’s breach of a fiduciary duty “unless the third party shows that the
lawyer was acting outside the scope of the lawyer-client relationship.”
See §§7.1-2 to 7.1-3.
See The Ethical Oregon Lawyer § 5.3-4 (OSB Legal Pubs 2015) (identifying
the lawyer’s client in the estate context).
§ 7.1-2 Clear Division of Responsibilities
Early in the process of the administration of an estate, the lawyer should
discuss with the personal representative the division of responsibilities, including
the role of other professionals, such as accountants and investment advisors. The
summary of duties mailed by the probate court to each individual fiduciary may
provide a useful framework for discussing the personal representative’s duties
and the hidden pitfalls. Personal representatives who fail to follow basic fiduciary
principles are a frequent cause of conflict in probate administration. See §7.1-3.
The lawyer should confirm whether there is any local requirement for a
nonprofessional personal representative to attend a class outlining the fiduciary
role and duties of a personal representative. See, e.g., Multnomah Supplemental
Local Rule (SLR) 9.076 (requiring a nonprofessional fiduciary to register for an
education program within 15 days of appointment and to complete the class within
60 days of appointment); Clackamas SLR 9.076; Lane SLR 9.093.
§ 7.1-3 Lawyer’s Instructions for Personal Representative
Generally, the lawyer should discuss the following matters with the
personal representative:
(1) Outline Obligations. The lawyer should explain the major
obligations of a personal representative: (a) to discover, preserve, and collect
income from all assets; (b) to notify all interested persons; (c) to pay appropriate
obligations and taxes; (d) to distribute the assets in accordance with the
decedent’s will, or the laws of intestate succession; and (e) to close the estate.
(2) Division of Responsibilities Regarding Assets. The lawyer should
discuss with the personal representative the division of responsibilities between
the lawyer and the client, and with other professionals, with respect to locating
assets, preparing the inventory, determining values, and deciding whether or not
appraisers are to be employed.
(3) Commingling of Assets. Many personal representatives, particularly a
personal representative who is the major beneficiary, will not understand the need
to strictly segregate the estate’s funds from the personal representative’s own
funds. The lawyer should stress that courts look harshly on commingling assets
and emphasize the need to keep funds separate.
(4) Bank Accounts. The estate will need a separate bank account or
accounts, and all of the decedent’s bank accounts should be transferred to the
estate account. The bank will require certified copies of the letters testamentary
and a taxpayer identification number to open the new account(s). Banks and
savings institutions will usually permit withdrawal of savings certificates and
certificates of deposit without penalty following the death of the depositor.
However, the personal representative should be certain of the institution’s policy
before withdrawing time deposits.
PRACTICE TIP: Asking the accountant who will be filing the estate’s
fiduciary income tax return to obtain the taxpayer identification number for
the estate should be done early in the process. Doing so will get the
accountant involved early in the process, allowing him or her to make tax
planning suggestions that the personal representative can use to the estate’s
advantage when planning the administration of the estate.
PRACTICE TIP: Because of the importance of maintaining accurate
records for preparing the final account, it is good practice for the lawyer to
keep the check register for the personal representative, to handle all deposits,
to write checks for the personal representative’s signature, and to set up the
account to prohibit use of counter checks or ATM access by the personal
representative. Setting up the accounts in this way will discourage the
personal representative from commingling funds and will simplify the
preparation of any required accountings.
(5) Income Tax Returns. The personal representative should locate and
review at least the last three years of the decedent’s income tax returns for future
use. See §§7.6-2 to 7.7.6-3(a).
The lawyer should also remind the personal representative of the tax
accounting responsibilities during the probate period and discuss the estate with
the accountant to address any tax problems that can reasonably be anticipated.
PRACTICE TIP: The lawyer should advise the personal representative to
consider hiring the decedent’s accountant to prepare the decedent’s final
income tax return. The Oregon State Bar Professional Liability Fund has
dealt with claims in which it is alleged that the accountant did not have clear
instructions to file the decedent’s final return.
(6) Life Insurance Claims. The personal representative has no direct
responsibility for collecting life insurance proceeds payable to named
beneficiaries, because life insurance policies are not assets of the estate.
However, the personal representative is often the person best positioned to know
what policies exist, to find records of the contracts, and to render assistance in
collecting any insurance proceeds. Insurance payable to the estate (either because
there is no beneficiary or because the estate is named) will, of course, be treated
as any other probate asset.
Because IRS Form 712 (Life Insurance Statement), issued by the insurance
company, must be filed if a federal or Oregon estate tax return is required, the
personal representative or lawyer should request Form 712 from the life
insurance company, in writing, to assure receipt in a timely manner. Most
insurance companies will not issue Form 712 unless requested to do so.
PRACTICE TIP: Life insurance policies may be associated with the
decedent’s health or with dental insurance policies, bank accounts, credit
union accounts, credit cards, employee benefit plans, home mortgage, or
other accounts or assets.
PRACTICE TIP: If the estate or personal representative is not a
beneficiary of a policy, the insurance company likely will not discuss the
policy with the personal representative. If this is the case, the personal
representative should send the company a death certificate and contact
information for the named beneficiaries.
(7) Other Insurance. The personal representative should examine the
decedent’s other insurance policies, such as fire, theft, casualty, liability, health,
and accident policies. When appropriate, he or she should make insurance claims.
In general, coverage of assets passing into the hands of the personal
representative must be maintained, and increased when inadequate. Among the
matters to be determined are:
(a) Whether the insurance is for replacement cost and, if not, whether
the coverage should be changed to replacement cost;
(b) If the policy is for replacement cost, whether the amount of
insurance is sufficient for the replacement cost provision and, if the amount is
insufficient, whether it should be increased;
(c) Whether the home insurance policy will be continued if the home is
vacant (the decedent’s policy will address coverage after vacancy; some policies
will cancel the insurance after the property has been vacant for a specified period
of time);
PRACTICE TIP: Many policies covering vacant property exclude
coverage for damage from vandalism, malicious mischief, or broken glass.
Most policies also exclude coverage for damage to or resulting from any
plumbing, heating, air-conditioning, or sprinkler system while the dwelling
is vacant or unoccupied, unless reasonable care has been used to maintain
the heating system or to shut off the water supply and drain the system and
appliances of water. The personal representative should discuss the policy
terms with the insurance agent, including the policy’s definition of vacant
and, if necessary, change policies or add a rider providing better coverage;
(d) Whether earthquake and flood insurance should be obtained;
(e) What the policy limits are for property such as silver, jewelry, furs,
guns, etc. (if coverage is inadequate, the personal representative should determine
whether such items should be specially insured or moved to safer storage);
(f) Whether liability policies, such as the automobile policy, should be
continued;
(g) Whether any umbrella policy should be continued or, if none exists,
whether one should be obtained; and
(h) Whether business interests, commercial properties, or other special
interests require consultation with the insurance adviser.
PRACTICE TIP: The inventory (see §§7.4-1 to 7.4-5) should be
assembled quickly, even if values are not yet finally established, so that the
insurance coverage can be reviewed again in light of the property
discovered. The personal representative should keep in mind that fair-market
value and replacement cost are not the same.
Some insurers automatically extend coverage under the homeowners’
policy to the legal representative of the deceased, but only with respect to the
premises and property of the deceased covered under the policy at the time of
death. Some policies define insured to include the person with proper temporary
custody of the property until appointment and qualification of a legal
representative.
The personal representative should immediately notify the insurance
carriers of the decedent’s death, and have them substitute him or her as the
insured. The personal representative should also consider whether the provisions
of ORS 114.215 (regarding the immediate vesting of title in the heirs or devisees)
suggest that the heirs or devisees should also be named as insureds.
PRACTICE TIP: The personal representative should cancel policies of
insurance that cover risks that ended with the death of the decedent, such as
health and accident, medical and dental, and errors and omissions policies.
The personal representative should also stop any automatic withdrawals of
premiums from the decedent’s bank account, and apply for the refund of any
unearned premiums.
(8) Social Security. In addition to the Social Security benefits that may
be payable to survivors, medical, hospital, and funeral benefits for the decedent
may be payable to the personal representative or the surviving spouse.
(9) Mail. Arrangements should be made for forwarding the decedent’s
mail to the personal representative or, even better, to the lawyer. The post office
provides cards for giving notice of forwarding mail. Important information
concerning assets and liabilities may be lost if the mail is not forwarded. If a
surviving spouse is not the personal representative, forwarding the mail may not
be practical. For decedents who transacted business on the Internet, the personal
representative may need to access the decedent’s e-mail and Internet banking and
other accounts.
(10) Outline of Estate Plan. It is useful for the attorney to prepare an
outline of the dispositive terms of the will early in the process, especially if there
are specific or general devises, tax-planning trusts, or other complicating factors.
Preparing the outline may uncover issues that would otherwise be missed. The
outline becomes a useful guide during administration, as well as for explaining
the will to the personal representative and devisees. The earlier an outline is
prepared, the more useful it will be. Understanding and planning the
administration of the estate at a very early date improves efficiency and avoids
mistakes.
(11) Cash Flow. Many estates experience cash flow problems. It is
helpful to determine as early as possible the cash needs of the estate, and to
develop a strategy to generate that cash. The personal representative should
consider bills, court fees, support needs, income and estate taxes, and any other
cash needs that may arise.
(12) Asset Sales. Specifically devised property cannot be sold without
authorization in the will or a court order. ORS 114.325(2)(b). Family sentiment
may dictate against sales if other property is available. The Oregon State Bar
Professional Liability Fund has received claims because the personal
representative sold property that family members wanted, or conducted a sale
without giving the beneficiaries a chance to bid on the property.
(13) Disclaimers. Disclaimers are powerful postmortem planning tools if
used properly. To be effective for gift tax purposes, most disclaimers must be
made within nine months after the decedent’s death. See IRC §2518(b)(2). Note
that for decedents dying in 2010, the time for making a disclaimer was extended
by §301(d)(1)(c) of the 2010 Tax Act, Pub L No 111-312, 111th Cong., 2nd Sess
(2010). See also the Oregon Uniform Disclaimer of Property Interests Act, ORS
105.623–105.649, which does not impose a time limit on disclaimers. See also
ORS 105.645, as amended by 2011 Or Laws ch 526, §16. For a more complete
discussion of disclaimers, see §§8.3-2(a) to 8.3-2(f). The Oregon State Bar
Professional Liability Fund has dealt with claims concerning disclaimers that
were not filed within the time limits imposed by IRC §2518(b)(2).
(14) Environmental Hazards. As early as possible, the lawyer should try
to determine whether any property belonging to the decedent has been
environmentally contaminated. See §§7.2-4(a)(3), 10.8-4 to 10.8-4(d).
PRACTICE TIP: Under OAR 340-122-0140, only financial institutions
serving in a fiduciary capacity, but not individuals serving as personal
representatives, are protected from potential personal liability if the estate
includes contaminated property. Therefore, the nominated individual
personal representative should consider declining the appointment if the
estate might contain contaminated property. In light of the favorable
treatment given to banks and trust companies by the rule, it may be wise to
nominate a bank or a trust company as the personal representative.
(15) S Corporation Stock. If the decedent owned stock in an S
corporation, the lawyer should immediately consider the effect of the decedent’s
will on the S election. The transfer of shares to an ineligible shareholder, such as
a corporation, partnership, nonresident alien, and certain trusts, can cost the
corporation its S election. See IRC §1361(b)(1). See also 1 ADVISING OREGON
BUSINESSES §§13.7–13.13 (Oregon CLE 2001 & Supp 2007). In addition, care
must be taken to avoid having more than 100 shareholders. IRC §1361(b)(1)(A).
(16) Bond Requirements. If the will does not provide for waiver of the
bond required by ORS 113.105, or if the personal representative is not the sole
heir and devisee, the individual personal representative will need to obtain a
bond. Corporate personal representatives are exempt from the bond requirement
by ORS 113.105(3), as are certain other persons described in ORS 113.105(1).
Under ORS 113.105, the court has the authority to require a bond,
notwithstanding a provision in the will that no bond is required. Local practice in
some counties requires a bond of out-of-state personal representatives. ORS
113.105(4) allows the court to waive the bond only if all of the heirs and devisees
consent in writing and the agreement is filed with the petition for the appointment
of the personal representative.
COMMENT: It may be possible to persuade a court to agree to waive
bond without complying with the requirement that all of the heirs and
devisees consent, but this could invalidate the appointment of the personal
representative if a dispute arises. However, in Smith v. Wells, 128 Or App
492, 500, 876 P2d 850 (1994), the Oregon Court of Appeals approved the
waiver of bond without the consent of the heirs and devisees, because the
personal representative, a stranger to the decedent, did not know the identity
of the heirs and devisees. Note that in the Smith case, the probate was
opened under ORS 30.090 at the request of a tort claimant. Smith, 128 Or
App at 500.
The personal representative’s own liability insurer may be a source for the
bond. The personal representative must ensure that the bond is large enough to
cover all of the estate’s assets and any increase from income. ORS 113.105(2).
PRACTICE TIP: Some bonding companies will attempt to make the
lawyer jointly liable by asking the lawyer to cosign the bond or verify the
personal representative’s financial status. Lawyers should refuse to do so.
(17) Investment Options. The lawyer should alert the personal
representative to the investment obligations under the Oregon Uniform Prudent
Investor Act, ORS 130.750–130.775. See §10.4-1(b)(1). See also ADMINISTERING
TRUSTS IN OREGON ch 9 (Oregon CLE 2007). Hiring an appropriate investment
adviser to assist the personal representative with investment decisions, in
compliance with ORS 130.680(1), will help protect the personal representative
from liability. See ORS 130.680(3).
(18) Elective-Share Claims. If the decedent left a surviving spouse, the
personal representative should consider whether an elective-share claim by the
spouse under ORS 114.600–114.725 is possible. If it is, the personal
representative should try to calculate the value of the augmented estate (see ORS
114.630) and the value of assets passing to the surviving spouse to determine, as
early as possible, whether an elective-share claim can succeed. If a claim appears
to be possible, the personal representative should look for any evidence of a
waiver of the elective-share right by the spouse. See ORS 114.620.
(19) Parental Neglect. If a parent is an intestate heir of the deceased, the
personal representative should consider whether the parent may be deemed to
have predeceased the decedent under the parental-neglect statute. ORS 112.047.
PRACTICE TIP: It is advisable for the lawyer to send a letter to the
personal representative summarizing the basic items of instruction outlined
above, as well as summarizing the basic provisions of the will.
(15) S Corporation Stock. See 1 Advising Oregon Businesses § 13.2-5(b) to
§ 13.2-5(c)(6) (OSB Legal Pubs 2017) regarding eligible shareholders of a
subchapter S corporation.
(16) Bond Requirements. The 2017 Legislature updated bonding
requirements for personal representatives. Generally, the personal representative
must obtain a bond by a surety “qualified under ORCP 82 D to G.” ORS
113.105(1)(a). No bond will be required if the will provides for waiver of the bond,
or if the personal representative is the sole heir or devisee, although a court may
nonetheless require a bond in either case for good cause. ORS 113.105(2).
Corporate personal representatives are exempted from the bond requirement by
ORS 113.105(5), as are certain other persons described in ORS 113.105(2)(c).
The court has discretion to waive the bond requirement upon the personal
representative’s request, if the request states the reasons why waiver is requested
and describes the known creditors of the estate. ORS 113.105(3).
The court also has discretion to waive or reduce the bond if it receives
written confirmation that a financial institution holding estate property can
distribute it only by court order, or if the court has restricted distribution of
property without court approval. ORS 113.105(4). Note that local practice in some
counties is to require a bond of out-of-state personal representatives.
COMMENT: Under prior law, the court had authority to waive the bond
only when all devisees and heirs consented. The authority of the court to
waive the bond has become more general, and potentially broader. Although
the consent process among heirs and devisees is no longer explicitly
mentioned, written consent by such parties will still be compelling
supporting evidence to include when setting forth the reasons why a waiver
is requested in a request to waive the bond under ORS 113.105(3).
The personal representative’s own liability insurance company may be a
source for the bond. The personal representative must make sure that the bond is
large enough to cover all estate assets and any increase from income. ORS
113.105(1)(b).
(17) Investment Options. The lawyer should alert the personal
representative to the investment obligations under the Oregon Uniform Prudent
Investor Act (ORS 130.750–130.775). See Administering Trusts in Oregon ch 9
(OSB Legal Pubs 2018) (trust investments).
§ 7.2 LIABILITIES OF PERSONAL REPRESENTATIVE

§ 7.2-1 Fiduciary Duties
The personal representative should understand that he or she is a fiduciary.
See ORS 114.395. Among other things, the personal representative is under a
duty to follow the testator’s intent as expressed in the will (see ORS 112.227,
114.265); to collect income from property of the estate; and to preserve, settle,
and distribute the estate “with as little sacrifice of value as is reasonable under the
circumstances.” ORS 114.265.
Although the Oregon Uniform Trust Code is not directly applicable to
personal representatives, the rules applicable to trustees under the Uniform Trust
Code should be followed by the personal representative. See ORS 114.395. The
Uniform Trust Code provides that a fiduciary has the following duties: (1) a duty
of good faith, ORS 130.650; (2) a duty of loyalty, ORS 130.655; (3) a duty of
impartiality, ORS 130.660; (4) a duty of care, ORS 130.665; (5) a duty to
administer the trust at reasonable cost, ORS 130.670; (6) a duty to use any special
skills or expertise that the fiduciary has or represents that he or she has, ORS
130.675; (7) a duty to keep accurate records, ORS 130.695; (8) a duty to enforce
and defend claims, ORS 130.700; and (9) a duty to inform and report to
beneficiaries, ORS 130.710.
A fiduciary is not required to be an expert in every aspect of estate
administration and, therefore, is able to delegate certain duties, notably for
investment decisions, as long as he or she exercises due care in the selection of
the delagatee. ORS 130.680.
If the personal representative breaches a fiduciary duty, the personal
representative is liable “for resulting damage or loss to the same extent as a
trustee of an express trust.” ORS 114.395; see Moser v. Van Winkle, 103 Or App
398, 402–403, 797 P2d 1063 (1990); see also ORS 130.800, 130.805. The court
may surcharge the personal representative for “any loss caused by any breach of
duty and deny in whole or in part the right of the personal representative to
receive compensation.” ORS 116.123. Several specific instances in which a
personal representative might be personally liable are listed in ORS 116.063. See
§§10.4-1(c)(1) to 10.4-1(c)(3).
In Estate of Grove v. Selken, 109 Or App 668, 676–677, 820 P2d 895
(1991), the probate court imposed a surcharge on the personal representative for
loss caused by his breach of a fiduciary duty. The lawyer who drafted the
decedent’s will became the personal representative. In his capacity as personal
representative, the lawyer found a document purporting to create a joint tenancy
between the decedent and the lawyer’s wife as to part of the decedent’s extensive
book collection. Estate of Grove, 109 Or App at 671. The lawyer assumed that
the books passed to his wife by operation of law, but did not disclose the
existence of the document or of his assumption about its impact until the final
accounting. A devisee objected to the final accounting. The probate judge
surcharged the lawyer as personal representative for the value his wife had
received from the sale of the books, and for excessive payments that he made to
his relatives and to himself as lawyer for the estate. Estate of Grove, 109 Or App
at 672–673.
The Oregon Court of Appeals affirmed, agreeing that, as personal
representative, the lawyer had breached his fiduciary duty when he (1) failed to
notify the devisees about the document regarding the books within a reasonable
time; (2) decided to accept the document at face value, despite the conflict of
interest; (3) acted as his wife’s agent in the book sale; and (4) commingled estate
property with property that he thought belonged to his wife. Estate of Grove, 109
Or App at 675–676. The court of appeals also affirmed that ORS 116.123 gives
the probate court authority to enter a personal judgment against a personal
representative for breach of a fiduciary duty. Estate of Grove, 109 Or App at 676.
§ 7.2-2 Removal of Personal Representative
A personal representative who has been “unfaithful to or neglectful of the
trust” may be removed. ORS 113.195(2). See §§5.2-9(a) to 5.2-9(b). Removal can
be a difficult goal to achieve. In Roley v. Sammons, 215 Or App 401, 412, 170
P3d 1067 (2007), the court agreed that removal is justified “when the personal
interests of the personal representative conflict with a substantial and legitimate
interest of a beneficiary of the estate.” However, on the facts, the court of appeals
found that the personal representative’s self-serving (and incorrect) conclusion
that he was the sole devisee of the residue of the estate was “merely a difference
of opinion [between him and the other devisee] about the meaning of the will.”
Therefore, the court of appeals reversed the probate court’s removal of the
personal representative. Roley, 215 Or App at 412.
§ 7.2-3 Personal Liability to Persons Interested in the Estate
Under ORS 114.395, 116.063(3), and 116.123, the personal representative
is liable for the breach of a fiduciary duty to the extent of the loss or damage
caused. Any person who seeks to impose personal liability on the personal
representative must prove some loss or damage. The personal representative will
be liable for the breach of a fiduciary duty to the same extent as the trustee of an
express trust in similar circumstances would be liable. ORS 114.395; see Moser
v. Van Winkle, 103 Or App 398, 403, 797 P2d 1063 (1990) (the personal
representative was liable for the costs and attorney fees incurred in investigating
a breach-of-duty claim).
§ 7.2-4 General Principles of Liability
The principles regarding a trustee’s liability do not apply directly to
personal representatives, but personal representatives, like trustees, are
fiduciaries, so the principles applicable to trustees are analogous and provide
guidance for personal representatives. See ORS 114.395; see also ORS 130.650–
130.910. The general principles of trustee liability are spelled out in the
RESTATEMENT (SECOND) OF TRUSTS §§201–226 (1959), as supplemented by the
RESTATEMENT (THIRD) OF TRUSTS §§90–92 (Prudent Investor Rule) (1992). See
also 3 AUSTIN WAKEMAN SCOTT & WILLIAM F. FRATCHER, SCOTT AND ASCHER
ON TRUSTS §24 (5th ed 2007) (supplemented periodically) (citation not verified
by publisher), for an in-depth commentary on the Restatement.
In general, a trustee is in breach of the trust if the trustee intentionally or
negligently violates a duty owed to a beneficiary. In some situations, however, a
trustee can be liable even though not personally at fault, because of a mistake of
law regarding the extent of the duties and powers, or a mistake of fact or law in
the exercise of powers or the performance of duties. See SCOTT AND ASCHER ON
TRUSTS, supra, §201.
When it does not result from a breach of trust, the mere failure to make a
profit, or a loss or depreciation in value of trust property, is not sufficient to
impose personal liability on the trustee. RESTATEMENT (SECOND) OF TRUSTS §204
(1959).
The general principles of trustee liability, which provide guidance for
personal representatives, are spelled out in the Restatement (Second) of Trusts
§§ 201–226 (1959), as supplemented by the Restatement (Third) of Trusts §§ 90–
92 (2007) (Prudent Investor Rule). For an in-depth commentary on the
Restatement, see 3 Mark L. Ascher, Austin Wakeman Scott & William F. Fratcher,
Scott and Ascher on Trusts § 24 (5th ed 2007) (supplemented periodically)
(citation not verified by publisher).
§ 7.2-4(a) Specific Situations
§ 7.2-4(a)(1) Basis for Liability
Under ORS 116.063(1), a personal representative is responsible for, and is
chargeable in his or her accounts for, the entire estate of the decedent that comes
into his or her possession at any time, including income. The personal
representative may also be responsible for any property that is not part of the
estate, if he or she commingles it with the assets of the estate, and for any property
received in his or her representative capacity under a duty imposed by law. ORS
116.063(2).
The personal representative may be liable for any loss to the estate arising
from neglect or unreasonable delay in collecting assets, neglect in paying over
money or delivering property of the estate, failure to pay taxes as required by law,
or failure to close the estate within a reasonable time. ORS 116.063(3). In a case
that preceded the probate code, Fitchard v. Hirschberg’s Estate, 128 Or 317, 330,
272 P 906, 274 P 505 (1929), the court stated that, under some circumstances,
delay in closing an estate may make a personal representative liable to the
beneficiaries for interest on funds denied to the beneficiaries.
The personal representative may also be liable for (1) embezzlement, (2)
commingling estate assets with other property, (3) unauthorized self-dealing, (4)
wrongful acts or omissions of a copersonal representative that the personal
representative could have prevented by exercising ordinary care, and (5) “[a]ny
other negligent or willful act or nonfeasance in the administration of the estate by
which loss to the estate arises.” ORS 116.063(3)(d)–(f).
See Matter of White’s Estate, 289 Or 13, 18, 609 P2d 365 (1980), in which
the court included, under ORS 116.063(2)(b), the personal representative’s
obligation to properly manage a claim for wrongful death.
See also RESTATEMENT (SECOND) OF TRUSTS §§205–206 (1959), under
which a trustee may be surcharged for any loss or depreciation in value of trust
property, when he or she violates the duty of loyalty or is otherwise in breach of
trust.
Under ORS 116.073, the personal representative is not personally liable for
(1) “[d]ebts due the decedent or other assets of the estate that remain uncollected
without the fault of the personal representative,” or for (2) “[l]oss by the decrease
in value or destruction of property of the estate if the loss is caused without the
fault of the personal representative.”
§ 7.2-4(a)(2) Continuation of Decedent’s Business
If the decedent was engaged in any business or venture at the time of death,
the probate code authorizes the personal representative to (1) continue the
business or venture to preserve its value, (2) incorporate or otherwise change the
business form of the business or venture, or (3) discontinue and wind up the
business or venture. ORS 114.305(21)–(23).
If the personal representative chooses to operate the business, he or she
must comply with payroll tax laws and other statutory requirements of the
business. The failure to do this could result in personal liability.
For a more detailed discussion of issues with continuing the decedent’s
business, see §§10.10-1 to 10.10-4(d)(2).
§ 7.2-4(a)(3) Environmental Concerns
Under both federal law and state law, an owner or operator of contaminated
property may be personally liable for the costs of cleaning up the contamination.
42 USC §§9601–9675; ORS ch 465. Both federal law and Oregon law make
exceptions for owners who acquire the property by inheritance or bequest. 42
USC §9601(35)(A)(iii); ORS 465.255(3)(b). These exceptions would not apply if
the person is also an operator of the property as defined in the statutes.
Congress has limited the personal liability of fiduciaries for environmental
contamination, as long as negligence by the fiduciary does not cause or contribute
to the contamination. 42 USC §9607(n)(3). See ORS 465.440 for the Oregon
Environmental Quality Commission’s authority to specify when property held by
a fiduciary is exempt from environmental liability. Similar protection is provided
with respect to underground storage tanks under 42 USC §6991b(h)(9)(B).
In Oregon, under rules established in accordance with ORS 465.440, no
such protection is available for individuals serving as fiduciaries. The Department
of Environmental Quality defined by rule (OAR 340-122-0140) instances in
which a bank or trust company holding property in a fiduciary capacity can be
exempt from personal liability for environmental contamination, but the rule does
not include individuals.
PRACTICE TIP: Given that ORS 465.440 protects only corporate
fiduciaries, and not individuals who act as fiduciaries, and that a claim of
environmental contamination may arise long after the estate assets have been
distributed, lawyers should warn personal representatives about the risks
associated with environmentally contaminated property.
For a discussion of a trustee’s potential liability as the “owner” of real
property with environmental contamination, see ADMINISTERING TRUSTS IN
OREGON §§19.7, 19.9–19.14 (Oregon CLE 2007). For an overview of the major
issues raised in real estate transactions as a result of the statutes that impose strict
liability on property owners for the cleanup of hazardous substances, see
FUNDAMENTALS OF REAL ESTATE TRANSACTIONS ch 10 (Oregon CLE 1992 &
Supp 2001). See also 2 TORTS ch 23 (OSB Legal Pubs 2012) (toxic torts); 1
DAMAGES ch 21 (Oregon CLE 1998 & Supp 2007) (invasions of real property,
including environmental damage). These issues are discussed further in §§10.8-4
to 10.8-4(d).
For a discussion of a trustee’s potential liability as the “owner” of real
property with environmental contamination, see Administering Trusts in Oregon
§ 19.3-3(a), § 19.3-4 to § 19.3-4(e) (OSB Legal Pubs 2018) (liability as an owner;
the fiduciary exemption). For an overview of the major issues raised in real estate
transactions as a result of the statutes that impose strict liability on property owners
for the cleanup of hazardous substances, see 4 Oregon Real Estate Deskbook ch 40
(OSB Legal Pubs 2015) (environmental considerations in real estate transactions).
See also 1 Damages ch 19 (OSB Legal Pubs 2016) (invasions of real property
including environmental damage).
§ 7.2-4(a)(4) Search for Claimants
The personal representative’s obligation to search for, and provide notice
to, persons who may have a claim against the estate is detailed in ORS 115.003–
115.004. See §7.3-3(a). The search for claimants is necessary due process to
allow the bar on claims not asserted within the short time periods provided in the
probate code. See Tulsa Prof’l Collection Services, Inc. v. Pope, 485 US 478,
487–488, 108 S Ct 1340, 99 L Ed2d 565 (1988). The failure to diligently follow
these procedures may result in personal liability for the personal representative.
ORS 115.004(1). However, persons who receive distributions or other payment
from the estate must indemnify the personal representative and the surety to the
extent that the distribution or payment would have been reduced if the personal
representative had properly handled the claims procedure and, in some
circumstances, for the attorney fees in defending against allegations that the
personal representative handled the claims improperly. ORS 115.004(3)–(4).
Claims against the estate are discussed more fully in chapter 9.
§ 7.2-4(a)(5) Copersonal Representatives
The relationship between copersonal representatives and the rights of third
parties dealing with one personal representative is described in ORS 114.415. A
personal representative may be liable for the “[w]rongful acts or omissions of
copersonal representatives that the personal representative could have prevented
by the exercise of ordinary care.” ORS 116.063(3)(f).
§ 7.2-4(b) Defenses to Liability
§ 7.2-4(b)(1) Discharge After Partial Distribution
The distribution of estate assets pursuant to an order of partial distribution
is a full discharge of liability of the personal representative for all property
properly covered in the order, except as otherwise provided in the probate code.
ORS 116.033.
§ 7.2-4(b)(2) Approval of Final Account and Discharge
The court’s approval of the personal representative’s final account relieves
the personal representative from liability for the administration of the estate. ORS
116.123. See ORS 116.213. The court’s approval is conclusive as to persons
interested in the estate.
When the personal representative files receipts for the distribution of assets
as ordered in the general judgment, the court will enter a supplemental judgment
discharging the personal representative. The discharge bars most actions against
the personal representative. ORS 116.213.
However, a release and discharge of the personal representative are subject
to the right of appeal; the right of certain claimants to bring an action against the
personal representative within two years of the decedent’s death (ORS
115.004(5)); the power of the court to vacate its final orders (ORS 116.123); and
the power of the court to allow an action against the personal representative
within one year after discharge, if the supplemental judgment of discharge was
obtained through fraud or misrepresentation by the personal representative, or if
the claim was based on mistake, inadvertence, surprise, or excusable neglect of
the claimant (ORS 116.213).
§ 7.2-4(b)(3) Laches
Because a probate proceeding is equitable in nature, the equitable defense
of ignoring a stale claim may be available. See In re Webster’s Estate, 74 Or 489,
494, 145 P 1063 (1915). Long delay by a claimant in raising objections against a
personal representative can render the claim invalid, even when there is evidence
of questionable actions on the part of the personal representative. Taylor v.
Rubey, 2 Or App 277, 287, 467 P2d 132 (1970).
However, in Dahlhammer v. Schneider, 197 Or 478, 497, 252 P2d 807
(1953), the Oregon Supreme Court refused to allow a laches defense when the
plaintiff’s delay did not result in any disadvantage to adverse parties. The
plaintiff in the Dahlhammer case brought an action to cancel conveyances by the
administrator to herself six years after the administrator’s death and 10 years after
the plaintiff became of age. The court found that the plaintiff was “entirely
ignorant as to the proceedings in the estate of her deceased father and as to [her]
guardianship proceedings until after she had conferred with her attorney” years
later. Dahlhammer, 197 Or at 497. By the promises of the administrator (who was
the plaintiff’s mother) and by assurances given to her by her stepfather that “she
would in the future receive her full interest in her deceased father’s estate, [the
plaintiff] was in a way lulled into a false sense of security.” Dahlhammer, 197 Or
at 497. Considering all the facts and circumstances, the court declined to say that
the plaintiff’s claim was barred by laches. Dahlhammer, 197 Or at 497–498.
§ 7.2-4(b)(4) Consent, Waiver, and Estoppel
A beneficiary may waive his or her rights to bring an action against a
personal representative by acquiescing in, or having actual knowledge of, acts
constituting a breach, and thus will be estopped from asserting his or her rights.
In re Hemshorn’s Estate, 184 Or 364, 376–377, 198 P2d 597 (1948). In In re
Hemshorn’s Estate, 184 Or at 376, a beneficiary was barred from objecting to the
manner in which the decedent’s business continued to be operated, because she
was fully aware of the business’s operation for years without raising any objec-
tion.
§ 7.2-4(c) Liability to Third Persons
§ 7.2-4(c)(1) Liability in Contract
In dealing with third parties, the relationship between the personal
representative and the estate “is that of an agent for a disclosed principal.” ORS
114.405(1). The “personal representative is not personally liable on contracts
properly entered into in the fiduciary capacity in the course of administration of
the estate.” ORS 114.405(2). However, the personal representative may, by
agreement, become liable on such contracts. ORS 114.405(2).
A person who deals with the personal representative without having actual
knowledge that the personal representative is exceeding his or her authority is
protected under ORS 114.385. The protection afforded third parties by this statute
is very broad. The third party is not required to determine whether the personal
representative has the power to act. A third person is not protected under the
statute if he or she had actual knowledge of (1) a limitation on the personal
representative’s authority, (2) an improper exercise of the personal
representative’s power, (3) a term of the will limiting authority, or (4) a defect in
the qualification of the personal representative. ORS 114.385. The broad
protection provided by the statute is needed to implement one of the basic goals
of the probate code: to permit the personal representative to administer the estate
without constantly seeking court approval.
A personal representative’s contractual relationship with the attorney for
the estate does not require the personal representative to appeal if the court
disallows some of the attorney’s requested fees. “[I]n the absence of bad faith or
fraud to deprive the attorney of reasonable attorney fees, the personal
representative is not liable for refusing to appeal” an award of attorney fees
deemed inadequate by the lawyer for the estate. Smith v. U.S. Nat. Bank of
Oregon, 47 Or App 967, 976, 615 P2d 1119 (1980).
§ 7.2-4(c)(2) Liability in Tort
The personal representative is not personally liable for torts committed
during the course of administering the estate “unless the personal representative
is personally at fault.” ORS 114.405(3).
If an injury is caused by the negligence of an employee hired by the
personal representative, the personal representative is not personally liable unless
he or she failed to exercise “due prudence” in hiring the employee or negligently
performed some other duty. In re Chandler’s Estate, 136 Or 128, 135, 297 P 841
(1931).
Tort actions may be allowed against the estate whether or not the personal
representative is personally liable. ORS 114.405(4).
§ 7.2-4(d) Self-Dealing
§ 7.2-4(d)(1) Purchase of Estate Property
The personal representative may purchase or encumber estate property if
all of the interested persons consent, the will expressly authorizes the transaction,
or the transaction complies with a statute or a contract executed by the decedent.
ORS 114.355. In the absence of one of these factors, the purchase or
encumbrance is voidable, not void. The same rule applies to transactions between
the estate and the spouse, agent, or lawyer for the personal representative. ORS
114.355(1).
Any title received by a bona fide purchaser for value is protected, unless
the purchaser should have known of the circumstances that would make the sale
by the personal representative voidable. ORS 114.355(2).
§ 7.2-4(d)(2) Transactions with Beneficiaries
No rule voids transactions between the personal representative and the
beneficiaries of the estate. Given the permissive nature of ORS 114.355, such
transactions should be allowed if the personal representative has fully disclosed
to the beneficiary all of the relevant facts regarding the transactions and the
transactions are objectively fair.
§ 7.3 NOTICES
§ 7.3-1 To Heirs, Devisees, and Interested Persons
Upon appointment, the personal representative must deliver or mail
information to the devisees, heirs, and other interested persons. The contents and
required recipients of the notice are detailed in ORS 113.145(1). Additional
language must be provided to any person who challenges the will, or who has
been identified in the petition for appointment as contending that a parent of the
decedent willfully deserted the decedent or failed to provide proper care. See
ORS 113.145(1)(g)–(h). The notice to such persons must contain a statement that
the person’s rights may be barred unless he or she proceeds as provided in ORS
113.075 (for persons challenging the will) or ORS 112.049 (for persons alleging
forfeiture of a parent’s share). See §§2.5-1 to 2.5-4, 5.2-2(b). See Forms 5-10 and
5-11.
PRACTICE TIP: Although not expressly required by statute, it is good
practice to voluntarily supply copies of the will to persons who are
substantially interested in its contents. In any event, copies can be obtained
from the court by those sufficiently interested to procure them.
Within 30 days after appointment, the personal representative must file
proof of delivery or mailing of the notice required by ORS 113.145. A copy of
the notice and the names (but not the addresses) of the persons to whom the
notice was delivered or mailed must be included in the affidavit. ORS
113.145(4). See Form 5-12.
If at any time before the filing of the final account the personal
representative has actual knowledge that the petition for appointment failed to
name any person nominated as personal representative, or any heir, devisee, or
person required to be named as challenging the will (see ORS 113.035(8)), or a
parent who deserted the decedent (see ORS 113.035(9)), the personal
representative must promptly deliver or mail the notice described in ORS
113.145(1) to that person, and file with the court proof of compliance with this
requirement. ORS 113.145(5). See ORS 111.215 (proof of notice). See also
§§2.5-1, 2.5-5, 5.2-8.
Notice must also be mailed or delivered to the Department of Human
Services (DHS) and the Oregon Health Authority within 30 days after the
personal representative’s appointment. ORS 113.145(6). Although many
experienced attorneys recommend sending notice to both agencies as required by
the statute, notice to the DHS is sufficient to provide notice to the Oregon Health
Authority. OAR 943-001-0020(2)(e). The address for DHS is: Oregon
Department of Human Services, Estate Administration Unit, PO Box 14021,
Salem, OR 97309-5024.
Notice must also be mailed or delivered to the Department of Human
Services (DHS) and the Oregon Health Authority (OHA) within 30 days after the
personal representative’s appointment. ORS 113.145(6). Although many
experienced practitioners recommend sending notice to both agencies as required
by the statute, notice to the DHS is sufficient to provide notice to the OHA. OAR
943-001-0020(2)(e). If the personal representative is aware that the OHA has a
claim, the personal representative should also provide notice to the OHA under
ORS 115.003 and not rely on notice under ORS 113.145 to start the running of the
claims’ period. See State ex rel. Oregon Health Auth. v. Cue, 268 Or App 350, 342
P3d 98 (2014), rev den, 357 Or 324 (2015).
§ 7.3-1(b) Effect of Failure to Notify
The personal representative’s failure to provide notice constitutes a breach
of fiduciary duty to the persons concerned, but “does not affect the validity of
appointment, duties or powers or the exercise of duties or powers.” ORS
113.145(3).
The 2017 Legislature changed the wording of ORS 113.145(3), but did not
alter the substance of the statute.
§ 7.3-2 Publication of Notice to Interested Persons
Upon appointment, the personal representative must notify all of the
interested persons of the estate proceeding by publishing a specific notice in a
newspaper published in the county where the proceeding is pending. ORS
113.155(1). The term interested person includes “heirs, devisees, children,
spouses, creditors and any others having a property right or claim against the
estate of a decedent.” ORS 111.005(19). The required contents of the notice are
detailed in ORS 113.155(2). The notice must be published once in each of three
consecutive weeks. ORS 113.155(1). See Form 5-15. The personal representative
must file proof of publication, including a copy of the notice. ORS 113.155(4);
see ORS 111.218. See §2.5-5; Form 5-16. The publishing newspaper will usually
provide the affidavit if asked to do so at the time that the advertising copy is
submitted.
If an heir or a devisee cannot be identified or found, that person’s share
escheats to the state of Oregon. ORS 112.055(2). See §4.1-2(g). The Department
of State Lands is entitled to the same notice as would have been given to the
missing heir or devisee. ORS 112.055(3)(c)(B).
Under ORS 112.058(1), a missing person whose death cannot be proved, or
who cannot be presumed dead under the rules of that statute, is presumed to have
lived to age 100. An heir whose death is presumed is also presumed to have two
children, in addition to any known children, unless the presumption of death
arises under certain specific circumstances. ORS 112.058(2). The share of the
missing person and the share of his or her presumed children escheat to the state
of Oregon. ORS 112.055(2).
PRACTICE TIP: Estate planners may wish to include language in their
wills to avoid an unintended escheat that will occur if an heir or devisee
cannot be identified or found. For instance, a will could provide that “any
devisee or heir who cannot be identified or found, as that phrase is used in
ORS 112.055, will be deemed to have predeceased me without issue.”
Regarding the third paragraph of the 2012 text, ORS 112.055 now provides
that the intestate estate escheats to the State of Oregon if, “after diligent search and
inquiry that is appropriate to the circumstances, taking into account the value of the
decedent’s estate,” no known person takes by descent. ORS 112.055(1). See § 4.1-
2(g). The Department of State Lands is entitled to the same notice as would have
been given to the missing heir or devisee. ORS 112.055(3)(c)(B).
§ 7.3-2(b) Effect of Failure to Publish
The personal representative’s failure to publish the required notice is a
breach of duty to the persons concerned, but does not affect the validity of the
representative’s appointment or the exercise of his or her duties or powers. ORS
113.155(3). The failure to publish the required notice under ORS 113.155(1) was
one of several examples of lawyer misconduct cited in In re Conduct of Gresham,
318 Or 162, 166, 864 P2d 360 (1993), leading to the suspension of the lawyer in
the case.
§ 7.3-2(c) Successor Personal Representative
When a successor personal representative is appointed within four months
after publication of the notice required in ORS 113.155, the successor must
publish a new notice to interested persons in slightly different form, as set forth in
ORS 113.225.
§ 7.3-3 Diligent Search for and Notice to Claimants
Because the probate code allows the claims of creditors to be cut off if not
asserted within a short period of time (30 days after direct notice or four months
after published notice, ORS 115.005(2)), the personal representative must search
for claimants entitled to notice. ORS 115.003.
During the three months after appointment, unless the court allows a longer
time period, the personal representative must (1) “make reasonably diligent
efforts to investigate the financial records and affairs of the decedent,” and (2)
“take such further actions as may be reasonably necessary to ascertain the identity
and address of each person who has or asserts a claim against the estate.” ORS
115.003(1). See §9.3-3.
The personal representative may request, and the court must allow, a longer
time if the personal representative “cannot complete reasonably diligent efforts to
identify persons with claims” during the three-month period. ORS 115.003(1).
The court may allow another extension if the search cannot be completed within
the first extension. ORS 115.003(1).
Not later than 30 days after expiration of the time to search for claimants,
including any extensions, the personal representative must give notice “to each
person known by the personal representative during such period to have or assert
a claim against the estate.” ORS 115.003(2). The contents of the notice are
described in detail in ORS 115.003(3). The notice has the effect of cutting off
creditors’ claims if not asserted within 30 days. ORS 115.005(2)(b).
It is not “necessary to give notice on account of a claim that has already
been presented, accepted or paid in full or on account of a claim that is merely
conjectural.” ORS 115.003(2).
If a claimant is discovered after the expiration of the period allowed to
search for claimants, including any extensions, the personal representative may
cause the notice to be given to the discovered claimant. ORS 115.003(2).
Within 60 days after the expiration of the period allowed to search for
claimants, including any extensions, the personal representative must file proof of
compliance with the statute. ORS 115.003(4). The proof must include a copy of
the form of the notice, the date of delivery or mailing of the notice, and the name
and address of each person given notice. ORS 115.003(4). See ORS 111.218
(proof of notice).
PRACTICE TIP: In Lane County, the local practice is to require that the
affidavit of compliance include a list of the steps taken to comply with the
requirements of ORS 115.003. See Form 9-4.
As mentioned in the 2012 text, the personal representative generally has
three months after appointment to search for persons who have or assert claims
against the estate. ORS 115.003(1). Not later than 30 days after expiration of the
time to search for claimants (including any extensions), the personal representative
must give notice “to each person known by the personal representative during such
period to have or assert a claim against the estate.” ORS 115.003(2). The contents
of the notice are described in detail in ORS 115.003(3). The notice has the effect of
cutting off creditors’ claims if not asserted within 45 days (30 days under prior
law). ORS 115.005(2)(b).
A creditor’s claim against the estate is barred if not presented within the
applicable statute of limitations and before the later of the following time periods:
(1) four months after published notice or (2) 45 days after the personal
representative delivers or mails direct notice to the creditor as required by ORS
115.003(2) and (3). ORS 115.005(2).
§ 7.3-3(b) Failure to Make Search or Give Notice
The personal representative’s failure to make reasonably diligent efforts to
ascertain claims or to cause notice to be delivered or mailed is a “breach of duty
to the persons concerned, but does not affect the validity of appointment, duties
or powers or the exercise of duties or powers.” ORS 115.003(5). See §9.3-3 (the
failure to give actual notice to known creditors violates the due process clause).
A claimant who was not given the required notice has a cause of action
against the personal representative and the surety for the amount that the claimant
would have been paid from the estate if all of the claims not barred from payment
had been timely presented and had been allowed by the personal representative.
Any payment by others reduces the claim against the personal representative by a
like amount. ORS 115.004(1).
The claimant also has a cause of action against each interested person who
received a distribution or other payment from the estate, to the extent that payment
of the claim would have reduced payment to that person. ORS 115.004(2).
The personal representative and surety are indemnified against liability on
such a claim, to the extent that the payment received by the interested persons
would have been reduced by the payment of the claim. ORS 115.004(3).
To the extent that the interested persons must indemnify the personal
representative, they must also indemnify for costs, including attorney fees, if the
personal representative prevails against the claimant. If the claimant prevails, the
indemnity is for costs that could have reasonably been incurred by the estate on
disallowance of the claim if it had been timely presented. ORS 115.004(4).
Except as provided in ORS 115.004(6), an action against the personal
representative, the surety, or an interested person must “be commenced within two
years after the death of the decedent or within the statute of limitations applicable
to the claim, whichever is earlier.” ORS 115.004(5).
Under ORS 115.004(6), an action for indemnity must be brought within the
time period for an action against the personal representative described above,
except that the time for such an action is extended during the pendency of an
underlying action, if:
(1) The person seeking indemnity gives notice to each party from whom
indemnity is sought within 180 days after being served with the complaint in the
underlying action; and
(2) The action for indemnity is commenced within one year after the
judgment in the underlying action becomes final and not subject to further appeal.
§ 7.4 REPORTING ASSETS

§ 7.4-1 Identifying Assets
Generally, the personal representative is responsible for identifying and
locating the decedent’s assets. The personal representative should review the
decedent’s mail, tax returns, filing system, computer records, and other sources of
information to identify and locate assets. As financial institutions move toward
paperless records, access to the decedent’s computer, and computer passwords,
will be of increasing importance. The personal representative can also search for
the decedent’s unclaimed property by going to the national Web site at
www.unclaimed.org.
For a discussion of managing estate assets, see chapter 10.
§ 7.4-2 The Inventory
§ 7.4-2(a) Filing the Inventory
Within 60 days after appointment, unless the court extends the time, the
personal representative must file an inventory listing all of the property of the
estate that has “come into the possession or knowledge of the personal
representative.” ORS 113.165. The inventory must show estimates of the true
cash values of the assets as of the date of the decedent’s death. True cash value
means the gross value of the assets, not net equity. Any debt against assets is not
deducted in arriving at true cash value. See Form 7-1.
PRACTICE TIP: The duty to file an inventory within 60 days runs from
the date of the appointment of the personal representative, not from the date
that letters testamentary or letters of administration are issued. ORS 113.165.
If a personal representative has been appointed, but a bond is required,
letters testamentary or letters of administration will not be issued until the
bond is filed. ORS 113.125(1). Gathering needed information to complete
the inventory may be difficult before the letters are issued. To avoid
problems completing the inventory within the statutory time period, it is
helpful to discuss the availability of a bond with the bonding company
before petitioning for appointment. That way, the bonding company will be
ready to issue the bond as soon as it receives a copy of the order appointing
the personal representative. It will also be known early in the process
whether or not the proposed personal representative is bondable.
PRACTICE TIP: The following property is not part of the probate estate
and should not be listed in the inventory: property held with right of
survivorship or in a tenancy by the entirety, passing to the surviving joint
tenant; life insurance and other property passing outside the estate; and
property subject to ancillary probate in another state. Listing such property is
required on estate tax returns, but the property’s existence and value need
not be placed in the public record.
PRACTICE TIP: When personal property either has significant
economic value or is specifically devised, it should be itemized separately in
the inventory. Otherwise, it is common practice to lump together similar
kinds of items.
PRACTICE TIP: The personal representative need not include in the
inventory any of the decedent’s pets valued at less than $2,500. ORS
114.215(3).
Aside from meeting the statutory requirements for an inventory described
in ORS 113.165, the personal representative should consider the following when
preparing the inventory:
(1) The inventory identifies the decedent’s assets. The function of the
probate estate is to transfer title from the decedent to the heirs and devisees; that
transfer cannot be accomplished without identifying the decedent’s assets in the
court proceedings.
(2) The inventory is a guide in managing and administering the estate.
The fair-market values determined for inventory purposes are relevant in
determining the amount of insurance coverage needed, as well as asking prices
for the property to be sold. The inventory, therefore, is helpful for planning the
cash flow of the estate and determining what insurance protection is appropriate.
(3) The inventory helps establish the tax basis of the decedent’s assets
for income tax purposes. IRC §1014. A detailed itemization of the decedent’s
assets with the fair-market value of those assets helps with income tax returns.
(4) The inventory gives an early indication of whether federal or Oregon
estate tax returns must be filed. For a discussion of when estate tax returns must
be filed, see §7.6-4(b). See also chapters 12, 14.
The 2017 Legislature amended ORS 113.165, increasing the time within
which the personal representative has to file an inventory of estate property. Within
90 days after appointment (unless the court extends the time), the personal
representative must file an inventory listing all property of the estate that has
“come into the possession or knowledge of the personal representative.” ORS
113.165.
PRACTICE TIP: The duty to file an inventory within 90 days runs from
the date of appointment of the personal representative, not from the date that
the letters testamentary or letters of administration are issued. ORS 113.165.
If a personal representative has been appointed but a bond is required, the
letters testamentary or letters of administration will not be issued until the
bond is filed. ORS 113.125(1). Note that the 2017 Legislature updated
bonding requirements for personal representatives. See Supp § 5.2-6(a)
Assets of the estate now include, among other assets, tangible and intangible
personal property of an Oregon domiciliary, regardless of where the property is
situated. ORS 111.005(15)(b).
The 2017 amendments also provide that the inventory must show estimates
of the “fair market values” (rather than “true cash values”) of the assets as of the
date of the decedent’s death. ORS 113.165. See § 7.4-2(c) (appraisal of property).
As with other deadlines and filing requirements, the lawyer should work to
ensure timely action by the personal representative. See In re Hartfield, 349 Or
108, 116, 239 P3d 992 (2010) (a lawyer was sanctioned for, among other things,
failing to file an inventory or an accounting in a conservatorship).
§ 7.4-2(b) Supplemental Inventory
The personal representative must file a supplemental inventory within 30
days after receiving possession or knowledge of property belonging to the estate
that was not included in the inventory, or include the property in the next
accounting. ORS 113.175. See Form 7-2.
PRACTICE TIP: If the time for the annual or final accounting is closed,
the personal representative can include later-discovered property in an
amended inventory filed with the accounting.
PRACTICE TIP: A careful lawyer will distinguish between an “amended
inventory” (see Form 7-3), which corrects the information in the inventory
filed, and a supplemental inventory, which adds omitted property to the
inventory.
PRACTICE TIP: If joint property (for example, a joint bank account) is
disclaimed by the surviving joint owner, the disclaimed interest in the
property becomes part of the probate estate. The personal representative
should file a supplemental inventory listing the disclaimed property. See
§§8.3-2(a) to 8.3-2(f) for discussions of disclaiming property.
§ 7.4-2(c) Appraisal of Property
The personal representative may employ an appraiser to assist “in the
appraisal of any property of the estate the value of which may be subject to
reasonable doubt.” ORS 113.185(1). In lieu of an appraisal, the personal
representative is obliged to show in the inventory “estimates” of the “respective
true cash values” of all of the property as of the date of the decedent’s death.
ORS 113.165. Note that ORS 118.100(6), enacted in 2011, requires that an
executor filing an Oregon estate tax return explain “how the reported values were
determined and attach copies of any appraisals.”
The court has discretion to direct that all or any part of the estate property
be appraised by one or more court-appointed appraisers. ORS 113.185(2). The
appraisal must reflect the true cash value as of the date of the decedent’s death,
must be in writing, and must be signed by the appraiser(s). ORS 113.185(3). The
appointed appraisers are entitled to be paid a fee from the estate for their services
and to be reimbursed from the estate for expenses they have incurred. ORS
113.185(4).
PRACTICE TIP: Appraisal fees should be agreed on in advance of the
appraisal. The fees should be based on the complexity of the appraisal,
rather than on the value of the property appraised.
As stated in the 2012 text, the personal representative may employ an
appraiser to assist “in the appraisal of any property of the estate the value of which
may be subject to reasonable doubt.” ORS 113.185(1). In lieu of an appraisal, the
personal representative is obliged to show in the inventory “estimates” of the “fair
market values” (rather than “true cash values”) of the property as of the date of the
decedent’s death. ORS 113.165.
The court has discretion to direct that all or any part of the estate property be
appraised by one or more court-appointed appraisers. ORS 113.185(2).
An appraisal should reflect the “fair market values” of the assets as of the
date of the decedent’s death, must be in writing, and must be signed by the
appraiser. ORS 113.185(3); ORS 113.165.
§ 7.4-2(d) Requirements for Tax Purposes
Because the decedent’s property is given a new income tax basis at death
equal to its fair-market value under IRC §1014, the personal representative
should establish the fair-market value as of the date of the decedent’s death. In
some estates involving decedents dying in 2010, the personal representative was
allowed to allocate only a limited basis increase to the estate’s assets. Former
IRC §1022. See chapter 12.
For taxable estates, IRC §2031 and Treas Reg §20.2031-1(b) require that
the value of every item of property be included at its fair-market value as of the
date of the decedent’s death, unless the alternative valuation date is selected
under IRC §2032, or unless the special valuation provisions of IRC §2032A are
used.
The alternate valuation date and the special-use valuation provisions are
discussed in §§12.1-2 to 12.1-2(b) and 12.2-5(e). If the alternate valuation date
under IRC §2032 or the special valuation provisions under IRC §2032A are used,
the devisee’s tax basis in the property is determined by those values. IRC §1014.
An estate that is not required to file a federal estate tax return, but that is subject
to the Oregon estate or inheritance tax, may use the alternate valuation date. ORS
118.010(8).
Real property that is subject to a conservation easement may have some of
its value excluded under IRC §2031(c).
Penalties are provided under IRC §6662(g) for valuation understatements
for the purposes of estate and gift taxes. Also, overstatements of value may give
rise to income tax penalties. IRC §6662(e)(1)(A).
See chapter 12 for a more complete discussion of estate taxation.
§ 7.4-3 Form of the Inventory
The inventory should be in a form that sufficiently describes the decedent’s
assets, so that a stock transfer agent or title officer can quickly and accurately
identify the property to be transferred. Items listed on the inventory may be in a
format that is easily tied to items appearing on the federal or Oregon estate or
inheritance tax return, if required. See §7.6-4(b). See also chapters 12, 14. The
inventory should set forth sufficient information so that a tax auditor can verify
the information submitted without having to ask additional questions. For
example, the account number and tax lot information from the property tax
statement should be included, because it is common practice for auditors to verify
the assessed values. For general guidelines, see Treas Reg §§20.2031-1 to
20.2031-8. A sample inventory is included in Form 7-1.
PRACTICE TIP: If each inventory item is listed by number, later reports
to the court, such as the annual or final accounts, can refer to the item by
number, and thus be easier to follow.
§ 7.4-3(b) Real Property
The inventory should list real property with a correct legal description, as
well as the county’s tax account number and tax lot number. The inventory
should report the full value of the property, not merely the decedent’s equity in
the property.
PRACTICE TIP: A subnote should show any encumbrances on the
property so that heirs and devisees are not misled about the estate’s net
value. See Form 7-1.
§ 7.4-3(c) Stocks and Bonds
The inventory should give a precise description of the stocks and bonds
and show the number of shares or bonds. See Form 7-1. The inventory should list
the value of publicly traded stocks and bonds by using the mean between the
highest and the lowest quoted selling prices on the valuation date. See Treas Reg
§20.2031-2(b)(1). If the valuation date is on a weekend or holiday, or if no sales
took place on the valuation date but sales occurred within a reasonable time
before and after that date, a weighted average is used to determine value. See
Treas Reg §20.2031-2(b)(1). If a stock is trading ex-dividend, and the date of
record for payment is after the valuation date, the amount of the declared
dividend is added to the ex-dividend quotation. See Treas Reg §20.2031-2(i). If
the valuation date is after the record date, but prior to payment, the dividend is
listed as a separate item. See Treas Reg §20.2033-1(b).
The valuation of shares of stock in a closely held corporation or other
business entity is a complex matter that is beyond the scope of this chapter.
§ 7.4-3(d) Mutual Funds
Mutual funds are generally valued at the last public redemption price of the
shares on the date of the decedent’s death. Treas Reg §20.2031-8(b). See Form 7-
1.
§ 7.4-3(e) Mortgages, Notes, and Contracts
Notes and contracts receivable are normally valued at their unpaid
principal balance, plus accrued interest to the date of the decedent’s death. Under
some circumstances, however, the value might be lower. See Treas Reg
§20.2031-4; Rev Rul 67-276, 1967-2 CB 321 (1967).
If a note for money loaned is reported at less than face value, ordinary
income may be recognizable each time a principal payment is received. See Form
7-1.
If the note or contract is for assets sold, a discounted value should not
create ordinary income tax when principal payments are received. This is because
payments on notes or contracts for the sale of property, in which the gain is
recognized on an installment basis, constitute income in respect of a decedent.
Such notes and contracts do not receive a new basis as of the date of the
decedent’s death. IRC §691(a)(4).
§ 7.4-3(f) Cash and Bank Accounts
Bank accounts reported in the inventory should be listed and itemized
separately, with the name of the bank, the branch, and the account number. A
joint or beneficiary account should not be listed in the inventory unless it is
turned back to the estate, or the decedent’s interest is disclaimed by the joint
owner or beneficiary. See Form 7-1.
§ 7.4-3(g) Household Goods and Personal Effects
In general, household goods and personal effects can be lumped together in
the inventory without a detailed itemization of each and every piece. See Form 7-
1. But see Treas Reg §20.2031-6(a) (if the estate is taxable, the IRS considers it
“desirable” to list items room by room on the estate tax return).
§ 7.4-3(h) Antiques, Art Work, Coins, Jewelry, etc.
An appraisal is necessary to assess items with significant artistic or
intrinsic value if the value is in excess of $3,000. See Treas Reg §20.2031-6(b).
After appraisal, the personal representative should ensure that insurance coverage
is adequate. See §7.1-3 (item (7)). See Form 7-1.
§ 7.4-3(i) Community Property in Name of Decedent
Property of the decedent located in Oregon may be treated as community
property if the property was acquired in a community-property state, or is
traceable to such property. ORS 112.715. If titled in the decedent’s name,
community property should be shown on the inventory at its full value. If the
surviving spouse believes that the property is community property, then the
spouse must make a written demand for a set-aside of the survivor’s share of the
community property. ORS 112.745. Otherwise, all of the decedent’s property is
subject to testamentary or intestate succession distribution. The court cannot set
aside the survivor’s share of the community property unless all of the property is
shown on the inventory. See Form 7-1.
If the surviving spouse holds title to community property, neither the court
nor the personal representative is required to determine whether part of that
property should pass with the decedent’s estate, unless written demand is made
by an heir, devisee, or creditor. ORS 112.755. For discussion of community
property, see §§4.3 to 4.3-5.
§ 7.4-3(j) Cemetery Lots
The cemetery lot in which the decedent is buried need not be shown on the
inventory. A vacant cemetery lot owned by the decedent, however, should be
listed. See Treas Reg §20.2033-1(b). See Form 7-1.
§ 7.4-3(k) Annuities, Life Estates, and Remainders
Annuities, life estates, and remainders should be valued using the tables
provided by the IRS. See Treas Reg §20.2031-7. See Form 7-1.
§ 7.4-4 Assets Outside Oregon
Oregon courts have jurisdiction over a resident decedent’s personal
property wherever it is located. ORS 14.030. If the decedent was an Oregon
resident, the only asset that could be outside of Oregon, for probate purposes,
would be real estate. Real estate outside of Oregon is not part of an Oregon
probate, and should not be listed in the inventory.
California financial institutions may refuse to deliver personal property to
an Oregon personal representative, if that property exceeds $150,000 in value.
See CAL PROB CODE §§12570, and 13100; Robertson v. U. S. Nat. Bank, 44 Cal
Rptr 871 (Cal Ct App 1965). See §§6.6-1(a) to 6.6-6 for a discussion of estates of
nonresident decedents.
If the decedent was not an Oregon resident, the only property to be listed in
the inventory would be Oregon real estate.
§ 7.4-5 Incomplete Inventory
If all of the information required cannot be compiled by the deadline for
filing an inventory, an incomplete inventory may be filed listing what is known.
In this situation, the personal representative should list the property in the
inventory and indicate that the value has not yet been established. Difficulties can
be created on audit if one value has been reported on the inventory and a different
value is reported on the estate tax return. The inventory should be amended when
the value is finally determined. See Form 7-3.
PRACTICE TIP: The court may grant an extension of the time for filing
an inventory if the personal representative files a petition within 60 days
after his or her appointment, stating specific reasons why the inventory
cannot be completed within the 60-day period required by the statute. See
ORS 113.165.
The 2017 Legislature amended ORS 113.165, which is cited in the practice
tip in the 2012 text. The court may grant an extension of the time for filing an
inventory if the personal representative files a petition within 90 (rather than 60)
days after his or her appointment, stating specific reasons why the inventory cannot
be completed within the 90-day period required by the statute. See ORS 113.165.
§ 7.4-6 Ancillary Probate
Oregon does not have an ancillary probate statute as such. The probate of
Oregon assets of a decedent who resided in another jurisdiction is handled in the
same way that a probate of an Oregon resident is handled, but only the Oregon
real property should be listed on the inventory. Any debt against the Oregon real
property should be listed in a subnote on the inventory. See §§6.6-1(a) to 6.6-6,
for further discussion of ancillary administration.
§ 7.5 PROVIDING FOR SPOUSE AND CHILDREN

§ 7.5-1 Occupancy of Family Home
A surviving spouse or the decedent’s dependent children, or both, may
occupy the decedent’s principal place of abode for one year after the decedent’s
death, or until the earlier termination of a lease or life estate. ORS 114.005. This
right is superior to the personal representative’s duty under ORS 114.225 to take
possession of the estate. The right of occupancy requires no action by the family
or the court to make it effective.
The home is exempt from execution to the extent that it was exempt during
the decedent’s lifetime. ORS 114.005(4).
A decedent’s surviving spouse or dependent children (or both) who were
occupying the decedent’s “principal dwelling” at the time of the decedent’s death
may continue to occupy the dwelling for one year after the decedent’s death, or
until the earlier termination of a lease or an interest in the property if such interest
is less than a fee interest. ORS 114.005(1). This right is superior to the personal
representative’s duty under ORS 114.225 to take possession of the estate. The right
of occupancy requires no action by the family or court to make it effective.
NOTE: “For good cause shown, the court may waive or alter” the right
of the decedent’s spouse and dependent children to occupy the decedent’s
principal dwelling under ORS 114.005(1). ORS 114.005(3).
The home is exempt from execution to the extent that it was exempt during
the decedent’s lifetime. ORS 114.005(2)(d). The home remains subject to the
rights of a holder of a security interest in such property. ORS 114.005(2)(e).
§ 7.5-1(b) Duties of Occupants
The duties of the spouse or children remaining in possession of the family
home are described in ORS 114.005 as follows:
(1) They may not commit or permit waste to the home, or permit liens to
attach to it;
(2) They must keep the home insured to the extent of its fair-market
value, with protection against the hazards encompassed by extended-coverage
fire insurance; in the event of any loss or damage from hazards covered by the
policy, the occupants must restore the premises to the extent of the insurance; and
(3) They must pay taxes and improvement liens.
Regarding item (2) in the 2012 text, ORS 114.005 now provides that the
occupants must “pay the cost to keep the dwelling insured, to the extent of the fair
market value of the improvements, against fire and other hazards within the
extended coverage provided by fire insurance policies, with loss payable to the
estate.” ORS 114.005(2)(b).
§ 7.5-2 Support of Spouse and Children
The surviving spouse or any dependent child may petition the court for
support, or the personal representative may submit the petition on their behalf.
ORS 114.015. Temporary support may be allowed by ex parte order of the court
pending the hearing on the petition. ORS 114.035. The petition for support need
not await the filing of an inventory. The procedure for obtaining support and the
contents of the petition are discussed in §§6.2-1 to 6.2-4.
PRACTICE TIP: If temporary support has been requested pending the
hearing, the lawyer should advise the court of this fact and submit
appropriate orders.
PRACTICE TIP: The petition should also describe the nature of the
support desired and the suggested means of financing the support.
PRACTICE TIP: Amounts paid for the support of the surviving spouse
and children under ORS 114.015 are in addition to the elective-share rights
of the surviving spouse. ORS 114.600(2).
§ 7.5-2(b) Considerations in Determining Support
In determining “necessary and reasonable provision from the estate” (ORS
114.015) for support of the surviving spouse and children, the court takes into
account the following considerations:
(1) The assets of the estate and the assets of the spouse and dependent
children, taking into account the solvency of the estate, property available for
support other than estate property, and property inherited by or devised to the
spouse and children, see ORS 114.055(2);
(2) Whether the estate would be rendered insolvent after provision for
support, ORS 114.065; see §§6.2-4, 6.4-1 to 6.4-2; and
(3) Whether the spouse has waived rights to support, ORS 114.620; see
also Simmons v. Simmons, 82 Or App 540, 544–545, 728 P2d 921 (1986) (a valid
marital agreement may have the effect of waiving rights to support).
Although ORS 114.015(3) requires that notice must be given to persons
whose distributive shares may be diminished by the granting of a petition for
support, no statute directs the court to refuse or to limit support if the distributive
shares would be diminished. Creditors are not entitled to notice, but their rights
are taken into consideration by reason of the need for judicial attention to the
solvency of the estate. ORS 114.055(2).
§ 7.5-2(c) Priority
Support of the decedent’s surviving spouse and dependent children has
priority over administration expenses and over legacies and devises. ORS
114.075. Support is deducted along with administration expenses to determine the
net estate under ORS 111.005(23), but temporary support may not be deductible
for estate tax purposes. See Treas Reg §20.2056(b)-1, example (8). Support
payments ordered by the court pursuant to ORS 114.015 are not “charged against
the distributive share of the person receiving support.” ORS 114.075. See §§6.2-
4, 6.4-1 to 6.4-2, regarding insolvent estates. Support is in addition to the
surviving spouse’s elective-share rights. ORS 114.600(2).
§ 7.5-2(d) Modification and Termination of Support
The court has authority to modify or terminate an order for the support of
the decedent’s surviving spouse and dependent children. ORS 114.045. The
statute does not specify the procedure for securing a modification or termination.
It would be based presumably on the petition of an interested party and a further
hearing and notice, if the court so required.
§ 7.5-3 Setting Apart the Entire Estate
After the time for filing claims against the estate has expired (four months
after publication of the first notice), the entire net estate may be set apart for the
spouse or dependent children or both, when necessary for the reasonable support
of the spouse and dependent children, and the estate is thereafter closed. ORS
114.085. See §§6.3-1 to 6.3-3, for further discussion.
§ 7.6 INITIAL TAX MATTERS

§ 7.6-1 Introduction
Sections 7.6-2 to 7.6-6(p) below are not intended to be a complete
discussion of federal and Oregon estate and inheritance tax issues, but are
intended to guide lawyers in the early stages of dealing with tax issues.
Discussion of estate and inheritance taxation can be found in chapters 12–14.
§ 7.6-2 Gathering Information
The tax preparer should review copies of the decedent’s federal and
Oregon income tax returns for at least the last three years. The returns provide
information about the decedent’s assets, as well as the status of tax matters. If the
returns cannot be located among the decedent’s papers or obtained from the
decedent’s accountant, the lawyer can request copies from the Internal Revenue
Service, starting with a request for a transcript on IRS Form 4506-T. See
www.irs.gov/pub/irs-pdf/f4506t.pdf.
In addition to obtaining prior income tax returns, the probate lawyer
should:
(1) Contact the decedent’s tax adviser and review the status of estimated
income tax payments of the decedent;
(2) Obtain copies of any gift tax returns; and
(3) Gather information about property taxes.
PRACTICE TIP: Title companies or the assessor’s office can provide
printouts indicating the true cash and assessed values of real property, a
legal description or a reference to a deed, and the status of the taxes.
IRS Form 4506-T (Request for Transcript of Tax Return) is now available at
www.irs.gov/forms-instructions (search by form number).
PRACTICE TIP: Title companies or the assessor’s office can provide
printouts indicating the real market and assessed values of real property, a
legal description or a reference to a deed, and the status of the taxes.
§ 7.6-3 Notices and Applications
§ 7.6-3(a) Income Taxes
The personal representative should apply for a taxpayer identification
number for the estate, using IRS Form SS-4. (The number is not needed if the
estate holds no liquid assets and does not expect to file an income tax return.)
Form SS-4 is available as an electronic fill-in form at the IRS Web site,
www.irs.gov. Getting the accountant to obtain the taxpayer identification number
will assist in involving the accountant early in the process of tax planning. The
taxpayer identification number is used on the fiduciary income tax returns, but
not on the estate tax return. It should be furnished to anyone who is holding estate
funds and who is required to advise the IRS of payments made to the estate.
The personal representative should also file IRS Form 56 to notify the IRS
of the personal representative’s fiduciary relationship. No penalties apply to a
failure to file this form. If the form is not filed, however, the IRS can send
deficiency notices and other communications to the decedent’s former address,
and need not advise the personal representative of its actions. The IRS also may
fail to act on requests for prompt assessment of taxes if the notice of fiduciary
relationship is not filed.
IRS Form SS-4 (Application for Employer Identification Number) and IRS
Form 56 (Notice Concerning Fiduciary Relationship) are available at
www.irs.gov/forms-instructions (search by form number).
§ 7.6-3(b) Property Tax Exemption for Veterans
The surviving spouse of a veteran who qualified for the property tax
exemption described in ORS 307.250 may be entitled to the same exemption. The
application for exemption is made each year on or before April 1. ORS 307.260.
See also §7.6-4(a), item (4).
§ 7.6-4 Due Dates and Filing Requirements
§ 7.6-4(a) Due Dates
The lawyer for the personal representative should enter the following dates
in a tickler system:
(1) Estate Tax Returns. Returns must be filed within nine months after
the decedent’s date of death. See IRC §6075; ORS 118.100(1). The filing
thresholds are discussed in §7.6-4(b).
(2) Estate Tax Alternate Valuation Date. Property remaining in the
estate six months after the date of the decedent’s death must be valued as of the
date six months after the date of the decedent’s death. See IRC §2032. See also
§§7.6-6(h), 12.1-2(a), 12.2-5(e).
(3) Property Taxes: Property taxes are due on November 15. See ORS
311.250.
(4) Property Tax Exemption for Veterans. The surviving spouse of a
veteran qualifying for the exemption under ORS 307.250 must file a claim for the
exemption “on or before April 1 of the assessment year for which the exemption is
claimed, except that when the property designated is acquired after March 1 but
prior to July 1 the claim shall be filed within 30 days after the date of acquisition.”
ORS 307.260.
(5) Decedent’s Final Income Tax Returns: The decedent’s final income
tax returns are normally due on or before April 15. See Treas Reg §1.6072-1(b);
IRC §443(a)(2); ORS 316.382. No return needs to be filed if the decedent had not
earned sufficient income for the year by the date of death to require one. The
personal representative should keep records documenting the lack of a need to
file.
(6) First Fiduciary Income Tax Returns: Fiduciary income tax returns
must be filed by April 15 if the estate uses a calendar year, or within three months
and 15 days following the close of the fiscal year if the estate elects a fiscal year.
See IRC §6072(a). The estate may elect to have a fiscal year other than the
calendar year. See §7.6-6(d). It is helpful to log the latest possible date for filing,
which would be 15 months and 15 days after the end of the month immediately
preceding the decedent’s death. An estate that has less than $600 gross income
need not file an income tax return. IRC §6012(a)(3).
(7) Estimated Tax Payments: Quarterly payments are due for any tax
year ending two or more years after the decedent’s death, depending on the
amount of taxable income. This could apply to a tax year beginning as early as
one year after the decedent’s death, if a short first fiscal year is elected. See IRC
§6654(l)(2).
§ 7.6-4(b) Filing Requirements
The lawyer for the personal representative should prepare a rough estimate
of assets, liabilities, and income to review in view of the following filing
requirements:
(1) Federal Estate Tax: A federal estate tax return must be filed if the
gross estate exceeds the applicable exclusion amount. IRC §6018(a). The
applicable exclusion amount is defined in IRC §2010(c).
The applicable exclusion amounts under IRC §2010(c) as amended by the
2010 Tax Act (Pub L No 111-312, §§302(a)(l), 303(a) and 304) for years 1997 or
later are:
YEAR OF DEATH APPLICABLE EXCLUSION AMOUNT
1997 $600,000
1998 $625,000
1999 $650,000
2000–2001 $675,000
2002–2003 $1,000,000
2004–2005 $1,500,000
2006–2008 $2,000,000
2009 $3,500,000
2010 Unlimited/$5,000,000
2011 $5,000,000
2012 $5,120,000 (after inflation adjustment)
2013 $1,000,000 (unless Congress acts)
For purposes of the filing requirements, the gross estate means the gross
value, at the time of death, of all of the decedent’s assets, wherever they are
located (see IRC §2031(a)), plus the amount of the adjusted taxable gifts (as
defined in IRC §2001(b)) since 1976, plus the aggregate amounts of the pre-1977
specific gift tax exemption (under former IRC §2521 as it existed before 1977)
used between September 8, 1976, through December 31, 1976. IRC §6018(a)(3).
For estates of decedents dying in 2010, the executor could elect out of the
federal estate tax. See §301(c) of the 2010 Tax Act (Pub L No 111-312, §301(c),
124 Stat 3300). A discussion of the rules for electing out of the federal estate tax
is beyond the scope of this chapter.
(2) Oregon Estate or Inheritance Tax: The 2003 Oregon Legislature
reacted to the increases in the federal applicable exclusion amount by
“decoupling” the Oregon inheritance tax from the federal estate tax. ORS
118.007. As a result, since 2006, if an Oregon decedent’s taxable estate exceeds
$1,000,000, an Oregon inheritance tax is payable. ORS 118.010(4).
The Oregon inheritance tax return requires the personal representative to
fill out the schedules associated with a federal estate tax return, even if no federal
estate tax return is required. For deaths occurring before January 1, 2012, the
Oregon Inheritance Tax Return, Form IT-1, is available at
www.oregon.gov/DOR/forms/FormsPubs/form-it-1_150-103-001_2011.pdf. The
2011 Legislature rewrote Oregon’s inheritance tax and, among other things,
renamed it the estate tax and imposed new rates of tax. See 2011 Or Laws ch 526.
For deaths occurring on or after January 1, 2012, Oregon’s inheritance tax form
(Form IT-1) has been replaced by a new estate tax form, Form OR-706, Oregon
Estate Transfer Tax Return. See www.oregon.gov/dor/forms/Pages/default.aspx.
PRACTICE TIP: Because the Oregon estate tax is based on filling out
federal estate tax return schedules, it is relatively easy, in the case of the first
spouse to die, to file the federal estate tax return needed to claim the
deceased spousal unused exclusion amount under IRC §2010(c)(4)–(5). See
§§12.1-1, 12.1-6(b).
(3) Decedent’s Final Income Tax Return: The filing requirements vary,
depending on the status of the decedent. See instructions to IRS Form 1040,
available at www.irs.gov/formspubs/index.html.
(4) Fiduciary Income Tax Returns: Form 1041 (available at
www.irs.gov/formspubs/index.html) is used to file a return if the estate has a
gross income of $600 or more, or if there is a beneficiary who is a nonresident
alien. See instructions for IRS Form 1041 (available at
www.irs.gov/formspubs/index.html; see also IRC §6012(a)(3), (5).
(1) Federal Estate Tax: A federal estate tax return must be filed if the
gross estate exceeds the applicable exclusion amount. IRC § 6018(a). The
applicable exclusion amounts under IRC § 2010(c)—as amended by various acts,
including the act known as the Tax Cuts and Jobs Act of 2017 (Pub L 115-97,
§ 11061, 131 Stat 2054)—for recent years, after inflation adjustment, are:
2013 $5,250,000
2014 $5,340,000
2015 $5,430,000
2016 $5,450,000
2017 $5,490,000
2018 $11,180,000
§ 7.6-5 Availability of Deductions and Special Provisions
The probate lawyer should review the will and any trust agreement
regarding the following:
(1) Qualification for the marital deduction generally, see IRC §2056; see
also §§12.1-5(a) to 12.1-5(d);
(2) In a will written before September 12, 1981, if a formula marital
bequest is involved, whether the transition rule of §403(e)(3) of the 1981
Economic Recovery Tax Act (Pub L No 97-34) prohibits use of the “unlimited”
marital deduction;
(3) Whether to make a qualified terminable interest property (QTIP)
election under IRC §2056(b)(7);
COMMENT: Many bypass trusts, even though not drafted for the
purpose, qualify for the QTIP election. See IRC §2056(b)(7) for the required
terms. Making an Oregon QTIP election, as permitted by ORS 118.010(8),
with respect to a bypass trust may be useful to avoid Oregon inheritance tax
on the death of the first spouse. See OAR 150-118.010(7), example 2. See
also §§7.6-6(k), 12.1-5(c)(3). If a QTIP election is not available, the
personal representative should determine whether the trust can qualify for
the Oregon Special Marital Property election under ORS 118.013. See
§14.4-10. Such an election, if available, will allow the trust to qualify for the
marital deduction from the Oregon estate tax. See §7.6-6(l).
(4) Whether a charitable bequest or split-interest gift qualifies for the
charitable deduction, see IRC §2055; see also §12.1-4(i);
(5) Whether a special-use value under IRC §2032A should be
considered, see §§7.6-6(h), 12.2-12(b) to 12.2-12(b)(4);
(6) Whether the estate qualifies for installment payment of taxes under
IRC §6166; see §12.2-7(b)(3);
(7) Whether a corporation may redeem stock from the estate without
dividend treatment under IRC §303;
(8) Whether there will be any generation-skipping transfers (GST) (a
GST tax applies to taxable distributions, taxable terminations, or direct skips that
exceed the applicable exclusion amount), see IRC §§2611–2663, see also chapter
13; and
(9) Whether the will overrides the statutory apportionment of estate
taxes described in ORS 116.313 (note that the statute does not permit a trust
provision to override the statutory apportionment).
Regarding the comment after item (3) in the 2012 text, note that OAR 150-
118.010(7) was renumbered OAR 150-118-0070 (permitting a separate Oregon
QTIP election).
Regarding item (9) in the 2012 text, note that ORS 116.313 now permits a
provision in a will or a “revocable trust of which the decedent is settlor” to
override the statutory apportionment.
§ 7.6-6 Elections
§ 7.6-6(a) Income Tax Returns
(1) The Year of Death. The surviving spouse and the personal
representative may elect to file separate income tax returns with respect to the
decedent and the decedent’s surviving spouse for the year of the decedent’s
death. The surviving spouse and the personal representative may elect to file a
joint return with respect to the decedent and the decedent’s surviving spouse for
the year of death, reporting the decedent’s income to the date of death and the
surviving spouse’s income for the full tax year. IRC §6013(a)(3). If a joint return
is filed, the preparer may need to allocate the items of income, deductions, and
tax between the husband and the wife, so that the deceased spouse’s portion of
the tax liability will be known, and a deduction for this tax can be claimed for
estate and inheritance tax purposes.
The personal representative should file the final federal income tax return
on IRS Form 1040, 1040A, or 1040EZ, as appropriate. See
www.irs.gov/formspubs. The Oregon return is Oregon Form 40. The preparer
should mark the returns “Final Return” at the top of page 1 and indicate that the
taxpayer is deceased and show the date of death. The personal representative
should sign the return on behalf of the decedent, irrespective of whether the filing
status is joint or individual. A copy of the letters testamentary should be attached
to the return. If a refund is due the estate, IRS Form 1310, “Statement of Person
Claiming Refund Due a Deceased Taxpayer,” also should be completed and
submitted with the federal return, and the similar Oregon Form 243 also should
be filed.
(2) The Following Two Years. If the surviving spouse’s home is the
principal residence of a dependent child or stepchild, the surviving spouse may
qualify to elect to use joint return rates for two years after the decedent’s death.
See IRC §1(a), IRC §2(a). The right terminates if the surviving spouse remarries.
IRC §2(a)(2)(A). After the two-year period, the surviving spouse is entitled to file
as a “head of household” if he or she meets the requirements.
(3) Payments of Quarterly Estimates. Estimated taxes for the decedent
are not required after the date of the decedent’s death. See IRC §6654(l)(2).
However, if the decedent and the surviving spouse filed jointly, the surviving
spouse is still liable for making estimated payments for the tax year. See Treas Reg
§1.6654-2(e)(7)(ii). For a general discussion of estimated taxes, see Estimated
Tax, 581-2nd Tax Mgmt (BNA) (2008) (citation not verified by publisher).
NOTE: Congress repealed former IRC §§6015 and 6153, the statutes
that exempted the decedent from estimated tax filings (although §6015 has
since been replaced). The regulations written for repealed IRC §§6015 and
6153, Treas Reg §§1.6015 and 1.6153-1(a)(4), still provide support for the
conclusion that estimated taxes need not be paid. Until new regulations
under IRC §6654 are released covering estimated tax payments for a single
decedent, most commentators suggest following the regulations under the
repealed sections.
For instance, despite the repeal of IRC §6153 by the Deficit
Reduction Act of 1984, Pub L No 98-369, §412(a)(3), 98 Stat 792, the IRS
subsequently applied Treas Reg §1.6153-1(a)(4) to determine that no
estimated income tax had to be paid after the death of an individual. Priv Ltr
Rul 91-02-010 (Oct 10, 1990). The IRS further noted that there was “no
indication of a legislative purpose in enacting section 6654 to change the
position set forth in section 1.6153-1(a)(4) of the regulations.” Priv Ltr Rul
91-02-010, supra.
PRACTICE TIP: The lawyer should consider filing IRS Form 5495 to
allow the personal representative to request discharge from personal liability
for the decedent’s income taxes. See IRC §6905. The corresponding Oregon
form is entitled “Election for Final Tax Determination for Income Taxes and
Application for Discharge from Personal Liability for Tax of a Decedent’s
Estate.” Oregon Form 150-101-151.
(1) The Year of Death. Forms for federal income tax returns (Forms 1040,
1040A, and 1040EZ) are available at www.irs.gov/forms-instructions (search by
form number). Form OR-40 (Oregon Individual Income Tax Return for Full-year
Residents), as well as Form OR-40-P for part-year residents and Form OR-40-N
for nonresidents, are available at www.oregon.gov/DOR/forms/Pages/default.aspx
(search by form number).
(3) Payments of Quarterly Estimates. For a general discussion of
estimated taxes, see Estimated Tax, 581-3rd Tax Mgmt (BNA) (2013) (citation not
verified by publisher).
PRACTICE TIP: Oregon Form OR-DECD-TAX (Final Tax and
Discharge of a Decedent’s Estate) is available at
www.oregon.gov/DOR/forms/Pages/default.aspx (search by form number).
§ 7.6-6(b) Disclaimers
The surviving spouse and other beneficiaries may elect to disclaim benefits
received by reason of the decedent’s death. See IRC §2518 and ORS 105.623–
105.649. See also §§7.1-3 (item (13)), §§8.3-2(a) to 8.3-2(f). The use of
disclaimers as a postmortem planning tool can ameliorate mistakes in a
decedent’s estate plan, such as to allow a trust to qualify for the marital
deduction, or to allow beneficiaries to redirect assets to those with a greater need.
Care is needed to ensure that the disclaimer will have the desired effect. Fleenor
v. Williamson, 171 Or App 599, 17 P3d 520 (2000) (an heir who had executed a
complete and unconditional disclaimer of an interest in an estate could not later
revoke or revise that disclaimer based on a unilateral mistake of law).
§ 7.6-6(c) Personal Representative’s Compensation
A personal representative who is also a residuary beneficiary may wish to
elect to waive compensation. Compensation is taxable income to the personal
representative, but is not subject to self-employment taxes as long as the personal
representative is not a professional fiduciary. Rev Rul 58-5, 1958-1 CB 322
(1958). If the personal representative is the sole residuary beneficiary of a taxable
estate, the decision depends on a comparison of the estate tax and the personal
representative’s income tax. When appropriate, the personal representative should
promptly waive compensation to avoid being considered, for tax purposes, in
constructive receipt of the income. See Rev Rul 66-167, 1966-1 CB 20 (1966),
providing a safe harbor if the personal representative who wishes to waive
compensation does so within six months after appointment.
A personal representative is entitled to compensation for his or her work on
the estate. Compensation (a commission on the whole estate) is set by statute. ORS
116.173(3).
Note, however, that the 2017 Legislature enacted ORS 113.038, which
allows a petition for the appointment of a personal representative under ORS
113.035 to include “a request for the compensation of the personal representative
to be determined by a different method than as provided in ORS 116.173(3).” The
petition must explain why the compensation calculated under ORS 116.173(3)
would be inadequate relative to the reasonable value of the services provided. ORS
113.038(1). A petitioner who requests a different method of compensation under
ORS 113.038 must give notice as provided in ORS 113.038(2). See Supp § 5.2-
2(b) (contents of petition). See also Supp § 11.6-5(a) (personal representative’s
fee).
§ 7.6-6(d) Accounting Method, Fiscal Year
The personal representative may elect either the cash method or the accrual
method of accounting for the estate, and may select the fiscal year for the estate.
See IRC §441, IRC §443(a)(2), IRC §446. The election must be made by the time
the first estate income tax return is due (not including extensions). Treas Reg
§1.441-1(c)(1). By choosing a fiscal year other than a calendar year, the personal
representative can defer the time when estate income is taxed to the beneficiaries,
or divide into two tax years income that would otherwise be “bunched” into one
calendar year. If the trustee elects under IRC §645 to have the decedent’s
revocable trust taxed as part of the decedent’s estate, the trustee may also elect to
use a fiscal year for the trust.
PRACTICE TIP: The personal representative and the accountant who
will prepare the fiduciary income tax return should attempt to identify
opportunities to save or defer taxes by selecting a fiscal year end that may be
more advantageous than a calendar year.
§ 7.6-6(e) Trust Election to Be Taxed as Estate; 65-Day Rule
Under IRC §645, the decedent’s revocable trust can be treated as part of
the decedent’s estate for tax purposes (even if there is no probate estate) if the
trustee files an irrevocable election as described in IRC §645(c).
A personal representative may elect, under IRC §663(b), to treat
distributions made within 65 days after the end of the estate’s tax year as made on
the last day of that tax year for income tax purposes.
§ 7.6-6(f) Medical Expenses
The personal representative may elect to claim a deduction for the
decedent’s medical expenses paid within one year after death on the decedent’s
final income tax return if a separate return is filed, or on a joint return if the
surviving spouse consents and a joint return is filed. IRC §213(c). Alternatively,
medical expenses that are unpaid at the decedent’s death can be claimed as debts
for estate tax purposes. See IRC §2053.
§ 7.6-6(g) Interest on Savings Bonds
The personal representative may elect to accrue interest to the date of death
on U.S. Series E and EE bonds on the decedent’s final income tax return. See IRC
§454(a); Rev Rul 68-145, 1968-1 CB 203 (1968). If that election is not made, the
interest will, to the extent it relates to the period before the decedent’s death, be
taxable to the subsequent owner as income in respect of a decedent. Rev Rul 64-
104, 1964-1 CB 223 (1964). See IRC §454(a), IRC §691(a).
§ 7.6-6(h) Valuation Elections
For federal estate tax purposes, the personal representative may elect to
value the assets of the estate six months after the decedent’s death rather than on
the date of death. IRC §2032. The election may be made, however, only if both
the gross estate and the estate tax are decreased by reason of the election. See IRC
§2032(c). The personal representative may make the election for Oregon
purposes whether or not a federal estate tax return is filed. ORS 118.010(8).
The personal representative should also consider electing special-use
valuation under IRC §2032A, if the estate consists largely of farm, ranch, or
timber property. See §§12.2-12(b) to 12.2-12(b)(4). Such property, and
commercial fishing businesses, may also be eligible for the Oregon natural
resources credit under ORS 118.140. See §§14.2-6(a) to 14.2-6(d)(3).
§ 7.6-6(i) Administration Expenses
The personal representative may elect to deduct administration expenses
and losses during administration on either the fiduciary income tax returns or on
the estate tax return. A comparison of the effective rates and the time of payment
is necessary. For income tax purposes, the deduction can be taken only for the
year in which payment is made. Any such expenses that constitute miscellaneous
itemized deductions are deductible only to the extent that they are in excess of
2% of adjusted gross income. See IRC §67(a); see also §12.1-4(e)(3).
The IRS has extended its suspension of rules that would force corporate
trustees to segregate their administrative fees from investment advisory fees for
purposes of identifying fees that are subject to the 2% floor. Notice 2011-37,
2011-20 IRB 785 (2011).
Some expenses of administration (management) may be deducted from
estate income, rather than principal, under the so-called Hubert regulations (Treas
Reg §20.2055-3(b)), arising from the United States Supreme Court’s decision in
Comm’r v. Estate of Hubert, 520 US 93, 117 S Ct 1124, 137 L Ed2d 235 (1997).
The act known as the Tax Cuts and Jobs Act of 2017 (Pub L 115-97,
§ 11045(a), 131 Stat 2054) amended IRC section 67. Notwithstanding IRC section
67(a), “no miscellaneous itemized deduction” will be allowed until 2026. IRC
§ 67(g).
§ 7.6-6(j) Extension of Time to Pay
The personal representative may elect to extend the time for payment of the
federal estate tax under IRC §6161 or, if the estate consists largely of a closely
held business, under IRC §6166, or under both sections, and to extend the time
for payment of the Oregon estate tax under ORS 118.225. An extension of time to
file may be filed (on IRS Form 4768) as late as the due date of the estate tax
return. The estate will automatically receive a six-month extension of time to file.
However, the tax payment date is not extended unless the estate makes an
election under either IRC §6161 or IRC §6166.
See the instructions for Form 4768, available at
www.irs.gov/formspubs/index.html.
According to advice from the Oregon Department of Revenue, if an estate
is exempt from federal estate tax but is subject to the Oregon tax, the personal
representative may file for an extension using IRS Form 4768 marked “For
Oregon Only” at the top of the form.
IRS Form 4768 (Application for Extension of Time To File a Return and/or
Pay U.S. Estate (and Generation-Skipping Transfer) Taxes) and instructions to it
are available at www.irs.gov/forms-instructions (search by form number).
§ 7.6-6(k) Qualified Terminable Interest Property
The personal representative may elect to treat certain property as qualified
terminable interest property (QTIP) to obtain a marital deduction for federal
estate tax purposes. Many bypass trusts qualify for the QTIP election, even
though not originally intended to be QTIP trusts. See IRC §2056(b)(7). Making a
partial election with respect to a qualifying bypass trust may allow the estate of a
married decedent to escape Oregon estate tax. See §§7.6-5, 12.1-5(c)(3). The
Oregon Department of Revenue has adopted rules allowing an Oregon QTIP
election that is separate from any election on the federal estate tax return. See
OAR 150-118.010(7).
PRACTICE TIP: Careful use of disclaimers may allow beneficiaries to
modify a credit shelter trust that does not qualify for the QTIP election into a
trust that does qualify. See Treas Reg §20.2056(b)-7(h), example (4).
OAR 150-118.010(7) was renumbered OAR 150-118-0070. The rule allows
an Oregon QTIP election that is separate from any election on the federal estate tax
return.
§ 7.6-6(l) Oregon Special Marital Property
Oregon allows bypass trusts that fail to qualify for the qualified terminable
interest property (QTIP) election to qualify for the marital deduction, even if the
trust allows the accumulation of income, provided that any permissible
beneficiaries who are not the surviving spouse make an election described in ORS
118.016(2), releasing all rights to distributions from the property or trust during the
lifetime of the surviving spouse.
PRACTICE TIP: The release described in ORS 118.016(2) should be
treated as a disclaimer and made only in a manner that will qualify as a
disclaimer under IRC §2518. Otherwise, the consenting beneficiaries may be
considered to have made a taxable gift of the released interest. See §7.1-3
(item (13)); see also §8.3-2(c).
Under ORS 118.013(2), Oregon special marital property consists of any
portion of a trust or other property interest:
(1) “In which principal or income may be accumulated or distributed to
or for the benefit of only the surviving spouse of the decedent during the lifetime
of the surviving spouse”;
(2) “In which a person may not transfer or exercise a power to appoint
any part of the trust or other property interest to a person other than the surviving
spouse during the lifetime of the surviving spouse”; and
(3) “For which the executor of the estate of the decedent has made the
election described in ORS 118.016(1).”
If a trust or other property interest would qualify as Oregon special marital
property under ORS 118.013(2) “except that the trust or other property interest
allows principal or income to be distributed to other persons in addition to the
surviving spouse,” ORS 118.013(3) allows the executor to “elect to set aside a
share of the trust or other property interest as a separate share of the trust or
property interest or as a separate trust, which shall qualify as Oregon special
marital property,” if:
(1) The executor makes the election described in ORS 118.016(1);
(2) Each “permissible distributee” (as defined in ORS 130.010) makes
the election described in ORS 118.016(2);
(3) The surviving spouse makes the election described in ORS
118.016(2); and
(4) “All statements of elections are attached to the estate tax return filed
with respect to the estate of the decedent, or are filed or maintained as records as
otherwise prescribed by the Department of Revenue by rule.”
§ 7.6-6(m) Gain or Loss Recognition
In general, estates are not required to recognize gain or loss on distribution
of property to residuary beneficiaries. As a result of IRC §643(e)(3), passed in the
Deficit Reduction Act of 1984, however, a personal representative may elect to
recognize gain or loss on distribution of assets in kind in the same manner as if
the property had been sold to the beneficiary at its fair-market value. IRC
§643(e)(3). Otherwise, the property distributed in kind will have built-in
appreciation or depreciation based on the change in value subsequent to the date
of death or alternate valuation date, as applicable.
In deciding whether to make the election, the personal representative
should compare the effective income tax rates imposed on the estate and on the
beneficiary.
§ 7.6-6(n) Partnership Elections
A partnership may elect to adjust the basis of partnership property to reflect
the deceased partner’s higher individual basis in his or her partnership interest.
See IRC §§753–754.
§ 7.6-6(o) Review Payout Options
The lawyer should review various payout options from IRAs, profit-sharing
plans, 401(k) plans, and other deferred compensation plans. The Professional
Liability Fund notes that claims about distributions from IRAs are becoming
more common. Lawyers should consider the complicated tax rules governing
IRAs before advising a beneficiary how to handle an IRA.
§ 7.6-6(p) Generation-Skipping Transfers
In estates in which it is possible to use the generation-skipping exemption
described in IRC §2631(a), care must be taken to avoid paying unnecessary tax.
See §§13.5 to 13.5-3(b).
FORMS
Form 7-1 Inventory of Property of Decedent’s Estate

Download MS Word


____________________, )
) INVENTORY OF
Deceased. ) PROPERTY OF
) DECEDENT’S ESTATE
The personal representative sets forth an inventory of all of the property of

the estate that has come into the personal representative’s possession or
knowledge, with the personal representative’s estimate of the true cash value of the
property as of the date of death of the decedent, as follows:
Estimated Value
on
Date of Death
I. REAL PROPERTY:
Real property and improvements
located at 687 Oak Hill Drive,
Eugene, Lane County, Oregon, and
further described as Lot 13, Block
4, First Addition to Willamette
Heights as platted and recorded in
Book 12, page 13, Lane County
Oregon Plat Records in Lane $115,000
County, Oregon. 80,000
County tax account no: ______ $195,000.00
Tax lot number:
________________
2010-2011 Assessor’s RMV
Land:
Improvements:
(Encumbered by a mortgage to
ABC Bank with an unpaid balance
at date of death of $25,351.90)
II. STOCKS AND BONDS:
150 shares American Telephone &
Telegraph Co., common selling ex-
dividend at $50.25 per share. 7,537.50
American Telephone & Telegraph
Co. Declared but unpaid dividend.
[note: to be used when decedent
dies after ex-dividend but before
75.00
payment]
III. 100 shares American Telephone &
Telegraph Co., preferred at $40.00
per share. 4,000.00
IV. $10,000 Portland General Electric
7.8% bond, Series VII, maturing
12/1/2015. 9,300.00
V. 100 shares ABC 2.81% preferred,
maturity 6/30/2017. 3,500.00
VI. 599.813 shares Founders Mutual
Depositor Co., at $25.25 per share. 15,145.27
VII. $50 Series E Bond
dated May, 1980. 223.50
VIII. Dividend Reinvestment Account
No. 1234 at Chase Bank for AT&T
dividends, 12.456 shares at $50.25
per share. 625.91
IX. MORTGAGES, NOTES AND
CONTRACTS:
Vendor’s interest in a land sale
contract between decedent as
seller, and Mary Doe as purchaser,
held in escrow at XYZ Escrow as its
number 1234, in original amount of
$100,000 bearing interest at 7%
covering Lot 12, Block 2, Third
Addition to Oak Heights, in
Eugene, Lane County, Oregon
Unpaid balance at date of death: 55,653.85
Interest accrued to date of death: 32.98 55,686.83
X. Promissory note in original amount
of $100,000 dated 6/25/2002
bearing 10% per annum interest,
given by John C. Jones, secured by
a trust deed dated 6/25/2002,
recorded at Reel 1234R as
instrument number 2002-16543,
Lane County Official Records
covering: Lot 11, Block 2, Third
Addition to Solar Acres, in Eugene,
Lane County, Oregon.
18,757.83
Unpaid balance at date of death:
72.98 18,830.81
Interest accrued to date of death:
XI. CASH:
Cash found on person 105.36
XII. Uncashed checks:
ABC Company, dividend: 75.00
Medicare: 103.10
Car Insurance Co.: 25.00 203.10
XIII. ABC National Bank of Oregon
Eugene Main Branch,
Account No. 012 345 678 1,010.56
XIV. Time certificate No. 456 issued by
XYZ Bank of Oregon, N.A.: 10,000.00
Interest accrued to date of death: 45.00 10,045.00
XV. MISCELLANEOUS:
Miscellaneous household goods,
furnishings, equipment, and all
personal jewelry, clothing, and
other articles of personal and
domestic use or ornament located
in decedent’s residence at 687 Oak
Hill Drive, Eugene, Oregon 2,000.00
XVI. 1 cherry dresser that belonged to
decedent’s grandmother 750.00
XVII. Family Bible Nominal
TOTAL INVENTORY VALUE $322,922.92
DATED: _______________, 20___.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§7.4-2(a), 7.4-3(a) to 7.4-3(k). See UTCR 2.010 and UTCR
9.030 for the form of documents. See also ORS 111.205.
case.” UTCR 2.010(7).
this form.
NOTE: The inventory must now show estimates of the “fair market values”
(rather than “true cash values”) of the assets as of the date of the decedent’s death.
ORS 113.165. Form 7-1 should be revised accordingly.
information (UTCR 2.010(7)). See also UTCR 9.030. For documents filed
Form 7-2 Supplemental Inventory
Download MS Word


____________________, )
) SUPPLEMENTAL
Deceased. ) INVENTORY
The personal representative sets forth this supplemental inventory of all the
property of the estate omitted from the inventory previously filed that has now
come into the personal representative’s possession or knowledge, with an estimate
of the respective true cash values of the property as of the date of death of the
decedent as follows:
Estimated
Value on
Date of
Death
Total estimated true cash value of estate per
inventory filed __________________, 20___ $322,922.92
CASH:
XVIII. Currency found in envelope in file drawer. $ 1,050.00
Total supplemental inventory value $323,972.92
DATED: _______________, 20___.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §7.4-2(b). See UTCR 2.010 and UTCR 9.030 for the form of
documents. See also ORS 111.205.
case.” UTCR 2.010(7).
this form.
Form 7-3 Amended Inventory
Download MS Word


____________________, )
) AMENDED INVENTORY
Deceased. )
The personal representative sets forth this amended inventory of the personal
representative’s revised estimate of the respective true cash values of the following
listed property as of the date of death of decedent:
Estimated Value
on Date of Death
Total estimated true cash value
of estate per inventory filed
___________________, 20___ $650,510.00
XIX. 11,469.513 shares Franklin
Custodian Fund, Inc. a/c
90100030332
Originally reported $21,233.30
Adjusted to 21,792.07 558.77
XX. 2,798.646 shares Fund of
America, Inc., a/c 555-0014456-6
Originally reported 34,718.52
Adjusted to 31,204.90 (3,513.62)
Total amended inventory
estimated true cash value $647,555.15
DATED: _______________, 20___.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§7.4-2(b), 7.4-5. See UTCR 2.010 and UTCR 9.030 for the
form of documents. See also ORS 111.205.
case.” UTCR 2.010(7)
this form.
Chapter 8: RIGHTS OF INTERESTED PERSONS
TIMOTHY J. WACHTER, B.A., Washington State University (1984); J.D., Willamette University
College of Law (1987); admitted to the Oregon State Bar in 1987; partner, Duffy Kekel,
LLP, Portland.
§ 8.1 RIGHTS OF HEIRS AND DEVISEES

§ 8.1-1 When Title Vests
Upon the death of a decedent, title to both real property and personal
property vests immediately in the decedent’s heirs and devisees. ORS 114.205,
114.215. However, the vesting of title is subject to several limitations: (1) the
support of the decedent’s spouse and children (see ORS 114.015); (2) the rights of
creditors (see ORS 115.001–115.215); (3) the administration and sale of property
by the personal representative (see ORS 114.325); and (4) for property devised in a
will, the elective-share rights of a surviving spouse (see ORS 114.600–114.725).
ORS 114.215.
Because title vests in heirs or devisees upon a decedent’s death, the personal
representative lacks the power to set aside an allegedly void deed given by the
decedent, unless the action is necessary to protect creditors or other interested
persons. Hendrickson’s Estate v. Warburton, 276 Or 989, 997–998, 557 P2d 224
(1976).
Also, even though title vests in the heirs and devisees immediately, as a
practical matter, these persons do not receive marketable title until probate is
completed.
§ 8.1-2 Survivorship
For deaths occurring on or after October 23, 1999, subject to the provisions
of the decedent’s will and certain other statutory exceptions, if the title to or the
devolution of property depends on whether a specified person survives the death of
another person, “the specified person shall be deemed to have died before the other
person unless it is established by clear and convincing evidence that the specified
person survived the other person by at least 120 hours.” ORS 112.572.
For purposes of establishing death under the survivorship statutes, death
occurs when a person “has sustained irreversible cessation of circulatory and
respiratory functions” or when a person has sustained “irreversible cessation of all
functions of the entire brain, including the brain stem.” ORS 112.582(1). A
determination of death must be made “in accordance with accepted medical
standards.” ORS 112.582(1). See chapter 4, for further discussion of the
survivorship statutes.
NOTE: For deaths occurring before October 23, 1999, the
determination of the right to property continues to be governed by former
ORS 112.085 and former ORS 112.575–112.645. See 1999 Or Laws ch 131,
§9.
§ 8.1-3 Advancements
If a decedent died intestate as to all of his or her estate, property that the
decedent gave during his or her lifetime to an heir is treated “as an advancement
against the heir’s share of the estate if declared in writing by the decedent or
acknowledged in writing by the heir to be an advancement.” ORS 112.135. The
property is valued as of the time that the heir came into possession or enjoyment of
the property, or as of the time of the decedent’s death, whichever occurs first. ORS
112.135. See ORS 112.145–112.155.
ORS 112.135 overrules Seed v. Jennings, 47 Or 464, 467, 83 P 872 (1905),
which presumed that an advancement was intended when a lifetime gift of property
was made to a child. ORS 112.135 does not affect the result in Clark v. Clark, 125
Or 333, 342, 267 P 534 (1928), which held that a will might direct that a previous
gift be treated as an advancement in determining the shares into which an estate
will be divided.
See §4.1-3(f) for the effect of advancements on distributions.
ORS 112.135 was amended in 2016. The statute now applies if a decedent
died intestate as to all or part of his or her estate.
For purposes of applying the gift against the heir’s share of the intestate
estate, the property advanced is “valued as of the time the heir came into
possession or enjoyment of the property or as of the time of death of the decedent,
whichever occurs first, unless otherwise directed in the decedent’s writing.” ORS
112.135(1)(b) (emphasis added). The italicized clause was added to the statute in
2016.
The 2016 Legislature also added the following new provisions to the statute
that apply if a decedent dies testate:
(2)(a) Except as provided in ORS 112.385 [nonademption of specific
devises], property that a testator gives during the testator’s lifetime to a devisee is
treated as an advancement of the devisee’s share in whole or in part if:
(A) The will provides for deduction of the gift;
(B) The testator declared in writing that the gift is in satisfaction of the
devise or that its value is to be deducted from the value of the devise; or
(C) The devisee acknowledges in writing, before or after the testator’s
death, that the gift was made in satisfaction of the devise or that its value was to
be deducted from the value of the devise.
(b) For purposes of applying the gift against the devisee’s share of the
testate estate, the property advanced must be valued as of the time the devisee
came into possession or enjoyment of the property or as of the time of the
testator’s death, whichever occurs first, unless otherwise directed in the testator’s
will or a writing described in paragraph (a)(B) of this subsection.
(3)(a) Property not subject to probate administration, the transfer of
which is intended by the decedent to take effect on death, is treated as an
advancement against the heir’s share of the estate or the devisee’s devise under
the will if declared in writing by the decedent, or acknowledged in writing by the
heir or devisee, to be an advancement. Examples of transfers under this subsection
include but are not limited to beneficiary designation, right of survivorship and
transfer on death deed or transfer on death designation.
(b) The property transferred under this subsection must be valued as of
the time of the decedent’s death, unless otherwise directed in the testator’s will or
in a writing by the decedent.
ORS 112.135(2)–(3).
ORS 112.145 was also amended in 2016, to reflect use of ORS 111.005’s
defined terms heir in intestate estates and devisee in testate estates.
§ 8.1-4 Effect of Homicide or Abuse
§ 8.1-4(a) In General
A slayer is prevented from receiving property that would have passed to the
slayer by reason of the death of the person whose life is taken by the slayer. ORS
112.465(1).
Similarly, an abuser is prevented from receiving property that would have
passed to the abuser by reason of the death of a decedent who died not later than
five years after the abuser has been convicted of a felony by reason of conduct
against the decedent under ORS 124.105 (physical abuse) or ORS 124.110
(financial abuse). ORS 112.465(1), 112.455(2)(b).
In addition, limitations apply to a slayer’s or an abuser’s rights to receive
property indirectly through an heir or devisee of the decedent. ORS 112.465(2).
Specifically, if property would have passed to the slayer or abuser by reason of the
death of an heir or devisee of the decedent, the abuser or slayer is prevented from
receiving the property, unless the heir or devisee specifically provided for the
slayer or abuser in a will (or other instrument) after the death of the decedent.
Under these provisions, the slayer or abuser will be treated as predeceasing the
decedent. ORS 112.465(2).
The term slayer is defined as “a person who, with felonious intent, takes or
procures the taking of the life of a decedent.” ORS 112.455(3). “A final judgment
of conviction of felonious and intentional killing is conclusive for purposes of ORS
112.455 to 112.555.” ORS 112.555. If the slayer has not been convicted of
felonious and intentional killing, the court may determine the issue for purposes of
ORS 112.455–112.555 based on a preponderance of the evidence. ORS 112.555.
Pursuant to the definition of slayer, the statutes on homicidal death do not apply if
the decedent’s death was caused without felonious intent, such as death caused by
recklessness or negligence, which may be prosecuted as manslaughter in the first
degree (ORS 163.118), manslaughter in the second degree (ORS 163.125), or
criminally negligent homicide (ORS 163.145).
“A final judgment of conviction of felonious and intentional killing is
conclusive for purposes of ORS 112.455 to 112.555,” but only “[a]fter any right to
appeal has been exhausted.” ORS 112.555 (as amended in 2015).
§ 8.1-4(b) Property Interests Covered
In addition to property that would have passed by intestate succession, a
will, a trust, or a transfer-on-death deed to the slayer or abuser (see §8.1-4(a)), the
following property vests as if the slayer or abuser had predeceased the decedent
(ORS 112.465):
(1) Property owned by the decedent and the slayer or abuser, as tenants
by the entirety or with a right of survivorship (ORS 112.475);
(2) Property owned by the decedent, the slayer or abuser, and others with
a right of survivorship (ORS 112.485);
(3) Property in which the slayer or abuser owns a reversion or vested
remainder subject to an estate for the lifetime of the decedent (ORS 112.495);
(4) Property appointed by the decedent’s will for the benefit of the slayer
or abuser (ORS 112.505(1));
(5) Property owned either presently or in remainder by the slayer or
abuser, subject to divestment by the decedent’s exercise of a power of revocation
or a general power of appointment (ORS 112.505(2));
(6) Proceeds of life insurance and other benefit plans of the decedent
payable to, or for the benefit of, the slayer or abuser as the beneficiary or assignee
of the decedent (ORS 112.515(1)); and
NOTE: If proceeds are payable from an heir or devisee of the decedent
to a slayer or abuser, the slayer or abuser will be entitled to receive proceeds
only if the heir or devisee has specifically provided for the payment by
written instrument executed after the death of the decedent. ORS 112.515(2).
(7) Proceeds of insurance on the life of the slayer or abuser when the
decedent is the beneficiary or assignee of the policy (ORS 112.525).
Insurance companies, banks, trustees, and other obligors who make payment
or perform an obligation to the slayer or abuser without written notice by a person
claiming under ORS 112.455–112.555 are protected by ORS 112.535. Similarly,
purchasers for value who deal with the slayer without notice are protected by ORS
112.545.
PRACTICE TIP: In a homicide case in which the victim and the slayer
are husband and wife, or are otherwise in a position to inherit from each
other, and large estates are involved, the use of a wrongful death action
against the slayer or the slayer’s estate can be an effective estate-planning
technique.
The 2015 Legislature repealed ORS 112.485 (property owned by the
decedent, the slayer or abuser, and others with a right of survivorship), but added
its provisions to ORS 112.475.
In Herinckx v. Sanelle, 281 Or App 869, 385 P3d 1190 (2016), the court
held that the Employee Retirement Income Security Act of 1973 (ERISA)
preempts ORS 112.515 as applied to the distribution of life insurance proceeds to a
named beneficiary pursuant to a life insurance plan that the deceased plan
participant obtained through her work.
§ 8.1-4(c) Prior Law
ORS 112.455–112.555 replace former law, which had been construed as
inapplicable when a cotenant of a tenancy by the entirety property murders the
other cotenant. Wenker v. Landon, 161 Or 265, 273–274, 88 P2d 971 (1939). The
Wenker case was overruled by use of a constructive trust theory in Hargrove v.
Taylor, 236 Or 451, 453–454, 389 P2d 36 (1964). By adopting ORS 112.475, the
legislature confirmed the theory implicit in Hargrove and in this part of the probate
code—the murderer should not profit by the decedent’s death. In 2005, the probate
code was amended to prevent abusers, as well as slayers, of the decedent from
profiting upon the decedent’s death. ORS 112.475.
§ 8.1-5 Factors Affecting Testamentary Distribution
§ 8.1-5(a) Antilapse Statute
Under the antilapse statute (ORS 112.395), unless the decedent’s will
provides otherwise, when property is devised to a person who is related to the
decedent by blood or adoption, and who predeceases the decedent leaving lineal
descendants surviving, the property passes to those lineal descendants by
representation. Unless the will provides otherwise, a devisee under a class gift is
included with those devisees whose descendants are protected by the antilapse
statute, if the death occurred after execution of the will. ORS 112.395. See §§4.2-
7(h) to 4.2-7(i).
§ 8.1-5(b) Lapse of Devise to Trust
Unless the testator’s will provides otherwise, a devise to the trustee or
trustees of a trust will lapse if the testator revokes or terminates the trust before the
testator’s death. ORS 112.265(5).
§ 8.1-5(c) Abatement of Devises
If the assets of an estate are insufficient to satisfy the devises described in
the will, the shares of the distributees will abate as described in ORS 116.133. The
order for abatement contained in ORS 116.133(2) applies only if (1) the will does
not express an order of abatement, and (2) the statutory scheme would not defeat
the express or implied purpose of the devise or the testamentary plan. ORS
116.133(1). Except as provided in ORS 112.405 (relating to pretermitted children),
and ORS 114.600–114.725 (relating to the elective share of the surviving spouse),
shares of distributees abate in the following order, with no preference or priority
between real property and personal property:
(1) Property not disposed of by the will;
(2) Residuary devises;
(3) General devises; and
(4) Specific devises.
ORS 116.133(2).
COMMENT: The provisions for payment of an elective share of a
surviving spouse under ORS 114.615 are discussed in §8.2-5(e).
For purposes of abatement, a general devise charged on any specific
property or fund is considered to be a specific devise to the extent of the value of
the specific property or fund on which it is charged. ORS 116.133(3).
Devisees of “tangible personal property not used in trade, agriculture or
other business are not required to contribute from that property unless the
particular devise forms a substantial amount of the total estate and the court
specifically orders contribution because of the devise.” ORS 116.133(5).
§ 8.1-6 Inheritance by Nonresident Alien
Former ORS 111.070 limited the right of a nonresident alien to receive
property by inheritance or devise from a decedent’s estate. See §2.1. The repeal of
the statute was precipitated by a ruling of the United States Supreme Court holding
that the statute was unconstitutional as applied, as an interference in foreign affairs.
Zschernig v. Miller, 389 US 429, 432, 88 S Ct 664, 19 L Ed2d 683 (1968), rev’g
243 Or 567 (1966). The current probate code includes no other provision limiting
the rights of a nonresident alien to receive property by inheritance or devise from
the estate of an Oregon decedent.
§ 8.1-7 Determination of Heirship
The probate code has no detailed statutory procedure for determining the
heirs of an estate. However, ORS 111.095(2) provides that “[a] probate court has
full, legal and equitable powers to make declaratory judgments, as provided in
ORS 28.010 to 28.160, in all matters involved in the administration of an estate,
including . . . the determination of heirship.” Thus, pursuant to ORS 111.095(2)
and ORS 28.040, any interested person may bring a declaratory judgment
proceeding in probate court to determine the heirs or devisees of an estate. The
procedure is described in §§8.2-3(a) to 8.2-3(b)(7).
§ 8.2 CLAIMING AN INTEREST IN A DISTRIBUTION

§ 8.2-1 When Issue May Be Raised
NOTE: In this section, the word claim is used in its generic sense, and
not as a claim against the estate, which is governed by ORS chapter 115 (see
§9.2).
An heir or a devisee may claim an interest in the distribution of an estate at
several different stages in the probate proceedings. The heir or devisee may:
(1) File a petition for instructions under ORS 114.275 (see §8.2-2);
(2) Commence a declaratory judgment proceeding as authorized by ORS
111.095(2) (see §§8.2-3(a) to 8.2-3(b)(7));
(3) For property subject to the Uniform Disposition of Community
Property Rights at Death Act, institute an action to perfect title, as provided in
ORS 112.755 (see §§8.2-4(a) to 8.2-4(b)(3));
(4) File a petition for a partial distribution of estate property by
complying with the requirements of ORS 116.013 (see §§11.8-1 to 11.8-1(b));
(5) Object to the final account and petition for distribution, as provided in
ORS 116.103 (see §§11.7-1 to 11.7-3);
(6) For escheated property, if the heir or devisee did not have actual
knowledge of the order of escheat to the state of Oregon (ORS 116.193), make a
claim for the return of escheated property or its proceeds as provided in ORS
116.253; and
(7) To exercise a spouse’s elective-share rights, file a motion as provided
in ORS 114.610 (see §§8.2-5(a) to 8.2-5(c)).
COMMENT: Prior statutes (now repealed) that dealt with
determination-of-heirship proceedings created a problem regarding a probate
court’s jurisdiction, or lack of it, to determine heirship. At common law, real
property vested at death in the heirs or devisees, and the probate court had
no jurisdiction to determine who was entitled to the decedent’s real property.
The problem has largely been resolved by ORS 111.095(2), which gives the
probate court the power to decide heirship by declaratory judgment, and
ORS 114.275, which gives the probate court the power to issue instructions
on “any matter concerning the administration, settlement or distribution of
the estate.” The solution may also be found in ORS 116.093, which requires
actual notice of the filing of the final account and petition for a judgment of
distribution, and in ORS 116.113(4), which gives conclusive effect to the
judgment of final distribution. ORS 116.113(1) requires that the judgment
“designate the persons in whom title to the estate available for distribution is
vested and the portion of the estate or property to which each is entitled.”
ORS 111.095(2) was renumbered ORS 111.095(3) (declaratory judgments).
ORS 116.113(4) was renumbered ORS 116.113(3) (conclusive effect of the
judgment of final distribution). See Hobbs v. Harrington, 284 Or App 125, 130,
391 P3d 915 (2017).
In Price v. Lotlikar, 285 Or App 692, 397 P3d 54 (2017), the court held that
for an heir or other interested person to bring an action with regard to a decedent’s
estate, the interested person must have some property right or claim against the
estate that may be affected by the proceeding.
See Supp § 8.2-6 (petition to admit noncompliant writing as decedent’s will
§ 8.2-2 Petition for Instructions
As an interested person in the estate, an heir or devisee may apply to the
probate court for instructions “on any matter concerning the administration,
settlement or distribution of the estate.” ORS 114.275; see ORS 111.005(19)
(defining interested person). Upon the filing of a petition for instructions, the
probate court must “instruct the personal representative of the estate or rule on the
matter as may be appropriate.” ORS 114.275. The probate procedures set forth in
ORS 111.205–111.275 govern a proceeding brought under ORS 114.275.
CAVEAT: Although a petition for instructions results in an
intermediate determination, the determination is not final until a judgment of
final distribution is made. ORS 116.113(4); see In the Matter of Estate of
Roley, 01C-19332, A124116 (Or Feb 2, 2005); Roley v. Sammons, 197 Or
App 349, 105 P3d 879 (2005). If an heir or devisee needs the issue to be
determined with the finality of a judgment before the completion of the
probate proceeding, a declaratory judgment is required. See §§8.2-3(a) to
8.2-3(b)(7); see also ORS 111.275 (regarding the court’s authority to enter a
limited judgment).
ORS 116.113(4) was renumbered ORS 116.113(3) (conclusive effect of the
judgment of final distribution). See Hobbs v. Harrington, 284 Or App 125, 130,
391 P3d 915 (2017).
§ 8.2-3 Declaratory Judgment Proceeding
§ 8.2-3(a) Jurisdiction
A probate court “has full, legal and equitable powers to make declaratory
judgments, as provided in ORS 28.010 to 28.160, in all matters involved in the
administration of an estate, including those pertaining to the title of real property,
the determination of heirship and the distribution of the estate.” ORS 111.095(2);
see also ORS 114.275.
Any person interested in the administration of a trust, or of the estate of a
decedent, “may have a declaration of rights or legal relations in respect thereto” to:
(1) “[A]scertain any class of creditors, devisees, legatees, heirs, next of
kin or other”; or
(2) Direct the administrators or trustees “to do or abstain from doing any
particular act in their fiduciary capacity”; or
(3) “Determine any question arising in the administration of the estate or
trust, including questions of construction of wills and other writings.”
ORS 28.040.
PRACTICE TIP: ORS 111.095(2) was drafted on the assumption that
probate jurisdiction would be in the circuit court in every county. But the
probate code leaves probate jurisdiction in the county courts of six counties:
Gilliam, Grant, Harney, Malheur, Sherman, and Wheeler. ORS 111.075. See
§§2.2-1 to 2.2-3(c)(4), 5.2-1(a). It is doubtful that the drafters of the code
intended that probate declaratory judgment proceedings be conducted in the
county court. Although county courts are courts of record (OR CONST art
VII, §1 (original)), ORS 28.010 is not clear that county courts are included
in the grant of power therein. In those six counties, the better procedure
would be to apply for a transfer of the estate proceeding to the circuit court
under ORS 111.115(1) before, or concurrently with, filing a complaint for
declaratory relief. See §§2.2-3(b)(1) to 2.2-3(b)(3).
See 2 OREGON CIVIL PLEADING AND PRACTICE ch 37 (OSB Legal Pubs
2012), for a discussion of declaratory judgments.
ORS 111.095(2) was renumbered ORS 111.095(3). The 2016 Legislature
amended the statute to add that a probate court also has the power to make
declaratory judgments pertaining to the ownership of personal property.
§ 8.2-3(b) Declaratory Judgment Procedure
§ 8.2-3(b)(1) The Complaint
An heir or a devisee, or a person claiming to be such, may file a complaint
for a declaratory judgment regarding his or her claim to an interest in the
distribution of a decedent’s estate. ORS 111.095(2), 28.040.
CAVEAT: Asking the probate court for a declaratory judgment, or
referring to ORS chapter 28 in a petition for instructions, invokes a variety
of procedural requirements not normally present in a petition for
instructions. For example, the initiation of a petition for instructions under
ORS 114.275 only requires a petition and notice to interested persons. ORS
111.205. In contrast, a declaratory judgment proceeding requires the filing of
a complaint and personal service of process. Matter of Riddle’s Estate, 288
Or 687, 694–695, 607 P2d 1370 (1980). Moreover a declaratory judgment
action requires that all affected persons be named as parties. ORS 28.110;
State ex rel. Dewberry v. Kulongoski, 220 Or 345, 358, 187 P3d 220 (2008),
aff’d, 346 Or 260 (2009). If the same result can be obtained by a petition for
instructions, without mentioning a declaratory judgment as among the relief
being requested, then the procedure will be simpler, but the ruling will not
have the force and effect of a final judgment.
A declaratory judgment proceeding to determine an issue of fact “may be
tried and determined in the same manner as issues of fact are tried and determined
in other actions at law or suits in equity in the court in which the proceeding is
pending.” ORS 28.090. The complaint in a declaratory judgment proceeding
should bear the same title of the court and the same filing number as the probate
proceeding, and should be filed in the probate court. See ORS 111.095(2); ORCP
16 A; UTCR 2.010(11); see also ORCP 13 B.
CAVEAT: As mentioned in §8.2-3(a), if the probate proceeding is in a
county court, the heir or devisee should first petition the county judge for an
order transferring the entire proceeding to the circuit court for the county;
then the circuit court sitting in probate will try the proceeding.
The parties should be listed as “plaintiff” and “defendant.” The first pleading
may be entitled “Complaint for Declaratory Judgment.” See UTCR 2.010(11).
The complaint should show:
(1) That the plaintiff is an interested party entitled to maintain the
proceeding (see ORS 28.040);
(2) That all necessary parties have been joined as plaintiffs or defendants
(see ORS 28.110);
(3) The present existence of a justiciable controversy (see Brown v.
Oregon State Bar, 293 Or 446, 449, 648 P2d 1289 (1982));
(4) The facts from which the plaintiff claims to be entitled to an interest
in the distribution; and
(5) The contentions of each party on the questions in dispute.
The prayer of the complaint should ask for:
(1) A determination of the controversy described in the complaint;
(2) A decision in favor of the plaintiff on the points in controversy; and
(3) Other relief that may be just and proper in the circumstances.
A complaint may be filed at any time after the administration of the estate is
commenced, and before the entry of the judgment of final distribution.
After the entry of the judgment of final distribution, to claim an interest in
the distribution, the heir or devisee must either move for the court to vacate the
judgment or appeal from the judgment, if the issues have been preserved. ORS
116.113(4).
§ 8.2-3(b)(2) Parties Defendant
All persons who have or claim any interest that would be affected by the
declaration must be made parties to the declaratory judgment proceeding. ORS
28.110. The personal representative and all other known heirs or devisees (or
persons claiming to be such) must be made parties defendant.
§ 8.2-3(b)(3) Parties
When declaratory relief is sought, all persons who have or claim any interest
that would be affected by the declaration must be made parties to the proceeding.
ORS 28.110.
PRACTICE TIP: Oregon Rules of Civil Procedure govern the
proceeding. For example, service of summons on “unknown heirs or
persons” under the Declaratory Judgments Act is controlled by ORCP 7
D(6)(e), rather than the general probate procedural rules found in ORS
111.215.
§ 8.2-3(b)(4) Answer
The form and contents of the answer in a declaratory judgment proceeding
are governed by the rules applicable to other suits. See ORS 28.090.
§ 8.2-3(b)(5) Trial of Issues of Fact
The mode of procedure in the exercise of jurisdiction in the probate court is
“in the nature of an action not triable by right to a jury,” except as otherwise
provided by statute. ORS 111.205; see ORS 28.090.
§ 8.2-3(b)(6) Judgment and Appeal
The declaration has the force and effect of a final judgment. ORS 28.010.
On a determination that “there is no just reason for delay,” the court in a
probate proceeding may enter a limited judgment for a decision on a request made
in a proceeding for a declaratory judgment under ORS 111.095(2). ORS
111.275(1)(d), (2). “The judgment document need not reflect the court’s
determination that there is no just reason for delay.” ORS 111.275(2).
The judgment is appealable. ORS 28.070, 19.205; In re Estate of Toles, 188
Or App 456, 71 P3d 584 (2003). Assuming that the proceeding is in the circuit
court, the appeal would be to the court of appeals. ORS 111.105(2).
§ 8.2-3(b)(7) Costs
The court may award costs in a declaratory judgment proceeding “as may
seem equitable and just.” ORS 28.100.
§ 8.2-4 Property Subject to the Uniform Disposition of Community
Property Rights at Death Act
All community property and all property acquired with the rents, issues,
income, or sale proceeds from community property, or property traceable to
community property, is property subject to the Uniform Disposition of Community
Property Rights at Death Act, ORS 112.705–112.775. ORS 112.715.
Upon the death of a married person, “one-half of the property to which ORS
112.705 to 112.775 apply is the property of the surviving spouse and is not subject
to testamentary disposition by the decedent or distribution under the laws of
succession” of Oregon. ORS 112.735. Thus, if property is subject to this uniform
act, each spouse is entitled to testamentary-disposition rights over one-half of the
property.
For further discussion of the Uniform Disposition of Community Property
Rights at Death Act, see §§4.3 to 4.3-5.
§ 8.2-4(b) Proceedings to Perfect Title
§ 8.2-4(b)(1) Property Held by Decedent
If a decedent’s estate includes property that is subject to the Uniform
Disposition of Community Property Rights at Death Act (ORS 112.705–112.775),
a surviving spouse may perfect title in one-half of the property that is subject to the
act.
The title of the surviving spouse “may be perfected by an order of the
probate court or by execution of an instrument by the personal representative or the
heirs or devisees of the decedent with the approval of the court.” ORS 112.745.
Neither the personal representative nor the court in which the decedent’s estate is
being administered has a duty to discover or to attempt to discover whether
property is subject to the uniform act, unless a written demand is made by the
surviving spouse or the spouse’s successor in interest. ORS 112.745.
§ 8.2-4(b)(2) Property Held by Surviving Spouse
If, at the time of the decedent’s death, a surviving spouse holds the title to
property that is subject to the Uniform Disposition of Community Property Rights
at Death Act (ORS 112.705–112.775), the decedent’s personal representative or an
heir or a devisee of the decedent may institute an action to perfect the title to the
property. The personal representative has no fiduciary duty to discover or to
attempt to discover whether any property held by the surviving spouse is subject to
the uniform act, unless a written demand is made by an heir, a devisee, or a
creditor of the decedent. ORS 112.755.
§ 8.2-4(b)(3) One-Half of Property Is Not Subject to Right to
Elective Share
Regarding property that is subject to the Uniform Disposition of Community
Property Rights at Death Act (ORS 112.705–112.775), the one-half of the property
that is the property of the decedent is not subject to the surviving spouse’s right to
elect against the will. ORS 112.735.
§ 8.2-5 Surviving Spouse’s Elective Share
For deaths occurring on or after January 1, 2011, a surviving spouse may
elect to receive the elective share provided under ORS 114.600–114.725. Under
the prior law (see former ORS 114.105–114.165), because the elective share was
limited to 25% of the decedent’s net probate estate, a spouse’s elective-share rights
could be defeated through the use of nonprobate transfers. Under the current law,
the elective share applies to the augmented estate, which generally includes all
probate and nonprobate assets of both the deceased spouse and the surviving
spouse. ORS 114.605, 114.630–114.635. See §§8.2-5(i)(1) to 8.2-5(i)(2) for
discussions on a spouse’s elective share under the prior law.
Once the augmented estate is determined as provided in ORS 114.600–
114.725, the elective share is a dollar amount calculated as a percentage of the
augmented estate. ORS 114.605. The percentage varies, depending on the length of
the marriage, in accordance with the following schedule, which is set forth in ORS
114.605(2):
If the decedent and the spouse The elective-share percentage is:
were married to each other:
Less than 2 years 5% of the augmented estate
2 years but less than 3 years 7% of the augmented estate
If the decedent and the spouse The elective-share percentage is:
were married to each other:
15 years or more 33% of the augmented estate
If the aggregate value of the surviving spouse’s estate, including probate and
nonprobate property received from the decedent, is less than the elective-share
amount, any additional amount required to satisfy the elective-share amount is paid
out of the decedent’s probate and nonprobate estate. ORS 114.615.
§ 8.2-5(b) Availability of Election
An election to receive an elective share of the estate is available to a
surviving spouse only if the decedent is domiciled in Oregon on the date of the
decedent’s death. ORS 114.600(1). If a decedent dies while domiciled outside of
Oregon, the surviving spouse’s rights in the decedent’s property are governed by
the law of the decedent’s domicile. ORS 114.600(3).
The surviving spouse may elect to claim the elective share personally, or a
conservator, guardian, or agent under the authority of a power of attorney may
claim the elective share on the surviving spouse’s behalf. ORS 114.625. The
election, however, must be made before the death of the surviving spouse. ORS
114.600(1). If the election is timely made before the death of the surviving spouse,
the personal representative for the estate of the surviving spouse may take steps to
secure payment of the elective share. ORS 114.600(1). See Form 8-1.
Although not expressly provided for in ORS 114.600–114.725, the election
to receive an elective share of the estate is also available to a partner in a domestic
partnership. See ORS 106.340.
§ 8.2-5(c) Mechanics of Election
The surviving spouse may claim the elective share only as described in ORS
114.610, but the election must be made within nine months after the death of the
decedent as follows:
(1) If a probate proceeding has been commenced for the decedent’s
estate, the surviving spouse may file a motion in the probate proceeding to exercise
the elective share within nine months after the death of the decedent. A copy of the
motion must be served on the personal representative, as well as on all persons
entitled to receive information under ORS 113.145, and on all distributees and
recipients of portions of the augmented estate known to the surviving spouse who
can be located with reasonable efforts. ORS 114.610(1)(b). See Form 8-1.
(2) If no probate proceeding has been commenced, the surviving spouse
may file a petition for the appointment of a personal representative for the estate of
the deceased spouse, and then file a motion for the exercise of election, within nine
months after the decedent’s death. ORS 114.610(1)(a)).
(3) The surviving spouse may claim the elective share by filing a petition
for the exercise of the election in circuit court within nine months after the death of
the decedent. ORS 114.610(1)(c), 114.720(1). The venue for the proceeding is the
same as the venue for a probate proceeding. ORS 114.720, 113.015. A copy of the
petition must be served on all persons who would be entitled to notice under ORS
113.145, as well as on all of the distributees and recipients of portions of the
augmented estate known to the spouse who can be located with reasonable efforts.
ORS 114.720(1). The proceeding is governed by the Oregon Rules of Civil
Procedure, and any party may request that the pleadings and records in the
proceedings be sealed. ORS 114.720(1). If a probate proceeding is commenced for
the estate of the deceased spouse, whether before or after a petition under ORS
114.720 has been filed, the court is required to consolidate the circuit court
proceeding with the probate proceeding. ORS 114.720(3).
§ 8.2-5(d) Determining the Augmented Estate
ORS 114.630 provides that the augmented estate consists of three separately
described components: (1) the decedent’s probate estate (see §8.2-5(d)(1)), (2) the
decedent’s nonprobate estate (see §8.2-5(d)(2)), and (3) the surviving spouse’s
estate (see §8.2-5(d)(3)).
NOTE: Before an amendment that became effective on June 9, 2011,
ORS 114.630 provided that the augmented estate consisted of the three
components described above, as well as two additional components: (1) the
decedent’s probate transfers to the surviving spouse, and (2) the decedent’s
nonprobate transfers to the surviving spouse. See former ORS 114.630(1).
This prior law applies to the surviving spouse of a decedent who died
between January 1, 2011 and June 8, 2011. See 2011 Or Laws ch 305, §§4,
7.
§ 8.2-5(d)(1) Decedent’s Probate Estate
The decedent’s probate estate includes the value of all of the estate property
that is subject to probate and that is available after payment of claims and
administrative expenses, or the value of all of the property that could be
administered pursuant to a small-estate affidavit (see §§5.3-1 to 5.3-2). ORS
114.650. The probate estate does not include any probate property that constitutes
a probate transfer to a surviving spouse. ORS 114.650.
§ 8.2-5(d)(2) Decedent’s Nonprobate Property
The decedent’s nonprobate property consists of the decedent’s interest in
property, described in ORS 114.665, that is not included in the decedent’s probate
estate and that does not constitute a transfer to the decedent’s surviving spouse.
ORS 114.660. Effective June 9, 2011, the value of the decedent’s nonprobate
estate is reduced by all of the debts and liabilities of the decedent that are not paid
in probate, all of the costs incurred in settling claims against the nonprobate estate,
and administrative expenses. ORS 114.660; see 2011 Or Laws ch 305, §§2, 7. The
list of nonprobate property included in the augmented estate is broad, and includes
the following:
(1) Property held in a form of survivorship tenancy immediately before
the death of the decedent, in an amount equal to the value of the decedent’s
fractional interest that passes by right of survivorship at the decedent’s death to a
surviving tenant other than the decedent’s surviving spouse, ORS 114.665(1);
(2) Property held immediately before death under a payable-on-death
designation or deed, under a transfer-on-death registration or in a co-ownership
registration with right of survivorship, in an amount equal to the value of the
decedent’s interest that passes on the decedent’s death to any person other than the
decedent’s estate or surviving spouse, ORS 114.665(2);
(3) Property owned immediately before death for which the decedent had
the power to designate a beneficiary, “but only to the extent that the decedent could
have designated the decedent, or the spouse of the decedent, as the beneficiary,”
ORS 114.665(3); and
NOTE: The “but only to the extent” clause quoted above applies only
to decedents dying on or after June 9, 2011. See 2011 Or Laws ch 305, §§3,
7.
COMMENT: Examples of property covered by the statute include life
insurance, annuities, and retirement plans, including public and private
pensions, disability compensation, and similar arrangements.
(4) “[P]roperty that immediately before death the decedent could have
acquired by the exercise of a revocation, without regard to whether the revocation
was required to be made by the decedent alone or in conjunction with other
persons,” ORS 114.665(4).
In recognition that life insurance is commonly used for shareholder
agreements, satisfaction of support obligations, and other funding purposes, the
present value of life insurance proceeds payable to a beneficiary other than a
spouse is not included as a nonprobate asset of the decedent. ORS 114.665(5),
114.660; see also ORS 114.690(1)(c). In contrast, if the insurance is payable to the
surviving spouse, the entire amount of life insurance proceeds is includible in the
decedent’s nonprobate transfers to the surviving spouse. ORS 114.690(1)(c); see
§8.2-5(d)(3).
§ 8.2-5(d)(3) Surviving Spouse’s Estate
Effective June 9, 2011, the surviving spouse’s estate includes:
(1) The decedent’s probate transfers to the spouse (as described in ORS
114.685), ORS 114.675(1)(a);
COMMENT: Pursuant to ORS 114.685, a decedent’s probate transfers
to a surviving spouse include all probate property that passes to the
surviving spouse after payment of claims and expenses of administration.
(2) The decedent’s nonprobate transfers to the spouse (as described in
ORS 114.690), ORS 114.675(1)(b);
COMMENT: For this purpose, a decedent’s nonprobate transfers
include all property that passes outside probate to the surviving spouse upon
the decedent’s death, including any survivorship interest, insurance proceeds
payable to the surviving spouse by reason of the decedent’s death, and all
other property that would have been included in the decedent’s nonprobate
estate had it passed to a person other than the decedent’s spouse. ORS
114.690. Social Security benefits are not included as part of the surviving
spouse’s estate. ORS 114.690(2).
(3) All other property of the spouse, as determined on the date of the
decedent’s death, ORS 114.675(1)(c); and
(4) Any property that would have been included in the surviving spouse’s
estate “except for the exercise of a disclaimer by the spouse after the death of the
decedent,” ORS 114.675(1)(d) (see §§8.3-2(a) to 8.3-2(f) regarding disclaimers).
CAVEAT: For purposes of determining a decedent’s nonprobate and
probate transfers to a surviving spouse, any property that has been
disclaimed by the surviving spouse will continue to be included as part of
the surviving spouse’s estate for purposes of the elective share. ORS
114.675(1)(d).
NOTE: ORS 114.675 was amended effective June 9, 2011. For
decedents who died between January 1, 2011 and June 8, 2011, see 2011 Or
Laws ch 305, §§5, 7.
§ 8.2-5(d)(4) Valuation
Generally, the value of an asset is the value used for purposes of federal and
gift tax laws. In determining the value of probate and nonprobate property, the
value is reduced by the amount of any enforceable claims and encumbrances on the
property. ORS 114.650, 114.660.
In determining the value of the surviving spouse’s estate, however, specific
trust-valuation rules apply to an interest in a trust that is provided for the benefit of
the spouse by the decedent.
For a trust that provides for the distribution of income and principal to a
surviving spouse, the entire value of the trust corpus will be considered as part of
the surviving spouse’s estate, if all of the trust income must be distributed to the
surviving spouse during the spouse’s lifetime, and either (1) the spouse has a
general power of appointment that the spouse may exercise, acting alone, to or for
the benefit of the surviving spouse or the surviving spouse’s estate, ORS
114.675(2)(a), or (2) “the trust principal may be accessed only by the trustee or the
spouse and only for the purpose of providing for the health, education, support or
maintenance of the spouse,” ORS 114.675(2)(b).
For an income-only trust, one-half of the value of the trust corpus will be
considered as part of the surviving spouse’s estate, if (1) all trust income must be
distributed to or for the benefit of the surviving spouse during the spouse’s
lifetime, and (2) neither the trustee nor the spouse has the power to distribute trust
principal to or for the benefit of the surviving spouse or any other person during
the spouse’s lifetime. ORS 114.675(2)(c). Amounts distributed to a surviving
spouse from a unitrust under ORS 129.225 are also considered income. ORS
114.675(2)(d).
For any other beneficial interest in a trust established for the benefit of the
surviving spouse, the surviving spouse’s estate includes the present value of
amounts payable under the trust to the surviving spouse. ORS 114.630(3). The
value of the interest is determined under federal estate and gift tax laws. ORS
114.630(4).
NOTE: ORS 114.630, 114.660, and 114.675 were amended effective
June 9, 2011. For decedents who died between January 1, 2011 and June 8,
2011, see 2011 Or Laws ch 305, §§2, 4, 5, 7.
COMMENT: As with other new laws, provisions in the elective-share
laws will require further legislative refinement or court interpretation. One
of these provisions is found in ORS 114.675(2)(b), which includes 100% of
the trust corpus in the surviving spouse’s estate if access to the trust
principal is allowed only for the purpose of providing for the health,
education, support, or maintenance of a spouse. A marital trust for the
benefit of a spouse may contain broader access powers than those provided
in ORS 114.675(2)(b). For example, a trust may provide for the distribution
of principal for the comfort and happiness of a surviving spouse.
Presumably, a trust that provides greater access to principal than provided
for by this statute would also be 100% includible, but based on the statutory
provisions for valuing a trust for the benefit of a spouse, it is not clear
whether a trust that provides broader access powers than those limited to
“health, education, support or maintenance” would be 100% includible, 50%
includible as an income-only trust, or valued under subsection (3) or (4) of
ORS 114.630.
Similarly, there is limited guidance regarding the valuation of a
spouse’s beneficial interest in a sprinkling trust that allows for discretionary
distribution of income or principal to a spouse and the spouse’s children.
Although the valuation of a spouse’s beneficial interest in a sprinkling trust
is determined under federal and gift tax law pursuant to ORS 114.630(4), the
value may not be readily ascertainable under current tax laws. If a spouse’s
beneficial enjoyment in the trust is restricted, the fair-market value of the
interest may need to be determined based on all of the facts and
circumstances relating to the interest. Treas Reg §1.7520-3(b)(1)(ii)–(iii).
These facts and circumstances may include the life expectancy of the
spouse, the trust distribution standard, the needs of the spouse, the spouse’s
available resources, and other factors. See Treas Reg §1.7520-3(b)(2)(ii)(A).
§ 8.2-5(d)(5) Exclusions from Augmented Estate
The augmented estate does not include the following interests:
(1) “Any value attributable to future enhanced earning capacity of either
spouse,” ORS 114.635(1);
(2) “Any property that is irrevocably transferred before the death of the
decedent spouse,” ORS 114.635(2);
(3) Any property that is transferred on or after the death of the decedent
spouse “with the written joinder or written consent of the surviving spouse,” ORS
114.635(3);
(4) Any community property, whether under ORS 112.705–112.775 (see
§8.2-4(a)) or under the laws of the jurisdiction where the community property is
located, ORS 114.635(4); or
(5) Any property that is held by either spouse in a fiduciary capacity,
ORS 114.635(5).
NOTE: The discussion above reflects the 2011 amendments to ORS
114.635. The amendments apply only to decedents dying on or after June 9,
2011. See 2011 Or Laws ch 305, §§1, 7.
§ 8.2-5(e) Payment of Elective Share
Under ORS 114.615, once the elective share amount is calculated, the court
considers the values of (1) the decedent’s probate estate, (2) the decedent’s
nonprobate estate, (3) the surviving spouse’s estate, (4) the decedent’s probate
transfers to the surviving spouse, and (5) the decedent’s nonprobate transfers to the
surviving spouse.
If the aggregate values of the surviving spouse’s estate and the decedent’s
probate and nonprobate transfers to the surviving spouse do not satisfy the amount
of the elective share, any additional amount required to satisfy the elective share is
to be paid out of the decedent’s probate and nonprobate estate. ORS 114.615. The
priority for the payment of this amount is set forth in ORS 114.700.
Pursuant to ORS 114.700, the surviving spouse’s estate (as described in
ORS 114.675) is “applied first to satisfy the dollar amount of the elective share.”
ORS 114.700(1). If, after this application of the surviving spouse’s estate, the
amount of the elective share is not fully satisfied, the amounts included in the
decedent’s estate and nonprobate estate are applied as necessary. ORS 114.700(2).
Unless otherwise provided by the decedent in a will, trust, or other
instrument, the amounts needed to satisfy the elective share will be collected from
the probate and nonprobate estates “in a manner that ensures that the probate and
nonprobate estates bear proportionate liability for the amounts necessary to pay the
elective share amount.” ORS 114.700(3)(a).
Unless the decedent provides otherwise, the amounts applied against the
unsatisfied elective-share amount must be apportioned among all recipients of the
decedent’s estate “in a manner that ensures that each recipient bears liability for a
portion of the payment that is proportionate to the recipient’s interest” in the estate.
ORS 114.700(3)(b)–(c).
For nonprobate property, only the original recipients of estate property, or
those persons who receive estate property for less than fair consideration from an
original recipient, may be required to make a proportional contribution to the
spouse’s elective share. ORS 114.705(1). A recipient who is required to make a
contribution toward the satisfaction of the elective-share amount may return the
property to satisfy the recipient’s obligation, or pay money equal to the value of the
property. ORS 114.705(2).
COMMENT: If the decedent’s nonprobate estate includes an IRA that
does not name the spouse as a designated beneficiary, careful consideration
must be given to the income tax consequences relating to a return of a
portion of the IRA to satisfy the recipient’s contribution obligation. Among
other considerations, if a spouse does not qualify as a “designated
beneficiary” for the returned portion of the IRA, this may result in a loss of
any tax deferral by the surviving spouse and taxable income to either the
estate or to the recipient returning the IRA. See generally IRC §401(a)(9)
and regulations issued thereunder.
NOTE: ORS 114.700 was amended effective June 9, 2011. For
decedents who died between January 1, 2011 and June 8, 2011, see 2011 Or
Laws ch 305, §§6–7.
§ 8.2-5(f) Protective Orders
If a surviving spouse files a motion or petition to claim the elective share
(see §8.2-5(c)), any person who received any part of the decedent’s probate or
nonprobate estate may request that the court issue a protective order to prohibit or
impose conditions on the transfer of property included in the augmented estate.
ORS 114.710(1).
In addition, any recipient of any part of the probate or nonprobate estate who
is required to make a contribution toward satisfaction of the elective share may file
a motion or petition requesting a determination of his or her proportionate
contribution toward the elective-share amount. Once the court makes that
determination, the person may be discharged from all further contribution claims if
the amount or security for the amount determined is deposited with the court. ORS
114.710(2).
§ 8.2-5(g) Waiver of Elective Share
The right of election under the elective-share statutes may be waived before
or after marriage by a written contract, agreement, or waiver signed by the
surviving spouse. ORS 114.620(1). For this purpose, a written agreement that
waives all rights in the property of the estate of a present or prospective spouse is a
waiver of all rights to an elective share. ORS 114.620(2).
CAVEAT: If a decedent owned a qualified plan subject to the
Employee Retirement Income Security Act (ERISA), the waiver may also
need to meet the applicable ERISA requirements for the waiver of the
spouse’s interest in the qualified plan to be effective. See ERISA §205, IRC
§417(a)(2).
COMMENT: ORS 114.620 waivers are enforceable under a different
standard than the standard that governs the execution of a premarital
agreement under ORS 108.700–108.740, but conflict rules regarding the
representation of multiple parties continue to be present.
NOTE: A written agreement or waiver entered into before January 1,
2011, whether prenuptial or postnuptial, that waives the elective share is
effective as a waiver, unless a court determines that the agreement or waiver
is not enforceable under the standards of ORS 114.620. 2009 Or Laws ch
574, §24.
§ 8.2-5(h) Separation
If the decedent and the surviving spouse were living apart at the time of the
decedent’s death, the court may deny the surviving spouse the right to the elective
share or reduce the amount of the elective share “to such amount as the court
determines reasonable and proper.” ORS 114.725. In making this determination,
the court considers various factors, including whether the marriage was a first or
subsequent marriage, the contribution of the surviving spouse to the property of the
decedent in the form of services or transfers of property, the length and cause of
the separation, and any other relevant circumstances. ORS 114.725.
§ 8.2-5(i) Spouse’s Elective Share Under Prior Law
§ 8.2-5(i)(1) Law Before January 2011
For deaths occurring before January 1, 2011, a surviving spouse’s elective
share is one-fourth of the net probate estate of the deceased spouse, reduced by the
value of certain property given to the surviving spouse under the deceased spouse’s
will. Former ORS 114.105–114.165. The elective share is limited to not more than
one-half of the sum of (1) the probate estate, (2) most of the nonprobate estate, and
(3) certain gifts made by the decedent. Former ORS 114.125; see 2009 Or Laws ch
574, §23. This prior law applies to the surviving spouse of a decedent who died
between January 1, 2011 and June 8, 2011. See 2011 Or Laws ch 305, §7.
§ 8.2-5(i)(2) Law from January 1, 2011 to June 8, 2011
Oregon’s elective-share statutes enacted effective January 1, 2011, were
subsequently amended in 2011, with the changes becoming effective June 9, 2011.
2011 Or Laws ch 305. For deaths occurring between January 1, 2011 and June 8,
2011, the prior versions of ORS 114.630, 114.635, 114.660, 114.665, 114.675, and
114.700 apply. See 2011 Or Laws ch 305.
§ 8.2-6 Petition to Admit Noncompliant Writing as Decedent’s Will or a
Revocation or Alteration of the Will (new)
with the formalities of ORS 112.235 (regarding the execution of a will). The
statute allows the proponent of the writing to establish “by clear and convincing
evidence” that the decedent intended the writing to constitute
ORS 112.238(1).
A writing described in ORS 112.238(1) may be filed with the court for
administration as the decedent’s will pursuant to ORS 113.035 (petition for
appointment of personal representative and probate of will). The proponent of the
writing must give notice of the filing of the petition to those persons described in
ORS 113.035(5), (7), (8), and (9). ORS 112.238(2).
The statute also allows an heir or a devisee to claim an interest in the
distribution of an estate by filing “a petition with the court to establish the
decedent’s intent that the writing was to be a partial or complete revocation of the
decedent’s will, or an addition to or an alteration of the decedent’s will.” ORS
112.238(3). The proponent of the writing must give notice of the filing to “any
personal representative appointed by the court, the devisees named in any will
admitted to probate and those persons identified in ORS 113.035(5).” ORS
112.238(3).
A person who files a petition under ORS 112.238 must pay a filing fee in
accordance with ORS 21.135. ORS 112.238(5).
After the filing of a petition under ORS 112.238(2) or (3), the court “may
make a determination regarding the decedent’s intent after a hearing or on the basis
of affidavits.” ORS 112.238(2)–(3).
“If the court determines that clear and convincing evidence exists showing
that a writing described in [ORS 112.238(1)] was intended by the decedent to
accomplish one of the purposes set forth in [ORS 112.238(1)],” the court will (1)
“[p]repare written findings of fact in support of the determination”; and (2) “[e]nter
a limited judgment that admits the writing for probate as the decedent’s will or
otherwise acknowledges the validity and intent of the writing.” ORS 112.238(4)(a).
The court’s determination “does not preclude the filing of a will contest
under ORS 113.075, except that the will may not be contested on the grounds that
the will was not executed in compliance with ORS 112.235.” ORS 112.238(4)(b).
The court may enter a limited judgment regarding its decision on a petition
filed under ORS 112.238. ORS 111.275(1)(f).
For further discussion of ORS 112.238, see Supplement § 5.2-4(h)
(contested will).
§ 8.3 ALTERING INTESTATE SUCCESSION AND TESTAMENTARY

DISPOSITION
§ 8.3-1 Distribution by Agreement
By agreement, a decedent’s devisees or heirs may effect a change in the
distribution of the estate property that each would otherwise be entitled to under a
will or by intestate succession. The agreement must be approved by the court. ORS
116.113(1), (3). The agreement is usually described in the final accounting and
approved by the court in the general judgment of final distribution. In many cases,
this agreement eliminates the necessity for executing a partition deed between the
heirs or the devisees.
PRACTICE TIP: The judgment of final distribution must incorporate the
terms of the agreement, and operates as a transfer of the property described
in the judgment between the parties to the agreement. Thus, if real property
is the subject of the agreement, the property description in the final judgment
should be of the same formality and accuracy as would be required if the
property were transferred by deed (although a deed should usually be
recorded after the judgment is entered). The judgment of distribution should
incorporate the terms of the agreement, rather than incorporating the
agreement by reference. Incorporation by reference should be used only if
the agreement is lengthy and complex.
CAVEAT: The lawyer should carefully examine any agreement
between devisees or heirs that alters distribution under the will or by
intestate succession to ensure that no unforeseen estate tax, gift tax, or
generation-skipping-transfer tax consequences result. In addition, the lawyer
should carefully examine any agreement that alters distributions to a charity
or a surviving spouse to ensure that there are no unintended estate tax
consequences relating to qualification for the federal estate tax marital or
charitable deductions. Income tax consequences may also be present.
§ 8.3-2 Disclaiming an Interest
Pursuant to the Uniform Disclaimer of Property Interests Act (the “UDPI
Act”), ORS 105.623–105.649, a person may disclaim, in whole or in part, any
interest in property or any power over property. If the requirements of the UDPI
Act are met, the disclaimed interest passes as if the disclaimant never had an
interest in the disclaimed property. See In re Nistler, 259 BR 723, 727 (Bankr D Or
2001); see also ORS 105.633.
In addition to the requirements of the UDPI Act, if a disclaimer also meets
the requirements of a qualified disclaimer under IRC §2518, the disclaimer will not
result in a taxable gift being made by the disclaimant.
Disclaimers can be used in many ways to alter the distribution of an estate,
to cure defects in an estate plan, to avoid ownership of property (such as
contaminated real estate), and to engage in other postmortem planning. The many
uses of a disclaimer are not covered in this chapter, which is limited to a review of
the procedural rules for disclaimers.
ORS 105.633 describes specific rules that apply to the disposition of an
interest in property that has been disclaimed.
If the will creating the property interest provides for the disposition of the
interest in the event that the interest is disclaimed, the disclaimed interest passes in
accordance with the will. ORS 105.633(2)(b).
If the will does not provide for the disposition of a disclaimed interest, or if
the interest arises under the laws of intestate succession, the following rules apply:
(1) If the disclaimant is an individual, except as provided in ORS
105.633(3)(a)(B)–(C), the disclaimed interest passes as if the disclaimant had died
immediately before the time of distribution. ORS 105.633(3)(a)(A).
(2) If the disclaimant’s descendants would have shared in the disclaimed
interest by any method of representation had the disclaimant died before the time
of distribution, the disclaimed interest passes only to the disclaimant’s descendants
who survive the time of distribution. ORS 105.633(3)(a)(B).
(3) If the disclaimed interest would pass to the disclaimant’s estate had
the disclaimant died before the time of distribution, the disclaimed interest passes
by representation to the descendants of the disclaimant who survive the time of
distribution. If no descendant survives the time of distribution, the disclaimed
interest passes to those persons who would receive the transferor’s estate under the
intestate succession laws of the transferor’s domicile had the transferor died at the
time of distribution. However, if the transferor’s surviving spouse is living, but is
remarried at the time of distribution, the transferor is deemed to have died
unmarried at the time of distribution. ORS 105.633(3)(a)(C).
(4) If the disclaimant is not an individual, the disclaimed interest passes
as if the disclaimant did not exist. ORS 105.633(3)(b).
A disclaimer is irrevocable when “the disclaimer is delivered or filed
pursuant to ORS 105.642 or when the disclaimer becomes effective as provided in
ORS 105.633 to 105.641, whichever occurs later.” ORS 105.629(5); see Fleenor v.
Williamson, 171 Or App 599, 606–607, 17 P3d 520 (2000) (once a disclaimer is
made, it cannot be revoked or revised). See Form 8-2.
§ 8.3-2(b) Requirements of a Disclaimer–Oregon Law
For purposes of Oregon law, to be effective a disclaimer must:
(1) “Be in writing or otherwise recorded by inscription on a tangible
medium or by storage in an electronic or other medium in a manner that allows the
disclaimer to be retrieved in perceivable form,” ORS 105.629(3)(a);
(2) “Declare that the person disclaims the interest in the property or in the
power,” ORS 105.629(3)(b);
(3) “Describe the interest in property or power over property that is
disclaimed,” ORS 105.629(3)(c);
(4) Be signed by the disclaimant, ORS 105.629(3)(d); and
(5) Be delivered or filed in the manner provided in ORS 105.642, ORS
105.629(3)(e).
The delivery of the disclaimer may be made by personal delivery, first class
mail, or another method likely to result in receipt of the disclaimer. ORS
105.642(2).
If the interest being disclaimed is created under the laws of intestate
succession or by a will, other than an interest in a testamentary trust, the disclaimer
must be delivered to the personal representative of the decedent’s estate. ORS
105.642(3)(a). But if no personal representative is serving at the time the
disclaimer is made, the disclaimer must be filed with a court having authority to
appoint the personal representative. ORS 105.642(3)(b).
If the interest being disclaimed is an interest in a testamentary trust created
by a will, the disclaimer must be delivered to the trustee. ORS 105.642(4)(a). If a
trustee is not serving at the time the disclaimer is made, but a personal
representative for the decedent’s estate is serving, the disclaimer must be delivered
to the personal representative. ORS 105.642(4)(b). If neither a trustee nor a
personal representative is serving at the time the disclaimer is made, the disclaimer
must be filed with the court having authority to enforce the trust. ORS
105.642(4)(c).
PRACTICE TIP: Although not required by statute, to document the
timely delivery or filing of the disclaimer, the disclaimant should request the
personal representative to acknowledge receipt of the disclaimer and request
filing of the disclaimer in the probate proceeding.
A person may disclaim any interest in property, or any power over property.
The Uniform Disclaimer of Property Interests Act (the “UDPI Act”) provides
detailed rules regarding the disclaimer of different types of property interests,
including the effect of the disclaimer and the delivery and filing requirements. To
execute a disclaimer, the lawyer must properly identify the property interest being
disclaimed and follow the proper procedural requirements set forth in the UDPI
Act. In this regard, specific provisions govern the disclaimer of survivorship rights
in jointly held property (ORS 105.634), the disclaimer of a power of appointment
or other powers not held in a fiduciary capacity (ORS 105.638), and the disclaimer
of an interest by an appointee of a power of appointment (ORS 105.639).
In addition, with regard to a trust, a trustee may disclaim assets that would
otherwise become trust property (ORS 105.636), or a fiduciary may disclaim
powers held in a fiduciary capacity (ORS 105.641). These disclaimers must be
consistent with the trustee’s fiduciary duties.
See Forms 8-2 to 8-7.
§ 8.3-2(c) Tax-Qualified Disclaimer–Federal Law
The tax consequences of a disclaimer are determined pursuant to IRC §2518
and the regulations promulgated under it. If the disclaimer does not meet the
requirements of IRC §2518, the disclaimer is not qualified and may result in a
taxable gift from the disclaimant to the recipient of the disclaimed property. For a
disclaimer to be deemed a qualified disclaimer for federal tax purposes, it must
meet all of the following requirements:
(1) The disclaimer must be an “irrevocable and unqualified” refusal to
accept an interest in property. IRC §2518(b).
(2) The refusal must be in writing. IRC §2518(b)(1). The writing must be
delivered in person or by registered or certified mail within the time limits
specified in IRC §2518(b)(2). The writing may be, but is not required to be, filed in
the court exercising probate jurisdiction. If the disclaimer relates to real property, it
may be recorded. See Form 8-2.
(3) The written disclaimer “must be delivered to the transferor of the
interest, the transferor’s legal representative, the holder of the legal title to the
property to which the interest relates, or the person in possession of such property.”
Treas Reg §25.2518-2(b)(2); IRC §2518(b)(2).
(4) The disclaimer must be made, delivered, and received not more than
nine months after the later of (a) the day the transfer creating the interest in the
disclaimant is made, or (b) the disclaimant’s 21st birthday. IRC §2518(b)(2)(A)–
(B); Treas Reg §25.2518-2(d)(3).
(5) The disclaimant must not have accepted the interest, or any of its
benefits, before the disclaimer. Acceptance of any consideration in return for
making the disclaimer is treated as an acceptance of the benefits of the interest
disclaimed. IRC §2518(b)(3); Treas Reg §25.2518-2(d)(1).
(6) The interest must pass to either the decedent’s spouse or a person
other than the disclaimant as a direct result of the disclaimant’s refusal to accept
the property, without any direction by the disclaimant. IRC §2518(b)(4)(A)–(B);
Treas Reg §25.2518-2(e).
CAVEAT: Under the Internal Revenue Code, with certain exceptions, a
disclaimer must be filed within nine months after the date of the transfer
creating the interest in the disclaimant. IRC §2518(b)(2). Under Oregon law,
no nine-month requirement applies to the disclaimer of property. Therefore,
if a disclaimer is made after the nine-month period, it may be a valid
disclaimer for state purposes, but it would not be a qualified disclaimer
under IRC §2518. If so, the disclaimer would transfer a property right, but a
gift tax might be triggered.
COMMENT: Oregon law places no restrictions on whole or partial
disclaimers. See ORS 105.629(1). In contrast, under federal law, a
disclaimant can only disclaim a partial interest if it is an undivided portion of
each interest or right owned by the disclaimant in the separate interest that is
disclaimed. Treas Reg §25.2518-3(b). Consequently, a partial disclaimer that
might not meet federal tax standards is valid for nontax purposes.
The federal regulations governing valid partial disclaimers involve a
narrow and steep path. Consequently, before using a partial disclaimer for
federal tax purposes, the lawyer must carefully examine the Internal
Revenue Code, Treasury Regulations, Tax Court cases, and federal cases to
avoid what might be considered a valid partial disclaimer which, in reality,
is not. Because of the many factors involved in a partial disclaimer, this
section does not provide exhaustive examples of partial disclaimers for
federal tax purposes.
COMMENT: One example of a partial disclaimer that can create
problems is a disclaimer of an undivided portion of a separate interest in
property when the disclaimant also has another separate interest in the same
property, if the disclaimed separate interest was created by the transferor and
can be separated from the other interest.
EXAMPLE: Consider the following facts: A gives B an undivided one-
fourth interest in A’s cattle ranch. Later on, A’s will devises B another
undivided one-fourth interest in the same cattle ranch with a remainder over
to C if the devise fails. B decides to disclaim the devise so that C can receive
it. B’s disclaimer does not clearly describe the devise and the description
could include the earlier gift.
COMMENT: Tax-qualified disclaimers of certain survivorship interests
in property are possible. A surviving owner of a joint bank, brokerage, or
other investment account may disclaim (within nine months of that owner’s
death) the portion of the account contributed by the deceased owner, as long
as the owner could have unilaterally retrieved his or her contribution without
the consent of the others. Treas Reg §25.2518-2(c)(4)(iii). Also, if a
survivorship asset is established, such as a tenancy by the entirety in real
estate, the disclaimant may disclaim the interest that he or she acquired at
the creation of the tenancy within nine months of the creation; in contrast,
the disclaimant has until nine months after the owner’s death to disclaim the
interest that the disclaimant later acquires by survivorship. See Treas Reg
§25.2518-2(c)(4)(i), Treas Reg §25.2518-2(c)(5), examples (7)–(8), (10).
COMMENT: As the foregoing discussion demonstrates, disclaimer
planning requires a yeoman’s working knowledge of Oregon law, tax law,
and the facts. The lawyer should not delegate disclaimer planning to a legal
assistant or another nonlawyer staff member, unless that person has the
prerequisite knowledge to make an informed and correct decision. Likewise,
disclaimer planning should not be undertaken by a lawyer who does not
have adequate knowledge of the subject area. Consequently, this discussion
is an introductory guide only, and a thorough analysis of Oregon and federal
tax law that takes into consideration the facts and circumstances surrounding
the interest to be disclaimed must be undertaken before an interest in
property is disclaimed.
§ 8.3-2(d) Right to Disclaim May Be Barred
A disclaimer may be barred or limited as described in ORS 105.643–
105.649. A disclaimer is barred by a written waiver of the right to disclaim. ORS
105.643(1).
Also, a disclaimer of an interest in property is barred if any of the following
events occur before the disclaimer is effective:
(1) “The disclaimant accepts the interest sought to be disclaimed,” ORS
105.643(2)(a);
(2) “The disclaimant voluntarily assigns, conveys, encumbers, pledges or
transfers the interest sought to be disclaimed or contracts to do so,” ORS
105.643(2)(b); or
(3) “The interest sought to be disclaimed is sold pursuant to a judicial
sale,” ORS 105.643(2)(c).
A disclaimer is also barred if the purpose or effect of the disclaimer is to
prevent a victim of a crime from recovering money or property to be applied
against a judgment for restitution under ORS 137.101–137.109. ORS 105.643(6).
§ 8.3-2(e) Effect on Other Rights
The Uniform Disclaimer of Property Interests Act does not limit any right of
a person to waive, release, disclaim, or renounce an interest in property, or power
over property, under any other law. ORS 105.628(2).
§ 8.3-2(f) Prior Law
In enacting the Uniform Disclaimer of Property Interests Act, the 2001
Legislature repealed the Uniform Disclaimer of Transfers by Will, Intestacy or
Appointment Act, former ORS 112.650–112.667. The Uniform Disclaimer of
Transfers Under Nontestamentary Instruments Act, former ORS 105.625–105.640,
was also repealed.
Except as otherwise provided in ORS 105.643, an interest in property or
power over property existing on January 1, 2002, may be disclaimed in the manner
provided by ORS 105.623–105.649 after January 1, 2002, unless the time for
delivering or filing a disclaimer had expired under the law in effect immediately
before January 1, 2002. See 2001 Or Laws ch 245, §20.
§ 8.4 WILL CONTESTS; BREACH OF CONTRACT TO MAKE A WILL

§ 8.4-1 Notice and Filing Period
The petition for the appointment of a personal representative and for the
probate of a will must include the names and addresses of the decedent’s heirs and
devisees. ORS 113.035(5), (7). The petition must also include the name and
address of any person asserting an interest in the estate based on the contention
that:
(1) The will alleged in the petition is ineffective in whole or in part, ORS
113.035(8)(a);
(2) Another will of the decedent exists, ORS 113.035(8)(b));
(3) The decedent “agreed, promised or represented that the decedent
would make or revoke a will or devise, or not revoke a will or devise, or die
intestate,” ORS 113.035(8)(c); or
(4) A parent of the decedent “willfully deserted the decedent or neglected
without just and sufficient cause to provide proper care and maintenance for the
decedent, as provided by ORS 112.047,” ORS 113.035(9).
The personal representative must mail or deliver the information required by
ORS 113.145 to those heirs, devisees, and other persons asserting an interest in the
estate. ORS 113.145(1). See §§2.5-1 to 2.5-7.
An action to contest a will based on any of the above reasons must be
commenced before the later of (1) four months after the date of mailing or delivery
of the information described in ORS 113.145, if that information was required to
be mailed or delivered to the person on whose behalf the petition is filed, or (2)
four months after the first publication of notice to interested persons, if the person
contesting the will was not required to be named in the petition as an interested
person. ORS 113.075(1), (3).
NOTE: A contention that the decedent breached a contract to make or
revoke a will or devise, or not revoke a will or devise, or died intestate, may
not be presented as a claim under ORS chapter 115. ORS 113.075(4). Such
an action “may be commenced by the filing of a separate action in any court
of competent jurisdiction.” ORS 113.075(2).
For a thorough discussion of will contests, see §§15.2-1(a) to 15.2-2(g).
ORS 113.075(4) was renumbered ORS 113.075(5) in 2017.
The 2017 Legislature also added new provisions to ORS 113.075.
A person who commences a will contest under ORS 113.075(1) must “give
notice of the action to heirs and devisees identified in the petition for probate or
amended petition for probate, and to the Department of State Lands if the personal
representative has delivered or mailed information to the department under ORS
113.045.” ORS 113.075(4)(a).
In addition, if any devisee under the contested will is “a charitable trust as
described in ORS 130.170, a public benefit corporation as defined in ORS 65.001
or a religious organization,” a person who commences a will contest under ORS
113.075(1) must give notice to the Attorney General. ORS 113.075(4)(b).
not comply with the formalities of a validly executed will. For a more
detailed discussion of ORS 112.238, see Supplement § 8.2-6 (petition to
admit noncompliant writing as decedent’s will or a revocation or alteration
of the will).
§ 8.4-2 Contesting a Foreign Will
Foreign wills may be contested on the same grounds as domestic wills. ORS
113.065(2). A foreign will is the written will of a testator who died domiciled
outside Oregon which, upon probate, may operate on property in Oregon. ORS
113.065(1).
PRACTICE TIP: Based on the proximity of ORS 113.065 to ORS
113.075, the same time limit for contests of domestic wills should apply to
contests of foreign wills. See §8.4-1.
§ 8.4-3 No Statutory Grounds for Contest
The most common grounds for contesting the probate of a will are improper
execution of the will, the mental incapacity of the testator, and undue influence
exercised on the testator by a devisee. See §§15.2-2 to 15.2-2(g).
Oregon does not recognize the separate and distinct tort of intentional
interference with prospective inheritance. However, the Oregon Supreme Court has
held that intentional interference with prospective inheritance is actionable under
the tort of intentional interference with prospective economic advantage. Allen v.
Hall, 328 Or 276, 281–282, 974 P2d 199 (1999).
For a case involving the improper execution of a will, see Kirkeby v.
Covenant House, 157 Or App 309, 319–320, 970 P2d 241 (1998) (the testator’s
acknowledgment of her signature on her will to witnesses during telephone
conversations did not satisfy the statutory requirement of acknowledgment in the
presence of witnesses under ORS 112.235(1)). See also Walker v. Walker, 145 Or
App 144, 147–149, 929 P2d 316 (1996) (proper signing of the testator’s name at
the direction of the testator).
For a will contest based on undue influence, see Sangster v. Dillard, 144 Or
App 210, 925 P2d 929 (1996), opinion modified on recons. sub nom. Matter of
Estate of Cochrane, 146 Or App 105 (1997); and McNeely v. Hiatt, 138 Or App
434, 909 P2d 191, adhered to on recons., 142 Or App 522 (1996).
For a will contest based on the defective exercise of a power of appointment,
see Smith v. Brannan, 152 Or App 505, 954 P2d 1259 (1998).
intended the writing to constitute
ORS 112.238(1).
will).
§ 8.4-4 Filing Fee
Any person filing an appearance in a probate proceeding must pay the fees
established under ORS 21.135(2)(h).
ORS 21.135(2)(h) was renumbered ORS 21.135(2)(g).
§ 8.4-5 Appeal
Any party to a will contest may appeal from an adverse judgment of the
court. Because most wills are probated in the circuit court, appeals will be to the
court of appeals. ORS 111.105(2). If a will contest is not transferred to a circuit
court under ORS 111.115(1) and is tried in the county court, the appeal will be to
the circuit court. ORS 111.105(3).
PRACTICE TIP: The contestant or the proponent of the will, or both,
should try to avoid this situation because it could involve two or possibly
three appeals (to the circuit court, then to the court of appeals, then to the
supreme court).
§ 8.4-6 Effects of Successful Will Contest
The effects of a successful will contest depend on whether the testator
executed one or more other wills. If no other will exists, the testator is deemed to
have died intestate. If the testator executed a will or wills in addition to the
successfully contested one, the judgment would probably not be held to be res
judicata, preventing the probate of one of these wills. See E. H. Schopler, Annot,
Judgment Denying Validity of Will Because of Undue Influence, Lack of Mental
Capacity, or the Like, as Res Judicata as to Validity of Another Will, Deed, or
Other Instrument, 1952 WL 7842 (1952).
Assuming that the contested will contained a provision revoking a previous
will, the revocation would be a nullity and the previous will could be offered for
probate. However, if the testator had physically destroyed the previous will, the
destruction would be a revocation and the will contest would not affect it. ORS
112.285, 112.295.
FORMS
Form 8-1 Election to Receive Elective Share of Estate Under ORS

114.610
Download MS Word


____________________, )
) MOTION TO EXERCISE
Deceased. ) ELECTIVE SHARE OF
) ESTATE UNDER ORS
) 114.610
1.
I, ____________________, am the surviving spouse of the above-named
decedent, who died testate and was domiciled in Oregon at the time of death.
2.
The date of the decedent’s death was ______________, 20__.

3.
I hereby elect to receive the elective share provided by ORS 114.600–
114.725.
4.
As of the date of the decedent’s death, my property, other than any probate
or nonprobate transfers from the decedent, is as follows:
[Describe]
5.
I have, or am entitled to receive, the following nonprobate property from the
decedent listed under ORS 114.690:
[Describe]
DATED:____________________, 20___.
/s/__________________________
[surviving spouse’s name]
SURVIVING SPOUSE
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR SURVIVING SPOUSE:

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: The election must be made within nine months after the date of the
decedent’s death as described in §8.2-5(c). ORS 114.610. A copy of the motion
must be served on the personal representative or the personal representative’s
lawyer, all persons who would be entitled to receive information under ORS
113.145, and all distributees and recipients of portions of the augmented estate
known to the surviving spouse who can be located with reasonable efforts. ORS
114.160(1)(b).
If no probate proceeding has been commenced, the surviving spouse may
file a petition for the appointment of a personal representative for the estate of the
deceased spouse, and then file a motion for the exercise of election, within nine
months after the decedent’s death. ORS 114.610(1)(a). See §8.2-5(c).
COMMENT: See §§8.2-5(a) to 8.2-5(c). See UTCR 2.010 and UTCR 9.030
this form.
NOTE: See UTCR 2.010 for the form of court documents, including
contact information (UTCR 2.010(7)). See also UTCR 9.030. For documents
filed electronically, see UTCR chapter 21, including UTCR 21.040 (format)
and UTCR 21.090 (electronic signatures).
Form 8-2 Disclaimer by Heir
Download MS Word


____________________, )
) DISCLAIMER BY HEIR
Deceased. )
1.
I, ____________________, the [e.g., son or daughter] of the above-named
decedent, hereby disclaim my entire interest in the estate of the above-named
decedent pursuant to ORS 105.623–105.649, the Uniform Disclaimer of Property
Interests Act.
2.
This disclaimer is delivered to ____________________, personal
representative of the decedent’s estate, either in person or by registered or certified
mail.
3.
I have not accepted any of the property or interest or benefit under the
decedent’s estate, and my right to disclaim is not barred by any of the other events
described in ORS 105.643.
4.
This disclaimer is irrevocable.
DATED: _______________, 20____.
/s/__________________________
[disclaimant’s name]
Disclaimant
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, being duly sworn, depose and say: I am the

disclaimant named in the above disclaimer by heir and the foregoing disclaimer by
heir is true as I verily believe.
/s/__________________________
SUBSCRIBED AND SWORN TO before me on _____________, 20__.
/s/__________________________
Received this ____ day of _______________, 20__.
/s/__________________________
[address]
[telephone no.]
[fax no.]
COMMENT: See §§8.3-2(a) to 8.3-2(c). See UTCR 2.010 and UTCR 9.030 for
the form of documents.
this form.
NOTE: See UTCR 2.010 for the form of documents in court proceedings,
including contact information that must appear on documents. See also UTCR
9.030 (“The contact information required by UTCR 2.010(7) must be typed or
printed on the last page of every document submitted to the court.”). For
documents filed electronically, see UTCR chapter 21, including UTCR 21.040
(format) and UTCR 21.090 (electronic signatures).
Form 8-3 Disclaimer by Surviving Spouse
Download MS Word


____________________, )
) DISCLAIMER BY
Deceased. ) SURVIVING SPOUSE
1.
I, ____________________, the surviving spouse of the above-named
decedent, pursuant to ORS 105.623–105.649, hereby disclaim my interest in the
following estate property:
[For example:
Bearer Bonds described in attached Schedule A $161,146.20
AAA Life Insurance, Account #18261 $12,000.00
Boat Sale Proceeds, Oregon Title #123456 $1,000.00
1995 Pickup, Oregon license #ABC 123 $2,000.00
Contents of Residence described in Probate $7,930.00
Appraisal of Household Items made by AAA
Appraisers dated 1/1/03
TOTAL $184,076.20]
2.
In order to effectuate this disclaimer, I also disclaim the interest in my
deceased spouse’s estate, which is established by article IV and article VI of my
deceased spouse’s last will and testament (the will).
3.
This disclaimer is precautionary. It is intended to be effective only to the
extent that I otherwise have an interest in the disclaimed property pursuant to the
documents establishing title to the property or the provisions of articles IV and VI
of my deceased spouse’s will.
4.
To the extent that property passes by reason of this disclaimer to the residue
of my deceased spouse’s estate, which is governed by the provisions of article VII
of my deceased spouse’s will, I hereby make the following further disclaimer with
respect to the residuary trust established by article VII: I disclaim the right as
cotrustee of that residuary trust to direct the beneficial enjoyment of the disclaimed
property with respect to any of my children and the issue of any deceased child of
mine.
5.
Except as specified above in paragraph 4, I do not disclaim my interest in the
residuary trust established by article VII of my deceased spouse’s will.
6.
DATED: _______________, 20____.
/s/__________________________
[surviving spouse’s name]
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, __________________, being duly sworn, depose and say: I am the

disclaimant in the above-entitled disclaimer by surviving spouse and the foregoing
disclaimer by surviving spouse is true as I verily believe.
/s/__________________________
/s/__________________________
COMMENT: See §§8.2-5(a) to 8.2-5(c), 8.3-2(b). See UTCR 2.010 and UTCR
case.” UTCR 2.010(7).
this form.
Form 8-4 Written Partial Disclaimer of Bequest of Partnership
Interest
Download MS Word


____________________, )
) WRITTEN PARTIAL
Deceased. ) DISCLAIMER OF
) BEQUEST OF
) PARTNERSHIP
) INTEREST
1.
I, ____________________, declare that I am the _____________ of the
decedent, who died on ____________, 20___, and who was domiciled in
______________ County, Oregon, leaving a will that was duly admitted to probate
in the above-captioned Court on ___________, 20___, and under the terms of
which I am the sole beneficiary.
2.
I hereby disclaim, renounce, and refuse to accept ____% of the decedent’s
_____% interest in ______________________, a [general / limited] partnership.
3.
I affirm I have not accepted any interest in or benefit from the property
interests hereby disclaimed, and I have not received and I will not receive any
consideration in money or money’s worth for making this disclaimer.
4.
I intend that this disclaimer constitutes a disclaimer under ORS 105.623–
105.649, the Uniform Disclaimer of Property Interests Act, and a qualified
disclaimer as defined in IRC §2518(b) or the corresponding provisions of any
subsequent federal tax law.
5.
DATED: ________________, 20____.
/s/__________________________
Disclaimant
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, ____________________, being duly sworn, depose and say: I am the

disclaimant in the above-entitled disclaimer and the foregoing written partial
disclaimer of bequest of partnership interest is true as I verily believe.
/s/__________________________

/s/__________________________
Received this ____ day of ________________, 20__.
/s/__________________________
[address]
[telephone no.]
[fax no.]
case.” UTCR 2.010(7).
this form.
Form 8-5 Disclaimer to Cover Residuary Interest
Download MS Word


____________________, )
) DISCLAIMER OF
Deceased. ) RESIDUARY INTEREST
The undersigned, pursuant to ORS 105.623–105.649, the Uniform

Disclaimer of Property Interests Act, hereby disclaims any and all interest to the
real property described that is included in the remainder and residue of the estate or
trust created by Article __ of the will of the above-named decedent. [Describe the
interest and the real property the same as required for a deed.]
DATED: ________________, 20____.
/s/__________________________
Disclaimant
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, ___________________, being duly sworn, depose and say: I am the
disclaimant in the above-entitled disclaimer and the foregoing disclaimer of
residuary interest is true as I verily believe.
/s/__________________________
/s/__________________________
/s/__________________________
[address]
[telephone no.]
[fax no.]
case.” UTCR 2.010(7).
this form.
Form 8-6 Disclaimer of Intestate Succession or Devise
Download MS Word


____________________, )
) DISCLAIMER OF
Deceased. ) INTESTATE
) SUCCESSION OR DEVISE
The undersigned, pursuant to ORS 105.623–105.649, the Uniform

Disclaimer of Property Interests Act, hereby disclaims [specify whether the
disclaimer is the whole or only a part of the property and describe with
particularity the property being disclaimed].
DATED: ________________, 20____.
/s/__________________________
Disclaimant
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
I, ___________________, being duly sworn, depose and say: I am the
disclaimant in the above-entitled disclaimer and the foregoing disclaimer of
intestate succession or devise is true as I verily believe.
/s/__________________________
/s/__________________________
/s/__________________________
[address]
[telephone no.]
[fax no.]
case.” UTCR 2.010(7).
this form.
Form 8-7 Nontestamentary Disclaimer
Download MS Word
[Name and address of Keogh trustee]

Re: Account No. ____________________
Keogh Account of ___________________
Ladies or Gentlemen:
The undersigned is the adult child of [name of vested owner], and a
beneficiary of [name of vested owner’s] Keogh account with your institution.
Pursuant to ORS 105.623–105.649, the Uniform Disclaimer of Property
Interests Act, the undersigned hereby disclaims the entire interest in the above-
entitled account.
The event determining that the undersigned has an interest in the account is
the date of death of [name of vested owner], which is [date of death]. For your
information, a copy of [name of vested owner]’s certificate of death is attached.
This disclaimer is mailed by certified mail on a date that is less than nine
months after [operative disclaimer date].
This disclaimer is delivered to [deliveree] as the person having possession of
the disclaimed account. This disclaimer relates back for all purposes to [operative
date], and the account herein disclaimed shall devolve as if the undersigned
disclaimant had died before [date].
The undersigned has not accepted the above-described account or any
interest or benefit thereunder.
The undersigned hereby authorizes [lawyer name and address], attorney at
law, to represent the undersigned regarding effecting this disclaimer.
/s/__________________________
Disclaimant
[address]
[telephone no.]
[fax no.]
STATE OF __________ )
) ss.
County of __________ )
The above instrument was acknowledged by the above-named

_______________ to be [his / her] voluntary act.
/s/__________________________
COMMENT: See §§8.2-5(a) to 8.2-5(c), 8.3-2(b).

this form.
Chapter 9: CLAIMS AGAINST THE ESTATE
HELEN RIVES PRUITT, A.B., Wellesley College (1976); J.D., University of Oregon School of
Law (1980); member of the Oregon State Bar since 1980 and the Washington State Bar
Association since 1984; partner, Wyse Kadish, LLP, Portland.
The author acknowledges the research contributed by Nancy L. Mensch in updating this
chapter.
KATHARINE L. WEST, B.A., University of British Columbia (1993); J.D., Stanford University
Law School (1997); admitted to the State Bar of California in 1997 and the Oregon State
Bar in 2008; partner, Wyse Kadish, LLP, Portland.
§ 9.1 OVERVIEW
The presentation and collection of claims, as defined in the probate code, are
resolved in probate proceedings governed by ORS 115.001–115.335. The probate
claims process is designed to determine and resolve outstanding claims against a
decedent, so that the personal representative may promptly distribute the
decedent’s estate to the beneficiaries, free of claims. The personal representative
has a duty to notify potential claimants by publishing a notice of the probate
proceeding in a local newspaper to invite claims, to search for potential claimants,
to file proof of the search effort with the court, and to give individual notice to any
claimants discovered during the search process. ORS 115.003(2)–(4). See §§2.5-1
to 2.5-5; see also §5.2-8.
Some claims need not be presented, such as secured claims, claims covered
by liability insurance, actions pending against the decedent on the decedent’s date
of death, and certain equitable claims. See §§9.4-2(d), 9.4-6(a) to 9.4-6(f). Whether
and in what order claims will be paid is based on the availability of funds and the
statutory scheme of priorities. See §§9.5-8 to 9.5-9; Form 9-8.
The 1997 Legislative Assembly enacted ORS 112.272 to validate in
terrorem clauses. The statute defines the term in terrorem clause as “a provision in
a will that reduces or eliminates a devise to a devisee if the devisee contests the
will.” ORS 112.272(4). See §15.2-1(e). The statute also sets forth exceptions to the
general validation of in terrorem clauses. ORS 112.272(2)–(3). Lawyers should
review this statute and its exceptions, because beneficiaries occasionally use the
claim procedure to try to enhance their inheritances and avoid in terrorem clauses.
A personal representative’s failure to object to this stratagem may lead to a waiver
of the right to enforce the in terrorem clause.
The 2015 Legislature clarified that an in terrorem clause “reduces or
eliminates a devise to a devisee if the devisee contests the will in whole or in part.”
ORS 112.272(4) (emphasis added). The legislature also added two exceptions to
the general validity of in terrorem clauses. See ORS 112.272(2)(a)(C), (b). The
legislature added a new subparagraph clarifying that the statute “is not intended as
a complete codification of the law governing enforcement of an in terrorem clause”
and that the “common law governs enforcement of an in terrorem clause to the
extent the common law is not inconsistent” with the statute. ORS 112.272(5).
§ 9.2 CLAIM DEFINED

The Oregon probate code defines claim as follows: “‘Claim’ includes
liabilities of a decedent, whether arising in contract, in tort or otherwise.” ORS
111.005(7). The definition is further modified by the language of ORS 115.005(1),
which provides: “Claims against the estate of a decedent . . . shall be presented to
the personal representative.” In other words, a claim is the assertion by a creditor
who seeks to be paid a dollar amount from the general funds of the estate, for some
debt or obligation incurred during the decedent’s lifetime.
The creation of an obligation during the decedent’s lifetime is an essential
element of a claim. An obligation created during the administration of the estate is
not a claim, should not be presented as a claim, and may not be resolved using the
claims resolution procedure. An obligation that is not a claim should be resolved
through other means, such as a petition for instructions (see §9.5-5) or an objection
to an accounting (see §§11.7-1 to 11.7-3).
Cases decided before the enactment of the probate code in 1969 add to the
definition of claim, and are still valid. In Weill v. Clark’s Estate, 9 Or 387 (1881),
the decedent advanced purchase money to acquire business assets, which were
placed in a trust. The decedent assigned to one party the right to receive $4,500
from the trust as the trustee made distributions from the operation of the business.
In the event that the parties who had advanced the money had not been repaid by a
certain date, the trustee was to sell assets to repay the parties. After the decedent’s
death, the lender’s assignee filed a written claim to be repaid. The court held that
the obligation to pay the assignee arose from the agreement creating the trust.
Therefore, the decedent was not personally liable on the obligation. The assignee’s
cause of action, if any, was against the trust, and not against the decedent’s estate.
An action to enforce a contract to make a will is not a claim within the
meaning of ORS 115.005. Willbanks v. Goodwin, 70 Or App 425, 430–431, 689
P2d 1004 (1984), rev’d on other grounds, 300 Or 181 (1985). In the Willbanks
case, the Oregon Supreme Court allowed review, but did not reach this issue. The
appeal was resolved on the basis that the evidence of the alleged contract was not
clear and convincing, and no decision was reached on the claim issue. Willbanks v.
Goodwin, 300 Or 181, 183, 709 P2d 213 (1985). See §9.4-6(e). (For background
reading, see Dickie v. Dickie, 95 Or App 310, 769 P2d 225 (1989), in which the
plaintiff sought to enforce a contract to make a will while the decedent was still
alive.)
When the decedent is jointly liable on an obligation, the holder of the joint
obligation has a claim against the decedent’s estate. Nadstanek v. Trask, 130 Or
669, 685–686, 281 P 840 (1929).
Libel contained in a decedent’s will does not give rise to a claim for a tort
because it is absolutely privileged. Binder v. Oregon Bank, 284 Or 89, 91–92, 585
P2d 655 (1978), overruling Kleinschmidt v. Matthieu, 201 Or 406 (1954).
In a proper case, claims for personal services rendered to a decedent may be
allowed, although such claims are based on an implied promise by the decedent to
pay for those services. See §9.5-7.
If the lawyer for the personal representative represented the decedent before
death, the lawyer should file a claim for his or her fees in the same manner as other
claims are filed, because claims for attorney fees incurred during the decedent’s
lifetime must be filed as claims against the estate. Baumann v. Wright, 249 Or 212,
437 P2d 488 (1968). See In re Conduct of Weidner, 320 Or 336, 338 n 2, 883 P2d
1293 (1994). Attorney fees earned while representing the personal representative
during estate administration are not claims as defined in the probate code, because
they are not incurred by the decedent during his or her life. See §9.4-6(b).
ORS 111.005(7) was renumbered ORS 111.005(6) (claim defined).
As stated in the 2012 text, “[c]laims against the estate of a decedent . . . shall
be presented to the personal representative.” ORS 115.005(1). The 2017 Legislature
added clarifying provisions to the statute, including that “[f]iling a claim with the
court does not constitute presentation to the personal representative.” ORS
115.005(1)(a). See Supplement § 9.3-2 for additional provisions regarding the
manner of presenting claims.
An action to enforce a contract to make a will is not a claim within the
meaning of ORS 115.005. ORS 113.075.
ORS 112.238 allows an heir or a devisee to claim an interest in the
decedent’s intent that the writing was to be a partial or complete revocation of the
decedent’s will, or an addition to or an alteration of the decedent’s will.” Notice of
the filing must be given to “any personal representative appointed by the court, the
devisees named in any will admitted to probate and those persons identified in
ORS 113.035(5).” ORS 112.238(3). See Supplement § 8.2-6 (petition to admit
noncompliant writing as the decedent’s will or a revocation or alteration of the
will).
§ 9.3 PROCEDURE FOR MAKING A CLAIM

§ 9.3-1 Formalities of a Claim
The probate code provides relatively few formal requirements for making a
claim. The form of a claim is not critical; a letter is sufficient, although the best
practice is for the claimant to prepare a pleading that is clearly captioned as a
claim. The only requirements are that the claim:
(1) Be in writing (typing is not required);
(2) Describe the nature of the claim and the amount alleged to be due, if
ascertainable;
(3) State the claimant’s name and address; and
(4) State the name and address of the claimant’s lawyer, if any. ORS
115.025.
PRACTICE TIP: A claim should be presented in pleading form with the
probate heading and labeled as a claim in the caption. The claimant should
sign the claim. See Form 9-1.
A simple handwritten note or letter may be a claim. If the writing presented
to the personal representative meets the requirements for a claim, as described in
ORS 115.025, the personal representative must disallow it or it is deemed allowed.
ORS 115.135; Wilson v. Culbertson, 41 Or App 475, 477–478, 599 P2d 1163
(1979) (the delivery of a letter to the decedent’s business rather than to the
personal representative constituted presentment within the meaning of the probate
code; the personal representative’s denial of the claim on its merits waived any
objections to the formalities of the claim).
Any agreement, contract, note, or other writing that the claimant relies on
may, but need not, be presented with the claim. However, the claimant must
produce written evidence of the claim or account for its nonproduction, if the
personal representative demands it. ORS 115.045.
PRACTICE TIP: The personal representative should demand copies of
all documentation from the claimant immediately upon receiving a claim.
The personal representative or the court may waive any defect in the form of
a claim that is timely presented. ORS 115.035. However, the personal
representative may not waive a late filing. See ORS 115.005; §9.4-5.
If a claim is an account for which interest accrues, the claim should include a
claim for the interest. A claim in which interest does not accrue under its terms, but
that is not timely paid under the probate proceeding, may subsequently give rise to
a claim for statutory interest for the delayed payment period. See §9.5-10.
See Supplement § 9.5-1 (allowance and disallowance of a claim) for 2017
amendments to ORS 115.135.
PRACTICE TIP: The statute requires “presentation” of claims to the
personal representative; not filing with the court. Filing a claim with the
court does not constitute presentation to the personal representative. ORS
115.005(1)(a).
As mentioned in the 2012 text, a simple handwritten note or letter may be a
claim. If the writing presented to the personal representative meets the
requirements for a claim, as described in ORS 115.025, the personal representative
must disallow it within 60 days or it will be deemed allowed. ORS 115.135.
§ 9.3-2 Manner of Presenting Claims
All claims, except those of the personal representative as a creditor of the
decedent, must be presented to the personal representative at the address published
in the notice to interested persons. ORS 115.005(1). But see Wilson v. Culbertson,
41 Or App 475, 599 P2d 1163 (1979) (discussed in §9.3-1).
As stated in the 2012 text, claims against a decedent’s estate must “be
presented to the personal representative.” ORS 115.005(1). The 2017 Legislature
clarified that “[f]iling a claim with the court does not constitute presentation to the
personal representative.” ORS 115.005(1)(a).
Furthermore, the 2017 Legislature added that except as provided in ORS
115.005(1)(b), “a claim is presented to the personal representative when the claim
is mailed or personally delivered to the personal representative at” any of the
following addresses:
(1) the “address for the personal representative included in the petition for
appointment of the personal representative under ORS 113.035”;
(2) the “address provided for presentation of claims under ORS 115.003”;
or
(3) the “address provided for presentation of claims in the published
notice under ORS 113.155 or 113.225.”
ORS 115.005(1)(a).
In addition, the personal representative may (but is not required to) authorize
creditors to present claims “by electronic mail or facsimile communication to a
designated electronic mail address or facsimile number.” ORS 115.005(1)(b). If the
personal representative authorizes presentation of claims by electronic mail or
facsimile communication, a claim is presented when it is sent to the designated
electronic mail address or facsimile number, unless the sender receives notice that
the transmission was unsuccessful. ORS 115.005(1)(b). If a dispute arises between
the personal representative and the claimant over receipt of a claim by either such
method, the burden is on the claimant “to demonstrate that the electronic mail was
properly addressed and sent or that the facsimile communication was properly
addressed and successfully delivered or transmitted.” ORS 115.005(1)(b). See
UTCR chapter 21 (filing and service by electronic means).
PRACTICE TIP: It is good practice to present a copy of the claim to the
personal representative’s attorney. However, if the attorney’s address is not
given as an address for presentation of claims, the claim must also be
presented to the personal representative directly as specified in ORS
115.005(1)(a).
§ 9.3-3 Personal Representative’s Notice Requirements
A personal representative has an affirmative duty to give known or
reasonably discoverable creditors of a decedent actual notice of the probate
proceeding. The failure to give actual notice to known creditors violates the due
process clause of the United States Constitution. See Tulsa Prof’l Collection
Services, Inc. v. Pope, 485 US 478, 485, 108 S Ct 1340, 99 L Ed2d 565 (1988).
Due process standards require that if a personal representative knows of, or can
reasonably ascertain, the identity of creditors with claims against the decedent, the
personal representative must give those creditors actual notice. Published notice
will bar only the claims of persons with conjectural claims or the claims of
creditors who were genuinely unknown and not reasonably ascertainable by the
personal representative or the estate’s lawyer. Tulsa Prof’l Collection Services,
Inc., 485 US at 489–490.
A due diligence search means that the personal representative, during the
three months after his or her appointment (unless the court allows a longer time
period), must “make reasonably diligent efforts to investigate the financial records
and affairs of the decedent” and must “take such further actions as may be
reasonably necessary to ascertain the identity and address of each person who has
or asserts a claim against the estate.” ORS 115.003(1). See Form 9-2.
Within 30 days after the expiration of the three-month period specified for
the personal representative’s due-diligence search, the personal representative must
deliver or mail to each known potential claimant a notice of the claimant’s right to
assert a claim against the estate. In other words, a claimant who is known or could
reasonably be ascertained by the personal representative is entitled to personal
delivery or mail delivery of the notice required by ORS 115.003(3). ORS
115.003(2). (However, the personal representative does not need to give notice on
account of a claim that has already been presented, accepted, or paid in full, or on
account of a claim that is merely conjectural.) The information that must be
included in the personal representative’s notice to creditors is specified in ORS
115.003(3). See Form 9-3.
Within 60 days after the expiration of the period described for the due-
diligence search, the personal representative must file in the estate proceeding
proof of compliance with ORS 115.003(1)–(2). The proof must include a copy of
the form of any notice delivered or mailed, the date on which each notice was
delivered or mailed, and the name and address of the person to whom each notice
was delivered or mailed. ORS 115.003(4). See §2.5-5. See also Forms 9-4, 2-4.
PRACTICE TIP: At the beginning of probate, the lawyer should give the
personal representative the Creditor Search Checklist (see Form 9-2). The
lawyer should ask the personal representative to complete all of the
recommended searches within the first three months of commencing probate
and to compile a list of the names and addresses of all potential claimants.
At the end of the three-month period, the lawyer for the estate should send
out the 30-day notice letters to all of the potential creditors who have not
already filed claims in the estate. It is helpful to keep a chart showing all of
the potential creditors, the dates on which the notice letters were sent, and
the dates on which claims were received, so that a list of timely claims can
be maintained.
As mentioned in the 2012 text, a personal representative has an affirmative
duty to give known or reasonably discoverable creditors of a decedent actual notice
of the probate proceeding. ORS 115.003. The notice—which must be given within
30 days after the expiration of the three-month period specified for the personal
representative’s due-diligence search—must include the following information:
(a) the title of the court in which the estate proceeding is pending;
(b) the name of the decedent;
(c) the name of the personal representative and the address at which
claims are to be presented;
(d) a statement that claims against the estate not presented to the personal
representative within 45 days of the date of the notice may be barred.
ORS 115.003(3).
If the personal representative knows that the Oregon Health Authority
(OHA) or the Oregon Department of Human Services may have a claim against the
estate, the personal representative must send notice to such entity as provided in
ORS 115.003(2) to (3). The notice to interested parties that is required to be sent to
these entities pursuant to ORS 113.145 is not sufficient notice of the right to assert
a claim. State ex rel. Oregon Health Auth. v. Cue, 268 Or App 350, 356–361, 342
P3d 98 (2014), rev den, 357 Or 324 (2015) (reversing summary judgment in favor
of the personal representative, holding that the OHA, a known claimant, was
entitled to receive notice of the right to assert a claim under ORS 115.003(2) to (3),
and, in the absence of such notice, its claim presented after the four-month
creditor-claim period was not untimely).
§ 9.3-4 Time for Presenting Claims
All claims against the estate of a decedent (other than claims of the personal
representative as a creditor of the decedent, see §9.4-2(c)) must be presented to the
personal representative within the statute of limitations applicable to the claim, and
before the later of (1) four months after the date of first publication of the notice to
interested persons pursuant to ORS 113.155, or (2) 30 days after the personal
representative was required to mail or deliver a personalized notice to creditors
who are entitled to such notice pursuant to ORS 115.003. ORS 115.005(2).
ORS 115.005(3) provides that a claim presented after claims are barred
under ORS 115.005(2) may be paid from the estate only if:
(1) The claim is presented both before the expiration of the statute of
limitations applicable to the claim, and before the personal representative files the
final account, ORS 115.005(3)(a);
(2) It is presented by a person who did not receive the 30-day notice letter
and who is not an assignee of a person who received such notice, ORS
115.005(3)(b);
(3) The claim would be allowable but for the time that it was presented,
ORS 115.005(3)(c); and
(4) The estate has sufficient assets to pay the claim after payment of all
expenses that have priority over the claim under ORS 115.125, and after payment
of all previously presented claims, ORS 115.005(4) (see §§9.5-8 to 9.5-9; see also
Form 9-8).
NOTE: Before amendment in 2003, former ORS 115.005(4) barred
claims that were not presented within two years after the decedent’s death or
within the applicable limitations period, whichever was earlier. Currently,
the only time limitation applicable when the notice procedure has not been
followed is the applicable statute of limitations.
In Jones v. Hunt, 228 Or App 11, 206 P3d 1202 (2009), the court permitted a
creditor who had not received notice to reopen a probate two years after it had been
closed. The creditor had obtained a judgment against the decedent during the
decedent’s lifetime, and ultimately prevailed in collecting his claim against the
estate.
NOTE: For estates administered under the small-estate procedure set
forth in ORS 114.505–114.560, if a creditor did not receive a copy of the
small-estate affidavit in which the creditor was listed as a disputed creditor,
and the creditor has not been paid the full amount owed, the creditor may
file a petition for summary review of the administration of the estate within
two years after the filing of the affidavit under ORS 114.515. ORS 114.550.
Before being amended in 2003, the statute required that the petition had to
be filed within two years after the decedent’s death. For further discussion of
small-estate procedures, see §§5.3-1 to 5.3-8(d).
ORS 115.005 specifies two exceptions to the time limitations in the statute.
First, ORS 115.005(5)(a) provides that the time limitations do not affect or prevent
“[a]ny proceeding to enforce a mortgage, pledge or other lien upon property of the
estate, or to quiet title or reform any instrument with respect to title to property.”
This provision is consistent with ORS 115.065, which allows a secured creditor to
file a claim as an unsecured debt, or to rely entirely on the security without
presentation of a claim (see §9.4-2(d)).
Second, ORS 115.005(5)(b) provides that the time limitations do not affect
or prevent, “[t]o the limits of the insurance protection only, any proceeding to
establish liability of the decedent or the personal representative for which the
decedent or personal representative is protected by liability insurance at the time
the proceeding is commenced.” See §9.4-6(f).
Note the two conditions within the insurance exception:
(1) The exception applies only to the limits of insurance protection (and,
therefore, not to any uninsured portion of the claim); and
(2) The decedent or the personal representative must be protected by
liability insurance at the time the proceeding is commenced; “[i]f ‘claims made’
insurance coverage lapses before the time the proceeding is commenced, a timely
claim must be filed.” 1993 OREGON LEGISLATION 11-3 (Oregon CLE 1993).
ORS 115.325 cross-references ORS 115.005(5), making clear that a secured
claim or an insured claim need not be presented to the personal representative
before an action on the claim may be commenced.
A claim that is barred by the statute of limitations may not be allowed,
except on the written consent of all persons who would be adversely affected by
allowing it. ORS 115.205. A claim that is not barred by the statute of limitations on
the date of the decedent’s death is not barred by the statute of limitations thereafter,
until at least one year after the date of the decedent’s death. ORS 115.215.
In evaluating the timeliness of a claim, the personal representative must
consider both the procedural statute of limitations in the probate code, and the
statute of limitations applicable to the particular type of claim. See State ex rel
Dept. of H.S. v. Broyles, 228 Or App 264, 208 P3d 519 (2009), for a discussion of
the interplay of the two.
The 2017 Legislature amended ORS 115.005. Claims against the estate of a
decedent (other than claims of the personal representative as a creditor of the
decedent) must be presented to the personal representative within the statute of
limitations applicable to the claim, and before the later of (1) four months after the
date of first publication of the notice to interested persons pursuant to ORS
113.155 or (2) 45 days after the personal representative mails or delivers a
personalized notice to creditors who are entitled to such notice pursuant to ORS
115.003. ORS 115.005(2).
PRACTICE TIP: At the expiration of the three-month creditor-search
period of ORS 115.003, the lawyer should review the status of claims to
determine whether any potential claimants have been identified that have not
submitted a claim. The four-month time limit to present claims does not
apply to known claimants to whom the personal representative fails to
deliver notice of the right to assert a claim under ORS 115.003.
§ 9.4 TYPES OF CLAIMS
§ 9.4-1 Who May Make a Claim
The probate code does not define the word claimant. Any person or entity
that has a claim (as defined in ORS 111.005(7)) may file a claim against the estate.
The creation of an obligation during the decedent’s lifetime is an essential element
of a claim. See §9.2.
§ 9.4-2 Claims That Must Be Presented
All claims must be presented, except certain causes of action that might be
thought of as claims, but are nevertheless exceptions to the rule. See §§9.4-6(a) to
9.4-6(f).
A secured creditor that intends to rely solely on the security need not present
a claim. ORS 115.065(1). See §9.4-2(d).
See Supplement § 9.4-2(d) (secured claims) regarding 2017 amendments to
ORS 115.065.
§ 9.4-2(b) Contingent and Unliquidated Debts
Contingent and unliquidated debts must be presented in the same manner as
any other claim. ORS 115.085.
If the contingent or unliquidated debt becomes absolute or liquidated before
the distribution of the estate, the debt must be paid in the same manner as any other
claim on an absolute or liquidated debt. ORS 115.085(2).
If the debt does not become absolute or liquidated before the distribution of
the estate, the court has broad discretion to provide for payment of the claim:
(1) The creditor and the personal representative may determine the value
of the debt by agreement, arbitration, or compromise, and, if the court approves,
the personal representative may pay the claim in the same manner as a claim on an
absolute or liquidated debt. ORS 115.085(3)(a).
(2) The court may order the personal representative to distribute the
estate, but to retain sufficient estate funds to pay the debt if and when it becomes
absolute or liquidated. If a debt does not become liquidated or absolute within two
years after distribution of the remainder of the estate, the estate must be closed and
the retained assets must be distributed. ORS 115.085(3)(b). If, after distribution,
the debt becomes absolute or liquidated, the distributees remain liable for the claim
to the extent of the assets they received from the estate. ORS 115.085(3)(d).
(3) The court may order the personal representative to distribute the entire
estate as though the claim did not exist, but the distributees remain liable to the
extent that they received assets. ORS 115.085(3)(c)–(d).
The distributees may arrange for payment of the claim by the methods
described in ORS 115.085(3)(d).
§ 9.4-2(c) Personal Representative’s Claims
A claim of the personal representative, as a creditor, is not presented in the
same manner as other claims. The personal representative’s claim must be filed
with the court and must be approved by the court before payment. ORS 115.105.
This approval is usually sought at the next accounting.
Upon the application of the personal representative or of any interested
person, the court may hear the claim either at the time of the hearing on the final
account, or before that time on notice to interested persons. ORS 115.105.
No provision is made for a separate action or an appeal by the personal
representative from an adverse determination of his or her claim by the court. The
court’s determination is apparently final. See ORS 115.105, 115.145.
§ 9.4-2(d) Secured Claims
A secured creditor may either (1) rely entirely on the security without
presenting his or her claim, or (2) surrender the security and present a claim for the
unsecured debt. ORS 115.065(1).
PRACTICE TIP: When the debt exceeds the value of the security, the
secured creditor should present the claim if the objective is to recover more
than the value of the security. ORS 115.065; see Meissner v. Murphy, 58 Or
App 174, 179, 647 P2d 972 (1982) (“by exercising the remedies reserved
under her security before filing a claim [against the decedent’s estate],
plaintiff elected to rely solely on her security and, therefore, she is not
entitled to recover a deficiency judgment”).
If a secured claim is presented, the security must be described. If the security
is an encumbrance that is recorded, it is sufficient to describe the encumbrance by
reference to the book, page, date, and place of its recording. ORS 115.065(2).
If the secured creditor does not surrender the security, payment to the
creditor is based on (1) the amount of the claim allowed minus the amount realized
on the security (if the creditor exhausts the security), or (2) the amount of the claim
allowed minus the agreed value of the security (if the creditor does not exhaust the
security). ORS 115.065(5).
Because ORS 115.145 gives all creditors the right to either request a
summary determination of the claim by the probate court or to file a separate
action in a court of competent jurisdiction, a secured creditor has the same rights of
review as other creditors whose claims are disallowed. See UTCR 9.070.
The personal representative may convey the security to the secured creditor
in full or partial satisfaction of the claim. ORS 115.065(6).
The 2017 Legislature amended ORS 115.065. Prior law required a creditor
to elect between relying solely on the security or surrendering the security and
presenting a claim. Under current law, a secured creditor may file a claim to
preserve its right to recover a deficiency against the estate, without waiving the
creditor’s security interest. ORS 115.065(1).
If a secured claim is presented, the claimant must “describe the security
generally.” ORS 115.065(2) (emphasis added). If the security is an encumbrance
that is recorded, it is sufficient to describe the encumbrance by reference to the
book and page or document number, date and place of recording or filing.” ORS
115.065(2).
§ 9.4-3 Judgment Debts
A creditor may collect on a judgment debt obtained before the decedent’s
death only by making a claim against the estate under the procedures described in
ORS chapter 115 or under the small-estate procedures prescribed by ORS
114.505–114.560 (see §5.3-7). ORS 18.312. The creditor must attach a copy of the
judgment to its claim. ORS 115.070; see ORS 115.005.
The personal representative may disallow such a claim only if (1) the
judgment was void or voidable, (2) the judgment could have been set aside on the
date of the decedent’s death, or (3) the claim was not presented within the time
required by ORS 115.005. ORS 115.070. If the judgment was a lien against the
decedent’s property, the personal representative should treat it as a secured debt. In
all other cases, however, a judgment debt has the same priority under ORS 115.125
as it would have had were the debt not reduced to judgment. ORS 115.070.
In 2007, the Oregon Legislature amended ORS 18.312 to allow secured
creditors that obtain judgments of foreclosure to foreclose on the property even
after the decedent’s death. If the proceeds from the sale of the property are not
sufficient to satisfy the debt, the creditor may make a claim against the estate to
recover the deficiency. ORS 18.312(2).
If a judgment was entered before the decedent’s death but was not a lien
against the decedent’s property, then the judgment creditor may collect on the
judgment debt obtained before the decedent’s death only by making a claim
against the estate under the procedures described in ORS chapter 115 or under the
small-estate procedures prescribed by ORS 114.505 to 114.560 (see § 5.3-7). ORS
18.312. The creditor must attach a copy of the judgment to its claim. ORS 115.070.
See ORS 115.005 (time limitations on presentation of claims).
As a general rule, a judgment creditor may not execute on the decedent’s
property while it remains in the estate; however, execution may commence once
the property ceases to be an asset of the estate (e.g., after distribution to a
beneficiary). ORS 18.312(1), (3). An exception is provided in ORS 18.312(2),
which allows execution against the estate pursuant to a judgment of foreclosure
and sale.
§ 9.4-4 Debts Not Due
§ 9.4-4(a) Presenting Claims on Debts Not Due
A decedent’s obligations may not be due as of the date of the decedent’s
death, and may not be due until long after the time anticipated to complete the
administration of the estate. The presentation of claims on obligations not yet due
is governed by ORS 115.075 as follows:
(1) Claims, whether or not secured, may be presented as claims on debts
due;
(2) If the claim is allowed, allowance must be “in an amount equal to the
value of the debt on the date of allowance”;
(3) The creditor may withdraw the claim without prejudice to other
remedies; and
(4) Payment of the amount allowed discharges the debt and the security,
if any.
“The probate code contemplates a quick and final settlement of estates, with
claimants being paid off immediately. See ORS 115.075 (claims for debts not yet
due may be presented and allowed at their present value, facilitating settling the
estate before future debts become due).” Thomas By & Through Petersen v. State
By & Through Senior & Disabled Services Div., 319 Or 520, 527, 878 P2d 1081
(1994).
§ 9.4-4(b) Secured Debts Not Currently Due
A creditor with a secured claim against an estate for a debt not yet due must
decide whether to present a claim against the estate or to rely on the security. See
ORS 115.065. See also §9.4-4(a). The creditor’s decision will be based generally
on what the creditor perceives as the prospects for recovering the entire debt if the
security is exhausted. See §9.4-2(d). Other factors that may influence the creditor’s
decision include the value of the decedent’s estate, the existence of co-obligors,
and the feasibility of accepting less than the face value of the debt.
A creditor with a secured claim against an estate for a debt not yet due may
present a claim against the estate or rely on the security. See ORS 115.065. See
Supplement § 9.4-2(d) (secured claims) regarding 2017 amendments to ORS
115.065.
§ 9.4-4(c) Allowance of Claim for Debt Not Yet Due
If allowed, a creditor’s claim against an estate for a debt not due entitles the
claimant to “an amount equal to the value of the debt on the date of allowance.”
ORS 115.075. Presumably, this means a discount to the present value of the debt.
§ 9.4-5 Waiver of Defect
Under ORS 115.035, the personal representative or the court may waive a
defect in the form of a claim timely presented, but may not waive the presentment
of a claim or the late presentment of a claim. Claims not presented as required by
statute are barred from payment. ORS 115.005(2)–(4). See §9.3-4.
§ 9.4-6 Rights Not Requiring Regular Presentment
There are exceptions to the procedure for presenting claims against the estate
of a decedent. Certain obligations incurred by the decedent before death (such as
income taxes and insured liability claims) and other rights do not require
presenting a claim. See §§9.4-6(b) to 9.4-6(f).
§ 9.4-6(b) Expenses of Administration
Expenses or liabilities that the personal representative incurs during the
administration of the decedent’s estate are not claims against the estate, and should
not be presented as claims or processed under the claim resolution procedure; they
are instead obligations of the personal representative. Expenses that are properly
incurred for the benefit of the estate may be reimbursed to the personal
representative out of the estate assets. The order of payment of expenses and
claims is set forth in ORS 115.125(1). See §§9.5-8 to 9.5-9; Form 9-8.
A personal representative may be reimbursed for expenditures in connection
with the administration of the estate and is entitled to a preference, even though
allowing such expenses might not leave sufficient funds to pay the decedent’s
creditors. Expenses of estate administration are the second level of priority after
support for the decedent’s spouse and children. ORS 115.125(1).
Similarly, compensation for the personal representative’s services and fees
for his or her lawyer are not claims against the estate that must be presented,
although these fees must be court-approved before payment. See ORS 116.173
(personal representative’s fees) and ORS 116.183 (attorney fees). Claims for
attorney fees incurred before the decedent’s death may be barred if not timely
presented under the claims procedures. See §9.3-4.
A personal representative is not personally liable on contracts that he or she
properly enters into in his or her fiduciary capacity “unless the personal
representative expressly agrees to be personally liable.” ORS 114.405(2). Nor is
the personal representative personally liable for torts committed in the course of
administration “unless the personal representative is personally at fault.” ORS
114.405(3). Tort and contract obligations arising during the administration of the
estate “may be allowed against the estate whether or not the personal
representative is personally liable therefor.” ORS 114.405(4).
In Widing, Matter of Estate of, 149 Or App 451, 453, 944 P2d 969 (1997),
two estate beneficiaries lent money to the personal representatives of the estate “to
pay estate taxes and to take care of other administrative expenses.” The trial court
held that the loans were obligations of the estate, but that they did not have the
priority of administrative expenses, leaving the beneficiaries in the same status as
general creditors of the estate, although the debt was created after the decedent’s
death and thus did not constitute a claim.
As stated in the 2012 text, expenses of estate administration are the second
level of priority. ORS 115.125(1)(b). The 2017 Legislature added language to ORS
115.125(1)(b) so that it now reads as follows: “Expenses of administration of the
estate, and subject to preferences established under federal law, expenses of
administration of any protective proceeding in which the decedent was the
protected person authorized by the court in the protective proceeding.” ORS
115.125(1)(b) (emphasis added). See Supp Form 9-8 (priority of payment of
expenses and claims).
§ 9.4-6(c) Tax Claims
In general, because of lien statutes, neither the United States nor the state of
Oregon needs to file claims for taxes that are due. See 26 USC §6324; ORS
118.210 et seq. If the personal representative fails to pay taxes, he or she remains
personally liable in most instances, and the distributee remains liable to the extent
of the value of the property transferred.
The procedures for discharging the personal representative from personal
liability for taxes are found in 26 USC §2204 and ORS 316.387. See IRS Form
5495 (Request for Discharge from Personal Liability Under IRC Section 6905),
available at www.irs.gov/pub/irs-pdf/f5495.pdf, and Oregon Department of
Revenue Form 150-101-151, available at
www.oregon.gov/dor/forms/Pages/default.aspx.
IRS Form 5495 (Request for Discharge From Personal Liability Under
Internal Revenue Code Section 2204 or 6905) is available at www.irs.gov/forms-
instructions (search by form number).
Oregon Form OR-DECD-TAX (Final Tax and Discharge of a Decedent’s
Estate) is available at www.oregon.gov/DOR/forms/Pages/default.aspx (search by
form number).
§ 9.4-6(d) Actions Pending Against Decedent
§ 9.4-6(d)(1) Substitution for a Decedent in Trial Court
If an action against the decedent was commenced before or pending on the
date of the decedent’s death, the plaintiff in that action may move the court to
substitute the personal representative for the deceased party at any time within one
year after the defendant’s death, unless (1) the personal representative mails or
delivers notice, including the information required by ORS 115.003(3), to the
claimant or the claimant’s lawyer; and (2) the claimant or his or her lawyer fails to
move the court to substitute the personal representative within 30 days of mailing
or delivery of the notice. ORCP 34 B(2). No claim need be presented for a case
already in litigation. ORS 115.315. See Hitchman v. Burkey, 95 Or App 508, 512,
769 P2d 799 (1989) (the plaintiffs did not present their claim against the estate
when they brought suit against the defendant during the defendant’s lifetime).
§ 9.4-6(d)(2) Substitution for a Decedent in Appellate Court
Substitution for a deceased party in an appeal is governed by ORAP 8.05(1),
which adopts ORCP 34 by reference. In addition, ORAP 8.05(2) provides
specifically for the dismissal of an appellate proceeding when a criminal defendant
dies before the appeal process is completed.
§ 9.4-6(e) Certain Equitable Claims Need Not Be Presented
In general, early Oregon cases held that all equitable claims against a
decedent, like all legal claims, must be presented to the decedent’s personal
representative, except that no claim need be filed (1) by a beneficiary seeking to
impose a trust on the deceased’s assets, (2) by a party demanding a conveyance
under a land sale contract or the return of specific property under claim of
ownership, or (3) to protect a security interest that is validly filed. Harris v.
Craven, 162 Or 1, 18, 91 P2d 302 (1939); Dunham v. Siglin, 39 Or 291, 64 P 661
(1901).
In ORS 115.325, the probate code clearly directs that no action may be
commenced against the personal representative unless the claim has been presented
to and disallowed by the personal representative (except as provided in ORS
115.004, 115.005(5), and 115.065). Notwithstanding this statute, however, a body
of case law decided after the enactment of the probate code holds that certain
equitable claims need not be the subject of the claim-and-disallowance procedures
before the commencement of equitable procedures.
In Willbanks v. Goodwin, 70 Or App 425, 689 P2d 1004 (1984), rev’d on
other grounds, 300 Or 181 (1985), the plaintiff brought an action for the specific
performance of an oral contract to make a will. The trial court granted specific
performance and imposed a constructive trust on the assets that the plaintiff
claimed were his by reason of a breach of the contract to make a will. The court of
appeals held that the presentation of a claim against the estate was not required.
Willbanks, 70 Or App at 431. The Oregon Supreme Court reversed, but declined to
rule on whether the plaintiff had to make a claim against the estate before bringing
the equitable action. Willbanks v. Goodwin, 300 Or 181, 183, 709 P2d 213 (1985).
COMMENT: The supreme court’s analysis is troublesome. Whether the
plaintiff had to file a claim with the personal representative in compliance
with ORS 115.325 appears to be a threshold question. The supreme court
should have ruled on that issue before analyzing the quantum of proof, much
less the sufficiency of proof on the specific facts of this case.
In Wilkinson v. Higgins, 117 Or App 436, 844 P2d 266 (1992), (opinion
amended and reinstated 1993), the plaintiff (the decedent’s girlfriend) sued the
defendant (the decedent’s wife) for her partnership interest in a horse farm. The
court of appeals held:
Plaintiff’s claim to an interest in the land, to the extent that it is based on her
partnership in the business, is not a claim against [the decedent’s] estate, because
her rights in specific partnership property depend on her status as a partner, not on
[the decedent’s] being deceased. ORS 68.420. Declaring a partner’s rights in
partnership property is not within the scope of a personal representative’s official
duties.
Wilkinson, 117 Or App at 440.
§ 9.4-6(f) Liability Claims Covered by Decedent’s Insurance
To the limits of insurance protection only, the time limitations in ORS
115.005 regarding the presentation of claims against the estate of a decedent do not
affect “any proceeding to establish liability of the decedent or the personal
representative for which the decedent or personal representative is protected by
liability insurance at the time the proceeding is commenced.” ORS 115.005(5)(b).
The general statutes of limitations still run. Some tolling takes place under ORS
115.215, which extends the statute of limitations “until at least one year after the
date of death,” if the claim is not barred by the statute at the time of the decedent’s
death. See §9.3-4.
§ 9.5 DISPOSITION OF CLAIMS

§ 9.5-1 Allowance and Disallowance of a Claim
After presenting a claim, the claimant need do nothing unless the personal
representative disallows the claim (in whole or in part). A claim is deemed allowed
unless it is disallowed within 60 days of its presentment. ORS 115.135(1).
The personal representative disallows a claim by mailing or delivering a
notice of disallowance to the claimant and the claimant’s lawyer (if any) within 60
days after presentment of the claim. ORS 115.135(1). The claim and a copy of the
notice of disallowance must be filed in the estate proceedings. ORS 115.135(1). A
notice of disallowance must “inform the claimant that the claim has been
disallowed in whole or in part and, to the extent disallowed, will be barred unless
the claimant proceeds as provided in ORS 115.145.” ORS 115.135(2). See Form 9-
5.
Before filing the final account, the personal representative may rescind the
allowance of an unpaid claim because of error, misinformation, or excusable
neglect. ORS 115.135(3). See §9.5-2.
The 2017 Legislature amended ORS 115.135. A notice of disallowance of a
claim must now “state the reason for the disallowance” as well as “inform the
claimant that the claim has been disallowed in whole or in part and, to the extent
disallowed, will be barred unless the claimant proceeds as provided in ORS
115.145.” ORS 115.135(2). The personal representative is not limited to the stated
reasons for disallowance, and may assert other defenses to the claim. ORS
115.135(2) (the personal representative’s stated reason for disallowance “is not an
admission” and “does not preclude the assertion of other defenses to the claim”).
Allowed claims are paid in accordance with the priorities established in ORS
115.115 and 115.125, to the extent of available assets. ORS 115.135(4).
§ 9.5-2 Error in Allowance of Claim
Unpaid claims against an estate allowed by the personal representative
because of error, misinformation, or excusable neglect may be rescinded, if the
personal representative mails or delivers notice of rescission to the claimant and
the claimant’s lawyer, if any, not less than 30 days before filing the final account.
ORS 115.135(3). The form of rescission must contain “the same information as a
notice of disallowance.” ORS 115.135(3); see §9.5-1.
PRACTICE TIP: Although the statute does not require the personal
representative to state the facts that justify entitlement to the rescission, the
personal representative’s petition should recite these facts in the body of the
petition or in supporting affidavits.
§ 9.5-3 Procedure After Disallowance of Claim
A claimant must act within 30 days after the personal representative has
mailed or delivered the notice of disallowance, or the claim is barred. ORS
115.145(2). Within the 30-day period, the claimant must either:
(1) File a request for a summary determination of the claim in the probate
court, with proof of service of a copy of the request on the personal representative
or the personal representative’s lawyer, ORS 115.145(1)(a) (see Form 9-6; §9.5-6;
UTCR 9.070); or
(2) Commence a separate action in a court of appropriate jurisdiction,
which will be tried as any other action, ORS 115.145(1)(b).
See §9.5-6, regarding the summary determination of a claim.
If the claimant requests a summary determination, the personal
representative may require the claimant to prove the claim in a separate action.
ORS 115.155. Within 30 days after being served with a copy of the request for a
summary determination, the personal representative “may notify the claimant in
writing that if the claimant desires to prove the claim the claimant must commence
a separate action against the personal representative on the claim within 60 days
after the date of receipt of such notice.” ORS 115.155. See Form 9-7. If the
claimant fails to commence a separate action within the 60-day period, “the claim,
to the extent disallowed by the personal representative, is barred.” ORS 115.155.
Any interested person may be heard in a proceeding for the summary
determination of a claim and may intervene in a separate action against the
personal representative on the claim. ORS 115.175.
The claimant may testify in the summary-determination proceeding or the
separate action, but the claimant must offer competent evidence, other than the
claimant’s own testimony, to prove the claim. ORS 115.195(1). See §§9.5-6 and
9.5-7, regarding the evidence necessary for the claimant to meet the burden of
proof. However, claims for the recovery of public assistance, as defined by ORS
411.010, may be allowed based on evidence in the form of documents from the
Department of Human Services or the Oregon Health Authority. ORS 115.195(2).
In State ex rel. Dept. of Human Res. v. Payne, 157 Or App 612, 617–618,
970 P2d 266 (1998), superseded by statute as stated in State ex rel. Dept. of
Human Resources v. Payne, 157 Or App 612 (1998), the court of appeals expressly
held that the state was not subject to the 30-day time limitation for filing after the
disallowance of a claim. In direct response to this decision, the legislature enacted
ORS 115.008, which provides as follows:
Notwithstanding ORS 12.250, and except as otherwise specifically
provided in this chapter, all statutes of limitation and other time limitations
imposed under this chapter apply to actions brought in the name of the state, or
brought in the name of any county or public corporation, and to actions brought
for the benefit of the state or for the benefit of any county or public corporation.
See State ex rel Dept. of H.S., 228 Or App 264, 208 P3d 519 (2009) (holding
that ORS 115.008 caused the four-month limitations period under ORS 115.005,
and all other time limitations within the probate code, to apply to the state’s
recovery for medical expenses paid for the benefit of the decedent, but did not
incorporate any other statutory limitations that would bar state claims).
Summary-determination proceedings are limited to resolving “claims
disallowed in whole or in part by the personal representative,” and may not be used
to assert a counterclaim against the claimant. In re Estate of Ramey, 260 Or App
652, 658–64, 320 P3d 586 (2014).
The claimant may testify in a summary-determination proceeding or in a
separate action, but the claimant must offer “competent, satisfactory evidence,”
other than the claimant’s own testimony, to prove the claim. ORS 115.195(1).
However, claims for the recovery of public assistance (as defined by ORS
411.010) and claims for the recovery of medical assistance (as defined by ORS
414.025) “may be allowed based on evidence in the form of documents from the
Department of Human Services or the Oregon Health Authority that contain
information relating to that public assistance or medical assistance.” ORS
115.195(2). Examples of such information include “the date that services were
provided to the decedent, the classification of those services, the name of the
provider or the provider’s identification number, and the amount of the public
assistance or medical assistance payment made for the services.” ORS 115.195(2).
§ 9.5-4 Compromise of Claims
The personal representative has the power to compromise, settle, and satisfy
claims against the estate. ORS 114.305(4), (25), 115.095. The personal
representative may do so without prior court approval. ORS 114.275.
PRACTICE TIP: The personal representative should not pay or finally
settle a compromised claim without considering whether the settlement
should have court approval. The personal representative should consider
giving notice of the proposed settlement to persons who would be affected
by it.
A personal representative may allow a claim that is insufficient in form as
long as it is timely presented. ORS 115.035. However, a personal representative
may not allow a claim that is not timely filed or that is barred by the statute of
limitations, without the consent of all of the persons who would be adversely
affected by allowance of the claim. ORS 115.205. See §9.3-4.
PRACTICE TIP: When the estate property may be insufficient to pay all
claimants in full, or when opposition to payment is anticipated, the personal
representative should neither pay nor finally settle compromised claims until
(1) the final account reporting the settlement proposal is approved by the
court, or (2) the notice to interested persons is given and court approval is
obtained.
§ 9.5-5 Applying for Court Instructions
The personal representative or any interested person may petition the
probate court to approve a settlement, interpret the language of the will that may be
the basis for a dispute, or give him or her instructions on how to proceed. ORS
114.275. See Barker v. Barker, 65 Or App 635, 672 P2d 370 (1983).
PRACTICE TIP: A court order under ORS 114.275 can create a safe
harbor by giving instructions concerning competing positions or
interpretations. If the personal representative’s good-faith resolution of a
dispute is questioned by an heir, a devisee, or a creditor, and problems are
anticipated, or if the issue is novel, the personal representative should
petition the court for instructions.
CAVEAT: ORS 114.275 seems to allow some discretion regarding the
notice required to be given to those affected by the proposed action, but if
the proposed action would have an impact on the property rights of a party,
the personal representative must give notice to the persons affected. The
same due-process requirements that led the 1989 Legislature to change the
statute regarding notice to claimants are applicable here. See §9.3-4. There
probably never can be too much notice. The failure to give notice of a
proposed action can easily be the basis for review and reversal. See §9.3-3.
As an alternative to a petition for instructions, the probate court’s
jurisdiction includes the “full, legal and equitable powers to make declaratory
judgments, as provided in ORS 28.010 to 28.160.” ORS 111.095(2). See ORS
28.040 (declaratory judgments in trusts and estates).
As a result of 2016 amendments to ORS 111.095, the last paragraph of the
2012 text should read as follows:
As an alternative to a petition for instructions, the probate court’s
jurisdiction includes the “full, legal and equitable powers to make declaratory
judgments, as provided in ORS 28.010 to 28.160, in all matters involved in the
administration of an estate, including matters pertaining to the title of real property
and ownership of personal property, the determination of heirship and the
distribution of the estate.” ORS 111.095(3). See ORS 28.040 (declaratory
judgments in trusts and estates).
§ 9.5-6 Summary Determination of a Claim
In a proceeding for a summary determination of a claim disallowed, in
whole or in part, by the personal representative, the personal representative must
“move or plead to the claim as though the claim were a complaint filed in an
action.” ORS 115.165(1). Although the pleadings are the same as in a separate
action against the personal representative on the claim, the probate court hears the
matter without a jury and determines the claim “in a summary manner.” ORS
115.165(1)–(2). The court makes an order allowing or disallowing the claim, in
whole or in part. No appeal may be taken from such an order. ORS 115.165(3).
Any interested person may be heard in a proceeding for the summary
determination of a claim. ORS 115.175.
ORS 115.195(1) provides that “[a] claim that has been disallowed by the
personal representative may not be allowed by any court except upon some
competent, satisfactory evidence other than the testimony of the claimant.” This
means that a claimant must prove a prima facie case with evidence other than the
claimant’s own testimony; only then does the case go to the factfinder. See
Johnson v. Ranes, 67 Or App 667, 680 P2d 688 (1984) (discussed in §9.5-7), for
an analysis of the quality of evidence necessary for the claimant to meet the burden
of proof.
The claimant is a competent witness to testify on his or her behalf, but the
claimant’s testimony alone is not sufficient to establish a claim. Goltra v. Penland,
45 Or 254, 262–265, 77 P 129 (1904); Uhler v. Harbaugh, 110 Or 609, 614–617,
224 P 89 (1924); see In re Johnson’s Estate, 178 Or 214, 220–221, 164 P2d 886
(1945). Competent evidence refers to admissible evidence and not to the weight of
the evidence. Bonnett v. Keiffer, 115 Or 244, 249, 237 P 1 (1925). See In re Kries’
Estate, 182 Or 311, 318–321, 187 P2d 670 (1947). The claimant’s testimony alone,
however, may establish presentment and disallowance, nonpayment, and the
reasonable value of a claim. Goltra, 45 Or at 262–265; Littlepage v. Sec. Sav. &
Trust Co., 137 Or 559, 560, 3 P2d 752 (1931).
The testimony of an employee of a corporate claimant is treated as other
testimony, not as the testimony of the corporation. Mason, Ehrman & Co. v. Lewis,
131 Or 242, 260, 282 P 772 (1929). A bookkeeping entry made in the regular
course of business during the decedent’s lifetime is also treated as other testimony.
In re Hattrem’s Estate, 170 Or 613, 633, 135 P2d 777 (1943).
In a proceeding for the summary determination of a claim that was
disallowed (in whole or in part), the personal representative must “move or plead
to the claim as though the claim were a complaint filed in an action” (ORS
115.165(1)); however, the personal representative may not assert counterclaims
against the claimant (In re Estate of Ramey, 260 Or App 652, 320 P3d 586 (2014)).
If the personal representative has a counterclaim against the claimant, he or she
should require the claimant to file a separate action under ORS 115.155.
§ 9.5-7 Claims for Services
Litigation in probate proceedings often involves a claim for the value of
personal services rendered to the decedent before his or her death. In many cases,
no evidence is in writing, and most of the proof of the entitlement consists of the
claimant’s testimony. See generally chapter 15.
PRACTICE TIP: These claims are troublesome and difficult to evaluate,
and predicting the outcome is problematic. Invariably, most of the evidence
comes from the claimant and the claimant’s family, and the court and
counsel must struggle with whether services were provided gratuitously, and
whether only after the decedent’s death was the opportunity for money
seized upon.
As discussed in §9.5-6, ORS 115.195(1) is controlling and provides that “[a]
claim that has been disallowed by the personal representative may not be allowed
by any court except upon some competent, satisfactory evidence other than the
testimony of the claimant.”
Three cases are instructive on this recurring situation. In Johnson v. Ranes,
67 Or App 667, 680 P2d 688 (1984), the plaintiff brought a claim against the
decedent’s personal representative for services provided to the decedent before the
decedent’s death. The court of appeals stated that the statute requires a claimant to
“establish a prima facie case with evidence other than [the claimant’s] own
testimony before the case can be submitted to the jury.” Johnson, 67 Or App at
672. A prima facie case for services to a decedent requires (1) that the claimant
provided valuable services to the decedent; (2) that the decedent either requested
the services or acquiesced in their receipt, knowing that they were not provided
gratuitously; (3) that there was no express contract regarding payment for the
services; and (4) that proof be presented as to the reasonable value of the services
provided to the decedent. Johnson, 67 Or App at 672.
In Kohler v. Armstrong, 92 Or App 326, 328–330, 758 P2d 407 (1988), the
plaintiff was awarded the reasonable value of her services for assisting the
decedent during the final year of the decedent’s life. The proof in Kohler was
weaker than in the Johnson case. The plaintiff in the Kohler case was a niece of the
decedent. Although the defendant pointed out that services rendered to a close
relative are presumed to be gratuitous, the court stated that every case depends on
its own facts. Kohler, 92 Or App at 329. The court of appeals found that the
plaintiff overcame that presumption by the plaintiff’s own testimony and the
testimony of her daughters. The court also noted that the plaintiff’s usual
occupation was in-home care for the elderly, for which she was usually paid.
In Jones v. Hunt, 228 Or App 11, 206 P3d 1202 (2009), the father of the
decedent claimed that he agreed to provide room, board, transportation, and
medical care to the decedent in exchange for the payment of money by the
decedent sometime in the future. The agreement was not in writing, and the court
found no adequate testimony to support an oral understanding. Furthermore, the
father could not produce written documentation of the amount of his actual
expenses incurred under the agreement, or the value of the services that he
provided under it. The court of appeals held that the father failed to provide
sufficient evidence to support his claim.
§ 9.5-8 Priority of Claims
When the estate assets are not sufficient to pay all of the claims and
expenses in full, the personal representative must pay them in accordance with
statutory priorities. ORS 115.125. See Form 9-8. Claims of any class are prorated if
funds are insufficient to pay all of the claims of that class. ORS 115.125(2).
A secured creditor whose lien attaches before the death of the decedent can
claim the secured property on a “first in time, first in right” basis, rather than by
accepting a pro rata distribution under ORS 115.125(2) to the extent of the value of
secured property. Heiller v. Nelson, 127 Or App 189, 192, 872 P2d 26 (1994); see
ORS 115.070 (if a “judgment was a lien against the property of the estate on the
date of the decedent’s death it shall be treated as a claim on a debt due for which
the creditor holds security”). If the claim exceeds the value of the secured property,
the balance of the claim will be prorated by class in accordance with ORS 115.125.
§ 9.5-9 Payment of Claims
The payment of claims is governed by ORS 115.115. See Form 9-8 for a
checklist on priority for payment of claims and expenses.
Claims are paid only after “all known claims are barred under ORS
115.005(2)” (i.e., on the expiration of four months from the date of the publication
of notices to interested persons under ORS 115.005(2)(a), or 30 days after the
notice required under ORS 115.003(2)). ORS 115.115. See §9.3-4 (time for
presenting claims). If a claim is allowed but not paid within six months, the
creditor may apply to the court for an order compelling payment of the claim to the
extent that funds of the estate are available. ORS 115.185.
The personal representative may not allow and pay a claim that is barred by
the statute of limitations, without the written consent of all of the persons who
would be adversely affected by allowance of the claim. ORS 115.205.
The priority order for the payment of claims is found in ORS 115.125. See
§9.5-8; Form 9-8. Under ORS 115.125(1), child-support arrearages have priority
over general creditors and certain state-reimbursement claims in a probate case in
which assets are insufficient to pay all of the claims. See ORS 114.085 (setting
apart the entire estate for the support of the surviving spouse and dependent
children); ORS 114.065 (priorities of payment for an insolvent or partially
insolvent estate). See also §§6.2-1 to 6.2-4 (support of a surviving spouse and
children); §9.3-4 (claims filed after four-month period).
See Supplement § 9.3-4 (time for presenting claims) regarding 2017
amendments to ORS 115.005(2) (the reference to 30 days in the statute was
changed to 45 days).
Claims are paid in the order of priority set forth in ORS 115.125, with
lower-priority claimants receiving payment only after all higher-priority claims are
paid in full. ORS 115.125.
§ 9.5-10 Interest on Claims
In Thomas By & Through Petersen v. State By and Through Senior and
Disabled Services Div., 319 Or 520, 878 P2d 1081 (1994), the state made a claim
against the decedent’s estate for medical assistance provided to the decedent. The
estate’s primary asset was a land sale contract, and the estate paid the claim over a
nine-year period as the payments under the land sale contract were collected. The
state asserted a right to interest on the claim pursuant to ORS 82.010(1). The
supreme court held that the state was entitled to statutory interest from the date that
was “‘six months after the date of the first publication of notice to interested
persons,’” because the personal representative had a duty to pay the state’s claim
as of that date. Thomas By & Through Petersen, 319 Or at 529 (quoting ORS
115.185). The court ruled that the claim became “due” as defined under ORS
82.010(1), as of six months after the first publication. The court further ruled that
the state did not have to assert a claim for interest in its claim, because the interest
did not accrue until the estate did not pay the claim six months after the publication
date. The court held that the state had adequately asserted its claim for interest in
its objection to the final account. Thomas By & Through Petersen, 319 Or at 529–
532.
PRACTICE TIP: When responding to any claim, the lawyer should keep
the Thomas By & Through Petersen case in mind. To avoid a later demand
for interest under the authority of this case, the lawyer should deal with the
interest issue at the outset. For example, in responding to any claim, the
lawyer could allow the claim in part (allowing only the principal), and
disallow the claim in part (specifically disallowing any current or future
demand for interest on the claim). The point is to avoid potential problems
regarding the content of the claim. If the claimant presses the interest issue,
the lawyer could settle the matter by negotiation. (Settlement options include
reducing the interest accrued to the date of the claim, lowering the interest
rate, and selling the estate’s contract receivables.) If settlement negotiations
fail, the matter may be resolved by summary determination, litigation, or
arbitration. The lawyer should use all of his or her dispute-resolution tools.
In short, the decision in the Thomas By & Through Petersen case is a
practice tip in itself. The lawyer should review the rules set forth in the
opinion and consider how the result might have been avoided.
Interest on an unpaid claim is payable at the rate of 9% per annum from the
time that payment of the claim was due. ORS 82.010(1). See Thomas By &
Through Petersen, 319 Or at 529–530. For unliquidated claims, interest accrues
from the date that the claim is established by judgment. ORS 82.010(2); In re
McKinney’s Estate, 175 Or 28, 40, 149 P2d 980 (1944).
FORMS
Form 9-1 Form of Claim Against Decedent’s Estate

Download MS Word


____________________, )
) CLAIM AGAINST
Deceased. ) DECEDENT’S ESTATE
I, [interested person or creditor’s name], claim:

The above-entitled estate is indebted to [creditor’s name and address] in the
amount of $__________ for [describe the nature of the claim].
[For example: Balance owing on installment contract for purchase of a
Model X hearing aid. Original contract dated March 17, 2011, in amount of $675;
payments received and credited to date $350; remaining unpaid balance $325,
payable $50 per month.]
I [am the claimant / am presenting this claim on behalf of the claimant and
have personal knowledge of the facts stated above]. The amount of $__________
[is justly due the claimant / is justly owing to the claimant and will become due on
_______________, 20___]. No payments have been made that are not credited,
and there is, to my knowledge, no offset or counterclaim except as stated above.
Optional—Attached is a copy of [document evidencing claim].
Claimant’s lawyer is [name and address of claimant’s lawyer].
DATED: _______________, 20____.
/s/__________________________
[claimant’s name]
CLAIMANT:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR CLAIMANT:

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §9.3-1. See UTCR 2.010 and UTCR 9.030 for the form of
documents, including requirements regarding document title, spacing, and format.
case.” UTCR 2.010(7).
this form.
NOTE: See UTCR 2.010 and UTCR 9.030 for the form and format of court
documents in general. For documents filed electronically, see UTCR chapter 21,
including UTCR 21.040 (format of documents filed electronically). A document
submitted electronically also must comply with UTCR 2.010 (except for the
requirement of a physical signature). UTCR 21.040(4). See UTCR 21.090
(requirements for electronic signatures).
Form 9-2 Personal Representative’s Creditor Search Checklist
Download MS Word
As personal representative, you have a legal obligation to take reasonable

actions during the first three months of administering this estate to identify every
person to whom the decedent owes a debt or other obligation, and every person
who claims to be owed such a debt, even if the claim is not valid. This checklist is
intended to assure that you satisfy your legal obligation to identify claimants. Mark
each item “X” if completed or “N/A” if inapplicable. You should return this
completed checklist to the lawyer for the estate three months after the initiation of
the estate proceeding. Within that time period, you should discuss with your
lawyer the requirements for giving notice to claimants.
_____ Notify the Postal Service (by change of address notice) to

forward to you all of the decedent’s mail, including mail to
the decedent’s residence and any business address of the
decedent.
_____ Continually review all mail for bills or other indication of
debt for three months after the date of your appointment.
_____ Review all available bank account records of the decedent for
the last year to identify regular installment payments and
partial payments on indebtedness. Follow up with inquiries
regarding all payments that suggest a continuing obligation.
_____ Review all available records in the possession of the
decedent. Follow up with inquiries as appropriate.
_____ Ask each lawyer, accountant, or other financial consultant of
the decedent known to you to have provided services to the
decedent to provide you with information on any creditors of
the decedent known to them.
_____ Review income tax returns for the last three years with an
accountant or the estate lawyer, who may obtain appropriate
tax releases.
_____ If the decedent was ever divorced, review divorce records to
identify any unpaid obligations for property division, debts,
spousal or child support, or attorney fees.
_____ If any records or information shows that the decedent was
involved in any litigation during the last 20 years, the estate
lawyer should review the court judgment docket to verify
whether judgments are outstanding.
_____ Check with hospitals, ambulance companies, and physicians
known to have provided recent care to the decedent to
determine whether any balances are owed that have not been
paid by Medicare or medical insurance.
_____ If the decedent has received any form of public assistance,
including Medicaid payment of nursing home expenses,
determine whether any reimbursement is owed to the public
welfare agency providing the assistance.
_____ If the decedent was involved in an accident during the two
years ending on the date of death, review the circumstances to
identify any outstanding claims for personal injury or
property damage allegedly caused by the decedent.
_____ If the decedent operated a business, review business records
and discuss potential claims with all business partners and
associates. If the business was incorporated, check the
corporate minute book, and check for guarantees of corporate
debts. Consider purchasing tail coverage on existing liability
policies.
_____ If the decedent owned real property, including a home, check
with the tax assessor to determine whether property taxes
have been paid. If the decedent rented an apartment or home
or business property, verify that no further rent is owed.
_____ If you have any claim against the estate on account of a debt,
notify the estate lawyer to file a personal representative’s
claim with the court.
_____ Consider whether any other obligations of the decedent exist,
but are not covered by this checklist.

this form.
Form 9-3 Notice of Right to Assert Claims Against the Estate
Download MS Word


____________________, )
) NOTICE OF RIGHT TO
Deceased. ) ASSERT CLAIMS
) AGAINST THE ESTATE
I am the personal representative for the estate of the above-named decedent.

It appears that you may have or assert a claim against the estate of the
decedent. In order to assert a claim, you must present that claim in writing to the
The name of the personal representative and the address at which claims are
to be presented are: ______________________________.
The date of this notice and the date that this notice is delivered or mailed is:
___________, 20___. Any claims against the estate not presented within 30 days
of the date of this notice may be barred.
DATED: _______________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §9.3-3; ORS 115.003(3). See UTCR 2.010 and UTCR 9.030
for the form of documents.
this form.
NOTE: The last sentence in Form 9-3 in the 2012 text should read as follows:
“Any claims against the estate not presented within 45 days of the date of this
notice may be barred.” See Supp § 9.3-3 (personal representative’s notice
requirements).
Form 9-4 Proof of Personal Representative’s Compliance
Download MS Word


____________________, )
) DECLARATION OF
Deceased. ) COMPLIANCE
) REGARDING SEARCH
) FOR CLAIMS AND
) NOTICE TO CLAIMANTS
I, [personal representative], say that:

1.
I have completed a review of the financial records and affairs of the
decedent and taken such further actions as appear to me reasonably necessary to
ascertain the identity and address of each person who has or asserts a claim against
the estate. Attached as part of this affidavit is a completed checklist of actions I
have taken to identify persons with claims.
2.
To the best of my knowledge and belief, no person has or asserts a claim
against the estate, other than persons whose claims have been presented, accepted,
or paid in full.
DATED: _______________, 20____.
I HEREBY DECLARE THAT THE ABOVE STATEMENT IS TRUE TO THE BEST OF MY
KNOWLEDGE AND BELIEF, AND THAT I UNDERSTAND IT IS MADE FOR USE AS EVIDENCE
IN COURT AND IS SUBJECT TO PENALTY FOR PERJURY.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §9.3-3; ORS 115.003.

NOTE: See UTCR 2.010 and UTCR 9.030 for the form of documents.
this form.
NOTE: The declaration under penalty of perjury should appear above the date
line.
Form 9-5 Notice of Disallowance of Claim
Download MS Word


____________________, )
) NOTICE OF
Deceased. ) DISALLOWANCE OF
) CLAIM
To: [creditor’s name]

Your claim against the above estate has been [disallowed / allowed in the
amount of $__________ and disallowed in the remaining amount].
Your claim and a copy of this notice, with proof of service by mail, will be
filed in the above-entitled proceeding. Your claim[, to the extent that it is
disallowed,] will be barred unless within 30 days after the date of mailing or
delivery of this notice you file in this proceeding a request for summary
determination of your claim, with proof of service as provided by ORS 115.145, or
commence an action against the personal representative on the claim in a court of
competent jurisdiction.
DATED: _______________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §9.5-1; ORS 115.135.

this form.
NOTE: A notice of disallowance of a claim must also “state the reason for the
disallowance.” ORS 115.135(2). See Supp § 9.5-1 (allowance and disallowance of
a claim). The first paragraph of Form 9-5 should now read as follows:
“Your claim against the above estate has been [disallowed / allowed in the
amount of $__________ and disallowed in the remaining amount]. The reason for
the disallowance is [state reason].”
Form 9-6 Request for Summary Determination of Claim
Download MS Word


____________________, )
) REQUEST FOR
Deceased. ) SUMMARY
) DETERMINATION
[Creditor’s name], pursuant to ORS 115.145(1)(a), hereby requests a

hearing by this Court for summary determination of [her / his] claim, which was
presented to the personal representative on ________, 20___, and [partially]
disallowed by notice of the personal representative dated _____________, 20___.
Proof of service of this request on the [personal representative / lawyer for
the personal representative] is attached.
[Creditor’s name] is tendering the fee of $____ with this request.
DATED: _______________, 20___.
/s/__________________________
[name]
Claimant
CLAIMANT:
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR CLAIMANT:
[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §9.5-3; ORS 115.145.

NOTE: See UTCR 2.010 and UTCR 9.030 for the form of documents. See
also UTCR 9.070.
case.” UTCR 2.010(7).
this form.
UTCR 21.040 (format of documents filed electronically). A document submitted
electronically also must comply with UTCR 2.010 (except for the requirement of a
physical signature). UTCR 21.040(4). See UTCR 21.090 (requirements for
electronic signatures).
Form 9-7 Notice by Personal Representative of Separate Action on
Claim Required
Download MS Word


____________________, )
) NOTICE OF SEPARATE
Deceased. ) ACTION ON CLAIM
) REQUIRED
To: [creditor’s name]

NOTICE IS HEREBY GIVEN pursuant to ORS 115.155 that if you desire
to prove the claim presented to the undersigned on or about _______________,
20___, and disallowed by the undersigned on or about _______________, 20___,
you must commence a separate court action against the personal representative
within 60 days after the date you receive this notice.
DATED: _______________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]
[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: The personal representative should send a copy of this notice by

certified mail, return receipt requested, to ascertain the date of delivery. The
original of this notice (with proof of service) should be filed with the court.
COMMENT: See §9.5-3; ORS 115.155.
this form.
UTCR 21.040 (format of documents filed electronically). A document submitted
electronically also must comply with UTCR 2.010 (except for the requirement of a
physical signature). UTCR 21.040(4). See UTCR 21.090 (requirements for
electronic signatures).
Form 9-8 Checklist for Priority of Payment of Expenses and Claims
Download MS Word
If the assets of the estate are not sufficient to pay all claims and expenses in
full, the personal representative must make payment in the following order:
_____ (1) Support of the decedent’s spouse and children, ORS
115.125(1)(a);
_____ (2) Expenses of administration, ORS 115.125(1)(b);
_____ (3) Expenses of a “plain and decent funeral and disposition
of remains of the decedent,” ORS 115.125(1)(c);
CAVEAT: The personal representative of an estate
having insufficient assets to pay all claims should
closely review the propriety of the claim submitted for
funeral expenses. The personal representative may be
required to disallow payment to the extent the amount
claimed exceeds the “plain and decent” standard.
_____ (4) Debts and taxes with preference under federal law, ORS
115.125(1)(d);
_____ (5) Reasonable and necessary medical expenses and
hospital expenses of the decedent’s final illness,
including compensation of persons attending the
decedent, ORS 115.125(1)(e);
_____ (6) Taxes with preference under state law that are due and
payable while the personal representative has possession
of the estate, ORS 115.125(1)(f);
_____ (7) Debts owed to the decedent’s employees for labor
performed within 90 days preceding the decedent’s
death, ORS 115.125(1)(g);
_____ (8) Child support arrearages, ORS 115.125(1)(h);
_____ (9) A claim of the Department of Human Services or the
Oregon Health Authority for the amount of the state’s
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, ORS 115.125(1)(i);
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, funded
entirely by moneys from the General Fund, ORS
115.125(1)(j)(A); and
(b) Public assistance, as defined in ORS 411.010, funded by
a combination of state and federal funds, ORS
115.125(1)(j)(B);
Oregon Health Authority for the care and maintenance
of the decedent at a state institution, as provided in ORS
179.610–179.770, ORS 115.125(1)(k);
_____ (12) A 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–
179.770, ORS 115.125(1)(l);
_____ (13) Any other claim presented both (a) within the statute of
limitations applicable to the claim and (b) within the
time for presenting claims against the estate (i.e., claims
presented within four months of the first publication of
notice to interested persons and claims presented within
30 days after notice is delivered or mailed to the last-
known address of a person who was entitled to notice,
see ORS 115.003(2)), ORS 115.125(1)(m); and
_____ (14) Any other claim presented after the time for presenting
claims against the estate, but presented both (a) before
the expiration of the statute of limitations applicable to
the claim, and (b) before the personal representative
files the final account, ORS 115.005(2)–(3),
115.125(1)(m); however, such a claim may be paid only
after payment of all expenses having priority over
claims under ORS 115.125 and payment of all
previously presented claims, ORS 115.005(4).
COMMENT: See §§9.5-8 to 9.5-9; ORS 115.125. See also §§9.5-3 (time for
presenting claims), 9.1, 9.3-4, 9.4-6(b).
NOTE: If the assets of the estate “are insufficient to pay in full all expenses
or claims of any one class specified in [ORS 115.125(1)], each expense or claim of
that class shall be paid only in proportion to the amount thereof.” ORS 115.125(2).
CAVEAT: This form reflects the 2012 edition of the probate code. Before
using this checklist, the personal representative (or the personal representative’s
lawyer) must check for any statutory amendments.
NOTE: ORS 115.125, as amended in 2013, 2016, and 2017, now provides as
follows:
(1) If the applicable assets of the estate are insufficient to pay all claims and
expenses 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.
(b) Expenses of administration of the estate, and subject to preferences
established under federal law, expenses of administration of any protective
proceeding in which the decedent was the protected person authorized by the
court in the protective proceeding.
(c) Expenses of a plain and decent funeral. [Caveat: The personal
representative should scrutinize funeral and burial costs to ensure that they fall
within the “plain and decent” standard. If the assets of the estate are insufficient
to pay all claims in full, expenses in excess of this standard should be disallowed.]
(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 to
which the persons are otherwise entitled by law.
(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.
(h) Child support arrearages.
(i) The claim of the Department of Veterans’ Affairs under ORS 406.100,
including a claim the waiver of which was retracted by the Director of Veterans’
Affairs under ORS 406.110.
(j) The claim of the Department of Human Services or the Oregon Health
Authority for the amount of the state’s 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 properly or improperly paid to or for
the decedent, in the following order:
(A) Public assistance, as defined in ORS 411.010, and medical
assistance, as defined in ORS 414.025, funded entirely by moneys from
the General Fund; and
(B) Public assistance, as defined in ORS 411.010, and medical
assistance, as defined in ORS 414.025, 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 to 179.770.
(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
to 179.770.
(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.
CAVEAT: This provision reflects the 2017 edition of the probate code. The
personal representative (or the personal representative’s lawyer) must check for
any statutory amendments.
Chapter 10: MANAGING ESTATE ASSETS
JONATHAN S. LEVY, A.B., Harvard College (1977); J.D., University of Michigan Law School
(1982); admitted to the Oregon State Bar in 1988; partner, Wyse Kadish LLP, Portland.
KATIE S. GROBLEWSKI, B.A., University of Washington (2000); J.D., Seattle University Law
School (2003); LL.M., Taxation, University of Washington (2004); member of the
Washington State Bar Association since 2003 and the Oregon State Bar since 2006;
associate, Stokes Lawrence, P.S., Seattle, Washington.
The authors wish to acknowledge the contributions of Sally C. Landauer and D. Ed Fletcher to
the prior versions of this chapter, much of which has been retained in this revision.
§ 10.1 NATURE OF PERSONAL REPRESENTATIVE’S POSITION

A personal representative is a fiduciary to both the estate and the interested
persons of the estate. ORS 114.265, 114.395. Although a personal representative
is not a trustee in the strict sense, his or her liability to interested persons for
damage or loss resulting from a breach of duty is the same as that of a trustee of
an express trust. ORS 114.395, 130.800–130.810. Personal liability to third
parties is that of an agent for a disclosed principal. ORS 114.405(1). A personal
representative is not an agent of the decedent. In re Gorday Garment Co., 2 F
Supp 162, 164 (D Or 1932), aff’d sub nom. Crocker v. Kay, 62 F2d 391 (9th Cir
1932). See chapter 7, which discusses in greater detail the liability of a personal
representative.
§ 10.2 PERSONAL REPRESENTATIVE’S POWERS AND DUTIES

GENERALLY
The powers, authority, and duties of the personal representative emanate
from the Oregon probate code, the will, and orders of the court. The will and
orders of the court may restrict or expand the personal representative’s authority
and powers vested by the code.
§ 10.2-2 When Powers Commence
The powers, authority, and duties of the personal representative commence
on the issuance of letters. See §5.2-7. All relate back in time, however, to the
moment of death, to give prior acts of the personal representative the same effect
as if they occurred after the issuance of the letters. ORS 114.255.
A person designated in a will as a personal representative commonly
participates in the opening of the decedent’s safe-deposit box, arranges for the
decedent’s burial, and performs other acts for the benefit of the decedent or the
decedent’s estate before the issuance of the letters. See chapter 3.
If the transaction undertaken is one that is an authorized transaction after
the issuance of the letters, any third party involved will be protected by the
subsequent issuance of the letters. Similarly, a personal representative may ratify
and accept acts performed on behalf of the estate by others, if those acts would
have been proper for the personal representative to perform. ORS 114.255.
§ 10.2-3 General Duties
The general duties of the personal representative are “to preserve, settle
and distribute the estate” in accordance with the will (if any) and the probate
code, “as expeditiously and with as little sacrifice of value as is reasonable under
the circumstances.” ORS 114.265. The personal representative must act reasonably
for the benefit of interested persons. ORS 114.305.
Upon the issuance of the letters, the personal representative is obligated to
embark on the duties without adjudication or order of the court, unless he or she
chooses to apply to the court for authority, approval, or instructions, or unless he or
she is precluded by the terms of the will or by a court order obtained by the
intervention of an interested person. If requested by the personal representative, the
court will authorize, approve, or instruct with or without a hearing as the court
decides. ORS 114.275.
§ 10.2-4 General Powers
In general, the personal representative has the power “to sell, mortgage,
lease or otherwise deal with property of the estate without notice, hearing or court
order.” ORS 114.325(1). However, the personal representative may not sell
property, except after notice, hearing, and order of the court if: (1) the sale
contravenes the will, (2) the property is specifically devised and the will does not
permit its sale, or (3) a bond increase is needed as provided in ORS
114.325(2)(c). ORS 114.325(2).
A person who deals with or assists a personal representative without actual
knowledge that the personal representative is improperly exercising his or her
power is protected under the probate code “as if the personal representative
properly exercised the power.” ORS 114.385. Such a person has no duty (1) to
inquire whether the personal representative is properly exercising his or her
power, or (2) to inquire about the provisions of any will or court order that may
affect the propriety of the acts of the personal representative. This protection
extends to persons dealing with or assisting a personal representative appointed
under ORS 113.085 without actual knowledge that the personal representative
was not qualified as provided in ORS 113.095, or that the appointment of the
personal representative involved procedural irregularity.
EXAMPLE: Although the personal representative is generally
empowered to sell property of the estate, if the personal representative does
so in violation of a prohibition in the will or an order of the court, ORS
114.385 protects the person who innocently deals with the personal
representative.
The 2017 Legislature amended ORS 114.325. The amendments deleted the
explicit provision in ORS 114.325(2)(c) regarding increasing a bond when the sale
price of the property to be sold exceeds $5,000, but added a clause making the
statute subject to ORS 113.105, which governs bond requirements. See Supp § 5.2-
6(a) (necessity of a bond). See also Supp § 5.2-6(c) (increasing, decreasing, or
requiring a new bond).
§ 10.2-5 The Personal Representative’s Authority
§ 10.2-5(a) Under the Probate Code
Unless restricted by the will or a court order, a personal representative
acting reasonably for the benefit of interested persons is authorized by the probate
code to do all things required for the prudent collection, management, and
distribution of the assets of the estate. ORS 114.305. Authorized transactions are
enumerated in ORS 114.305; they are similar in many respects to the powers of a
trustee found in the Uniform Trust Code, ORS 130.650–130.725.
§ 10.2-5(b) Under the Will
The testator is, of course, free to enlarge, limit, or restrict the authority of
the personal representative. See ORS 114.305.
PRACTICE TIP: In view of the broad powers and authority that the
probate code grants to a personal representative, a lawyer should explain
carefully to a client who is about to make or alter a will the position, powers,
and authority of the personal representative, unless provision is made
otherwise in the will. This explanation could be accomplished by reviewing
with the client certain provisions of the code, particularly ORS 114.225,
114.265, 114.275, 114.305, 114.325, 114.385, 114.395, and 114.405.
§ 10.2-5(c) Acts with Copersonal Representatives
When two or more persons are appointed copersonal representatives, the
concurrence of all the representatives is required for all of the acts pertaining to
the administration and distribution of the estate, except:
(1) Any one of them “may receive and receipt for property due the
estate”;
(2) “When the concurrence of all cannot readily be obtained in the time
reasonably available for emergency action”;
(3) When any others have delegated their power to act;
(4) When the will provides otherwise; or
(5) When the court otherwise directs.
ORS 114.415(1).
A person who deals with a copersonal representative, unaware that another
copersonal representative has been appointed, is fully protected under the probate
code. ORS 114.415(2).
§ 10.3 POSSESSION AND CONTROL OF PROPERTY OF THE ESTATE

On the decedent’s death, the title to the decedent’s property vests in the
decedent’s devisees or, in the absence of a will, in the decedent’s heirs, subject to
certain rights and interests. ORS 114.215(1). The personal representative,
however, has both the right and the obligation to take possession and control of
all property in the decedent’s estate. See, e.g., ORS 114.225, 114.265.
Early in the process, the lawyer should determine how closely he or she
needs to work with the personal representative to gather, value, and manage estate
assets. Many persons named as personal representatives have never been involved
in a probate, and most are mourning the loss of a loved one. While significant
lawyer involvement may become expensive, some personal representatives are
simply inattentive to detail, lack practical sense, or have not handled significant
financial matters before. It is therefore imperative that the lawyer assist the
personal representative so that he or she does not become his or her own worst
enemy. The lawyer should ensure that the personal representative understands the
fiduciary duties that he or she is assuming on behalf of heirs, devisees, and
creditors. See, e.g., §7.1-3.
§ 10.3-2 Gathering Information
The first step that the personal representative should take to determine the
scope and breadth of the decedent’s assets is to locate the available agents,
advisors, and involved family members (including, obviously, a surviving
spouse) to discuss the decedent’s affairs. The personal representative should also
go through the decedent’s papers and residence, and should review the decedent’s
mail for important clues about the decedent’s income, assets, and debts. If the
estate will need to file an estate tax return, the personal representative will need
detailed information about nonprobate assets payable to named beneficiaries, as
well as probate assets. See §§3.4-1 to 3.4-2. The decedent’s records may be
incomplete, but income tax returns, bank statements, dividend statements, and
custodial receipts often reveal bank accounts, investments, and the location of a
safe-deposit box. Warehouse receipts are signs that the decedent owned furs,
jewelry, or paintings stored elsewhere.
Once an initial snapshot of the decedent’s assets has been taken, the personal
representative should monitor all correspondence relating to the decedent’s assets.
This would include arranging for the decedent’s mail to be forwarded to the
personal representative and canceling all subscriptions, unless a surviving spouse
or other relative remains in the house who can be trusted to forward relevant mail
to the personal representative and to collect newspapers and magazines. If the
decedent owned a business, the personal representative should gather relevant
documents from the place of business and from the secretary of state of the
business’s state of formation (if any). A prudent personal representative should
determine the designated registered agent of the business, and either change it to
the personal representative (if the decedent had been the prior agent), or contact the
current agent to notify the agent of the decedent’s death. Handling business assets
is covered in more detail in §§10.10-1 to 10.10-4(d)(2).
Finally, early in the process, the personal representative or the lawyer should
also inform family members of what the probate process will entail and the length
of time it will likely take to complete. The personal representative or the personal
representative’s lawyer should also inquire about any special concerns about the
estate and desires of the family members to receive particular assets. The more the
personal representative knows more about the family’s desires regarding estate
assets, the better he or she will be able to judge how and whether to take
possession of the assets and then manage them as part of the estate.
If the decedent’s family and advisors are not forthcoming or are of little
assistance, the probate code sets forth discovery procedures to enable the personal
representative to learn of the existence and location of estate assets. ORS
114.425. Pursuant to ORS 114.425, the court may order any person to appear and
give testimony by deposition, if it appears probable that the person:
(1) Has concealed, secreted, or disposed of (a) any property of the
decedent’s estate, or (b) any writing, instrument, or document pertaining to the
estate;
(2) Has been entrusted with property of the decedent’s estate and fails to
account for it to the personal representative;
(3) Has knowledge or information that is necessary to the administration
of the estate; or
(4) As an officer or agent of a corporation, has refused to allow
examination of the books and records of the corporation that the decedent had the
right to examine.
A person who fails to appear or to answer questions asked as authorized by
court order is subject to contempt proceedings. ORS 114.425(2). See Forms 10-5
to 10-6. See also chapter 15.
The 2016 Oregon Legislature enacted the Revised Uniform Fiduciary
Access to Digital Assets Act (codified in Oregon at ORS 119.006 to 119.086),
which authorizes a court to grant a personal representative access to the protected
person’s electronic communications and other digital assets. ORS 119.056(1). See
Michael D. Walker, Oregon’s New Uniform Digital Assets Law: Estate Planning
and Administration in the Information Age, OSB Est Pl & Admin Sec Newsltr 1
(Dec 2016).
§ 10.3-3 Should Possession Be Taken?
The less hazardous course for the personal representative may be to refrain
from taking possession of an asset whenever possible, because he or she becomes
accountable for the estate assets in his or her possession. ORS 114.225, 116.063.
See chapters 7, 11. Presumably, the personal representative is not accountable for
assets left in the possession of an heir or a devisee. See ORS 116.063(1); but see
ORS 116.063(3)(a), regarding negligent failure to collect assets. Nonetheless, the
fiduciary’s responsibility to the estate and to the beneficiaries dictates that when
any question exists regarding the safety of the property or the need for the assets
to settle the claims of creditors and to administer the estate, the personal
representative should ordinarily assume possession of and control over the
property.
In contrast, a personal representative may wish to permit an heir or devisee
to retain or take possession of a motor vehicle, motor boat, or similar item, when
(1) it appears that the estate will not need to sell the vehicle or boat to satisfy
claims or expenses; (2) the heir or devisee will be eligible to receive the vehicle
or boat at the close of the estate; (3) the personal representative transfers title to
the vehicle or boat to the heir or devisee; and (4) the heir or devisee agrees, in
writing, to insure the vehicle or boat and to return it to the estate if the personal
representative later informs the heir or devisee that it is needed to pay claims or
expenses. Form 10-1 is an example of a custody receipt.
Alternatives to delivery by custody receipt are (1) selling the property to
the heir or devisee, in exchange for a note for the value (that can later be
distributed to the heir or devisee after an order for distribution is taken); or (2)
keeping possession during probate, but disabling the vehicle or other property.
COMMENT: The personal representative should be wary of
distributing a vehicle or similar item to an heir or devisee by custody
receipt, if the personal representative knows, or should know, that the heir
or devisee has a bad driving record. Distribution to such a person could
arguably give rise to a claim for negligent entrustment. Instead, if the heir or
devisee will ultimately end up with the vehicle, the personal representative
should wait until distribution is protected by a court judgment of
distribution. Even if the heir or devisee has a good driving record, the
personal representative may have some potential liability if the heir or
devisee is involved in a collision. Before distributing the vehicle or a similar
item, the personal representative should update the insurance as described in
§10.3-4.
Any pet of a decedent with a value of less than $2,500 need not be listed on
the inventory of the estate and, therefore, taking possession of any such pet is
unnecessary. ORS 114.215(3). A relative or friend of the decedent or an animal
shelter may take custody of the pet immediately on the decedent’s death. The
person who takes custody of the pet is entitled to payment from the estate for the
cost of caring for the pet. On request, the person must deliver the pet to the
personal representative or to any heir or devisee entitled to its possession. ORS
114.215(3).
§ 10.3-4 Insuring Estate Assets
The personal representative is authorized to insure assets of the estate
against damage or loss, ORS 114.305(13), and his or her failure to obtain such
insurance may constitute negligence, ORS 114.405(3), 116.063(3)(g). Until
distribution of an asset is made with court approval, the personal representative
should insure all estate property, whether or not in the possession of the personal
representative. The personal representative should ensure that the estate is named
as an additional insured, even if an asset is held in a revocable trust created by the
decedent.
When personal property of the estate is a motor vehicle, the personal
representative should review the vehicle insurance coverage and keep it in force,
or the title should be transferred to the beneficiary of the vehicle by custody
receipt, as described in §10.3-3. A motor vehicle is potentially a large liability
risk for the estate. Under most vehicle insurance policies, the personal
representative becomes the named insured until the next renewal date. At the
renewal date (if title has not been transferred to the devisee or heir), the personal
representative and any person driving the car should be designated as the named
insured and additional driver, respectively.
Most estates will also have real property that should be insured, and the
personal representative should be aware of the difficulty and additional expense
of insuring a decedent’s unoccupied residence. Many homeowners’ insurance
policies do not cover an unoccupied dwelling. The personal representative should
check with the decedent’s insurance agent promptly if the house is to be left
vacant. The personal representative may also consider allowing a family member
to remain in the house as a caretaker, to preserve both the assets in the dwelling
and the insurance on the house and its contents.
§ 10.3-5 Repair of Estate Assets
The personal representative is charged with the duty to preserve the estate.
ORS 114.265. This charge probably imposes a duty to make such repairs as are
required to preserve the estate assets. Conceivably, preservation of estate assets
could involve repairs or improvements greater than the ordinary. However, the
probate code provides for the allocation of income to make “ordinary repairs.”
ORS 116.007(2)(a). The implication is that only ordinary repairs, not
improvements, are permitted. See In re Stout’s Estate, 151 Or 411, 423, 50 P2d
768 (1935).
PRACTICE TIP: When it is unclear whether the personal representative
should invest estate money for substantial repairs or improvements, the
personal representative should seek court instructions or the informed
consent of all of the interested parties.
§ 10.3-6 Funds to Be Used for Expenses
The decedent’s will may provide direction to the personal representative
about what assets of the estate bear the estate’s expenses (e.g., the residue).
However, if the will is silent on this issue, then the statutes direct the personal
representative to pay all expenses of administration from the “principal” of the
estate. ORS 116.007. Without direction from the will, the personal representative
must determine how each estate asset that is included in the definition of
“principal” of the estate should bear expenses, because different classes of gifts
are treated differently. ORS 116.007(2)(a) specifically provides that expenses
related to the operation of specifically devised property should be deducted from
the income received from such property. ORS 116.007(2)(b) provides that all
other devises (except nonmarital, outright pecuniary devises, such as a credit
shelter bequest) should proportionately bear all of the other expenses of the estate
management. This default statutory allocation is buttressed by the Uniform
Principal and Income Act, ORS chapter 129. Some administration expenses that
are related to specifically bequeathed property may reasonably be a general
administration expense, instead of an operational expense allocated to such
property’s income (e.g., boundary-line issues related to real property). The
personal representative should review the will and the default statutes, as well as
the type of expense, to understand how best to keep track of expenses.
PRACTICE TIP: The personal representative must separately keep track
of all of the income and expenses of separately bequeathed property. For
rental property, the personal representative should consider maintaining a
separate bank account for the property, or creating a separate single-member
LLC (owned by the estate) to hold the rental property during the period of
administration. The personal representative should also consider distributing
specifically devised property to the devisees by means of a petition for
partial distribution to eliminate the problem of property that cannot carry its
own expenses. See ORS 116.013.
§ 10.3-7 Payment of Taxes
The personal representative “is chargeable in the accounts of the personal
representative” and may be liable for all of the property coming into his or her
possession. ORS 116.063(1). The personal representative has a duty to pay taxes
that accrue on the property and its income for the period that the property is in the
representative’s possession. In re Banfield’s Estate, 137 Or 256, 281, 3 P2d 116
(1931). In addition, the personal representative may be liable for any loss to the
estate arising from failure to pay taxes as required by law. ORS 116.063(3)(c).
ORS 115.125, which sets forth the order of payment of expenses and
claims, places in fourth priority taxes with preference under federal law, and
places in sixth priority those taxes with preference under Oregon law that are due
and payable while possession of the decedent’s estate is retained by the personal
representative. The personal representative should begin preparing to raise cash
to pay all of the necessary taxes as soon as possible during the administration of
the estate. If necessary, the personal representative may need to sell assets,
borrow funds, or request an extension of time to pay certain taxes (if available).
ORS 116.113(2) provides that the personal representative is not entitled to
approval of the final account until all Oregon income and personal property taxes
have been paid “and appropriate receipts and clearances therefor have been
filed,” or until payment of those taxes has been secured by bond, deposit, or
otherwise. See chapter 11. However, the courts do not actually require the filing
of “receipts and clearances” for the taxes. See ORS 116.083(3)(a), which requires
only that the final account include a statement that the taxes have been paid, “or if
not so paid, that payment of those taxes has been secured by bond, deposit or
otherwise, and that all required tax returns have been filed.”
A personal representative should not distribute all of the property of the
estate without evaluating whether all of the decedent’s taxes have been paid,
including taxes related to real property and business interests. If the estate is
taxable for Oregon inheritance tax purposes, the personal representative should
complete a Request for Discharge from Personal Liability for Oregon Inheritance
Tax. See www.oregon.gov/DOR/forms/FormsPubs/103-005.pdf. In most cases, the
personal representative should wait to completely distribute the estate until after
receiving a federal estate tax closing letter (for a federally taxable estate) or a
Certificate of Discharge from the Oregon Department of Revenue, although
partial distributions may be made of all of the assets except those needed to
secure potential tax liabilities. It may also be necessary to evaluate the decedent’s
prior years’ income tax returns or whether proper state income taxes were filed
based on residency. In such cases, the personal representative should consider
filing forms with the IRS and the Oregon Department of Revenue requesting
prompt assessment and discharge from personal liability from income taxes, and
holding back estate assets for distribution until the discharge has been given.
The 2017 Legislature deleted ORS 116.113(2), which provided that the
personal representative was not entitled to approval of the final account until all
Oregon income and personal property taxes had been paid. However, a provision
regarding payment of taxes is included in ORS 116.083(3), which provides, in part,
as follows:
When the estate is ready for final settlement and distribution, the account
must also include:
(a) A statement that any required estate tax return has been filed.
(b) A statement that all Oregon income taxes, estate taxes and personal
property taxes that are due, if any, have been paid, or if not paid, that payment of
those taxes has been secured by bond, deposit or otherwise, and that all tax returns
currently due have been filed.
(c) Any request to retain a reserve for the determination and payment
of any additional taxes, interest and penalties, and of all related reasonable
expenses.
§ 10.4 INVESTING ESTATE FUNDS

§ 10.4-1(a) Scope of Authority to Invest
The personal representative’s authority to invest estate funds and, equally
important, the limitations on that authority, are set forth in ORS 114.305(6).
Estate funds cannot be managed appropriately, however, without an
understanding of the cash needs of the estate. See §10.4-2(a)(1).
§ 10.4-1(b) Sources of Authority to Invest
A personal representative has the duties of a trustee in managing the estate’s
investment securities, but with a short-term focus. The sources of a personal
representative’s investment authority are Oregon law, particular authorizations
from a court, and the language in the will. See §§10.4-1(b)(1) to 10.4-1(b)(3).
§ 10.4-1(b)(1) Statutory Authority to Invest
In Oregon, two basic sources of law pertain to estate investing: ORS
114.305(6) and the Uniform Prudent Investor Act, ORS 130.750–130.775.
ORS 114.305(6) authorizes a personal representative to:
Deposit funds not needed to meet currently payable debts and expenses,
and not immediately distributable, in bank or savings and loan association
accounts, or invest the funds in bank or savings and loan association certificates
of deposit, or federally regulated money-market funds and short-term investment
funds suitable for investment by trustees under ORS 130.750 to 130.775, or short-
term United States Government obligations.
ORS 130.750–130.775 is Oregon’s version of the Uniform Prudent Investor
Act. See generally Jonathan Levy, Uniform Prudent Investor Act in Oregon, OSB
EST PLAN & ADMIN SEC NEWSLTR, Jan 1999, at 1; ADMINISTERING TRUSTS IN
OREGON ch 9 (Oregon CLE 2007).
In addition, a personal representative may (1) vote stocks or other
securities; (2) pay calls, assessments, and other sums chargeable or accruing from
securities; (3) sell or exercise stock subscription or conversion rights; and (4)
hold securities in the name of a nominee—all without specific court order. ORS
114.305(8)–(10), (12). However, the personal representative has no authority to
buy securities or similar obligations unless a will or court order so authorizes.
Other statutes outside the probate code permit executors or administrators
to invest in certain specified investments. These include investments in real
property mortgages insured by the Federal Housing Administration (ORS
86.620).
COMMENT: Although the considerations set forth in ORS 130.775
appear to broaden the scope of a personal representative’s investment
powers, as opposed to the words of limitation in ORS 114.305(6), a personal
representative should avoid investments that tend to fluctuate in value
rapidly or widely.
See Administering Trusts in Oregon ch 9 (OSB Legal Pubs 2018)
(discussing trust investments).
§ 10.4-1(b)(2) Court Authorization to Invest
A personal representative may apply to the court for authority, approval, or
instructions on any matter concerning the administration of the estate. The court
may instruct or rule, with or without a hearing, as may be appropriate. ORS
114.275.
PRACTICE TIP: The prudent personal representative will obtain court
authorization for investing estate funds in any form of investment other than
one specifically authorized by ORS 114.305(6). A request for investment
authority should not ask the court what to invest in, because the court has
neither the time nor the special qualifications necessary to pass on the
wisdom of specific investments. Likewise, a request for an order directing
investment is inappropriate; the petition should merely ask the court to
authorize such an investment.
§ 10.4-1(b)(3) Testamentary Authority to Invest
The personal representative may perform all lawful acts required or
permitted by the decedent’s will. ORS 114.305(26). Thus, the will may grant to
the personal representative investment authority that is broader than that
authorized by statute.
§ 10.4-1(c) Personal Representative’s Liability
§ 10.4-1(c)(1) Failure to Invest
When possible, a personal representative should invest surplus estate funds
to earn interest, both as a general rule and, in particular, when the will includes
general pecuniary devises.
When a power or a duty to invest exists, but the personal representative
fails to invest surplus funds, the personal representative may be surcharged with
the interest that he or she might have obtained on those funds. 34 CJS Executors
and Administrators §229 (1998); see Fitchard v. Hirschberg’s Estate, 128 Or
317, 329, 274 P 505 (1929); Estate of Bruner, 691 A2d 530 (Pa Super Ct 1997);
In re Estate of Perry, 597 A2d 796 (Vt 1991). But see Matter of Steinberg’s
Estate, 34 Or App 293, 578 P2d 487 (1978) (a personal representative who kept
more funds than ultimately were needed in noninterest-bearing account, but with
most of the liquid assets in a savings account, was not surcharged for loss of
interest).
Under ORS 116.143, general pecuniary devises, which are not entitled to a
share of income, bear interest at a discount rate based on the 91-day U.S.
Treasury bill auction, beginning one year after appointment of the personal
representative until payment, unless a contrary intent is evidenced in the will or
unless otherwise ordered by the court. Discount rate means “the auction average
rate on 91-day United States Treasury bills, as established by the most recent
auction of these Treasury bills and as reported by the United States Department
of the Treasury, Bureau of the Public Debt.” ORS 116.143(1). The discount rate
is to be determined, with reference to the most recent auction date, before May 15
and before November 15 of each year. ORS 116.143(1). If payment of general
pecuniary devises will be delayed, the personal representative should
appropriately invest idle funds to meet the payment of such interest.
§ 10.4-1(c)(2) Investing Without a Court Order
If a personal representative makes an investment that is complained about
later, the fact that he or she did not obtain a court order authorizing the
investment is immaterial, if the investment is in accordance with the law. 31 AM
JUR2D Executors and Administrators §369 (2002). See M.L.C. Annot, Liability of
Trustee, Guardian, Executor, or Administrator for Loss of Funds as Affected by
Failure to Obtain Order of Court Authorizing Investment, in Absence of
Mandatory Statute, 116 ALR 437 (1938). This result should follow from the
Oregon probate code, which authorizes personal representatives to act, subject to
listed exceptions, without prior court authorization. See ORS 114.275,
114.305(6).
§ 10.4-1(c)(3) Standard of Care in Investments
In making investments, a personal representative acts as a trustee. 31 AM
JUR2D Executors and Administrators §497 (2002); 34 CJS Executors and
Administrators §224 (1998); see ORS 114.395. As such, a personal representative
does not act at his or her peril in making investments, but must act only as a
prudent investor. Compliance with the prudent investor rule is not determined by
hindsight. Rather, it is determined in light of the facts and circumstances existing at
the time of the trustee’s decision or action. ORS 130.770. In other words, trustees
are not insurers. Uniform Prudent Investor Act §8 comment (available online at
www.uniformlaws.org/HigherLogic/System/DownloadDocumentFile.ashx?Docum
entFileKey=22cb68ce-097b-178f-899d-320e70be214d&forceDialog=0).
§ 10.4-2 Practical Considerations in Investing
§ 10.4-2(a) Liquidity Problems
§ 10.4-2(a)(1) Necessity for Liquidation
The personal representative faces problems of paying timely and continued
tax payments, family-support allowances, creditors’ claims, funeral expenses,
administration expenses, and cash legacies. See chapter 7. In many cases, the
personal representative is also faced with the problem of making interim
investments of excess funds, such as when liquidation takes place before the
funds are needed. A cash-flow analysis that forecasts on a monthly basis the
timing of available cash income and receipts and of estate expenses is essential to
allow the personal representative to determine, well in advance of need, what
action is necessary to create the cash needed.
§ 10.4-2(a)(2) Time of Liquidation
Once sufficient cash is on hand, the question becomes whether the personal
representative should liquidate the estate’s remaining stock portfolio. One view is
that failing to liquidate stocks amounts to speculation by the personal
representative; the other view is that the personal representative is merely retaining
assets approved by the decedent. See ABA Committee on Investments by
Fiduciaries, Investments by Personal Representatives, 8 REAL PROP, PROB &
TRUST J 465 (1973).
ORS 114.305 authorizes, by implication, retention of securities as assets
that family members, for sentimental reasons, may urge the personal representative
not to sell. However, if the holdings decline in value, other relatives, with the
wisdom of hindsight, may seek to hold the personal representative liable for not
selling sooner. If a family business is involved in the estate administration, the
personal representative should work with the family, to the extent reasonable, to
understand continued investment in, or maintaining status-quo holdings in, the
business.
Clearly, when the estate portfolio is not diversified, the personal
representative should move quickly to sell concentrated holdings. See ORS
130.760, 130.765. Even with a diversified portfolio, the personal representative
should strongly consider liquidating stocks, unless all of the heirs and devisees
have given informed consent, or special language in the will authorizes retention.
This cautious approach is based on the short-term focus of estate investing, the
volatility of the stock market, and the stepped up basis for appreciated stock that
should eliminate substantial capital-gain taxes on the sale.
Statistics from three market downturns illustrate the stock market’s short-
term volatility. The Dow Jones Industrial average dropped 89% from September
1929 through July 1932. JEREMY SIEGEL, STOCKS FOR THE LONG RUN 28 (1994).
During the bear market of 1973 to 1974, the “Nifty Fifty,” a group of growth
stocks favored by institutional investors, lost 80% in value from their peak. BRUCE
TEMKIN, THE TERRIBLE TRUTH ABOUT INVESTING 115 (1999). The S&P 500 index
fell 56.78% between October 9, 2007 and March 9, 2009. 2010 IBBOTSON SBBI
CLASSIC YEARBOOK, at 13.
Similarly, the personal representative should consider selling intermediate
and long-term bonds, which may lose substantial value if interest rates rise. See
Frank Fabozzi, Mark Pitts & Ravi Dattatreya, Price Volatility Characteristics of
Fixed Income Securities, in THE HANDBOOK OF FIXED INCOME SECURITIES ch 5 (5th
ed 1997). Other risks of bonds include the risk of default or downgrade of their
ratings. See Ravi Dattatreya & Frank Fabozzi, Risks Associated with Investing in
Fixed Income Securities, in THE HANDBOOK OF FIXED INCOME SECURITIES ch 3 (5th
ed 1997).
When the cash needs are known, the question of the timing for liquidation
must also take into consideration the effect of liquidation on the use of the
alternate valuation date for estate tax purposes. An asset sold during the six-
month period after the date of death must be valued at its sale price if alternate
valuation is selected; declines in value, although saving estate tax, also reduce the
total value of the estate. Treas Reg §20.2032-1(a)(1). See §§12.1-2(a), 12.2-5(e).
The lawyer for the personal representative should avoid giving investment
advice, which is not covered by the Oregon State Bar’s Professional Liability
Fund. See OSB Professional Liability Fund 2012 Claims Made Plan §V, 9. The
lawyer should encourage a personal representative who lacks investment expertise
to hire an outside investment manager. See RESTATEMENT (THIRD) OF TRUSTS §80
comment a & §90 comment j (2007) (a trustee who lacks necessary investment
expertise may be liable for his or her failure to delegate).
Investment advice is still not covered by the OSB’s Professional Liability
Fund. See 2021 PLF Primary Coverage Plan § VI, 9, available at
https://assets.osbplf.org/documents/Cover Plans/2021 PLF Primary Coverage
Plan.pdf.
§ 10.4-2(a)(3) Consent of Interested Parties
Either theory described in §10.4-2(a)(2) is open to criticism by estate
beneficiaries when using hindsight. Therefore, if practicable, the personal
representative should consult with, and obtain the consent of, beneficiaries
regarding any major plan of liquidation and temporary investment. Creditors may
also have a definite interest in the liquidation of estate assets, particularly when
solvency of the estate may be an issue.
§ 10.4-2(b) Common Investment Problems
§ 10.4-2(b)(1) Stock Rights
Stock rights represent the privilege of acquiring, at an advantageous price,
additional shares of corporate stock, usually requiring the payment of a stipulated
sum in cash. Stock rights are often issued on securities held by an estate. These
rights have a market value. The time within which they can be exercised or sold
is usually limited to a few days or weeks. Under ORS 114.305(10), the personal
representative may sell or exercise stock subscription or conversion rights
without court approval.
§ 10.4-2(b)(2) Fractional Shares
Akin to the problems connected with exercising stock rights are those
involved in “rounding out” into full shares fractional shares of stock held by or
issued to the estate. If the fractional shares result from the exercise of stock rights,
the acquisition of additional shares would be permissible under ORS 114.305(10).
In this respect, the estate is retaining its interest in the issuing company.
§ 10.4-2(b)(3) Shares in Mutual Funds
Administrators of mutual investment funds must distribute substantially all
of the capital gains to their shareholders, to avoid having income taxes levied
against them. Shareholders usually have the option to receive either cash or
additional shares of stock. Frequently, additional shares of stock are
automatically received unless the holder makes a specific request for payment in
cash. ORS 114.305(10) appears broad enough to cover this situation.
Corporate fiduciaries ordinarily elect to receive the cash, on the theory that
to receive the shares is tantamount to an unauthorized investment of the estate
funds, which may give rise to personal liability unless court approval is obtained.
The usual procedure is to notify the company on the form provided for that
purpose of the election to receive cash. Receipt of the cash is detailed in the next
estate accounting to the court.
§ 10.4-2(c) Deposit Insurance
The personal representative should also keep in mind that deposit insurance
coverage of an estate’s deposits in any single bank, savings and loan association, or
credit union is limited. The recent mortgage crisis has led to an increase in bank
failures, demonstrating the need for insurance of deposits from the Federal Deposit
Insurance Corporation (FDIC) or the National Credit Union Insurance Fund. The
insurance limit is now $250,000 for most bank and credit union accounts. See
www.fdic.gov/deposit/deposits/faq.html (FDIC insurance limits);
www.ncua.gov/Legal/GuidesEtc/GuidesManuals/NCUAHowYourAcctInsured.pdf
(insurance of credit union shares). Many banks, however, are members of a
network called “CDARS®” where funds in excess of $250,000 may be deposited
in one account, but the account is actually split (behind the scenes) between as
many banks as necessary to make sure that the entire amount is insured by the
FDIC. See www.cdars.com/home/faqs.
§ 10.5 BORROWING MONEY

§ 10.5-1(a) Scope
Sections 10.5-1(a) to 10.5-3 summarize some of the matters that a fiduciary
should consider before borrowing money.
§ 10.5-1(b) Statutory Power
ORS 114.305(14) authorizes personal representatives to advance or borrow
money, with or without security, when acting reasonably and for the benefit of
interested persons. The right to borrow is subject to the basic test of whether
borrowing money appears to be to the advantage of the estate and the
beneficiaries. See ORS 114.265.
§ 10.5-2 Fundamental Considerations
§ 10.5-2(a) The Decision to Borrow
§ 10.5-2(a)(1) Risk of Devaluation
Within the first few months of estate administration, after determining the
cash needs of the estate, the personal representative should generally reduce
sufficient assets of the estate to cash or cash equivalents, to provide for the
payment of debts, taxes, pecuniary bequests, and expenses of administration. This
practice minimizes the risks of devaluation of the estate assets, and avoids
speculation with estate assets. If the estate contains sufficient liquidity, borrowing
will not be necessary.
§ 10.5-2(a)(2) Business Judgment Necessary
A personal representative’s decision to borrow money may be based on a
business-judgment test; that is, whether an estate asset might best be preserved by
borrowing against the asset instead of selling it, keeping in mind the best interests
of the beneficiaries of the estate. If the decision to borrow is supported and
ratified by court approval, the personal representative will be more comfortable in
electing to borrow. Even when court approval is available, the personal
representative should present the borrowing versus sale choice to beneficiaries,
and secure their written consent, approval, or instruction.
PRACTICE TIP: When an existing loan is overdue, or should be
extended or renewed, or when collateral for a secured loan should be
substituted, the personal representative should secure an appropriate court
order authorizing or approving the action.
§ 10.5-2(b) Basic Problems in Borrowing
Personal representatives must be cognizant of the risks involved in
repaying a loan, particularly the risk of a drop in the market value of an asset to
be used for repayment. The marketability of estate assets, such as real property or
crops, may also be problematic.
Fiduciaries should ordinarily avoid speculating with estate assets.
Speculation can be implicit both in holding assets that are likely to fluctuate
widely in value, and in creating, increasing, extending, or continuing loans made
on the pledge of such assets. Sharp declines in the value of securities and
property can occur quickly.
§ 10.5-2(c) Special Problems in Borrowing
Problems beyond the scope of this chapter arise when an estate includes
assets such as (1) securities in a closely held corporation, or (2) a going business
that needs substantial loan capital. In both situations, an appraisal of the value of
the business is probably required to determine the wisdom of increasing,
extending, or continuing loans.
A fiduciary is often required to consider the effect of a loan on the often-
conflicting interests of remainder and income beneficiaries. The personal
representative must recognize the effect on an estate of the sale of an asset, which
may give rise to taxable gains or losses. On the other hand, although borrowing
against an estate asset is not a taxable event, a loan gives rise to problems
associated with making loan and interest payments out of current income. When
the estate is to pass to a sole heir or devisee, a prudent personal representative
will consider that person’s wishes.
In any loan, secured or unsecured, the fiduciary must limit liability for
repayment to the estate only and, preferably, to the estate asset given as security
for the loan.
PRACTICE TIP: Certain sources of cash are frequently available for
estate borrowing. Irrevocable life insurance trusts and life insurance
proceeds payable to beneficiaries of the decedent are often intended to
provide liquidity outside of probate. However, if no liquidity is available to
the estate, the personal representative may apply for a hardship deferral of
federal estate taxes. IRC §6161. The hardship deferral must be applied for
and granted one year at a time, for up to 10 years. IRC §6161(a)(2).
In addition, if qualified, the personal representative may elect to defer
the payment of a closely held business-related portion of federal estate tax
for up to 14 years. IRC §6166. The estate may pay interest at a rate of 2% on
certain portions of the business-related estate tax extended under IRC §6166,
and the hardship deferral interest rates are often higher. IRC §6601(j).
Estates that must defer the payment of federal tax may also qualify for an
Oregon inheritance tax deferral for the same period as the federal deferral,
but the interest rates on the Oregon tax deferral are not special rates and are
often much higher than the federal rates.
§ 10.5-3 Loan Purposes and Procedure
Although a personal representative has limited investment powers (see
§§10.4-1(a) to 10.4-2(b)(3)), most of the objectives of a decedent’s estate can be
realized by the personal representative’s borrowing of money under ORS
114.305(14), or through loans made in the continued operation of a business
under ORS 114.305(21), if a sale of assets is not indicated.
§ 10.6 TRANSFER OF SECURITIES

Today, marketable securities held by estates are typically held in book-
entry form by brokerages and other custodians. To manage the estate’s securities,
the personal representative must obtain an estate EIN (employer identification
number), open a new estate brokerage account, and transfer the securities to the
new estate account. Thereafter, the personal representative may sell the estate
securities or hold them for distribution of cash to the beneficiaries, or, if
distribution of the securities will occur in-kind, the personal representative may
direct the broker to transfer the securities from the estate brokerage account to
each beneficiary’s own brokerage account. However, in some cases, the decedent
might own securities in certificate form, which may require additional steps to
transfer the securities into the name of the personal representative or the
beneficiaries. In these situations, the lawyer should understand the problems
involved in transferring certificated shares to heirs and devisees.
Sections 10.6-2 to 10.6-3(c) discuss the problems and mechanics of
transferring and reissuing certificated securities. Section 10.6-3(d) discusses
general issues related to the transfer of certificated or book-entry securities.
§ 10.6-2 Laws Affecting Transfers
The transfer of certificated securities is an internal matter of the issuing
corporation, governed by the laws of the state in which the company is
incorporated. The issuing corporation (the “issuer”), however, must also take into
account the laws of the state in which the estate is administered. The laws of the
state of administration determine the rights, powers, and authority of the estate
representative and they further determine the requirements and procedures to be
followed to transfer the securities from the estate to the beneficiaries. Therefore,
for Oregon purposes, the Oregon probate code and the Oregon Uniform
Commercial Code (UCC) govern the transfer of securities of an Oregon
corporation from an Oregon estate. Assuming that the personal representative has
been appointed and is transferring the securities in accordance with his or her
duties, ORS chapter 78 determines what documents a transfer agent or issuer may
require.
The issuer will register the transfer of a security as requested, if the
requirements set forth in ORS 78.4010 are met.
An indorsement or instruction must be made by the appropriate person, or by
an agent who has actual authority to act on behalf of the appropriate person. ORS
78.4010(1)(b). In the case of a transfer from an estate, the indorsement or
instruction is done by the personal representative on behalf of the estate. See ORS
78.3040, regarding indorsements.
Reasonable assurance, as described in ORS 78.4020, must be given that the
indorsement or instruction is genuine and authorized. ORS 78.4010(1)(c).
A person who guarantees the signature of an indorser of a security certificate
warrants that the signature is genuine, that the signer is an appropriate person to
indorse, and that the signer has the legal capacity to sign. ORS 78.3060.
A guarantee may be made by an officer of a bank or by a broker who is a
member of a recognized national stock exchange. The guarantee is usually stamped
on the instrument of assignment, below or near the indorsement.
CAVEAT: The personal representative should not confuse a notary
public with a guarantor of a signature. The indorsement of a notary is not the
same as a signature guarantee, and is not sufficient.
When the indorsement is made by a fiduciary, he or she must furnish
appropriate evidence of appointment or incumbency. ORS 78.4020(1)(c). For a
personal representative, appropriate evidence of appointment would be certified
copies of letters testamentary or letters of administration (or other certificate)
bearing a date of issuance within 60 days before the request for transfer. ORS
78.4020(3)(b). The letters are obtained from the clerk of the probate court. If the
estate includes a number of certificated shares, the cost of those letters may be
substantial. The cost may be reduced by requesting the return of the certified
copy of letters, although the 60-day requirement usually limits their use for
further transfers. Photocopies are usually not acceptable.
PRACTICE TIP: In view of the 60-day requirement, the number of
certified copies of letters requested at the inception of administration of the
estate should be limited to those immediately required.
PRACTICE TIP: Former ORS 118.320 required the Department of
Revenue to consent prior to a transfer. Although the statute was repealed in
1987, some transfer agents may still request such a consent. The 2003
Legislature reinstated an inheritance tax in Oregon (see 2003 Or Laws ch
806), but did not reinstate ORS 118.320.
Although the probate code contains a provision intended to deal with the
problem of excessive documentation (see ORS 114.375), few transfer agents will
alter their requirements for documentation, which are controlled by the UCC.
If the issuer is an Oregon corporation, the requirements of transfer will
undoubtedly be based on the laws discussed above. If, however, the issuer is
located in another jurisdiction, that jurisdiction’s requirements for transfer may
be different. If the UCC or the Uniform Act for Simplification of Fiduciary
Security Transfers is in effect in that jurisdiction, the requirements of transfer
should include those already discussed. But if neither of those acts has been
adopted, some variations of those requirements may exist.
The direct transfer of securities is effected through the secretary of the
issuing corporation or its transfer agent, either of whom can advise the personal
representative on the required documentation. Many transfer agents use printed
lists of requirements covering all types of transfer.
Additional requirements may include one or more of the following:
(1) Some states impose a tax on the transfer of securities by a resident.
Accordingly, an affidavit of residency, also known as an affidavit of domicile, is
also required. Such an affidavit is furnished in lieu of an inheritance tax release or
waiver when the decedent is a nonresident of that state.
(2) Some transfer agents take the position that they must be satisfied that
the security has been listed in the inventory of the estate. Therefore, they require
certified copies of the inventory.
(3) A certified order of the court may be required.
(4) If the personal representative of the estate is a corporation, a certified
copy of the resolution designating and authorizing the officer of that corporation
to effect the assignment may be requested.
(5) Rarely, a certified copy of the will of a decedent who died testate
may be required.
(6) If the transfer agent has knowledge of an impropriety in the transfer,
or if an adverse claim has been lodged with the transfer agent or the issuer,
additional requirements may be imposed.
(7) A certified copy of the death certificate is sometimes required.
§ 10.6-3 Mechanics of Transfer
The steps and documents required to effect the transfer of a certificated
security vary somewhat with the circumstances attending the transaction
involved. A corporate fiduciary might be able to enter into an indemnification
agreement with a transfer agent to reduce or eliminate the use of supporting
documents. Unless that is done, the documents required in the more common
situations would be as set forth in §§10.6-3(a) to 10.6-3(d).
§ 10.6-3(a) Transfer to the Personal Representative
Securities in the name of the decedent should not be retained in the
decedent’s name if they have any significant income attributes, because the
allocations between the fiduciary income tax return and the decedent’s final
return will be more complicated and subject to error. The most efficient way to
avoid the problem of interest and dividends being reported on the Social Security
number of a decedent, instead of on the employer identification number (EIN) of
the estate, is to move all of the certificated securities in the decedent’s name into
a brokerage account in the name of the estate, where they can be held in street
name (or book-entry) form. The transfer costs will be reduced or eliminated
entirely by doing so; the proper EIN will be attached to all dividends, interest,
and capital gains or losses; and the securities will be simple to transfer to the
ultimate distributees.
§ 10.6-3(b) Transfer to a Buyer
If the personal representative sells certificated securities and if no court
order authorizing the sale exists, the delivery of the following documents to the
transfer agent should be sufficient to effect the transfer in the usual situation:
(1) The security;
(2) The assignment and power properly signed with the signature
guaranteed;
(3) A certified copy of letters; and
(4) If appropriate, an affidavit of domicile of the decedent.
If a court order authorizing or ordering the sale exists, the following
documents, in addition to those listed above, should be furnished:
(1) A certified copy of the court order; and
(2) A certified copy of the bill of sale showing compliance with the
court order by sale in the manner, for the price, and on the terms and conditions
set forth therein.
§ 10.6-3(c) Transfer to a Co-Owner
The certificated security may be registered in the name of the decedent and
one or more persons in the following situations:
(1) If the security is registered in the name of the decedent and another
person as joint tenants or with right of survivorship, the only step required is to
effect the relinquishment of the decedent’s interest. The following documents
should be submitted to the transfer agent: (a) a certified copy of the death
certificate, (b) the security certificate, (c) the assignment and power signed by the
survivor with the signature guaranteed, and (d) an affidavit of domicile of the
decedent, if appropriate.
(2) If the security is registered in the name of the decedent and one or
more other persons as tenants in common, the only variations from the
requirements applicable to joint tenants, discussed above, are that (a) the
assignment and power must be signed by the decedent’s personal representative
and each of the surviving co-owners, with all of the signatures guaranteed, and
(b) the security must be accounted for in the probate proceeding.
(3) If the decedent was a life tenant, registration in the name of the
remainderholder is accomplished by furnishing the transfer agent with a certified
copy of the death certificate and a certified copy of the instrument creating the life
estate and showing the name of the remainderholder.
§ 10.6-3(d) Transfer to a Distributee
If securities are to be transferred pursuant to an order for partial
distribution or a judgment of final distribution, specific information should be
included in the order or judgment to allow for the easy transfer of such securities.
In some cases, ownership of the securities will need to be transferred to persons
other than named devisees or intestate heirs, for example, when (1) a devisee or
an heir has died and a new person has succeeded to the estate interest, (2) a
devisee or heir has changed his or her name due to marriage or divorce, (3) the
persons entitled to the estate have entered into an agreement about estate
distribution pursuant to ORS 116.113(3), or (4) the devisees or heirs have agreed
to a non-pro rata distribution of the estate. The order or the judgment should
explain how and why the actual distribution varies from the will or the intestate
shares, and the explanation should be sufficient to justify the actions of the
transfer agent or broker relying on the judgment or order. Even then, additional
documents may be required.
In a normal distribution of certificated securities, the following documents
should be forwarded to the transfer agent: (1) a certified copy of the order or
judgment in which the distribution is described, (2) the security certificates, (3)
the assignment and power signed by the personal representative with the
signature guaranteed, (4) a certified copy of letters, and (5) an affidavit of
domicile, if appropriate.
For securities that are held in street name, a letter of instructions from the
personal representative to the brokerage detailing how to distribute the securities
in the estate account, together with current (within 60 days) letters testamentary
or letters of administration, is normally all that the broker requires. The broker
should also require a copy of the court order or judgment. If a brokerage account
is frozen (to reduce the amount of the bond or in the case of an estate dispute), a
certified copy of the order unfreezing the account must also accompany the letter
of instructions.
PRACTICE TIP: Many brokers charge a set fee to transfer certificated
securities. The personal representative or lawyer should ask several
reputable brokers or corporate fiduciaries what they would charge.
Generally, the personal representative or lawyer can find a broker who will
effect these security transfers for substantially less cost and less effort than a
lawyer or legal assistant. On the other hand, the transfer of securities in-kind
from the estate account to an account or accounts in the names of the
distributees is usually cost-free, if done in street names.
Subsections (3) and (4) of ORS 116.113 were renumbered subsections (2)
and (3), respectively.
§ 10.7 TRANSFERS OF PROPERTY TO COMPLETE CONTRACTS

§ 10.7-1 Definitions
For purposes of the discussion in §§10.7-2 to 10.7-4, the following
definitions apply:
(1) A transfer is an act of the personal representative by which the title
to the decedent’s property is conveyed;
(2) Property includes both real property and personal property; and
(3) A contract is an agreement of the decedent.
§ 10.7-2 General Principles
Except as restricted or otherwise provided in the will or by court order, a
personal representative, acting reasonably for the benefit of interested persons, is
authorized to complete, compromise, or refuse performance of the decedent’s
contracts that continue as obligations of the estate. ORS 114.305(4).
§ 10.7-3 Limitations
Only enforceable contracts of the decedent are to be performed by the
personal representative. If the contract was not enforceable against the decedent
during his or her lifetime, the personal representative has the right and duty to
refuse performance. See ORS 114.305(4).
PRACTICE TIP: In deciding whether a contract is enforceable, the
personal representative should determine the existence of any bar, including
the decedent’s discharge in bankruptcy, a statute of limitations, the lack or
failure of consideration, incompetency, laches, prior performance, accord
and satisfaction, the existence of other security, or any other matter that
would abrogate the decedent’s or the estate’s liability under the contract.
If the estate has exposure to litigation and possible liability, the personal
representative may compromise the matter. ORS 114.305(4). The personal
representative who is uncertain in any case about whether to complete or to refuse
to complete a contract, or to negotiate a compromise, should petition the court for
instructions on the matter and authority to act. ORS 114.275. See Form 10-2.
§ 10.7-4 Method of Transferring Property
Except when a personal representative elects to seek court instructions and
authority to complete a decedent’s contract, the personal representative makes a
transfer by executing and delivering a deed, bill of sale, assignment, note,
mortgage, or other appropriate instrument of conveyance. For a proper
designation of the personal representative as a grantor, mortgagor, etc., see
PRINCIPLES OF OREGON REAL ESTATE LAW §6.26 (Oregon CLE 1995 & Supp
2003).
If the decedent’s contract calls for part payment and a mortgage, trust deed,
or security agreement for the balance, the personal representative has the
authority to execute such instruments on behalf of the estate. ORS 114.325(1).
See Form 11-6.
The personal representative may deliver a deed in escrow with directions
that the proceeds, when paid in accordance with the escrow agreement, be paid to
the successors of the decedent as designated in the escrow agreement. ORS
114.305(4)(b).
If a contract of the decedent to be completed by the personal representative
is for a sale of real property, and a fulfillment deed is required, a warranty deed
may be required. If the contract calls for a “good and sufficient deed,” a special
warranty deed may be required. A personal representative’s deed, however, may
be acceptable to the buyer in such cases, and such a deed should always be used
for sales of real property initiated by the personal representative. See
DOCUMENTATION OF REAL ESTATE TRANSACTIONS Form 5, §12 (OSB Legal Pubs
2008); PRINCIPLES OF OREGON REAL ESTATE LAW ch 6 (Oregon CLE 1995 &
Supp 2003).
PRACTICE TIP: If the decedent’s contract calls for a warranty deed (or
a special warranty deed), the personal representative should consider
obtaining a preliminary title report and furnishing an owner’s title insurance
policy.
CAVEAT: Unless the completion of the contract is being closed in
escrow, the personal representative should be certain that any personal
checks to the personal representative or the estate have been certified by the
drawee bank before instruments of conveyance are delivered.
See 1 Oregon Real Estate Deskbook ch 14 (OSB Legal Pubs 2015) (deeds
and conveyances). See also 2 Oregon Real Estate Deskbook Form 25-1 (contract of
sale).
§ 10.8 SALES, LEASES, AND MANAGEMENT OF REAL PROPERTY

§ 10.8-1 Sale of Property
§ 10.8-1(a) Notice, Hearing, and Court Order
In general, a personal representative may sell property of the estate without
notice, hearing, or court order. ORS 114.325(1). However, notice, a hearing, and
a court order are required if:
(1) The sale is in contravention of the provisions of the will;
(2) The property is specifically devised and the will does not authorize
its sale; or
(3) A required bond has not been increased to cover the amount of cash
realized on a sale when the sale price exceeds $5,000.
ORS 114.325(2).
PRACTICE TIP: If the amount of the bond must be increased for a sale,
the personal representative is required to obtain the increase-rider for the
existing bond, and an application to the court for an order for that purpose is
not necessary. The bond or increase-rider, when filed, should be approved
by the court. The word Approved, with a line for the signature of the judge
and date, can be written on the bond or rider, and is sufficient. See Forms
10-3 and 10-4. Supplementary local rules (SLRs), such as SLR 9.021
(Douglas County), may require corporate surety bonds when the personal
representative exercises his or her power of sale. The SLRs are available
online at www.courts.oregon.gov/Pages/default.aspx.
As with leasing, the personal representative must act prudently to obtain full
market value on the sale of estate property. See Hatcher v. U. S. Nat. Bank of
Oregon, 56 Or App 643, 643 P2d 359 (1982). In addition, the personal
representative may have a duty to consult with beneficiaries— and give them the
opportunity to buy real estate—before selling real property that is the major estate
asset. See Allard v. Pacific Nat. Bank, 663 P2d 104, 110 (Wash 1983).
The 2017 Legislature amended ORS 114.325, deleting the explicit provision
$5,000, but adding a clause making the statute subject to ORS 113.105, which
governs bond requirements. The amount of the bond set by the court “must be
adequate to protect interested persons.” ORS 113.105(1)(b). If a bond is required,
it must be “executed by a surety qualified under ORCP 82 D to G.” ORS
113.105(1)(a). See Supp § 5.2-6(a) (necessity of a bond). See also Supp § 5.2-6(c)
(increasing, decreasing, or requiring a new bond).
§ 10.8-1(b) Serving Notice of Hearing
When a personal representative’s sale of property must be preceded by
notice, a hearing, and a court order, as required by ORS 114.325(2) (see §10.8-
1(a), Forms 10-3, 10-4), the method and time of giving notice are controlled by
the general provisions of ORS 111.215, 111.218, 111.225, and 111.245. ORS
111.215(1) requires that notice be given “to each person interested in the subject
of the hearing.”
In intestate situations when the amount of the bond is not increased by the
amount of the sale proceeds exceeding $5,000 (see ORS 114.325(2)(c)), the heirs
should be served with the notice.
In testate situations when the sale is contrary to directions in the will, or the
sale is of property specifically devised, or the bond, if any, is not increased by the
amount of the sale (see ORS 114.325(2)), the notice should be given to both the
heirs and devisees until the period for contesting the will has expired (see ORS
113.075), and thereafter to the devisees.
CAVEAT: These requirements apply to sales of both real property and
personal property, and the word devisees includes legatees. ORS
111.005(12), (27).
The court may authorize notice by electronic means under ORS 111.215(2).
See UTCR chapter 21 (Filing and Service by Electronic Means; Electronic Files of
the Court).
The 2017 Legislature amended ORS 114.325, deleting the explicit provision
$5,000, but adding a clause making the statute subject to ORS 113.105, which
governs bond requirements. See Supp § 10.8-1(a) (notice, hearing, and court
order).
The 2016 Legislature amended ORS 111.005(12). Previously, the statute
provided that the term devisee “includes ‘legatee’ and ‘beneficiary.’” The statute
now defines the term devisee as “a person designated in a will to receive a devise.”
§ 10.8-1(c) Personal Representative Fails or Declines to Sell Property
If the sale of property of the estate is required for payment of spousal or
child support, the elective share of the surviving spouse, claims, or expenses of
administration, or for distribution, and the personal representative fails or
declines to sell the property, the court, on satisfactory proof by an interested
person, may order the personal representative to make the sale. ORS 114.335. See
Forms 10-3, 10-4.
§ 10.8-1(d) Sale Subject to Liens
Property sold by a personal representative is subject to liens and
encumbrances against the decedent or the decedent’s estate, but it is not subject to
the rights of creditors of the decedent or liens or encumbrances against the
decedent’s heirs or devisees. ORS 114.345. See Forms 10-3, 10-4.
§ 10.8-1(e) Voidable Sales
A sale to the personal representative or to the personal representative’s
spouse, agent, or lawyer, or to any corporation or trust in which the personal
representative has more than a one-third beneficial interest, is voidable unless:
(1) All interested persons affected by the transaction consent to it;
(2) The will expressly authorizes the transaction by the personal
representative; or
(3) The transaction was made in compliance with another statute or with
a contract or other instrument executed by the decedent.
ORS 114.355(1).
However, the title of a purchaser for value without notice of the
circumstances of the transaction with the personal representative is not affected
unless the purchaser should have known of the defect in the seller’s title. ORS
114.355(2). See Advisory Committee comment on ORS 114.355, online at
http://records.sos.state.or.us/ORSOSWebDrawer/RecordView/5888909.
For a case upholding a personal representative’s self-dealing in exercising a
purchase option from the estate, see McPherson v. Dauenhauer, 187 Or App 551,
69 P3d 733 (2003).
§ 10.8-2 Leases of Property
A personal representative has the same power to lease real or personal
property of the estate without notice, hearing, or court order as he or she has to
sell it. ORS 114.325. See §§10.8-1(a) to 10.8-1(b). Note, however, that the
restrictions in ORS 114.325(2) (see §10.8-1(a)) apply only to sales of property,
not to leases of property.
A lease by the personal representative may well be in the best interests of
the estate and of interested persons, in order to produce rents and profits, to
protect against vandalism and excessive depreciation, and to maintain insurance
coverage. See ORS 114.305(4).
Although not specifically stated in the statute, it is a fair assumption, in
view of the broad power granted to the personal representative to lease or sell
property, that the personal representative has the power to lease the property for a
term extending beyond the duration of probate. Seeking the approval of the heirs
or devisees for the longer term would be advisable, however. It may also be
appropriate to place the real property to be leased into a single-member limited
liability company owned by the estate for the duration of the probate, to further
protect the assets of the estate from potential liability. The personal representative
may want to consult with the eventual beneficiaries of the particular asset when
forming an estate entity.
In leasing real estate of the estate, the personal representative should seek to
minimize vacancies. If the property is vacant, the personal representative should
consider renting it to reduce the risk of vandalism and to avoid the difficulties of
insuring vacant buildings. The personal representative should also obtain
background checks on tenants, to avoid tenants with a record of skipping rent or
damaging property. The personal representative may be liable to the estate if he or
she fails to demand and collect market rent. See Jarrett v. U.S. Nat. Bank of
Oregon, 81 Or App 242, 725 P2d 384 (1986); Kinney v. Uglow, 163 Or 539, 98
P2d 1006 (1940).
For discussion on dealing with holdover occupants, see Sarah Subias,
Deceased Dad’s New “Girlfriend”: Removing a Holdover Occupant Using the
Probate or Trust Code, OSB Est Pl & Admin Sec Newsltr 1 (July 2013).
§ 10.8-3 Undeveloped Real Property
Personal representatives often encounter problems when undeveloped
property is an asset of the estate. There may be no market for undeveloped
property, and the expense of retaining it in the estate may be burdensome. The
property may be subject to sewer liens, liens of local improvement districts, and
tax liens.
The personal representative may be asked to develop the property to make
it saleable, but a prudent fiduciary should avoid doing so. If the beneficiaries
want the property to be developed, a petition for partial distribution of the
property to them may be appropriate so that they can do so. Title in the
beneficiaries will aid their ability to obtain financing and will relieve the personal
representative of liability for an unwise investment. A sale at a discount, after
obtaining the devisees’ consent, is also occasionally possible.
Oregon Measures 37 and 49 have altered the development rights related to
undeveloped property in Oregon. See 2005 Or Laws ch 1; 2007 Or Laws ch 424.
The personal representative should investigate carefully before developing or
distributing an estate’s undeveloped property. See 2 LAND USE ch 5 (OSB Legal
Pubs 2010).
See ORS 195.305 (compensation for restriction of use of real property due to
land use regulation); ORS 195.300–195.336 (just compensation for land use
regulation).
§ 10.8-4 Environmental Contamination
Dealing with potential environmental contamination of real property is a
serious matter. See §7.2-4(a)(3). The law, in general, imposes strict liability. The
cleanup costs can be ruinous. Liability may be present for pollution that occurred
long ago under actions that were considered acceptable at the time. For example, in
Newell v. Weston, 150 Or App 562, 946 P2d 691 (1997), the appeals court ruled
that an Oregon statute requiring cleanup of discharges from underground storage
tanks applied retroactively to a gasoline tank installed before the statute was
enacted.
The estate’s lawyer should consider associating with a specialist in
environmental law. For an additional discussion of this general topic, see
ADMINISTERING TRUSTS IN OREGON ch 19 (OSB CLE 2007). See also
ENVIRONMENTAL AND NATURAL RESOURCES LAW (Oregon CLE 2002 & Supp
2006); 1 DAMAGES ch 21 (Oregon CLE 1998 & Supp 2007).
See §§10.8-4(a) to 10.8-4(d).
For discussion on environmental liability issues, see Administering Trusts in
Oregonv ch 19 (OSB Legal Pubs 2018). See also 1 Damages ch 19 (OSB Legal
Pubs 2016) (invasions of real property including environmental damage).
§ 10.8-4(a) Federal Superfund Statute (CERCLA)
In general, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), 42 USC §§9601–9675, makes the “owner and operator
of . . . a facility” strictly liable for environmental cleanup costs incurred by the
government. 42 USC §9607(a)(1), (4); see ORS 465.200(20). A facility includes
any place where hazardous substances have “come to be located.” 42 USC
§9601(9); see ORS 465.200(13).
In Oregon, the personal representative is not considered to be the owner of
estate property. See ORS 114.215(1). However, the personal representative may
still be liable as an operator. See ORS 465.200(20). See also §§7.2-4(a)(3), 10.8-
4(c).
In response to concerns of lenders and fiduciaries, Congress amended
CERCLA in 1997 to limit personal liability. The amendment also limited liability
for underground storage tanks under the Resource Conservation and Recovery Act,
42 USC §§6901–6992k. The amendment provides, in part, that a fiduciary’s
liability may not exceed the assets held in a fiduciary capacity, and that the
fiduciary is not liable for administering a facility that was contaminated before the
fiduciary relationship began. 42 USC §9607(n)(1), (4)(H). However, the exception
does not protect the fiduciary if the contamination was due to the fiduciary’s own
negligence. 42 USC §9607(n)(3).
The 1997 amendment also establishes a safe harbor for activities of a
fiduciary that do not cause it to be deemed to be an operator of a facility. These
include cleaning up contamination at the instruction of an environmental agency,
resigning as fiduciary, and monitoring the facility. 42 USC §9607(n)(4).
§ 10.8-4(b) Federal Claims Priority Statute
The Federal Claims Priority statute, 31 USC §3713, makes the personal
representative indirectly liable for a decedent’s past violations of environmental
laws. In relevant part, the statute provides that “[a] representative . . . of an estate
. . . paying any part of a debt of the . . . estate before paying a claim of the
Government is liable to the extent of the payment for unpaid claims of the
Government.” 31 USC §3713(b). Distributing assets to heirs is considered paying a
debt of the estate. Thus, to the extent that a personal representative disburses and
depletes an estate, he or she may be liable for the federal government’s existing
claims against the deceased person. This liability is limited to the value of the
assets in the estate (plus interest) and does not apply to state claims.
Claims under the priority statute usually involve unpaid taxes. However,
other federal obligations, including environmental liability, may qualify,
particularly when the cleanup work has begun, or the decedent or a relative was
notified by the Environmental Protection Agency of potential liability for the
cleanup costs. See U.S. v. Moore, 423 US 77, 83–85, 96 S Ct 310, 46 L Ed2d 219
(1975); In re Jensen, 995 F2d 925 (9th Cir 1993).
§ 10.8-4(c) Oregon Cleanup Statute
Oregon’s environmental cleanup statute is similar to the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), 42 USC
§§9601–9675 (see §10.8-4(a)). See ORS 465.200–465.455, 465.900. Owners and
operators are strictly liable for remedial costs due to the release of a hazardous
substance, but limited defenses exist for persons who (1) did not know of the
contamination when they first became owner or operator, (2) acquired the facility
by inheritance or bequest, or (3) are otherwise exempted from liability by rules
adopted by the Oregon Department of Environmental Quality (DEQ). ORS
465.255, 465.440.
The Oregon DEQ has adopted a rule limiting liability for fiduciaries similar
to the 1997 federal amendment of CERCLA. OAR 340-122-0140. However, the
DEQ rule protects only bank trust departments and trust companies. The state of
Oregon was concerned that a blanket rule for all fiduciaries would lead to abuse by
individuals who would place their polluted properties into family trusts. Whether
or not this concern was valid, it is the law in Oregon. Therefore, a personal
representative can be held liable for cleanup costs under Oregon law even if the
personal representative is protected under CERCLA. See §7.2-4(a)(3).
§ 10.8-4(d) How to Protect the Personal Representative
A personal representative can take measures to minimize his or her exposure
to environmental liability. First, the personal representative should investigate
possible contamination before agreeing to serve as personal representative.
Second, the personal representative should consider asking the court for
instructions (see ORS 114.275), with notice to interested parties. This protects the
personal representative from second-guessing by heirs and devisees, who might
later complain that the personal representative either wasted their inheritance
returning dirt to its pristine state, or failed to do a thorough cleanup. At the same
time, seeking court instructions gives heirs and devisees a chance to be heard
ahead of time.
Third, the personal representative should consider hiring a property
manager, environmental consultant, or both, with special expertise.
Fourth, the personal representative should not lose hope of obtaining liability
insurance coverage. See generally ENVIRONMENTAL LAW AND NATURAL
RESOURCES LAW ch 22 (OSB CLE 2002 & Supp 2006). Although most
comprehensive general liability policies sold since 1985 have pollution clauses that
exclude coverage for environmental cleanup costs, older policies were not so
tightly drafted. A personal representative may be able to obtain coverage under the
pre-1985 policies owned by the former business whose activities caused the
pollution. For example, in St. Paul Fire & Marine Ins. Co., Inc. v. McCormick &
Baxter Creosoting Co., 324 Or 184, 923 P2d 1200 (1996), the Oregon Supreme
Court ruled that a wood-treating company was entitled to insurance coverage for
environmental cleanup costs under insurance policies issued dating back to 1949.
The court rejected arguments that coverage had expired and that the policies were
limited to injuries caused by accidents.
In addition, in 2003, the Oregon Legislature made it easier for policyholders
to establish the terms of lost policies of general liability insurance and to settle
claims with insurers for environmental coverage under such policies. See ORS
465.475–465.482 (as amended by 2003 Or Laws ch 799).
§ 10.9 COLLECTING ESTATE ASSETS

Persons holding assets belonging to the decedent’s estate will usually
deliver them to the personal representative without any problems or objections.
However, disputes concerning collection of assets may arise. The personal
representative is authorized to deal with those disputes in a number of ways. See
§§10.9-2 to 10.9-3.
§ 10.9-2 Compromise or Adjustment of Indebtedness to Estate
If advantageous to both the estate and interested persons, the personal
representative is authorized to “[c]ompromise, extend, renew or otherwise modify
an obligation owing to the estate.” ORS 114.305(15). Also, “[a] personal
representative who holds a mortgage, pledge, lien or other security interest may
accept a conveyance or transfer of the encumbered asset in lieu of foreclosure in
full or partial satisfaction of the indebtedness.” ORS 114.305(15).
The personal representative may accept other real property in part payment
of the purchase price of real property sold. ORS 114.305(16).
The personal representative’s authority to so act is not without limitations
or problems, including the following:
(1) The will or a court order may restrict the personal representative’s
authority. The court may issue restrictive orders on application of an interested
person or the personal representative. ORS 114.275, 114.305.
(2) The personal representative must act reasonably for the benefit of
interested persons. ORS 114.305. However, what appears to be reasonable to one
person may be deemed unreasonable by another person. When reasonableness
may be an issue, the safer practice is for the personal representative to apply to
the court for authority, approval, or instructions. See ORS 114.275. The court
may act on the application with or without a hearing. The application and order
should be prepared with care after consideration of the possible consequences.
For example, the order should authorize rather than direct, because it may not be
possible to effect the compromise. Changes in the proposed action may be
needed. If the application and order cannot be complied with, a new application
and order should be sought vacating the outstanding order and obtaining a new
one.
(3) Not all of the disputes that arise in the course of administration may
be resolved by compromise or other modification. The probate code authorizes
compromise or other modification only with respect to obligations owing to the
estate, and obligations of the estate resulting from the decedent’s contracts. ORS
114.305(4). Matters such as determining heirship and the claims of heirs or
beneficiaries are not included in the authority of the personal representative.
Compromises or modification in those matters may be effected only by the
persons or heirs involved, or by the probate court. See ORS 111.095(2).
§ 10.9-3 Litigation
The personal representative may find that collecting the assets of the estate
is undesirable or impossible without resorting to litigation or other formal
proceedings. Several provisions in the probate code grant authority to discharge
the personal representative’s duties in this respect. Those provisions, however,
are not without limitations or restrictions. Limitations or restrictions such as the
following may be found in the language of the provision or in other statutes or
rules of law:
(1) The discovery procedures available to the personal representative are
found in ORS 114.425, and may be used in connection with litigation or other
proceedings. See Forms 10-5 and 10-6.
(2) The personal representative has the same right to perfect a lien or a
security interest as the decedent would have if living. ORS 114.315.
(3) The personal representative may prosecute “actions, claims or
proceedings in any jurisdiction for the protection of the estate and of the personal
representative in the performance of” fiduciary duties. ORS 114.305(19).
COMMENT: The phrase “for the protection of the estate” is broad
enough to include the collection of the estate assets. ORS 114.225 gives the
personal representative the right and the duty to collect the estate assets,
although the personal representative is not required to collect and control an
asset in the possession of the asset’s specific heir or devisee, unless the asset
is necessary for purposes of administration.
The phrase “in any jurisdiction” (ORS 114.305(19)) is to be construed
in relation to the authority granted to the personal representative. Whether a
court in another jurisdiction would recognize such authority depends, of
course, on the laws of that jurisdiction. If the cause of action is assignable,
the personal representative may wish to assign the cause of action to himself
or herself in his or her individual capacity, and perhaps thus avoid technical
problems that would exist if the proceedings were brought in the
representative capacity.
NOTE: ORCP 26 A provides that “[e]very action shall be prosecuted in
the name of the real party in interest. An executor [or] administrator . . . may
sue in that party’s own name without joining the party for whose benefit the
action is brought.” However, ORCP 26 A does not govern all proceedings;
the requirement for parties is different in a number of situations. Under ORS
105.005, a person must have a legal estate in, and a present right to, the
possession of the subject real property to bring an action of ejectment. ORS
105.605 contains a similar requirement regarding suits to quiet title. The
Declaratory Judgments Act (ORS chapter 28) requires the personal
representative to include heirs and legatees as parties to any such
proceeding. ORS 28.110. Under the probate code, title to personal property,
as well as real property, vests in the heirs at law or devisees on the
decedent’s death. ORS 114.215. For competing views on whether claims
belong to the estate or the heirs or devisees, see Stephen L. Griffith,
Hendrickson’s Estate v. Warburton is Not the Only Law That Governs
Representative Actions and Its Holding is Qualified, OSB EST PLAN &
ADMIN SEC NEWSLTR, July 2005, at 2; James R. Cartwright, Hendrickson’s
Estate v. Warburton continues to be “Good Law,” OSB EST PLAN & ADMIN
SEC NEWSLTR, July 2005, at 4.
(4) The personal representative may prosecute claims of the decedent,
including claims for personal injury or wrongful death. ORS 114.305(20); ORS
30.010 et seq.
NOTE: The personal representative’s petition for approval of a
settlement of a personal injury claim must be accompanied by an affidavit
setting forth all of the relevant information concerning the settlement,
including medical reports on the nature and extent of the injury and the
prognosis. UTCR 9.040.
In addition to the affidavit, in some counties, Supplementary Local
Rules require that the affidavit describe the incident, the injuries, the amount
of the prayer and settlement, attorney fees and costs, disposition of the
proceeds, the present value of any future payments in a structured
settlement, and a brief statement explaining the reasons for the settlement.
See SLR 9.041 (Lane) and SLR 9.055 (Multnomah), available online at
www.courts.oregon.gov/rules/Pages/slr.aspx.
(5) All causes of action or suit “by one person against another, survive
to the personal representative of the former and against the personal
representative of the latter.” ORS 115.305.
(6) The personal representative has a limited right to recover property
transferred by the decedent with the intent to defraud his or her creditors, or
property transferred by any means that in law is void or voidable as against the
decedent’s creditors. ORS 114.435. See Matter of Hill’s Estate, 27 Or App 893,
906, 557 P2d 1367 (1976). However, this right may be exercised by the personal
representative only to the extent that such property is necessary for the payment
of expenses of administration, funeral expenses, claims, and taxes. See
Hendrickson’s Estate v. Warburton, 276 Or 989, 996, 557 P2d 224 (1976);
Ledford v. Yonkers, 278 Or 37, 40, 562 P2d 970 (1977).
(7) A personal representative who prosecutes any proceeding “in good
faith and with just cause,” whether successful or not, is entitled to receive from
the estate necessary expenses and disbursements incurred in the proceeding,
including reasonable attorney fees. ORS 116.183(2).
(8) The personal representative for the estate of a “vulnerable person”
may bring a civil action against any person who physically or financially abused
the decedent. ORS 124.100(2), (3)(c). The decedent must have been a vulnerable
person when the cause of action arose. ORS 124.100(3)(c). The statute defines
vulnerable person as (a) an “elderly” person who is 65 years of age or older (see
ORS 124.100(1)(a)); (b) a “financially incapable” person (see ORS
124.100(1)(b), 125.005); (c) an “incapacitated” person (see ORS 124.100(1)(c),
125.005); or (d) a person “with a disability who is susceptible to force, threat,
duress, coercion, persuasion or physical or emotional injury because of the
person’s physical or mental impairment.” ORS 124.100(1)(e).
Regarding item (7) in the 2012 text, ORS 116.183(2) was renumbered ORS
116.183(3).
Regarding item (8) in the 2012 text, see Supplement § 15.4 (physical or
financial abuse of vulnerable persons) and Elder Law § 9.4 (OSB Legal Pubs
2017) (elder-abuse litigation).
§ 10.10 CONTINUANCE OR LIQUIDATION OF DECEDENT’S
BUSINESS OR VENTURE
§ 10.10-1 Scope of Authority and Limitations in Handling Decedent’s
Business
The probate code grants the personal representative much latitude in
handling a decedent’s business affairs. The personal representative has authority
to “[c]ontinue any business or venture in which the decedent was engaged at the
time of death to preserve the value of the business or venture.” ORS 114.305(21).
CAVEAT: The personal representative’s authority under ORS
114.305(21) to continue a business or venture is qualified by the words “to
preserve the value of the business or venture.” These words could be
construed as limiting the authority of the personal representative. It could be
argued that liquidation would be required if it could be accomplished
without loss of value to the estate, even though it might be extremely
profitable to continue the business or venture. Perhaps a more reasonable
interpretation would be that the words are not words of limitation when they
allow the personal representative to continue a business or venture, as long
as the personal representative acts reasonably for the benefit of interested
persons. The meaning, however, requires judicial or legislative clarification.
The term venture also requires interpretation. Most authorities define
venture as a specific enterprise involving risk. Undoubtedly, the term
includes joint ventures. The absence of the word joint indicates that a
broader meaning should be ascribed to the word. Participation in a
partnership surely falls within its meaning.
The personal representative may incorporate or otherwise change the
business form of, or discontinue or wind up, any business or venture in which the
decedent was engaged at the time of death. ORS 114.305(22)–(23). The personal
representative’s discretion in these respects is limited by the requirement of
acting reasonably for the benefit of interested persons. Other limitations, intended
or not, probably exist.
QUERY: The authority of the personal representative to incorporate or
otherwise change the business form of any such business or venture is not
followed by any words of limitation. ORS 114.305(22). Does this mean that
the business or venture is to be continued only to preserve its value?
Remembering that the principal function of the personal representative is to
“preserve, settle and distribute the estate . . . as expeditiously and with as
little sacrifice of value as is reasonable under the circumstances” (ORS
114.265), all of the powers listed in ORS 114.305 should be regarded as
granting to the personal representative the needed authority to carry out
those functions.
§ 10.10-2 Ongoing Management of a Business
Special problems arise when the decedent was a key person in a closely
held business, whether the business is a corporation, a partnership, or a limited
liability company. The personal representative must determine whether or not the
business has adequate management and supervision, at least through a transition
period. The personal representative must then consider whether it is in the best
interests of the beneficiaries to continue the business, to sell the business or the
estate’s business interest, or to liquidate the business. The personal representative
must evaluate this decision in view of the following considerations:
(1) Was the decedent a key person in the business?
(2) Is another person qualified and willing to manage a continuing
business?
(3) Would adequate financing be available?
(4) Is the profitability and stability of the business sufficient to justify
leaving beneficiaries dependent on it?
(5) Can the business or the estate’s interest be sold for a fair price?
(6) Should the business be liquidated so that the risks of an ongoing
business are avoided and its value as represented by the proceeds can be put into
safer investments?
Frequently, decedents fail to provide for business succession in their will,
and the fiduciary has difficulty evaluating the qualifications of possible
successors. These are also time-sensitive questions. If the decedent was a key
person of the business, the value of the corporation may diminish rapidly on the
owner’s death. Another item that should be considered in evaluating the estate’s
continued ownership of a closely held business is whether or not the decedent has
signed personal guarantees.
§ 10.10-3 Management or Transfer Issues
§ 10.10-3(a) Entity Agreements
The business entity may have a series of entity management agreements.
For corporations, the company documents may include articles of incorporation,
bylaws, stock-restriction agreements, or buy-sell agreements. For partnerships
and limited liability companies, those company documents may include a
certificate of formation, articles of organization, an operating agreement, and a
partnership agreement. The personal representative must review and understand
the entity agreements before proceeding with any management or transfer of the
estate’s interest in a business.
§ 10.10-3(b) Minority, Noncontrolling Interests
If the decedent held a minority interest in a closely held corporation,
partnership, or limited liability company, or was a limited partner in a limited
partnership, the fiduciary’s management and transfer choices will be tied to some
extent by the size of the interest and the management scheme of the entity. Many
investments (i.e., not operating businesses) are held as entities that are governed
by strict notice periods to redeem the decedent’s interest. The personal
representative must understand how to protect the value of a minority interest for
the benefit of the beneficiaries. When someone other than the personal
representative is in control of the entity, it may be prudent to quickly determine
an exit strategy.
§ 10.10-3(c) Buy-Sell Agreements
The personal representative will be forced to carry out a buy-sell
agreement, if such an agreement is mandatory. However, if the sale is optional
under the agreement, the personal representative will need to decide whether
disposing of the business interest pursuant to the terms of the agreement is in the
best interests of the estate. Valuation is often the most important issue,
particularly when the value described in the buy-sell agreement might not be the
same value that must be used for estate-tax valuation. In such a case, it is often
best for all of the parties to use the estate-tax valuation, which may require some
kind of modification, waiver, or ratification of the entity agreements.
When a personal representative has an option either to sell the interest or to
require other contracting parties to purchase it on the specified notice or demand,
any personal representative who fails to give notice or to make demand when the
sale is in the best interests of the estate is liable to beneficiaries for whatever loss
results.
For more on buy-sell agreements, see 3 ADVISING OREGON BUSINESSES ch
47 (Oregon CLE 2003 & Supp 2009) (estate planning for owners of closely held
businesses); 2 ADVISING OREGON BUSINESSES ch 23 (Oregon CLE 2001 & Supp
2007) (corporate buy-sell agreements).
See 2 Advising Oregon Businesses ch 23 (OSB Legal Pubs 2017) (corporate
buy-sell agreements).
§ 10.10-4 Specific Business Interests
§ 10.10-4(a) Private Corporations
A corporation is owned by its shareholders and is managed by its officers
and its board of directors. ORS ch 60. The personal representative should review
the articles of incorporation, bylaws, and any other corporate documents to
determine how the corporation must be managed throughout the probate
proceeding.
A corporation must have at least one director, and the estate of a deceased
individual may not be a director. ORS 60.307(1). If the decedent was the sole
shareholder and director of the corporation, and no succession plan for the
management of the company exists, the estate, as the sole shareholder, may appoint
a director. See ORS 60.331. The personal representative may also create a new
structure or otherwise change the governing structure for the corporation under the
emergency powers described in ORS 60.064 and 60.081, if permitted by the
articles of incorporation. If the decedent was the sole or key person for the
corporation, new directors and/or officers must be elected to maintain loans or
ongoing corporate business. The death of a shareholder does not otherwise change
the rights of the estate associated with the shares.
§ 10.10-4(b) Partnerships
The estate of a deceased partner succeeds to the decedent’s partnership
interest, but not to partnership assets. See ORS 67.060. Therefore, the personal
representative must review the partnership agreement, if any, to determine the
rights of the estate in the partnership. ORS chapter 67 controls in the absence of a
partnership agreement, or if a partnership agreement is silent on a particular
issue. See ORS 67.015.
Unless the partnership agreement provides otherwise, the death of a partner
is not a cause of dissolution of the partnership, although it is a cause of
dissociation of the deceased partner. See ORS 67.220(7)(a), 67.230, and 67.250
for the effect of dissociation in general. Dissociation itself might not be an event
causing termination of the partnership (by statutory default or by the partnership
agreement).
If no partnership agreement exists, and if dissociation is not an event that
causes the partnership to terminate under ORS 67.290, then the partners have an
obligation to buy out the interest of the partnership. ORS 67.250. In addition,
while the partnership is operating, the estate of a deceased partner is liable to that
partner’s obligation to contribute to a partnership. ORS 67.255. Also, when
distributions are made from a partnership, distributions of cash and hard assets
become part of the deceased partner’s estate.
If there is no partnership agreement, and the dissociation of the deceased
partner causes the termination of the partnership under ORS 67.290, the surviving
partners have the right and obligation to wind up the partnership, and the estate is
usually a passive recipient of whatever comes. Nonetheless, the personal
representative cannot avoid oversight involvement in the winding up, because the
estate is jointly and severally liable for fraud, waste, conversion, and other
misdeeds of partners. See ORS 67.100, 67.105.
ORS 67.015 was renumbered ORS 67.042 (partnership agreements).
§ 10.10-4(c) Limited Liability Companies
Except as otherwise provided in the articles of organization or any
operating agreement, a member’s interest in a limited liability company (LLC)
ceases on the member’s death. ORS 63.265(1).
Except as otherwise provided in ORS 63.265(2)(b), following the cessation
of the member’s interest, the holder of the former member’s interest is considered
to be an assignee of that interest and has all of the rights, duties, and obligations
of an assignee under ORS chapter 63. ORS 63.265(2)(a). For the purposes of
ongoing management, an assignee has no continuing management rights, and is
entitled only to the economic benefit of the LLC. ORS 63.249.
If the member who ceases to be a member is the only member of the LLC,
the holder of the former member’s interest becomes a member simultaneously
with, and on the cessation of, the former member’s interest. ORS 63.265(2)(b).
Thus, the decedent’s estate may function as an assignee of a decedent’s
membership interest in an LLC with two or more members, but the estate becomes
the member when it is a single-member LLC.
§ 10.10-4(d) Sole Proprietorships
§ 10.10-4(d)(1) Nonprofessional Sole Proprietorships
Unless family members are active and competent in the business, a
personal representative should attempt to dispose of a sole proprietorship as soon
as possible. Sole proprietorships are usually businesses in which the decedent was
a key person, and the value of that business will diminish quickly unless it
already has employees who can function as key persons, which is not unusual for
old, established businesses with long-time employees.
§ 10.10-4(d)(2) Professional Sole Proprietorships
A personal representative must segregate and protect all of the files and
records belonging to clients or patients of a deceased professional, and must take
steps to ascertain ownership and to prevent improper disclosure of information.
The sale of a professional’s practice is very difficult, because so often it is a
personally linked type of activity. Frequently, only the hard assets are saleable.
If the deceased professional was a partner with other professionals, a
partnership agreement may permit the decedent’s firm to take over the business.
However, in a sole proprietorship, records and files belong to the decedent, not a
firm, and the personal representative has the problem of disposing of those
records and files. A personal representative should, at the request of clients or
patients, turn over pertinent records and files to the successors chosen by the
clients or patients. Files and records remaining after a suitable length of time may
need to be stored for many years. Strenuous efforts should be made to contact all
of the patients and clients to enable them to determine the disposition of such
records and files.
In addition, the personal representative should promptly seek to collect fees
for services performed by the decedent before his or her death. A decedent’s
accounts receivable age rapidly, and the personal representative should arrange
for billing and collections early in the administration to preserve their value.
§ 10.11 ENCUMBERED ASSETS

Some or all of the assets in the decedent’s estate may be encumbered. What
authority and what responsibilities does the personal representative have with
respect to any such encumbrances? Does it make any difference whether the
encumbrance was created or arose before or after the will was made? Did the
testator attempt to deal with and control the problem? Does a provision in the will
directing payment of debts impose an obligation on the personal representative
with respect to encumbrances? If property is specifically devised by will, the rights
of a devisee of property that is subject to an encumbrance are to be determined in
accordance with the law in effect on the date that the will was executed. ORS
115.255(5); see ORS 111.015(1). Sections 10.11-2 to 10.11-5 discuss these issues.
§ 10.11-2 Voluntary and Involuntary Encumbrances
The probate code classifies encumbrances as voluntary or involuntary.
ORS 115.255(1). A voluntary encumbrance means “any mortgage, trust deed,
security agreement, pledge or public improvement assessment lien, or any lien
arising from labor or services performed or materials supplied or furnished, or
any combination thereof, upon or in respect of property.” ORS 115.255(1)(a). An
involuntary encumbrance is defined as any encumbrance other than a voluntary
one. ORS 115.255(1)(b).
The word encumbrance is not defined in the probate code. The context of
the statute, however, indicates that it is a form of security given or that exists to
secure an obligation. As a result, taxes and judgments are involuntary
encumbrances. Furthermore, although leases, easements, and the like are
encumbrances within the meaning of other legislation, they are not deemed
encumbrances for purposes of ORS 115.255–115.275.
§ 10.11-3 Responsibilities of Personal Representative
A specific devisee takes the devised property subject to a voluntary
encumbrance that exists on the date of the testator’s death, regardless of when the
encumbrance came into being, that is, whether it was before or after the making
of the will. ORS 115.255(2), (3)(b).
The personal representative is not required to discharge a voluntary
encumbrance (fully or partially) out of other assets not specifically devised,
unless:
(1) The will specifically directs full or partial discharge of the
encumbrance out of other assets;
(2) The personal representative receives rents or profits from the
property, and the devisee requests (orally or in writing) that all or part of such
rents or profits, or both, be applied in full or partial discharge of the obligation
secured by the encumbrance; or
(3) The devisee is to receive other property of the estate and the devisee
requests, in writing, that the obligation secured by the encumbrance be fully or
partially discharged out of such other property, or the proceeds of the sale of it.
ORS 115.255(3)(b).
If a claim based on an obligation secured by a voluntary encumbrance on
specifically devised property is presented and paid, or if specifically devised real
property subject to a voluntary encumbrance is redeemed, and the devisee is not
entitled to exoneration under ORS 115.255(3), the personal representative
acquires a lien on the property in the amount paid. ORS 115.255(4).
If the encumbrance is an involuntary encumbrance, unless the will provides
otherwise, the devisee of specifically devised property may require that the
encumbrance be fully or partially discharged out of other assets not specifically
devised. ORS 115.255(3)(a). Presumably, if need be, the personal representative
would be obligated to sell assets not specifically devised to make any payment
required to comply with the request.
When any assets of the estate are encumbered by an encumbrance
(involuntary or voluntary), the personal representative may
discharge the encumbrance or any part of it, renew or extend any obligation
secured by the encumbrance, or convey or transfer the assets to the creditor in
satisfaction of the lien, in whole or in part, whether or not the holder of the
encumbrance has filed a claim, if it appears to be for the best interest of the estate.
ORS 115.275.
The discharge of an encumbrance does not increase the share of the
distributee entitled to the encumbered assets, unless the distributee is entitled to
exoneration under ORS 115.255(3). ORS 115.275.
Also, unless otherwise provided by the will, the personal representative
“may redeem property of the estate sold on foreclosure of mortgage or upon
execution if it appears that the redemption would be for the benefit of the estate
and would not be prejudicial to creditors.” ORS 115.265.
§ 10.11-4 Will Provisions
The testator, of course, has the power to provide for the disposition of
encumbrances. A mere direction in a will to pay debts is not to be considered a
direction for exoneration from encumbrances. ORS 115.001. Something more is
required if the testator desires to avoid the consequences that would otherwise
result under the probate code.
PRACTICE TIP: A lawyer preparing a will for a client should always
ask how the client would like the personal representative of the estate to deal
with any encumbrances that may exist or that may arise after the making of
the will.
§ 10.11-5 Heirs and Encumbrances
Under the probate code, the net intestate estate of the decedent descends to
the decedent’s heirs. ORS 112.015; see also ORS 112.025–112.055. The net
estate is the property remaining after payment of claims and other obligations of
the estate. ORS 111.005(23). The existence of an encumbrance against an asset of
the estate will not alter the rights of one heir as against those of any other heir. If
the obligation secured by the encumbrance is paid by the personal representative,
the shares of all of the heirs in the net estate will be proportionately reduced. If
the obligation is not so paid, the heirs will receive the asset subject to the
encumbrance, and their proportionate interests will remain unaffected.
The 2015 Legislature added the following provision to ORS 112.015:
A decedent by will may expressly exclude or limit the right of an individual or
class to succeed to property of the decedent passing by intestate succession. If that
individual or a member of that class survives the decedent, the share of the
decedent’s intestate estate to which that individual or class would have succeeded
passes as if that individual or each member of that class had disclaimed that
individual’s or member’s intestate share.
ORS 112.015(2).
For discussion on tax consequences of reverse mortgages, see Ginger
Skinner, Foreclosures of Reverse Mortgages: Inadvertent Tax Liability to Estate
Beneficiaries, OSB Est Pl & Admin Sec Newsltr 1 (Sept 2015).
§ 10.12 UNUSUAL ASSETS

§ 10.12-1 Natural Resources
Special problems may arise when mineral rights or other natural resources
are assets of the decedent’s estate. Specialized expertise may be required to
safeguard the asset, to determine its appropriate market value, or to sell the asset.
The personal representative may wish to work with a corporate fiduciary located
in the geographic region dominated by such assets.
EXAMPLE: A number of banks based in Texas may provide or assist in
obtaining the necessary expertise and advice on mineral rights.
§ 10.12-2 Contraband and Firearms
The decedent may have owned property, such as a firearm, that requires a
special license or permit. Or the decedent may have had illegal narcotics in his or
her possession. A personal representative who finds such items among the
decedent’s effects must act promptly to protect both the personal representative
and the estate against applicable penalties. Often, this means surrendering the
article or item to the proper authority. In the case of illegal narcotic drugs, for
example, a federal regulation may prescribe the procedure to be followed.
Special licensing and registration rules apply to transfers of firearms. If the
estate holds an automatic weapon, sawed-off rifle or shotgun, silencer, or other
firearm regulated by the National Firearms Act, the personal representative must
notify the compliance office of the Bureau of Alcohol, Tobacco, Firearms and
Explosives. See 18 USC §922(k); Bureau of Alcohol, Tobacco, Firearms and
Explosives, National Firearms Act (reprinted at www.atf.gov/firearms/nfa);
Transfers of National Firearms Act Firearms in Decedents’ Estates, revised Feb.
23, 2006 (reprinted at www.atf.gov/press/releases/1999/09/090599-openletter-nfa-
estate-transfers.html). Transfers of firearms are also subject to state law. See ORS
chapter 166.
PRACTICE TIP: The personal representative should conduct all sales of
firearms through a licensed gun dealer or licensed sales agent.
PRACTICE TIP: If the personal representative delivers contraband to the
proper authorities, he or she should request a receipt pending proper
disposition of the contraband.
The 2015 Legislature added a new provision to ORS chapter 166, relating to
the transfer of firearms. See ORS 166.435. Before transferring a firearm, the
transferor must obtain a criminal background check on the recipient of the firearm.
ORS 166.435(2)–(3). However, the statute sets forth exceptions to this
requirement. For example, if the transfer of a firearm “occurs because of the death
of the firearm owner,” a criminal background check is not required if
(1) “[t]he transfer is conducted or facilitated by a personal representative,
as defined in ORS 111.005, or a trustee of a trust created in a will”; and
(2) “[t]he transferee is related to the deceased firearm owner in a manner
specified in [ORS 166.435(4)(c)].”
ORS 166.435(4)(d).
For a comprehensive two-part series on firearms in estates, see Brian
Thompson, Firearms in Estate Administration, OSB Est Pl & Admin Sec Newsltr
1 (Sept 2016), and Brian M. Thompson, Firearms in Estate Administration Part II
– NFA Firearms, OSB Est Pl & Admin Sec Newsltr 13 (Dec 2016).
For a survey regarding dealing with other contraband, see Kate Kilberg &
Melissa May, Dealing with Contraband in Oregon Estates and Trusts, OSB Est Pl
& Admin Sec Newsltr 1 (Jan 2018).
§ 10.12-3 United States Savings Bonds
When a decedent’s estate includes United States savings bonds, the
personal representative should coordinate asset management and estate income
tax planning. See §§1.6-2, 7.4-3(c). On some bonds, interest does not continue to
accrue; on others, interest income is triggered when the bonds are redeemed.
PRACTICE TIP: The personal representative should analyze the tax
consequences of establishing a short first year for tax purposes and redeem
the savings bonds in order to capture the interest income in the estate and
reduce the overall income tax burden, while at the same time providing cash
for ultimate distribution. In addition, the personal representative may elect to
report all of the accrued interest up to the date of death for Series E, EE, or I
bonds on the decedent’s final income tax return. When the heir later redeems
the bonds, the only interest to report will be the interest that has accrued
from the date of the decedent’s death. Rev Rul 68-145, 1968-1 CB 203
(1968).
§ 10.12-4 Personal Property
Personal property is frequently specifically devised to family members or
other devisees. Distribution of specifically devised personal property does not
carry out the income of the estate in an unanticipated manner. Fiduciary income
tax returns that have distributable net income report any distribution from an
estate to a beneficiary as taxable income, even if the distribution is not in cash;
however, specifically devised property does not carry out taxable income to an
heir or devisee unless the property earns income itself. IRC §663(a)(1).
Therefore, unless the personal property is specifically devised, the personal
representative should distribute personal property under a custody receipt, rather
than an order for partial distribution, if the estate will be open past the end of the
first fiscal year, in order to avoid an income distribution.
Personal property not specifically devised and not wanted by the
beneficiaries of the estate should be sold or donated to avoid incurring storage
and insurance costs.
§ 10.12-5 Appraisal of Unusual Assets
Ample authority exists under Oregon law for a personal representative to
engage experts to provide an estimate of the market value of the estate assets as
of the decedent’s death. ORS 113.185. See §7.4-2(c). An appraisal is necessary to
assess items with significant artistic or intrinsic value if the value is in excess of
$3,000. See Treas Reg §20.2031-6(b).
The expertise and counsel of an expert should be obtained when the
personal representative might be dealing with a decedent’s closely held business.
If the decedent owned a boat, ship, yacht, or other vessel, an expert may be
necessary to properly value the asset. Obviously, an expert would not be required
to value the decedent’s 12-foot runabout, but certainly would be required to value
any vessel of significant worth.
For an aircraft, the avionics contained in that aircraft are the most
important feature in determining market value. An expert appraisal is important.
Proper safeguarding and insurance are extremely critical, considering the
significant value of the equipment.
Competent appraisal, proper safekeeping, and insurance are also important
if the estate contains jewelry, gold bullion, silver bullion, or other highly valuable
items.
PRACTICE TIP: Appraisers often advertise their services and areas of
expertise in the Oregon State Bar Bulletin, the ABA Journal, and other legal
periodicals. The personal representative may also want to contact corporate
fiduciaries or other law firms that have had the opportunity to deal
previously with a particular asset.
§ 10.12-6 Cooperative Apartments or Condominiums
If the decedent was a resident of a condominium or retirement home
facility for which a purchase price was paid, the personal representative should
obtain copies of all of the documents pertaining to its ownership. There is no
consistency from one organizational structure to another regarding the disposition
of the condominium. The personal representative may be surprised to find that
the decedent’s interest terminates without compensation on death.
FORMS
Form 10-1 Relinquishment of Possession and Control of Decedent’s

Property
Download MS Word


____________________, )
) RELINQUISHMENT OF
Deceased. ) POSSESSION AND
) CONTROL OF
) DECEDENT’S
) PROPERTY
The property described below is in, or is about to be delivered to, the

possession of ____________, [an heir / a devisee] of the above-named decedent.
The personal representative of the estate now believes that possession of the
property is not reasonably required for the administration of this estate.
Accordingly, the personal representative hereby relinquishes the right to
possession and control of the following property and will not be accountable
therefor: ___________________ [Describe property.]
If the ownership of the property is recorded with the Department of Motor
Vehicles or a similar agency, the personal representative will re-register the title
to the above-named [heir / devisee]. By accepting possession of this property, the
undersigned [heir / devisee] agrees (1) to keep it adequately insured (including
coverage for liability to third parties) and (2) to return title and possession of the
property to the personal representative if the personal representative informs the
[heir / devisee] that possession of the property is in fact required to administer the
estate.
DATED: _______________, 20___.
/s/__________________________ /s/__________________________
[name] [name]
Personal Representative [Heir / Devisee]
[name]
[address]
[telephone no.]
[fax no.]
LAWYER FOR PERSONAL REPRESENTATIVE

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §10.3-3. See also ORS 114.225. See UTCR 2.010 and
UTCR 9.030 for the form of documents, including requirements regarding
document title, spacing, and format.
case.” UTCR 2.010(7).
this form.
NOTE: See UTCR 2.010 and UTCR 9.030 for the form of court documents,
including contact information. See also Supp § 11.6-1(b) (discussing the rules
regarding contact information). For documents filed electronically, see UTCR
signatures).
Form 10-2 Application of Personal Representative for Authority,
Approval, or Instructions
Download MS Word


____________________, )
) APPLICATION OF
Deceased. ) PERSONAL
) REPRESENTATIVE FOR
) [AUTHORITY /
) APPROVAL /
) INSTRUCTIONS]
____________________, the personal representative of the estate of the

above-named decedent, alleges:
1.
The personal representative desires [authority / approval / instructions] on
the matter set forth in this petition, which concerns the [administration /
settlement / distribution] of the estate.
2.
[Set forth the matter.]
WHEREFORE,
3.
The personal representative prays for an order:
(a) [Setting a time for hearing on this matter.]
(b) [Authorizing the personal representative to / Approving the action of
the personal representative in / Instructing the personal representative
concerning] _______________________.
DATED: _______________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
UTCR 9.030 for the form of documents, including requirements regarding
case.” UTCR 2.010(7).
this form.
signatures).
Form 10-3 Petition of Personal Representative for Authority to Sell
Property
Download MS Word


____________________, )
) PETITION OF
Deceased. ) PERSONAL
) REPRESENTATIVE FOR
) AUTHORITY TO SELL
) PROPERTY
____________________, the personal representative of the estate of the

above-named decedent, alleges:
1.
The personal representative desires authority to sell certain property
[contrary to the provisions of the decedent’s will / which is specifically devised
and the will does not authorize its sale]. [The bond of the personal representative
has not been increased by the amount of cash to be realized on the sale.]
2.
A bond in the amount of $________ has been required and filed.
3.
The inventory shows that this estate consists of personal property valued at
$________ and real property valued at $___________. [The following-described
(real / personal) property is specifically devised to
__________________________ and the decedent’s will does not authorize its
sale.] [The decedent’s will specifically provides that the (real / personal) property
shall not be sold.] [The sale price of the property to be sold exceeds $5,000, and
the bond of the personal representative has not been increased by the amount of
cash to be realized on the sale.]
4.
[Set forth the reasons for application, for example:]
The previously authorized support of the decedent’s spouse and the still
unsatisfied expenses of administration, funeral expenses, claims, and taxes of the
estate are estimated to exceed $_______. To pay the support, expenses, claims,
and taxes, and for purposes of distribution, it is necessary for the personal
representative to sell the following-described property of the estate:
[Describe property.]
WHEREFORE,
5.
Petitioner prays for an order:
(a) Setting a date for hearing on this petition and directing that notice of
the hearing be given to the [heirs and] devisees of the estate;
(b) Appointing a guardian ad litem for ___________________, the
decedent’s minor child; and
(c) After the hearing, authorizing the personal representative to sell the
property.
DATED: _______________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: After expiration of the limitations period for filing a will contest
(see ORS 113.075(3)), it should not be necessary to give notice other than to
specific devisees.
COMMENT: See §§10.8-1(a) to 10.8-1(d). See also ORS 114.325. See UTCR
regarding document title, spacing, and format. See also ORS 111.205.
the attorney of record.” UTCR 9.030(1). See also UTCR 2.010(7).
this form.
NOTE: Regarding paragraph 3 in Form 10-3, the bracketed sentence
pertaining to a sale price that exceeds $5,000 should be deleted, because 2017
amendments to ORS 114.325 deleted the explicit provision regarding increasing a
bond when the sale price of the property to be sold exceeds $5,000.
Also, the 2017 Legislature amended ORS 114.325 to add a clause making
the statute subject to ORS 113.105, which governs bond requirements. See Supp
§ 10.8-1(a) (notice, hearing, and court order). As a result, Form 10-3 should
include a new paragraph just before WHEREFORE, as follows:
The current bond amount [is sufficient / should be increased to $______]
under ORS 113.105. In particular, _______________________
________________________________________ [explain sufficiency of requested
amount based on factors set forth in ORS 113.105(2) to (5).]
signatures).
Form 10-4 Order Authorizing Sale of Property
Download MS Word


____________________, )
) ORDER AUTHORIZING
Deceased. ) SALE OF PROPERTY
On petition of the personal representative and after hearing thereon, the

Court finds:
1.
Proof of giving notice on the petition to the [heirs and] devisees of the
estate has been filed.
2.
[The property described below is specifically devised and the decedent’s
will does not authorize its sale. / The decedent’s will specifically provides that
the property described below may not be sold.] [The sale price of the property to
be sold exceeds $5,000, and the bond of the personal representative has not been
increased from $_______ to the amount of cash to be realized on the sale.]
3.
The personal representative desires to sell the property because
____________________________________________________.
It is therefore
ORDERED that the personal representative is authorized to sell the
following property: _____________________________________
[The personal representative is required to file an additional bond in the
amount of $__________.]
DATED: _______________, 20____.
/s/__________________________
[judge’s name]
Judge
[fax number]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§10.8-1(a) to 10.8-1(d). See also ORS 114.325. See UTCR
regarding document title, spacing, and format.
of every petition, motion and order.” UTCR 9.030(1). The last page of every order
must also include the name, address, and telephone number of the personal
representative. UTCR 9.030(2). See also UTCR 2.010(7), (12).
this form.
NOTE: Regarding paragraph 2 in Form 10-4, the bracketed sentence
pertaining to a sale price that exceeds $5,000 should be deleted, because 2017
amendments to ORS 114.325 deleted the explicit provision regarding increasing a
bond when the sale price of the property to be sold exceeds $5,000.
Also, the 2017 Legislature amended ORS 114.325 to add a clause making
the statute subject to ORS 113.105, which governs bond requirements. See Supp
§ 10.8-1(a) (notice, hearing, and court order). As a result, the “It is therefore
ORDERED” clause should include a provision stating either that “the current bond
amount is sufficient under ORS 113.105” or that “the current bond should be
increased to $_____ under ORS 113.105.”
signatures).
Form 10-5 Petition for Order Requiring Testimony
Download MS Word


____________________, )
Deceased. ) REQUIRING
) TESTIMONY
____________________, the personal representative of the above-named

decedent, alleges:
1.
____________________, daughter of the decedent, has informed the
personal representative that the decedent owned shares in ABC Company, which
were in the possession of John Doe, president of that company, at the time of the
decedent’s death.
2.
The personal representative has requested John Doe to inform [him / her]
concerning the number of shares of stock in ABC Company owned by the
decedent and to deliver the certificates representing the shares. John Doe has
denied that the decedent was a shareholder in ABC Company, has refused to
deliver any stock certificates to the petitioner, and has refused to allow the
petitioner to examine the books and records of ABC Company.
3.
The personal records of the decedent, including an asset ledger and income
tax returns, indicate that the decedent owned shares of ABC Company and that
the shares were not disposed of before the decedent’s death.
WHEREFORE,
4.
Petitioner prays for an order requiring John Doe to appear and give
testimony by deposition concerning the foregoing.
DATED: _______________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§10.9-3, 10.3-2. See also ORS 114.425. See UTCR 2.010
document title, spacing, and format. See also ORS 111.205.
number (if any).
this form.
signatures).
Form 10-6 Order Requiring Testimony
Download MS Word


____________________, )
) ORDER REQUIRING
Deceased. ) TESTIMONY
From the petition of the personal representative, the Court finds that it
appears probable that John Doe, president of ABC Company:
(a) Has concealed, secreted, or disposed of stock of ABC Company
belonging to this estate;
(b) Has been entrusted with the stock and has failed to account for it to
the personal representative;
(c) Has concealed, secreted, or disposed of a document pertaining to the
estate;
(d) Has knowledge or information that is necessary to the administration
of the estate;
(e) As an officer or agent of ABC Company, has refused to allow
examination of the books and records of the corporation that the decedent had the
right to examine.
Accordingly, it is ORDERED that a subpoena issue from this court
requiring John Doe to appear and answer questions in connection with the
foregoing by deposition at ___________, Oregon, at ______ [a.m. / p.m.] on
_______________, 20___, before an authorized court reporter.
DATED: _______________, 20___.
/s/__________________________
[judge’s name]
Judge
[fax number]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§10.3-2, 10.9-3. See also ORS 114.425. See UTCR 2.010
of every order.” UTCR 9.030(1). The last page of every order must also include the
name, address, and telephone number of the personal representative. UTCR
9.030(2). See also UTCR 2.010(7), (12).
this form.
signatures).
Chapter 11: ACCOUNTING, DISTRIBUTION, AND CLOSING
SAM FRIEDENBERG, B.A., Tufts University (1980); J.D., Lewis & Clark Law School (1985);
admitted to the Oregon State Bar in 1985; attorney, Law Offices of Nay & Friedenberg
LLC, Portland.
AMY E. BILYEU, B.A., University of Oregon (1995); J.D., University of Oregon School of Law
(2000); LL.M. (Taxation), University of Washington School of Law (2001); admitted to
the Oregon State Bar in 2001 and the Washington State Bar Association in 2007; partner,
Wyse Kadish LLP, Portland.
We acknowledge the contribution of David R. Allen for his work on the prior edition of this
chapter.
§ 11.1 INTRODUCTION
The accounting to the court and beneficiaries and the petition for a judgment
of final distribution are the culmination of estate administration. See ORS 116.093.
The beneficiaries and the court will closely review the documents to be sure that
the estate was properly administered.
The probate code describes the personal representative’s legal obligations,
and the personal representative may be liable for failing to carry them out properly.
See ORS 116.063; see also chapter 7. Moreover, if any issue or expense is not
addressed in the accounting or by distribution, the personal representative will find,
at best, a delay and, at worst, additional expenses and insufficient estate funds with
which to pay them. Subject to some exceptions, the approval of the accounting will
absolve the personal representative (and the surety) of liability for administering
the estate. ORS 116.213. The lawyer for the personal representative will show his
or her skill and professionalism in carrying out these tasks.
§ 11.2 WHEN AN ACCOUNTING IS REQUIRED

An accounting is required under the following circumstances:
(1) Annual accounting—Unless the court orders otherwise, the personal
representative must file an account “annually within 60 days after the anniversary
date of the personal representative’s appointment,” ORS 116.083(1)(a);
(2) Final accounting—A final accounting is required when the estate is
ready for final settlement and distribution, ORS 116.083(1)(c);
(3) Interim accounting—An interim accounting is required 30 days after
the removal or resignation of the personal representative, ORS 116.083(1)(b); and
(4) Court order—A court may also require an accounting at other times,
ORS 116.083(1)(a), (d).
There is no statutory requirement for an accounting on a petition for partial
distribution. ORS 116.013.
NOTE: Each accounting must include a “declaration under penalty of
perjury in the form required by ORCP 1 E.” ORS 111.205.
The text of this chapter is followed by forms, including the following
accounting forms:
(1) Annual or Other Accounting, Form 11-1;
(2) Final Accounting and Petition for General Judgment of Final
Distribution, Form 11-2;
(3) Notice for Filing Objections to Final Accounting and Petition for
General Judgment of Final Distribution, Form 11-3; and
(4) Verified Statement in Lieu of Final Accounting and Petition for
Judgment of Final Distribution, Form 11-4.
Note that ORS 116.083 allows the personal representative to file a statement
under ORS 116.083(4) in lieu of the final account. See Supp § 11.3-4(b) (consent
accounting).
NOTE: If the “declarant is physically outside the boundaries of the
United States,” an accounting may include an “unsworn declaration under
ORS 194.800 to 194.835” in lieu of a “declaration under penalty of perjury
in the form required by ORCP 1 E.” ORS 111.205. See Supp § 11.6-1(a)
(discussing an unsworn declaration).
ORS 116.083(2)(g) includes a similar provision.
§ 11.3 FINAL ACCOUNTING
A final accounting of the estate can occur when all estate business has been
completed and the personal representative is prepared to report his or her actions to
the court and request a final distribution. ORS 116.083(1)(c).
As a practical matter, most estates are open less than one year, and the final
accounting, with a petition for fees and for a judgment of distribution, occurs
within that year and without any need for an interim or annual accounting.
See Form 11-2 (Final Accounting and Petition for General Judgment of Final
Distribution).
§ 11.3-2 Summary of Tasks
When the estate is ready for final settlement and distribution, the personal
representative must be sure to have completed all necessary tasks of the estate
administration. These tasks include those discussed below:
(1) Payment or settlement of claims. The personal representative must
have paid or settled claims against the estate. ORS 116.083(4)(b); see ORS
115.003.
(2) Payment of taxes. The personal representative must have paid all
Oregon income taxes, estate taxes, and personal property taxes. ORS
116.083(3)(a), 116.113(2); see ORS 118.010.
(a) Individual income taxes. The personal representative should file the
decedent’s personal income or other tax returns for the year in which the decedent
died. Moreover, the personal representative should review past years—certainly
the past three years—to determine unpaid liability and should consider requesting a
determination from the taxing authorities that no liability is pending.
(b) Estate taxes. If a federal estate tax or Oregon estate tax return is due
(before January 1, 2012, the Oregon estate tax was known as the Oregon
inheritance tax), whether or not a tax is payable, the personal representative must
file the return and pay the tax, if any, before filing a final accounting. See §§7.6-4
to 7.6-4(b).
(c) Estate fiduciary income taxes. The personal representative must file
the income tax returns for the estate for income earned from the decedent’s date of
death until distribution of the decedent’s assets. If a fiduciary return is due before
the final accounting, it must be filed before the accounting. But if income
continues to accrue to the date of distribution, an income tax return will be due
after the estate has been distributed, because the estate must report all income
through the distribution date. This postdistribution filing tends to be the exception
to the general proposition that all estate business must be completed before the
distribution. It also may require the personal representative to retain a reserve of
funds, usually in the estate’s name, to pay for the costs of preparing a tax return, or
to pay those costs in advance.
COMMENT: The tax obligations of an estate are beyond the scope of
this chapter, and the lawyer should look at separate material for that
information. See chapters 12–14. The lawyer should consider filing IRS
Form 4810, Request for Prompt Assessment Under Internal Revenue Code
Section 6501(d); IRS Form 5495, Request for Discharge from Personal
Liability Under Internal Revenue Code Section 2204 or 6905; and ODR
Form 150-101-151, Election for Final Tax Determination for Income Taxes
and Application for Discharge from Personal Liability for Tax of a
Decedent’s Estate.
(3) Control of assets and filing of inventory. The personal representative
must have filed timely inventories listing all property of the estate that came “into
the possession or knowledge of the personal representative.” ORS 113.165,
113.175. See chapter 7.
(4) Identification of beneficiaries. The personal representative must have
identified all heirs, devisees, and interested persons. ORS 116.083(3)(b); see also
ORS 113.035, 113.145, 113.155. See §§2.5-1 to 2.5-6, chapter 7.
(5) Notices. The personal representative must comply with the notice
requirements set forth in the probate code. For example, the personal representative
must give certain information to heirs, devisees, interested persons, the Department
of Human Services, and the Oregon Health Authority. ORS 113.145, 113.155. See
§§7.3-1(a) to 7.3-3(b); see also §§2.5-1 to 2.5-6.
(6) Other necessary tasks. The personal representative must complete
anything else that is necessary to properly distribute the estate. This responsibility
may include selling estate assets to meet the costs of administration of the estate or
to be able to distribute estate assets without difficulty. See ORS 116.083(2)(f).
(2) Payment of taxes. ORS 116.083(3)(a) was renumbered ORS
116.083(3)(b). Subsection (2) was deleted from ORS 116.113, but the requirement
that the personal representative pay Oregon income taxes, estate taxes, and
personal property taxes is stated in ORS 116.083(3)(b).
(a) Individual income taxes. See ORS 116.083(3)(b).
(b) Estate taxes. See ORS 116.083(3)(a) (the final account must include a
“statement that any required estate tax return has been filed”).
(4) Identification of beneficiaries. ORS 116.083(3)(b) was renumbered
ORS 116.083(3)(e). See Supp § 11.6-2(a) to § 11.6-2(b) (notice of final
accounting).
(6) Other necessary tasks. The final account may include a “request to
retain a reserve for the determination and payment of any additional taxes, interest
and penalties, and of all related reasonable expenses.” ORS 116.083(3)(c).
§ 11.3-3 Unresolved Issues
If any issue or dispute is unresolved, the personal representative should
disclose it to the beneficiaries and the court early on, and not wait until the final
account to do so. To wait until the end is to risk missing tax deadlines, incurring
additional fees that have to be petitioned for, and running past court deadlines.
Instead, the personal representative should consider petitioning for instructions in
advance of the final account pursuant to ORS 114.275. This broad statute allows
the personal representative to set the issue for notice and a court determination in
the absence of an agreement. Examples of issues that can arise for resolution are
the interpretation of a clause in a will, the inclusion of an asset in the probate
estate, and the sale of a difficult asset.
The final account may include a “request to retain a reserve for the
determination and payment of any additional taxes, interest and penalties, and of
all related reasonable expenses.” ORS 116.083(3)(c).
§ 11.3-4 Accounting Options
Pursuant to ORS 116.083, the personal representative may choose between
two types of final accountings—“ordinary” accounting or “consent” accounting.
See §§11.3-4(a) to 11.3-4(b).
§ 11.3-4(a) “Ordinary” Accounting
The first type of accounting is what the lawyer would refer to as the
“ordinary” accounting. This accounting must meet the detailed requirements of the
statute, the Uniform Trial Court Rules, and any relevant supplementary local rule.
See ORS 116.083(2); UTCR 9.010 et seq. In summary, an ordinary accounting
consists of a narrative (see §§11.4-1 to 11.4-6), an asset schedule (see §§11.5-3 to
11.5-3(d)), and lists of receipts and disbursements (see §§11.5-4(a) to 11.5-4(e)).
Notice of the final account and the right to file objections to it must be given
to heirs (if the estate is intestate), devisees (if testate), unpaid creditors, and
persons asserting claims against the estate. ORS 116.093. See Form 11-3.
This type of accounting is discussed in §§11.4-1 to 11.4-6.
COMMENT: Although not addressed in the statute, it is accepted
practice that no notice needs to be given to beneficiaries who have already
received their distributive share (e.g., in a partial distribution).
See Supplement § 11.4-1 for a summary of the format of an accounting as
required by UTCR 9.160.
§ 11.3-4(b) “Consent” Accounting
The second type of accounting (see §11.3-4) is referred to as a “consent”
accounting, a “short form” accounting, or a “verified statement” accounting. ORS
116.083(4). See Form 11-4. It is not an accounting at all; rather, it is a statement
prepared by the personal representative and filed with written consents signed by
all of the distributees. No notice is required.
This type of accounting must comply with relatively limited statutory
requirements. ORS 116.083(4) provides that the statement must include the
following:
(1) The period of time covered by the statement;
(2) A statement that “all creditors have been paid in full other than
creditors owed administrative expenses that require court approval”;
(3) A statement that all Oregon income taxes, estate taxes, and personal
property taxes have been paid or that other provisions have been made, and that all
required tax returns have been filed; and
(4) A petition for a general judgment authorizing distribution to the
proper persons and in the proper proportions.
Obviously, the accounting must also address the other issues relevant to
closing an estate, the personal representative’s fee, and attorney fees.
PRACTICE TIP: The consent accounting is cheaper and faster than an
ordinary accounting (see §11.3-4(a)). Therefore, the lawyer should discuss
this option with the personal representative.
PRACTICE TIP: Beneficiaries will most expeditiously sign a consent
accounting if the accounting or cover letter contains more information than
the minimum required by statute. Consequently, the lawyer should consider
adding more information to the statement, including a list of current assets
and values, a summary of important transactions, an explanation of the
calculation of the personal representative’s fee, etc. Although adding this
information adds time to the preparation of the accounting, it may still be
cost effective to do so.
ORS 116.083(4) was amended in 2013 and 2017.
The personal representative may file a statement under ORS 116.083(4)(a)
in lieu of a final account if (1) “[t]he distributees, other than distributees whose
only distribution is a cash or specific bequest that will be paid or satisfied in full,
consent in writing”; and (2) “[a]ll creditors of the estate, other than creditors owed
administrative expenses that require court approval, have been paid in full.” ORS
116.083(4)(a).
A statement under ORS 116.083(4) must include
(1) “[t]he period of time covered by the statement”;
(2) “[a] statement that all creditors of the estate, other than creditors owed
administrative expenses that require court approval, have been paid in full”;
(3) “[t]he statement and petition and any request to retain a reserve”
under ORS 116.083(3) (“for the determination and payment of any additional
taxes, interest and penalties, and of all related reasonable expenses”); and
(4) “[a] declaration under penalty of perjury in the form required by
ORCP 1 E, or an unsworn declaration under ORS 194.800 to 194.835, if the
declarant is physically outside the boundaries of the United States.
ORS 116.083(4).
Notice of time for filing objections to the statement described in ORS
116.083(4) is not required. ORS 116.083(5).
The 2017 Legislature amended ORS 116.113(1) to add that the judgment
must also contain any findings of the court regarding any reserve requested under
ORS 116.083 (for payment of any additional taxes, interest, penalties, and related
expenses), attorney fees, and approval of the final account or the statement filed in
lieu of the final account under ORS 116.083(4) in whole or in part. ORS
116.113(1)(j)–(l).
The court may enter a general judgment of final distribution if no objections
to the final account and petition for distribution are filed, or if objections are filed,
upon the hearing or upon the filing of a statement in lieu of the final account under
ORS 116.083(4). ORS 116.113(1).
§ 11.4 NARRATIVE OF THE FINAL ACCOUNTING

The ordinary accounting has a number of technical requirements set forth in
ORS 116.083(2) and UTCR 9.160 et seq. See also Form 9.160, UTCR Appendix
of Forms. What binds the accounting together, however, is the personal
representative’s narrative. The court regularly says that it wants to “read a story” of
what occurred in the estate. Beneficiaries say that they want to understand what
they are reading. The narrative is the place to relate that story in an understandable
manner, and to justify the professional fees. It is also the place where the rules
require the personal representative to address certain issues relevant to estate
administration. See §§11.4-2 to 11.4-6.
UTCR 9.160 has been amended. The rule provides that accountings must be
in substantially the form set forth in Form 9.160 in the Uniform Trial Court Rules
(UTCRs), Appendix of Forms. The beginning of an accounting is now referred to
as preliminary information rather than narrative. UTCR 9.060(1).
UTCR 9.160 explains the format of an accounting, which is summarized
below:
(1) Preliminary information. The beginning of the accounting must state
the first and last date of the accounting period and whether or not a bond is
required. If a bond is required, the accounting must state the amount of the bond
and include certain information, including information regarding assets and
income. UTCR 9.160(1).
(2) Asset schedule. The accounting must have a separate asset schedule
summarizing the property of the estate; this schedule must have at least the
following five columns:
(a) “Description of Asset” (describing each asset owned by the estate at
any time during the accounting period);
(b) “Beginning Value” (the value of each asset owned at the beginning of
the accounting period);
(c) “Value of Later-Acquired Asset” (the value at acquisition of each
later-acquired asset);
(d) “Value at Disposition” (the value at disposition of each asset that was
disposed of before the end of the accounting period); and
(e) “Current Value” (the current value of each asset that is in existence at
the end of the accounting period).
The rule includes various details about the structure and content of the
column descriptions.
(3) Receipts and disbursements. The rule sets forth in detail the
requirements for accounting of receipts and disbursements for each depository
account.
(4) Narrative. The narrative part of the accounting must describe “any
changes in the assets of the estate . . . not clearly shown in the Asset Schedule,”
including “corrections to previously declared values, omitted assets, the closing of
an account, the sale or purchase of an asset, a significant change in living expenses,
or a stock split.” UTCR 9.160(4).
NOTE: A judicial district may make the format of accountings set forth
in UTCR 9.160 mandatory. UTCR 9.160. See, e.g., Lane SLR 9.161;
Multnomah SLR 9.161; Clackamas SLR 9.165; Marion SLR 9.161.
Furthermore, the court may allow other forms of accounting. UTCR
9.160(5). See § 11.5-2 (rules are flexible). The lawyer should consult
supplementary local rules to determine the nature of the form required by a
particular county.
§ 11.4-2 Term of Accounting
The accounting narrative must include the first and last day of the
accounting period. For annual accountings, the last day of the accounting period
must be within 30 days of the anniversary of the personal representative’s
appointment, unless the court grants permission otherwise. UTCR 9.160(1)(a);
ORS 116.083(2)(a).
COMMENT: This 30-day “window” allows the personal representative
flexibility in picking the accounting date for the sake of expediency. For
example, the last day of the month may be used, or the date on which the
day-to-day bank account statement summarizes account activity.
For annual accountings, the accounting is due within 60 days of the
anniversary of the personal representative’s appointment. ORS 116.083(1)(a).
As stated in Supplement § 11.4-1 (introduction to accountings), the
beginning of the accounting (i.e., the “preliminary information”) must state the
first and last date of the accounting period. For annual accountings, the last day of
the accounting period must be within 30 days of the anniversary of the personal
representative’s appointment. UTCR 9.160(1)(a).
§ 11.4-3 Requirement of a Bond
The narrative of the final account must address the issue of the bond. UTCR
9.160(1)(b). See §§5.2-6(a) to 5.2-6(d). A bond is a contract with a surety for a
stated sum to warrant the personal representative’s faithful performance of his or
her duties. See ORS 113.105(1).
The lawyer ordinarily arranges for the bond. The estate pays the bond
premiums, and the size of the bond premium is directly related to the value of
assets and income that need to be bonded. ORS 113.105(2).
Most wills waive the bond requirement. Intestate estates generally require a
bond. Some institutional personal representatives are exempted from a bond. ORS
113.105(1). A court may also waive the bond requirement, but only under certain
narrow circumstances. ORS 113.105(4). (The lawyer should not attempt to have
the bond waived under circumstances other than those described in the statute.)
Also, a personal representative who is a sole heir or devisee of the estate need not
be bonded. ORS 113.105(1).
See §§11.4-3(a) to 11.4-3(b).
As stated in Supplement § 11.4-1 (introduction to accountings), the
beginning of the accounting must state whether or not a bond is required. If no
bond is required, the accounting must state the date of the court order waiving the
bond or refer to the statute exempting the personal representative from filing a
bond. UTCR 9.160(1)(b).
If a bond is required, the accounting must state the amount of the bond and
include certain information, including information regarding assets and income.
UTCR 9.160(1)(b).
ORS 113.105(2) was renumbered ORS 113.105(1)(b) (amount of bond).
NOTE: The 2017 Legislature updated bonding requirements for
personal representatives. See Supplement § 5.2-6(a) (necessity of bond;
court discretion).
ORS 113.105(2)(a) (as amended in 2017) now provides that the court “may,
for good cause,” require a bond even if the will waives the bond requirement.
If the personal representative is the sole heir or devisee, a bond may not be
required, “but the court may, for good cause, require a bond notwithstanding the
fact that the personal representative is the sole heir or devisee.” ORS
113.105(2)(b).
Upon the personal representative’s request, the court may waive the
requested” and (2) “describes the known creditors of the estate.” ORS 113.105(3).
The court may waive or reduce the requirement of a bond to the extent that
(1) “[t]he personal representative provides written confirmation from a financial
institution that property of the estate is held by the financial institution subject to
withdrawal only on order of the court”; or (2) “[t]he court restricts the sale,
encumbrance or other disposition of property of the estate without prior court
approval.” ORS 113.105(4).
§ 11.4-3(a) If No Bond Is Required
If no bond has been required, a statement must be included at the beginning
of the accounting that the fiduciary was not required to file a bond and the reason
therefor (e.g., the bond requirement was waived in the will or by a statute), or that
the bond requirement was waived by order of the court and the date of that order.
UTCR 9.160(1)(b).
If no bond is required, the preliminary information of the accounting must
state the date of the court order waiving the bond or refer to the statute exempting
the personal representative from filing a bond. UTCR 9.160(1)(b).
§ 11.4-3(b) If Bond Is Required
If a bond has been required, the narrative of the accounting must state the
current amount of the total bond. UTCR 9.160(1)(b). The narrative must also
provide additional information to assist the court and interested persons in
determining whether the bond amount is sufficient. UTCR 9.160(1)(b)(i)–(vii).
COMMENT: In effect, the additional information required by UTCR
9.160(1)(b)(i)–(vii) amounts to a formula. This formula is supposed to force
lawyers into calculating the statutory bond amount in conservatorships, but it
is also relevant to estates of decedents.
PRACTICE TIP: The formula can be adjusted to reflect other items
relevant to the setting of the bond, such as partial distributions and legal and
fiduciary fees about to be approved and paid. The critical issue is to explain
a bond amount that reasonably protects interested persons.
If a bond is required, the preliminary information of the accounting must
state the current amount of the total bond. UTCR 9.160(1)(b). The accounting must
also include the following information:
(i) The total value of the assets as of the last date of the current
accounting period;
(ii) The income estimated to be received during the next accounting
period;
(iii) Total assets and income (the sum of items (i) and (ii));
(iv) The value of the total assets and income which have been restricted
by court order and a reference to the dates of all orders restricting assets;
(v) Unrestricted assets and income (the difference between (iii) and
(iv), generally the amount which should be bonded);
(vi) The fiduciary’s request for any change in the amount of the
existing bond or in restrictions on assets or income.
(vii) If appropriate, an explanation for any difference between the
amount of the requested bond and the amount that should be bonded.
UTCR 9.160(1)(b).
§ 11.4-3(c) Restriction of Assets in Lieu of Bond
Assets are often restricted in lieu of posting a bond. See ORS 113.115. Any
asset restricted by court order must be identified in the accounting (or inventory) as
restricted with reference to the date and title of the order imposing the restriction.
UTCR 9.050. A notation of the restriction must be included in the asset schedule.
UTCR 9.160(2)(a)(i).
PRACTICE TIP: A final accounting of an estate that includes restricted
assets may run into a distribution difficulty if the judgment of distribution
does not explicitly remove the restriction before distribution.
§ 11.4-4 Changes in Assets or Finances
The narrative must include a description of any changes in the assets of the
estate if not clearly shown in the asset schedule. UTCR 9.160(4). This is a
codification of the desire of the court and the beneficiaries for a story of what
occurred in the estate.
EXAMPLE: The sale of the decedent’s rental property at 999 Going St.,
Wagontire, Oregon, was closed on August 15, 2012. A copy of the Seller’s
Statement provided by ABC Title Company is provided as Exhibit __. The
net sale proceeds in the sum of $9,999 were deposited on August 23, 2012,
in the Bank of Sublimity, account number 789.
EXAMPLE: The checking account balance noted in the Inventory for
Murchins Bank, account number 890, for October 12, 2012, was erroneously
listed as $14.99. The correct balance was $1,499,000.
EXAMPLE: The decedent’s 1967 Renault 10 was placed on
consignment at Classic Cars, LLC, in Gresham, Oregon. On approximately
September 1, 2011, while being test driven by a potential buyer on Scenic
Vista Highway, the car was destroyed in a collision with a horse. Insurance
proceeds were received for the full value of the car in the sum of $3,990 and
deposited in the estate checking account at Homebody Bank on June 3,
2012. The owner of the horse threatened to bring a lawsuit against the estate,
but legal counsel ascertained that the liability of the estate was nonexistent
because the horse and the driver shared fault. The estate has secured a
release from the potential plaintiff.
The narrative should also include information that may not be asset specific,
such as the existence of a parallel trust, nonprobate issues, or an ancillary probate
estate.
§ 11.4-5 Fiduciary Disclosure
The narrative of the accounting must specifically disclose and explain (1)
gifts, (2) transactions with a person or entity “with whom the fiduciary has a
relationship which could compromise or otherwise affect decisions made by the
fiduciary” (conflict-of-interest situations), and (3) payments for goods or services
provided either by a person who is not ordinarily in business or at a higher amount
than that ordinarily charged to the public. UTCR 9.170.
COMMENT: This rule was created to apply to conservatorships but also
applies to decedents’ estates.
EXAMPLE: Two common situations are (1) the sale of an estate asset to
a beneficiary or the personal representative, and (2) the personal
representative’s reimbursement of his or her own expenses. A less common
situation occurs when the personal representative may have breached his or
her fiduciary duty. These situations should be explained in detail.
§ 11.4-6 Information Required in Judgment
The narrative of the accounting should address the statutory requirements for
a final judgment of distribution set forth in ORS 116.113.
The judgment must designate the recipients of estate assets—whether by
intestate succession, by the will, or by a court-approved agreement—and the
portion of the estate or property to which each distributee is entitled. ORS
116.113(1). If distribution nuances are present, especially a distribution that diverts
from the will or intestate succession (whichever is relevant), they also need to be
addressed. ORS 116.113(3).
PRACTICE TIP: It is helpful for the personal representative to follow
the wording of any will when listing beneficiaries and their interests or
property.
A judgment, and therefore an accounting, should also contain findings
regarding advancements, a surviving spouse’s election against the will,
renunciation, lapse, and other issues listed in the statute. ORS 116.113(1).
See Supplement § 11.4-1 (introduction to accountings) for a summary of the
format of an accounting.
ORS 116.113(3) was renumbered ORS 116.113(2) (distribution that diverts
from the will or intestate succession).
The 2017 Legislature amended ORS 116.113(1) to add that the judgment
must also contain any findings of the court regarding any reserve requested under
ORS 116.083 (for payment of any additional taxes, interest, penalties, and related
expenses), attorney fees, and approval of the final account or the statement filed in
lieu of the final account under ORS 116.083(4) in whole or in part. ORS
116.113(1)(j)–(l).
§ 11.5 FINANCIAL INFORMATION OF THE ACCOUNTING
§ 11.5-1 Background and Authority
The statutory requirements for financial accounting in estates are found in
ORS 116.083(2). Under prior law, the lack of specifics in the statutes led to a great
variety of accounting formats, unscrupulous fiduciaries blurring or hiding their
actions, and difficulty for the court and beneficiaries when reviewing or auditing
the accountings. Because of these problems, the legislature gave the Chief Justice
of the Oregon Supreme Court authority to specify the form and content of probate
accountings. ORS 116.083(6). The Estate Planning Section and the Elder Law
Section joined the Uniform Trial Court Rules Committee to pass new accounting
requirements that became effective on August 1, 2000. Amendments improving the
rules and a new sample form were approved by the chief justice and became
effective August 1, 2001. These rules flesh out the statute addressing accountings
and should be carefully studied.
The new accounting rules are found in UTCR chapter 9, and the sample
form is in the UTCR Appendix of Forms. They can be found at the Oregon Judicial
Department’s Web site, www.courts.oregon.gov/forms/Pages/default.aspx? (click
on “Court Rules” and then click on Current UTCR Rules).
COMMENT: Form 9.160 in the UTCR Appendix of Forms is a
compromise, in that it addresses both probate estates and conservatorships.
The lawyer must expand on the form to meet all the necessities of an estate’s
final account.
UTCR 9.160 provides that accountings must be in substantially the form set
forth in Form 9.160 in the Uniform Trial Court Rules (UTCRs), Appendix of
Forms. The UTCRs are available at www.courts.oregon.gov/programs/utcr
/Pages/currentrules.aspx (click on “current rules”). A court may, however, allow
other forms of accountings. UTCR 9.160(5). See § 11.5-2 (rules are flexible).
§ 11.5-2 Rules Are Flexible
Because of the variety of individual and court practices around the state, the
Uniform Trial Court Rules Committee (see §11.5-1) had several concerns about
imposing a standardized format. One concern was whether counties with smaller
populations and a high percentage of general lawyers should be forced into
standardized accounting requirements. Another concern was that lawyers in any
county should be able to satisfy the rules of another county. Another concern was
that a clear, concise, and easily audited accounting should not be rejected merely
because it failed to meet the form requirement. The solution to these issues was to
allow flexibility in the use of the Uniform Trial Court Rules (UTCRs). Thus, the
UTCRs provide as follows:
(1) Accountings prepared in substantial compliance with the UTCRs must
be accepted in all judicial districts, UTCR 9.160;
(2) A supplementary local rule (SLR) may make the format of the UTCRs
mandatory, and SLR 9.161 is reserved for this purpose, UTCR 9.160; and
COMMENT: Multnomah, Lane, Marion, and Clackamas Counties have
made the format of UTCR 9.160 mandatory. SLR 9.161 (Multnomah, Lane,
and Marion); SLR 9.165 (Clackamas). Washington County has not adopted
SLRs on point, but seems to enforce the requirements of UTCR 9.160.
(3) A court in its discretion may allow other forms of accountings,
UTCR 9.160(5).
PRACTICE TIP: Although the court may accept other forms of
accountings, court staff in the tri-county area of Portland have emphasized
that an accounting in accordance with the rules will be easier to audit and
will expedite the processing of judgments.
NOTE: A judicial district may make the format of accountings set forth
in UTCR 9.160 mandatory. UTCR 9.160. See, e.g., Lane SLR 9.161;
Multnomah SLR 9.161. Furthermore, the court may allow other forms of
accounting. UTCR 9.160(5). The lawyer should consult SLRs to determine
the nature of the form required by a particular county.
PRACTICE TIP: Another reason the rules may allow other forms of
accounting is to simplify the accounting for very complicated assets, such as
a large investment account. If appropriate, the attorney can summarize the
account without documenting every single intra-account transaction.
§ 11.5-3 Asset Schedule
The essence of the financial accounting is a separate asset schedule that
shows all property of the estate owned at any time during the term of the
accounting period. UTCR 9.160(2). The asset schedule may be included in either
the accounting narrative or an exhibit to the accounting. See Form 9.160, UTCR
Appendix of Forms. See also Appendix 11A. For purposes of the schedule, UTCR
9.160(2)(e) provides that “the side margins may be one-half inch and font size may
be no smaller than 10 point type.”
COMMENT: The asset schedule should be a summary of estate assets
and not an accounting with receipts and disbursements, contrary to the way
some lawyers read the rule.
See Supplement § 11.4-1 (introduction to accountings) for a summary of the
format of an accounting under UTCR 9.160, including a summary of the asset
schedule.
§ 11.5-3(a) Five-Column Requirement
The asset schedule in an accounting must have at least five columns. UTCR
9.160(2)(a). These columns are described in §§11.5-3(a)(1) to 11.5-3(a)(5). See
Appendix 11A.
§ 11.5-3(a)(1) First Column: All Assets
The first column must describe all assets in existence at any point during the
accounting period. See Appendix 11A.
The description of several types of assets must include additional
information:
(1) The description of any asset that has been restricted by court order
must be identified as restricted and must include the date and title of the order
imposing the restriction (see UTCR 9.050; §11.4-3(c));
(2) The description of any asset acquired or disposed of during the
accounting period must include the date of acquisition or disposal; and
(3) The description of any depository account must include a reference to
the exhibit or paragraph containing the statement of receipts and disbursements for
the account (if relevant).
UTCR 9.160(2)(a)(i).
COMMENT: These additional requirements to the asset schedule were
placed in the first column because they might sabotage some accounting
computer software if placed in another (perhaps more relevant) column.
§ 11.5-3(a)(2) Second Column: Value at the Beginning of
Accounting
If the asset was in the estate at the beginning of the accounting period, and
presumably listed in the inventory or in the previous accounting, that asset’s initial
value should appear in the second column. UTCR 9.160(2)(a)(ii). See Appendix
11A.
PRACTICE TIP: Often, in an accounting, it is discovered that the
inventory value is incorrect. This error can be corrected in this column with
an explanation. If the error is significant, perhaps it should also be explained
in the narrative of the accounting.
§ 11.5-3(a)(3) Third Column: Value of Later-Acquired Asset
If the asset was discovered, found, purchased, or otherwise acquired after the
beginning of the accounting period, the third column must state the value at, and
the date of, acquisition. UTCR 9.160(2)(a)(i), (iii). See Appendix 11A.
COMMENT: The distinction between a second-column beginning asset
(see §11.5-3(a)(2)) and a third-column later-acquired asset has been a source
of confusion. The drafters of the Uniform Trial Court Rules intended that the
later-acquired (third-column) asset would be one with a new label and not
the increase in value or addition to an existing asset. The critical issue,
however, is that all assets appear in the asset schedule, and not necessarily in
the most appropriate column for a particular asset.
EXAMPLES: Examples that show differences between second-column
beginning assets and third-column later-acquired assets are as follows:
(1) A land sale contract is sold or pays out, and the proceeds are
invested in a new bank or brokerage account. This new account is a later-
acquired asset. (If the proceeds were deposited in an existing bank or
brokerage account, the account would not be a later-acquired asset. Instead,
an initial asset would be shown as having grown in value.)
(2) Proceeds from the sale of a house that are invested in a new
bank or brokerage account are a later-acquired asset.
(3) If a bond matures and the funds are used to purchase a new
Treasury direct account, that account is a later-acquired asset.
(4) If a bond had been held in an existing brokerage account, and
the proceeds are kept in the same brokerage account, albeit in another form,
such as by the purchase of a new bond, then it is unclear whether the new
bond is a later-acquired asset. One answer is that the brokerage account is
the asset, and no asset is later-acquired. Another answer is that the new bond
is a later-acquired asset. The latter answer would apply if the accounting
specifically detailed the contents of the brokerage account.
(5) If the bond had been held in certificate form rather than in a
brokerage account, and the proceeds were deposited in an existing bank
account, no asset would be later acquired.
(6) Further confusion exists with the discovery of an asset already
in existence, but left off the inventory. An example is a savings bond in the
decedent’s name. Because it was in existence at the start of the estate, it
might be listed as a second-column asset. However, because it was found
(acquired) by the personal representative later, it should be a third-column
asset.
(7) Another gray area involves the establishment of estate accounts
from existing accounts of the decedent. Perhaps the best approach is to show
the decedent’s account in existence at the time of the appointment of the
fiduciary as a second-column asset; but the transfer of the asset to a new
account after appointment of the personal representative makes the new
account a third-column asset.
§ 11.5-3(a)(4) Fourth Column: Value at Disposition
If the asset was sold, redeemed, gifted, lost, abandoned, or otherwise
disposed of before the end of the accounting period, the fourth column must state
the value at, and date of, disposition. UTCR 9.160(2)(a)(iv). See Appendix 11A.
EXAMPLE: A $100 car transferred to a nephew (presumably by
unanimous agreement and not to circumvent creditors) is a fourth-column
asset. The value shown in the fourth column would be $100 because that
was the value at disposition.
EXAMPLE: Household furniture sold at an estate sale is a fourth-
column asset, with the sale proceeds appearing in the fourth column. The
sale proceeds, if deposited in an existing account, would appear as a receipt
in the list of receipts and disbursements, rather than in this schedule. If the
sale proceeds were used to open a new account, the new account would
appear in the third column.
§ 11.5-3(a)(5) Fifth Column: Current Value
If the asset is in existence on the last day of the accounting period, the fifth
column must state the current value. This column, in turn, will become the second
column for the next accounting or the statement of current assets to be distributed.
UTCR 9.160(2)(a)(v). See Appendix 11A.
§ 11.5-3(b) Sum of Each Column
The sum of the second through fifth columns (see §§11.5-3(a)(1) to 11.5-
3(a)(5)) must be totaled at the bottom of each of those columns. UTCR
9.160(2)(b). See Appendix 11A.
COMMENT: The sum of the second column will be the sum shown in
the inventory or last accounting (unless adjusted by some reporting error).
The sum of the fifth column will be the current value. These two figures
should be helpful in preparing and auditing the account. The sums of the
third and fourth columns will not correlate mathematically to the second or
fifth column, but may be helpful to reviewers of the accounting.
§ 11.5-3(c) Additional Information
The schedule may include additional information that would aid in
accounting for assets. UTCR 9.160(2)(c). The rule gives the following examples of
such additional information: “original cost, increase or decrease in value, the
source of an acquisition or the reason for disposition of assets.” UTCR 9.160(2)(c).
COMMENT: Only a small amount of information is needed because this
schedule is a summary. See Appendix 11A.
§ 11.5-3(d) Household Goods
The value of household goods and personal belongings may be totaled on
one line in the asset schedule. UTCR 9.160(2)(d).
§ 11.5-4 Receipts and Disbursements for Depository Accounts
§ 11.5-4(a) Accounting for Receipts and Disbursements
The personal representative must account for receipts and disbursements to
and from estate depository accounts. UTCR 9.160(3). See Appendix 11B. UTCR
9.180(3) defines the term depository as an “entity holding assets of the estate . . . ,
including a bank, stock and bond broker, mutual fund, or similar entity.”
The following rules apply to accounting of receipts and disbursements for
each depository account:
(1) Each depository account must be accounted for separately. For each
depository account, the receipts and disbursements must “be separately listed in
chronological order, with the date and value of each transaction.” UTCR
9.160(3)(a). The total of each list of receipts or disbursements must be provided at
the end of each list. UTCR 9.160(3)(a).
COMMENT: The preparation and auditing of an accounting are simplest
when each account is handled separately. The national trend, and the
practice of a small number of Oregon lawyers, has been to combine receipts
and disbursements of all accounts in the estate into one list. The Uniform
Trial Court Rules Committee specifically rejected this approach.
(2) Each receipt in the account must show the source and briefly explain
the source or purpose of the entry. The first entry in the list of receipts must be the
beginning balance of the account. UTCR 9.160(3)(b).
(3) Each disbursement must show the payee or recipient and briefly
explain its purpose. If the disbursement is by check, the name on the check must
match the name on the disbursement. UTCR 9.160(3)(c).
(4) A sale of real property must “be evidenced by a copy of the seller’s
closing statement from escrow or, if none is available, third-party documentation
of the details of the transaction.” UTCR 9.160(3)(d).
(5) Any transfers between depository accounts must “be so labeled with
reference to the source or destination of the deposit or withdrawal.” UTCR
9.160(3)(e).
COMMENT: Transfers within accounts or to other accounts have been a
primary confusion in the preparation and auditing of accountings. They have
also been used to hide misappropriation.
PRACTICE TIP: The statutory requirement for receipts and
disbursements has always created a lot of difficult work in the accounting of
complicated brokerage and mutual fund accounts. These accounts can be
indecipherable even to the most experienced lawyers. Regularly, lawyers
ignore the requirement and just provide beginning and final values. This rule
for transfers suggests even more work. The authors, after consultation with
court staff, believe that the lawyer should take a practical approach to these
strict requirements. In a number of situations, the court may require only the
accounting of funds entering or leaving the brokerage or mutual fund
account, rather than an accounting of all the internal activity within the
account.
(6) The side margins of this schedule “may be one-half inch and font size
may be no smaller than 10 point type.” UTCR 9.160(3)(g).
(7) “Any difference between the closing balance shown for the account in
the accounting and the closing balance shown for the account in a depository
statement” must be “reconciled.” UTCR 9.160(3)(f). See §11.5-4(b).
UTCR 9.180(3) was renumbered UTCR 9.180(4) (depository defined).
§ 11.5-4(b) Reconciliation of Account Balances
As mentioned in §11.5-4(a), the accounting of receipts and disbursements
must reconcile any difference between (1) the account balance shown on the list of
receipts and disbursements, and (2) the account balance shown on the depository
statement filed with the accounting. UTCR 9.160(3)(f). See Appendix 11B.
Typically, the difference reflects checks written but not yet negotiated.
The form in the UTCR Appendix of Forms, although not the rules, calls for
an internal reconciliation of the receipts and disbursements. This reconciliation is
highly technical and is difficult to describe in text. In summary, the list of receipts
must include (1) a total of the receipts plus the opening balance, (2) an “ending
balance,” which is the total of the receipts and the opening balance minus
disbursements, and (3) a total of the disbursements plus the ending balance. See the
example below and in the forms in this chapter. If the mathematics is correct, then
(1) and (3) will be the same number.
EXAMPLE:
Receipts:
Beginning Balance of Account: $ 7
Receipt A $ 3
Receipt B $ 5
Receipt C $ 9
Total Receipts $ 17
Total Receipts Plus Beginning Balance of Account $ 24
Disbursements:
Disbursement D $ 6
Disbursement E $ 8
Disbursement F $ 2
Total Disbursements $ 16
Ending Balance of Account
Total Receipts—$17,
Plus Beginning Balance—$7, Minus Total
Disbursements—$16 $ 8
Total Disbursements Plus Ending Balance $ 24
This final figure should equal Total Receipts Plus Beginning Balance
(above). If it does not, the account is not reconciled.
COMMENT: Not surprisingly, conversations with court staff confirm
that lawyers often ignore the above reconciliation.
§ 11.5-4(c) Vouchers
With certain exceptions, an account of the personal representative must
include vouchers for disbursements made during the period covered by the
account. ORS 116.083(2)(d); UTCR 9.180. See Appendix 11B.
Vouchers are “documents evidencing each disbursement and showing the
name of the payee, date, and amount.” UTCR 9.180(1).
The most common voucher is a canceled check. Vouchers required by the
court or a statute must either accompany the accounting as a separate exhibit or be
attached to a cover page showing the case caption. UTCR 9.180(1).
COMMENT: The statutory requirement for filing vouchers is in contrast
with the banking trend away from vouchers and toward copies of checks, on-
line banking, electronic transfers, and payments and debit card transactions.
Unfortunately, the statute offers little flexibility. Each case has to find its
own compromise. One option for firms that control the estate checkbook is
on-line banking, where copies of negotiated checks can be printed by a
computer. Another option is to request a waiver of the voucher requirement.
In all events, the lawyer should determine what is allowed by the local court.
COMMENT: Courts do not want vouchers attached directly to the
accounting narrative. Attachment makes the pleading difficult to audit and
store, and complicates the return of the vouchers (see UTCR 9.190).
NOTE: If the personal representative is a bank or trust company, the
rules regarding the filing of vouchers are different. See ORS 116.083(2)(d),
709.030.
The 2017 Legislature amended ORS 116.083 to replace the term voucher
with the term evidence of disbursement. UTCR 9.180, however, still refers to
vouchers.
UTCR 9.180(3) provides that “[i]n a proceeding involving fiduciary
accounts for which the depository does not issue regular statements, the court must
accept a Depository Certification of Funds on Deposit that is substantially in the
form specified in Form 9.180.3 in the UTCR Appendix of Forms.”
§ 11.5-4(d) Depository Statements
A depository statement is a statement from a bank, brokerage firm, mutual
fund, insurance company, or similar entity in which estate assets are deposited,
evidencing the balance in the account during a given period of time. See UTCR
9.180(3). The most common depository statement is a monthly bank statement.
Unless the fiduciary is excused from the requirement of filing vouchers (see §11.5-
6), opening and closing depository statements for the accounting period must be
filed with the accounting. UTCR 9.180(2). See Appendix 11B.
COMMENT: The rule specifically states that copies of vouchers and
depository statements do not need to be served on persons who are entitled
to notice. UTCR 9.180(4).
UTCR 9.180(3) was renumbered UTCR 9.180(4) (depository defined). UTCR
9.180(4) was renumbered UTCR 9.180(5) (copies of vouchers and depository
statements do not need to be served on persons who are entitled to notice).
UTCR 9.180(3) provides that “[i]n a proceeding involving fiduciary
accounts for which the depository does not issue regular statements, the court must
accept a Depository Certification of Funds on Deposit that is substantially in the
form specified in Form 9.180.3 in the UTCR Appendix of Forms.”
§ 11.5-4(e) Sale of Real Property
A sale of real property must “be evidenced by a copy of the seller’s closing
statement from escrow or, if none is available, third-party documentation of the
details of the transaction.” UTCR 9.160(3)(d). See Appendix 11B.
§ 11.5-5 Paragraph or Exhibit
The rules allow both the asset schedule and the list of receipts and
disbursements to be included either as separate paragraphs in the narrative or as
exhibits to the accounting. UTCR 9.160.
§ 11.5-6 Trust Companies as Personal Representatives
A trust company acting as a personal representative is exempt from some of
the accounting requirements. For example, a trust company is exempt from filing
the chronological list of receipts and disbursements, from providing a five-column
asset schedule (trust companies only need to provide a two-column schedule), and
from filing vouchers. UTCR 9.160(3)(h), (2)(f); ORS 116.083(2)(d). Instead, a
trust company acting as a personal representative may provide a chronological list
of receipts and disbursements, with a total for the amount of receipts and a total for
the amount of disbursements. UTCR 9.160(3)(h).
PRACTICE TIP: The lawyer should remind the court of these
exemptions in the narrative.
§ 11.6 OTHER ACCOUNTING ISSUES
§ 11.6-1 Formalities
§ 11.6-1(a) Declaration Under Penalty of Perjury
An accounting filed in an estate proceeding must include a declaration under
penalty of perjury, in the form required by ORCP 1 E, made by the personal
representative or the personal representative’s lawyer. ORS 116.083(2)(g),
111.205.
A declaration under penalty of perjury must:
(1) Be signed by the declarant; and
(2) Include the following sentence in prominent letters immediately above
the declarant’s signature: “I hereby declare that the above statement is true to the
best of my knowledge and belief, and that I understand it is made for use as
evidence in court and is subject to penalty for perjury.” ORCP 1 E.
The 2013 Legislature amended ORS 116.083(2)(g) to provide that each
account must include “[a] declaration under penalty of perjury in the form required
by ORCP 1 E, or an unsworn declaration under ORS 194.800 to 194.835, if the
declarant is physically outside the boundaries of the United States.” ORS 111.205
was likewise amended.
ORS 194.825 (added to Oregon law in 2013) provides that an unsworn
declaration under the Uniform Unsworn Foreign Declarations Act (UUFDA) (ORS
194.800–194.835) must be in substantially the following form:
I declare under penalty of perjury under the law of Oregon that the foregoing is
true and correct, and that I am physically located outside the geographic
boundaries of the United States, Puerto Rico, the United States Virgin Islands and
any territory or insular possession subject to the jurisdiction of the United States.
Executed on the ___ day of __________, 20__, at [city or other location],
[Country].
/s/_________________________
[name]
ORCP 1 E(3) sets forth a substantially similar form for a declaration made
outside the boundaries of the United States.
See ORS 194.805 for definitions pertinent to the UUFDA.
§ 11.6-1(b) Information—Lawyer and Personal Representative
An accounting filed in an estate proceeding must include “the author’s
name, address, telephone number, fax number, if any, and, if prepared by an
attorney, the name, email address, and the Bar number” of the lawyer of record.
UTCR 2.010(7). This information (typed or printed) should appear on the last page
of every accounting. See UTCR 2.010(6), (7); see also UTCR 9.030 (regarding
information required for petitions, motions, and orders).
UTCR 2.010(7) now provides that “[a]ll documents must include the
author’s court contact information under UTCR 1.110(1) and, if prepared by an
attorney, the name, email address, and the Bar number of the author and the trial
attorney assigned to try the case.”
UTCR 1.110(1) defines court contact information as follows:
“Court contact information” means the following information about a person
submitting a document: the person’s name, a mailing address, a telephone
number, and an email address and a facsimile transmission number, if any,
sufficient to enable the court to communicate with the person and to enable any
other party to the case to serve the person under UTCR 2.080(1). Court contact
information can be other than the person’s actual address or telephone or fax
number, such as a post office box or message number, provided that the court and
adverse parties can contact the person with that information.
UTCR 9.030(1) provides that the contact information required by UTCR
2.010(7) “must be typed or printed on the last page of every document” submitted
to the probate court.
UTCR 1.110(4) defines document as “any instrument filed or submitted in
any type of proceeding, including any exhibit or attachment referred to in the
instrument. Depending on the context, ‘document’ may refer to an instrument in
either paper or electronic form.”
§ 11.6-2 Notice of Accountings
§ 11.6-2(a) Annual or Interim Accounting
Although annual and interim accountings are required as described in §11.2,
no notice to interested parties is required for these accountings (unless the interim
accounting is a final accounting for a personal representative). ORS 116.083. The
statutes do not require an order approving the accounting. If such an order is
sought, however, then notice must be provided. ORS 111.215.
Many attorneys provide notice of the annual accounting in order to air any
disputed issues and to provide an order approving the accounting subject to the
approval of the final accounting. Such an interim order would not discharge the
personal representative from liability for the administration of the estate. See ORS
116.123.
§ 11.6-2(b) Final Accounting
“Upon filing the final account and petition for a judgment of distribution, the
personal representative shall fix a time for filing objections thereto in a notice
thereof.” ORS 116.093(1). See Form 11-3. This notice must be mailed to the
persons described in ORS 116.093(1) not less than 20 days before the time fixed
for filing objections to the final account. ORS 116.093(1). Proof of mailing the
notice must be filed in the estate proceeding. ORS 116.093(3). See §2.5-5
regarding proof of notice. See Form 11-2.
COMMENT: The notice period for other petitions and orders is 14 days.
ORS 111.215.
The 2017 Legislature amended ORS 116.093. Upon filing the final account
and petition for a judgment of distribution, the personal representative must “set a
time for filing objections to the account and petition.” ORS 116.093(1). Not fewer
than 20 days before the time set, the personal representative “must mail a copy of
the final account and petition for judgment and notice of the time set for
objections” to (1) “[e]ach distributee at the last-known address of the distributee”
and (2) “[e]ach creditor who has not received payment in full and whose claim has
not otherwise been barred.” ORS 116.093(1).
If a charitable trust, a public-benefit corporation, or a religious organization
“is a residuary beneficiary of the estate,” or “will receive less under the judgment
than the amount of a specific devise to the trust, corporation or organization,” the
personal representative must mail the notice under ORS 116.093(1) to the Attorney
General. ORS 116.093(2).
Furthermore, ORS 116.093(5) provides as follows:
If the Department of Human Services has presented a claim under ORS chapter
411 or ORS 416.310 to 416.340, 416.350 or 417.010 to 417.080, or the Oregon
Health Authority has presented a claim under ORS chapter 414 or ORS 416.310
to 416.340, 416.350 or 416.510 to 416.990, or the Department of Corrections has
presented a claim under ORS 179.620 (3), and the claim has not been settled or
paid in full, the personal representative shall mail to the appropriate agency a
copy of the final account at the same time, and shall make proof of the mailing in
the same manner, as the notice provided for in this section.
ORS 116.093(3) was renumbered ORS 116.093(4) (proof of mailing the
notice must be filed in the estate proceeding).
NOTE: ORS 116.083 allows the personal representative to file a
statement under ORS 116.083(4) in lieu of the final account. See Supp
§ 11.3-4(b) (consent accounting).
§ 11.6-3 Allocation of Income
When income-producing property is specifically devised or distributed
unevenly among residuary beneficiaries, the accounting should address the
allocation of that income and the related expenses. ORS 116.007, 116.143. This
explanation will prevent surprises at distribution.
§ 11.6-4 Reserves to Pay Expenses of the Estate
The personal representative will request a distribution in a final account and
will subsequently need to prepare the fiduciary income tax forms for the estate. See
ORS 116.083(3). The distribution of estate assets, if timely, will distribute income
or loss to the beneficiaries, and the estate will not pay a tax. However, the cost of
preparing tax returns will be paid from the estate, and the personal representative
should retain a reserve to pay the expenses. The purpose and the amount of the
reserve should be noted in the accounting, as well as that any remaining reserve
will be distributed to the remainder beneficiaries. In the alternative, some attorneys
will determine the exact cost of postdistribution tax preparation and prepay it
without the need for a reserve.
In addition to expenses for preparing tax returns, other expenses may arise
after a distribution. The attorney should consider retaining a reserve for these
unknowns. These may include additional legal fees due to unknown complications
and delays. It is not unusual for a beneficiary to be recalcitrant or for a new modest
asset to be found.
When the estate is ready for final settlement and distribution, ORS
116.083(3)(a) now provides that the account must also include a “statement that
any required estate tax return has been filed.”
ORS 116.083(3)(c) now requires that “[a]ny request to retain a reserve for
the determination and payment of any additional taxes, interest and penalties, and
of all related reasonable expenses” must be included in the final account.
§ 11.6-5 Personal Representative’s Fees
§ 11.6-5(a) Statutory Fee
Unlike attorney fees, the personal representative’s compensation is set by
statute based on a formula. ORS 116.173(1). For estates exceeding $50,000, the fee
is $1,630 for the first $50,000 of estate value, plus 2% of the value of probate
assets exceeding $50,000, plus 1% of the value of nonprobate property, excluding
life insurance. The formula set forth in ORS 116.173(1) to arrive at the $1,630
figure is as follows:
($1,000 × 7%) + ($8,999 × 4%) + ($39,999 × 3%) = $1,630
The probate assets may include income and realized gains. Multiple personal
representatives must split the fee. ORS 116.173(1).
PRACTICE TIP: No pleading of the personal representative is required.
NOTE: A personal representative may elect to waive the fee in whole
or in part. Because the fee is taxable income, this is particularly true in a
nontaxable estate in which the personal representative is the sole beneficiary.
But it is also a matter of choice among some personal representatives who
are family members of the decedent.
COMMENT: The authors believe that the fee’s statutory nature
precludes objections from disgruntled beneficiaries on the basis that the
personal representative spent, in their estimation, too little time
administering the estate.
COMMENT: A beneficiary might have a valid objection to an attorney’s
fee if the attorney performed tasks that are the personal representative’s
duty.
The court also has discretion to allow additional compensation for
extraordinary services. ORS 116.173(2). See §11.6-5(b).
The 2017 Legislature amended ORS 116.173, renumbering subsections and
adding new provisions.
ORS 116.173(1) was renumbered ORS 116.173(3) (setting forth the
statutory formula regarding the personal representative’s compensation). ORS
116.173(2) was renumbered ORS 116.173(4) (allowing the court to award further
compensation).
Although the 2017 Legislature did not amend the statutory formula set forth
in ORS 116.173(3), it enacted a new statute (ORS 113.038), which allows a
petition for the appointment of a personal representative under ORS 113.035 to
include “a request for the compensation of the personal representative to be
determined by a different method than as provided in ORS 116.173(3).” See Supp
§ 5.2-2(b) (contents of petition). Unless the court has granted a request for a
different determination of the personal representative’s compensation under ORS
113.038, the personal representative, upon application to the court, is entitled to
receive a commission, which is based in part on the value of “property subject to
the jurisdiction of the court” as provided in ORS 116.173(3)(a). The 2017
Legislature added a definition for the phrase property subject to the jurisdiction of
the court in ORS 116.173(1).
NOTE: If the decedent’s will made special provision for the personal
representative’s compensation, but the estate’s assets are insufficient to pay
all expenses and claims of the estate, the personal representative’s
compensation may not exceed the compensation provided by ORS
116.173(3) and (4). ORS 116.173(5).
The 2017 Legislature also added another provision to ORS 116.173. For
purposes of the statute, each asset must be valued at its “highest value as reported
in the inventory, any amended or supplemental inventory, any interim account or
the final account or statement in lieu of the final account filed under ORS 116.083,
which may be based upon revaluation of the asset to reflect its then current fair
market value.” ORS 116.173(2).
If the decedent’s will made special provision for the personal
representative’s compensation,
(1) the personal representative is not entitled to any other compensation
for services unless, before appointment, the personal representative “signs and files
with the clerk of the court a written renunciation of the compensation provided by
the will”; and
(2) if the estate’s assets are insufficient to pay all expenses and claims of
the estate, the personal representative’s compensation may not exceed the
compensation provided by ORS 116.173(3) and (4).
ORS 116.173(5).
As a result of 2017 legislation, the final account should include “[a]
statement describing the determination of the compensation of the personal
representative under the will or under ORS 113.038 or ORS 116.173(3) and (4).”
ORS 116.083(3)(d).
§ 11.6-5(b) Additional Compensation
In addition to the statutory fee (see §11.6-5(a)), the personal representative
may request further compensation for “any extraordinary and unusual services not
ordinarily required of a personal representative.” ORS 116.173(2). See §2.8-
4(a)(1). A supporting affidavit is required. UTCR 9.060(3).
PRACTICE TIP: At least in the tricounty area, preparing and selling a
house is not considered extraordinary.
ORS 116.173(2) was renumbered ORS 116.173(4). That provision now
states that “[i]n all cases, further compensation as is just and reasonable may be
allowed by the court for any extraordinary and unusual services, including services
not ordinarily required of a personal representative in the performance of duties as
a personal representative.” ORS 116.173(4) (emphasis added).
The 2017 Legislature enacted ORS 113.038, which allows a petition for the
method than as provided in ORS 116.173(3).” See Supp § 11.6-5(a) (statutory fee),
Supp § 5.2-2(b) (contents of petition).
§ 11.6-5(c) Interim Personal Representative’s Fees
A personal representative may request an interim payment of personal
representative’s fees. ORS 116.183. Typically, such a request is made as part of a
petition for partial distribution or an annual or interim accounting.
PRACTICE TIP: As a matter of custom, a court will not allow full
payment of fees in advance, based on the premise that the personal
representative will have lost the financial incentive to close the estate in a
timely manner. Each county addresses this limit differently. For example,
some counties will allow the payment of only 80% of fees earned to date.
Other counties will allow only 50%.
§ 11.6-6 Attorney Fees
§ 11.6-6(a) Request for Attorney Fees
The personal representative’s accounting will also request attorney fees,
unless the fees are paid with nonprobate assets. The fees must be reasonable in
consideration of the factors set forth in ORS 116.183(1). See §2.8-5. An affidavit
must be filed in support of the fee request. UTCR 9.060(2). The affidavit must
comport with the form set forth in Form 5.080 in the UTCR Appendix of Forms
(Statement for Attorney Fees, Costs, and Disbursements). UTCR 5.080. See Form
11-16.
COMMENT: On the issue of reasonableness, consider Judge Charles E.
Luukinen’s statement about a firm that diligently poured itself into a probate
case: “I simply note that the evidence on expenditure of time is voluminous
and convincing. The evidence on the reasonable exercise of professional
attorney judgment on the expenditure of attorney resources is sorely
lacking.” The Estate of N. R. Palanuk, Polk County Case No 92P4037
(citation and quotation not verified by publisher).
PRACTICE TIP: An attorney who is serving in the dual capacity of
attorney and personal representative should inquire about the custom in the
county. In some counties, courts are reluctant to grant both fees.
PRACTICE TIP: Like the accounting, the affidavit in support of fees
should tell a story and contain the necessary level of detail. However, the
attorney should balance detail with the fact that the document will be a
public filing. Additionally, in some counties, billing statements are requested
by the court, and in other counties, they are not requested. Again, the lawyer
must check local practice.
PRACTICE TIP: A common problem is how to handle the time that the
lawyer will spend between the completion of the final account and the end of
all estate tasks. Many lawyers estimate future time in the final accounting
and request authority for payment in the judgment. The payment for the time
actually worked is a receivable, but the payment for future work is placed in
the lawyer’s trust account. Withdrawals are made as the work is completed.
If a balance of funds remains in the lawyer’s client trust account at the
completion of work, the estate is refunded the difference. If the lawyer has
performed work in excess of the amount held in the client trust account, he
or she may either write off the fee or petition for additional fees. The lawyer
may not pay himself or herself the amount determined for future services in
advance of those services. OSB Formal Ethics Op No 2005-151. See also
Oregon RPC 1.15-1. See §11.6-4 regarding reserves to pay expenses after
distribution.
The 2017 Legislature renumbered ORS 116.183(1) as ORS 116.183(2)(a)
(attorney fees must be reasonable in consideration of the factors set forth in the
statute).
The 2017 Legislature also added a new provision to the statute: “Before the
court awards attorney fees in an amount less than the amount requested by the
personal representative, the court must allow the attorney an opportunity to submit
additional materials supporting the requested amount.” ORS 116.183(2)(b).
The 2017 legislation also clarified that ORCP 68 does not apply to requests
for attorney fees under ORS 116.183. ORS 116.183(2)(c).
When the estate is ready for final settlement and distribution, the account
must also include “[a]ny request to retain a reserve for the determination and
payment of any additional taxes, interest and penalties, and of all related
reasonable expenses.” ORS 116.083(3)(c).
§ 11.6-6(b) Interim Legal Fees
Lawyers commonly request attorney fees as part of an annual or interim
accounting. See ORS 116.013, 116.183(1). As with the interim payment of
personal representative fees, local court custom should be investigated.
§ 11.6-7 Costs
Lawyer’s and personal representative’s costs may be paid without petition
and order. See, e.g., ORS 114.265, 114.275, 114.305. Examples of such costs are
the court filing fee, the cost of a bond, letters testamentary, publications, etc. The
list of disbursements should note these items. ORS 116.083(2). See §11.5-4(a)
(disbursements).
§ 11.7 OBJECTIONS TO THE FINAL ACCOUNTING

§ 11.7-1 Who May Object
Persons entitled to notice under ORS 116.093 may file objections to the
personal representative’s final accounting within the 20-day period specified in the
notice. ORS 116.103, 116.093. See §11.6-2(b).
Persons entitled to the notice under ORS 116.093 are (1) heirs, (2) devisees,
(3) creditors who have not been paid in full and whose claims are not barred, and
(4) “[a]ny other person known to the personal representative to have or to claim an
interest in the estate being distributed.” ORS 116.093(1). See Waybrant v.
Bernstein, 75 Or App 550, 706 P2d 1002 (1985).
ORS 116.093 was amended in 2017. See Supplement § 11.6-2(b) regarding
persons entitled to notice of the final account. ORS 116.093(1) no longer requires
notice to “[a]ny other person known to the personal representative to have or to
claim an interest in the estate being distributed.”
“[T]he time set by the personal representative under ORS 116.093 for filing
objections to the final accounting controls.” Hobbs v. Harrington, 284 Or App 125,
130, 391 P3d 915 (2017). “If no objections are filed by that date and the probate
court approves of the final accounting, the court enters a judgment of final
distribution. ORS 116.113.” Hobbs, 284 Or App at 130. “A judgment of final
distribution is the ‘conclusive determination of the persons who are the successors
in interest to the estate and of the extent and character of their interest therein.’”
Hobbs, 284 Or App at 130.
The decision in Fuentes v. Tillett, 263 Or App 9, 326 P3d 1263 (2014), stands
for the principal that a conservator who misrepresented or failed to disclose facts in
an accounting was not insulated from liability even though the accounting had
been approved by the court. The case is not precedent for accountings in a
decedent’s estate, but the principle is analogous.
§ 11.7-2 Form of Objection
No particular form of pleading is required for an objection. However, the
statute requires that the objector specify the particulars of the objection. ORS
116.103.
Supplemental objections may be filed, at least while the matter is still in
dispute. In re Roach’s Estate, 50 Or 179, 200, 92 P 118 (1907).
§ 11.7-3 Hearing on Objection
The court must set a hearing on objections to a final accounting. ORS
116.103. See ORS 111.215.
On a determination that there is no just reason for delay, the court in a
probate hearing may enter a limited judgment for a decision on an objection to an
accounting. ORS 111.275(1)(c), (2). “The judgment document need not reflect the
court’s determination that there is no just reason for delay.” ORS 111.275(2).
PRACTICE TIP: A clear trend exists toward alternative dispute
resolution in probate disputes. See SLR 9.016, 12.045 (Multnomah County).
If an objection to a final accounting is filed, the lawyer should review
pertinent supplementary local rules for the mediation procedure, the various
alternative dispute resolution options, or for reasons to seek a waiver of
mediation. Supplementary local rules are online at
www.courts.oregon.gov/rules/Pages/slr.aspx.
PRACTICE TIP: Each county has its own procedure to set hearings. The
objector will need to pay a first-appearance fee, if one has not been paid
previously.
See Hobbs v. Harrington, 284 Or App 125, 130, 391 P3d 915 (2017)
(discussed in Supp § 11.7-1).
§ 11.8 DISTRIBUTION OF ESTATE ASSETS

§ 11.8-1 Partial Distribution
A partial distribution of estate assets will be allowed as long as sufficient
assets will remain in the estate to pay support for the spouse and children,
administration expenses, and all known unpaid creditors, and as long as there will
be no loss to creditors, the estate, or the interested parties. ORS 116.013. If
necessary to protect creditors, the court may require that the personal
representative post a bond to protect creditors and other interested parties. ORS
116.023.
PRACTICE TIP: The personal representative should consider making
partial distributions in the following circumstances:
(1) To dispose of assets that are difficult and time-consuming to
manage, such as ongoing businesses, extensive rental properties, or motor
vehicles;
(2) To dispose of substantial cash not needed for administration
purposes;
(3) To dispose of other income-producing assets, including stocks,
bonds, and other securities;
(4) To dispose of other properties specifically devised; and
(5) To distribute income for income tax purposes.
PRACTICE TIP: The personal representative should not hold liquid
funds in amounts that exceed FDIC depository insurance limits. If
significant funds are on hand, the attorney should recommend CDARS
(multiple certificates of deposit with different banks all held in one
depository).
NOTE: The personal representative should consider income tax
implications before making such distributions. For example, because the
individual beneficiaries’ income taxes are due and payable on April 15 of
the subsequent calendar year, income distributed in January has a tax due
much later than income distributed in December. The personal
representative should obtain a receipt from each distributee for filing with
the court. See Form 11-5.
See Hobbs v. Harrington, 284 Or App 125, 130, 391 P3d 915 (2017).
§ 11.8-1(a) Procedure for Partial Distributions
The personal representative, or any other interested person, may file a
petition stating in substance that all the requirements for distribution have been
met, describing the property to be distributed, and naming the persons to whom
distribution should be made. Petitioners are not required to wait any prescribed
time before filing. In addition, the petition should recite whether an undertaking is
required, and whether notice should be given or a hearing set by the court. ORS
116.013, 116.023. The petition must include a declaration under penalty of perjury
in the form required by ORCP 1 E. ORS 111.205. See §11.6-1(a).
On the filing of the petition, the court may require that notice be given to
interested parties and that a hearing be set on the petition. ORS 116.013. Notice to
particular parties is not required by the statute. The court may, in appropriate
situations, dispense with notice and hearing.
The distribution of property pursuant to the court order is a full discharge of
the personal representative with regard to all property included in the order of the
court, subject to the provisions of ORS 116.063. ORS 116.033.
NOTE: The personal representative is not the only party allowed to
petition for partial distribution.
PRACTICE TIP: See §§11.8-6(a) to 11.8-6(b) regarding a distribution to
a minor or other protected person.
A petition for partial distribution must include “a declaration under penalty
of perjury in the form required by ORCP 1 E, or an unsworn declaration under
ORS 194.800 to 194.835.” ORS 111.205. See Supp § 11.6-1(a) (discussing ORS
111.205).
§ 11.8-1(b) Return of Distributed Property
If property previously distributed is needed for the payment of claims,
administration expenses, or taxes, the personal representative may petition the
court to order the return of all or part of the property. ORS 116.043.
Notice of hearing on the petition must be given to the distributees. ORS
116.043. The notice must state the date, time, and place for the hearing. ORS
111.215(1). Notice of the hearing may be given as follows:
(1) By mailing a copy to the distributee at least 14 days before the date of
the hearing; or
(2) By delivering a copy to the distributee personally at least five days
before the date of the hearing; or
(3) If the distributee’s address is unknown, by publication in a newspaper
of general circulation in the county where the hearing is to be held, once a week for
three consecutive weeks, with the last publication at least 10 days before the date
set for the hearing.
ORS 111.215.
NOTE: Notice must be given to the Oregon Department of State Lands
for any distributee whose address is unknown. ORS 113.045.
NOTE: The court may change the requirements for notice of the
hearing. ORS 111.215(2).
Upon the hearing, the court may order the return of the distributed property,
or any part of it, or may require the distributee to pay its value as of the time of the
distribution. If the distributee fails to obey the order within the time specified, the
distributee may be adjudged in contempt of court, and judgment may be entered
against the distributee and the sureties, if any. ORS 116.043.
The court may authorize notice by electronic means under ORS 111.215. See
UTCR chapter 21 (filing and service by electronic means).
The 2017 Legislature added a new provision to ORS 111.085 (probate
jurisdiction):
The distributees of an estate administered in Oregon are subject to the jurisdiction
of the courts of Oregon regarding any matter involving the distributees’ interests
in the estate. By accepting a distribution from an estate, the distributee submits
personally to the jurisdiction of the courts of this state regarding any matter
involving the estate.
ORS 111.085(2).
§ 11.8-2 Final Distribution
The court may enter a general judgment of final distribution if the following
requirements are met:
(1) The personal representative filed in the estate proceeding a final
account meeting the requirements of ORS 116.083 and a petition for a judgment of
distribution (see ORS 116.093);
(2) Notice for filing objections to the final account and petition was
provided as required by ORS 116.093 (see §11.6-2(b));
(3) Any objections to the final account and petition have been resolved,
ORS 116.113(1) (see §§11.7-1 to 11.7-3); and
(4) All Oregon income taxes, estate taxes, and personal property taxes
have been paid, or if not paid, payment of those taxes has been secured by bond,
deposit, or otherwise, and all required tax returns have been filed, ORS
116.083(3)(a), 116.113(2) (see §11.3-2).
COMMENT: ORS 116.113(2) effectively requires a statement in the
judgment of final distribution that Oregon income and personal property
taxes, if any, have been filed and paid, or that payment of such taxes has
been secured by bond, deposit, or otherwise.
PRACTICE TIP: Although ORS 116.113(2) does not mention Oregon
estate taxes, the judgment of final distribution should contain a statement
indicating payment of any estate tax or the provision of security for
payment. See ORS 116.083(3)(a).
PRACTICE TIP: Neither ORS 116.083 nor ORS 116.113 mentions the
Oregon fiduciary income tax, which is included in the references to Oregon
income taxes. Because the fiduciary tax returns normally must be prepared
after final distribution, it is advisable that the final account include a
statement indicating that these returns will be prepared and filed, and any tax
paid, before closing the estate. See §11.6-4 regarding setting aside a reserve
to pay taxes and tax-preparation fees. Many attorneys advise their personal
representatives to file the fiduciary income tax returns after the personal
representative has been discharged and the estate closed.
Regarding item (4) in the 2012 text (and the comments after it), note that
subsection (2) was deleted from ORS 116.113; however, pursuant to ORS
116.083(3)(b), the final account must include a statement that “all Oregon income
taxes, estate taxes and personal property taxes that are due, if any, have been paid,
or if not paid, that payment of those taxes has been secured by bond, deposit or
otherwise, and that all tax returns currently due have been filed.” The final account
also must include a “statement that any required estate tax return has been filed.”
ORS 116.083(3)(a).
NOTE: The court will also enter a general judgment of final
distribution upon its approval of a statement in lieu of the final account
under ORS 116.083(4). ORS 116.113(1). See Supp § 11.3-4(b) (consent
accounting). “Notice of time for filing objections to the statement described
in [ORS 116.083(4)] is not required.” ORS 116.083(5).
§ 11.8-2(a) General Judgment of Final Distribution
Approval of the final account and the distribution of the estate is made by
the court in a general judgment of final distribution. ORS 116.113(1). See Form
11-15. In the judgment, the court:
(1) Approves the final account in whole or in part, ORS 116.113(1)(j);
(2) Designates the persons in whom title to property of the estate
available for distribution is vested and the portion of the estate or property to
which each is entitled under the will, by agreement approved by the court, or by
intestate succession, ORS 116.113(1); and
(3) Includes any special findings that the court may have made regarding:
(a) Advancements;
(b) Elections against the will by the surviving spouse;
(c) Renunciations;
(d) Lapses;
(e) Adjudicated controversies;
(f) Partial distributions, which must be confirmed or modified;
(g) Retainers;
(h) Claims unpaid but for which a special fund is established; and
(i) Contingent claims allowed but unpaid.
ORS 116.113(1).
A personal representative’s deed must be recorded in the deed records of the
county where real property belonging to the estate is situated. The execution of a
personal representative’s deed does not place the personal representative in the
chain of title to the property conveyed, unless the personal representative is also an
heir, devisee, or claiming successor to the property conveyed. ORS 116.223. See
Form 11-6.
ORS 116.113(1)(j) was renumbered ORS 116.113(1)(l) (the court’s approval
of the final account in whole or in part).
Regarding item (3) in the 2012 text, the judgment must also include any
special findings that the court may have made regarding “[a]ny reserve requested
under ORS 116.083” (ORS 116.113(1)(j)) and attorney fees (ORS 116.113(1)(k)).
“Before the court awards attorney fees in an amount less than the amount
requested by the personal representative, the court must allow the attorney an
opportunity to submit additional materials supporting the requested amount.” ORS
116.183(2)(b).
NOTE: The court will also enter a general judgment of final
distribution upon its approval of a statement in lieu of the final account
under ORS 116.083(4). ORS 116.113(1). See Supp § 11.3-4(b) (consent
accounting).
§ 11.8-2(b) Procedure for Distributions
The personal representative must distribute the cash and property remaining
in the estate, including income, in accordance with the provisions of the will, a
distribution agreement, or intestate succession. Income is distributed in accordance
with the provisions of ORS 116.007.
The transfer of money, investments, or property by a personal representative
to the proper beneficiaries tends to be straightforward. If the estate is insolvent,
lawyers should refer to the claims statutes, especially ORS 115.125. See §9.5-8;
see also Form 9-8. Property that escheats is covered in ORS 116.193. See also
2003 Or Laws ch 395. For further discussion of escheat, see §§4.1-2(g) and 5.2-3.
If assets are insufficient to meet all testamentary provisions, and the will is unclear
about abatement, see ORS 116.133 and §8.1-5(c).
The distribution of various types of assets may be accomplished as discussed
below:
(1) Liquid assets. The distribution of liquid assets may be by check or
letter of instructions to an account executive. If funds, stocks, or bonds have not
been sold, the beneficiaries will need to participate by opening or identifying their
own brokerage or fund accounts.
(2) Real estate. A transfer of real property should be by a personal
representative’s deed. See Form 11-6. This transaction is a legal requirement if the
property is in a county different than that of the estate. ORS 116.223. Relying on
the judgment is not as efficient as recording a deed. The personal representative
should give the beneficiaries information about liability and fire insurance on the
property, and should advise the beneficiaries about changeover of utilities and
other services as necessary.
PRACTICE TIP: In all events, the judgment should contain the legal
description of any real property.
(3) Household goods and personal belongings. These assets ordinarily do
not have titles, and generally distribution is by possession and the signing of a
receipt.
(4) Vehicles. The Oregon Driver and Motor Vehicle Services Division
(DMV) will actually retitle a vehicle, without probate, once it receives a DMV
form, the “Inheritance Affidavit,” available at www.odot.state.or.us/forms/dmv
/516.pdf. The personal representative should keep the vehicle insured until a
receipt is signed and transfer is complete. On transferring the vehicle, the personal
representative should file with the DMV a completed DMV form, “Notice of Sale
or Transfer of a Vehicle” (available at www.odot.state.or.us/forms/dmv/6890.pdf)
to assure that liability for future use of the vehicle is not chargeable to the personal
representative.
The personal representative should have each distributee sign a receipt for
distributed property and file the receipts with the court. See ORS 116.213.
PRACTICE TIP: The personal representative should provide detailed
written receipts to all distributees for signature and return. See Form 11-7.
The court will not enter a supplemental judgment of discharge until the
personal representative has filed “receipts or other evidence satisfactory to
the court that distribution has been made as ordered in the general
judgment.” ORS 116.213. See §11.9-1.
PRACTICE TIP: The method and manner of distributing assets other
than cash are determined by the character of the property. A receipt may
contain a provision that the beneficiary will contribute to subsequent
liabilities up to the amount received as the beneficiary’s share of the estate.
See ORS 116.043. A remainder beneficiary’s receipt may state that a
beneficiary is entitled to his or her share of unused funds held in a tax-
preparation reserve fund.
PRACTICE TIP: Occasionally, a beneficiary will accept a distribution
but refuse to sign the receipt. If the distribution is for cash only, the court
will generally accept the negotiated check as evidence in lieu of the receipt.
If there are other issues, a motion to close the estate without a signed receipt
and a supporting affidavit should be filed.
PRACTICE TIP: See §§11.8-6(a) to 11.8-6(b) regarding a distribution to
a minor or other protected person.
The personal representative and his or her lawyer must address a multitude
of tax issues. These issues include preparing and filing the annual and final
fiduciary income tax returns, advising the beneficiaries not to file their own
personal returns until they have received from the estate their copies of IRS Form
1041, Schedule K-1 (Shareholder’s Share of Income, Credits, Deductions, etc.),
and advising the beneficiaries to seek tax advice on the income tax consequences
of receiving IRD (income with respect of a decedent) assets, especially in a taxable
estate.
See Bigsby v. Vogel, 248 Or App 423, 273 P3d 284 (2012).
(4) Vehicles. The “Inheritance Affidavit” is available at www.oregon.gov
/odot/forms/dmv/516fill.pdf.
§ 11.8-2(c) Effect of Judgment
“The judgment of final distribution is a conclusive determination of the
persons who are the successors in interest to the estate and of the extent and
character of their interests therein, subject only to the right of appeal and the power
of the court to vacate the judgment.” ORS 116.113(4); see Lawver v. Beesley, 86
Or App 711, 717–718, 740 P2d 1215 (1987). The judgment further operates to
transfer the title of property from persons initially vested in title by will or intestate
succession to persons receiving property from them by agreement approved by the
court. ORS 116.113(3).
A supplemental judgment of discharge releases the personal representative
and the personal representative’s surety from liability for the administration of the
estate, subject to the right of appeal and the power of the court to vacate its final
orders. ORS 116.123; Lawver, 86 Or App at 718–719. See First Interstate Bank of
Oregon, N.A. v. Haynes, 87 Or App 700, 743 P2d 1139 (1987).
ORS 116.113(4) was renumbered ORS 116.113(3). “The judgment of final
distribution is a conclusive determination of the persons who are the successors in
interest to the estate and of the extent and character of their interests therein,
subject only to the right of appeal and the power of the court to vacate the
judgment.” ORS 116.113(4).
See Hobbs v. Harrington, 284 Or App 125, 130, 391 P3d 915 (2017) (“A
judgment of final distribution is the ‘conclusive determination of the persons who
are the successors in interest to the estate and of the extent and character of their
interest therein.’”).
§ 11.8-2(d) Settlement Agreements
The personal representative should encourage settlement agreements if
beneficiaries desire a distribution different from that required by the decedent’s
will or by the law of intestate succession. ORS 116.113(1), (3). See §8.3-1. The
agreements are also useful in substituting property for monetary devises and
providing a means and manner of distributing property to residuary devisees or
intestate heirs and avoiding in-common ownership.
All interested beneficiaries must be parties to the agreement. If a minor or
incompetent person is involved, a conservator or guardian ad litem should be
appointed. Furthermore, income tax and estate tax consequences should be
considered before the agreement is finalized.
ORS 116.113(3) was renumbered ORS 116.113(2) (settlement agreements).
See Hobbs v. Harrington, 284 Or App 125, 130, 391 P3d 915 (2017) (“A
judgment of final distribution is the ‘conclusive determination of the persons who
are the successors in interest to the estate and of the extent and character of their
interest therein.’”).
§ 11.8-3 Offset and Retainer
§ 11.8-3(a) Defined
Offset and retainer is the right and duty of the personal representative to
offset a debt due the estate from a distributee against the interest of the distributee
in the estate. ORS 116.153.
Before ORS 116.153 was enacted in 1969, no statutory right of retainer
existed. However, this right was well established in the decisions of the Oregon
Supreme Court. See Stanley v. U.S. Nat. Bank of Portland, 110 Or 648, 657, 224 P
835 (1924); Slusher v. Slusher, 123 Or 108, 109–110, 261 P 75 (1927); Boise
Payette Lumber Co. v. Nat’l Sur. Corp., 167 Or 553, 558–559, 118 P2d 1066
(1941); In re Miller’s Estate, 189 Or 246, 251–252, 218 P2d 966 (1950).
NOTE: Retainer differs from the practice of subtracting an expense of
the estate from a beneficiary’s share, e.g., the cost to evict the beneficiary.
This latter type of surcharge has no express statutory authority.
§ 11.8-3(b) Procedure for Offset and Retainer
No particular procedure is necessary to establish the offset and retainer,
except to include the computation in the final accounting and in the judgment of
distribution. The judgment of final distribution must contain a special finding of
the retainer by the court. ORS 116.113(1)(g).
The right of retainer applies to debts owed to the decedent, whether arising
before or after the decedent’s death. Stanley v. U.S. Nat. Bank of Portland, 110 Or
648, 657–658, 224 P 835 (1924). A debt arising before the decedent’s death would
be a listed asset in the inventory of the estate. Stanley, 110 Or at 657–658. Debts
arising after the decedent’s death, which also may be offset, include debts arising
out of the misappropriation of funds by the personal representative (see Stanley,
110 Or at 658), and debts arising by reason of the personal representative’s paying
debts of distributees guaranteed by the decedent before his or her death. Slusher v.
Slusher, 123 Or 108, 110, 261 P 75 (1927).
§ 11.8-3(c) Priority of Right
The personal representative’s right of offset and retainer has priority over the
rights of judgment creditors, heirs, and assignees of the distributee. ORS 116.153.
This provision is a codification of Oregon case law. Stanley v. U.S. Nat. Bank of
Portland, 110 Or 648, 657–658, 224 P 835 (1924); Boise Payette Lumber Co. v.
Nat’l Sur. Corp., 167 Or 553, 559, 118 P2d 1066 (1941); In re Miller’s Estate, 189
Or 246, 252, 218 P2d 966 (1950).
§ 11.8-3(d) Defenses
Under the offset-and-retainer statute, the distributee has all the defenses that
would have been available to the distributee in a direct proceeding for recovery of
the debt. ORS 116.153. These defenses include the statute of limitations,
bankruptcy, setoff, and counterclaim. The statutory defenses appear to be a
departure from prior case law. See In re Miller’s Estate, 189 Or 246, 253, 218 P2d
966 (1950), in which the defense of statute of limitations was not allowed.
§ 11.8-4 Disposition of Unclaimed Assets
§ 11.8-4(a) “Unclaimed Asset” Defined
The term unclaimed asset refers to the personal representative’s inability to
deliver property to a known distributee, either because the distributee refuses to
accept the property, or because the distributee cannot be found within 30 days after
entry of the judgment of distribution. ORS 116.203. An unclaimed asset is to be
contrasted with an asset that escheats to the state when no known heirs exist. See
§§4.1-2(g) and 5.2-3 regarding escheat.
§ 11.8-4(b) Procedure for Unclaimed Assets
A personal representative faced with the problem of unclaimed assets
should, no fewer than 30 days after entry of the judgment of distribution, file a
report in the estate proceeding showing that payment or delivery of property in
possession or control of the personal representative cannot be made to the
distributee entitled to it. The report should state the reason for the inability to make
distribution. See Form 11-8.
The court will then order the personal representative to pay or deliver the
property to the Department of State Lands to be placed in the escheat funds of the
state. ORS 116.203. See Form 11-9.
§ 11.8-4(c) Receipt After Delivery of Unclaimed Asset
After payment or delivery of unclaimed assets to the Department of State
Lands, the personal representative will receive from the department a receipt
stating:
(1) From whom the property was received;
(2) A description of the property; and
(3) The name of the person entitled to the property.
ORS 116.203. See Form 11-10.
§ 11.8-4(d) Recovery of Unclaimed Asset
A claim for the recovery of an unclaimed asset may be made in the same
manner provided for the recovery of escheated property. ORS 116.203; see ORS
116.253. Such a claim may be made only by or on behalf of a person who either
had no actual knowledge of the escheat or, at the time of the escheat, was unable to
prove entitlement to the escheated property. ORS 116.253. The claim must be filed
within 10 years after the death of a decedent whose estate escheated in whole or in
part, or within eight years after the entry of a judgment or order escheating
property of an estate to the state. ORS 116.253.
NOTE: A person who refused to accept property of an estate cannot
seek to recover the escheated property at a later date. See ORS 116.253.
QUERY: Can a distributee who refused to accept distribution make a
claim for the property in view of subsections (1) and (2)(c) of ORS 116.253,
which require that the claimant have no knowledge or notice of the order
directing delivery to the Department of State Lands?
§ 11.8-5 Distribution to Foreign Personal Representative
Upon application by the personal representative, the court may authorize the
delivery to the personal representative of an estate of a decedent pending in a
foreign jurisdiction of any assets of the domiciliary estate appropriate for payment
of expenses of the ancillary proceeding or for distribution in the foreign
jurisdiction. ORS 116.163.
COMMENT: This procedure appears to apply to estates being probated
in different states, and not in other countries.
§ 11.8-6 Distribution to Persons Under Legal Disability
§ 11.8-6(a) Distribution to Minors
If the personal representative has actual knowledge of the appointment of a
conservator for a beneficiary who is a minor, or that proceedings are pending for
the appointment of a conservator for the minor, the personal representative must
distribute the minor’s distributive share of the estate to the conservator. ORS
126.700(2). If the personal representative has no such knowledge, he or she may
pay or deliver money or personal property in amounts not exceeding $10,000 per
year to:
(1) A person having the care and custody of the minor with whom the
minor resides, ORS 126.700(1)(a);
(2) A guardian of the minor, ORS 126.700(1)(b); or
(3) A financial institution pursuant to a deposit in a federally insured
savings account in the sole name of the minor and giving notice of the deposit to
the minor, ORS 126.700(1)(c).
When the personal representative pays or delivers money or personal
property under ORS 126.700, the personal representative is not responsible for the
proper application of the money or property. ORS 127.700(4).
Under ORS 126.816, the personal representative may apply to the court in
the final account for approval to distribute the minor’s share to a custodian for the
minor’s benefit as authorized in the will, pursuant to the Oregon Uniform Transfers
to Minors Act. ORS 126.832. See GUARDIANSHIPS, CONSERVATORSHIPS, AND
TRANSFERS TO MINORS ch 5 (OSB Legal Pubs 2009).
Under proper circumstances, upon application to the court, the personal
representative may secure other protective arrangements without the appointment
of a conservator.
In all other cases, to avoid possible liability, the personal representative
should secure the appointment of a conservator to accept the minor’s distributive
share. ORS 125.005 et seq.
For further discussion of the Oregon Uniform Transfers to Minors Act
(codified in Oregon at ORS 126.805–126.886), see Guardianships,
Conservatorships, and Transfers to Minors ch 5 (OSB Legal Pubs 2018).
For discussion of conservatorships and other protective proceedings, see
Guardianships, Conservatorships, and Transfers to Minors ch 4.
§ 11.8-6(b) Distribution to Other Protected Persons
For protected persons who are not minors, the personal representative must
distribute the protected person’s share to the conservator, if one has been
appointed. ORS 125.420. If the personal representative has notice or knowledge
that a distributee has been adjudged to be mentally ill, or if, under the facts and
circumstances, a reasonably prudent person would consider the distributee to be
mentally ill, but no conservator has been appointed, the personal representative, to
avoid liability, should seek appointment of a conservator for that distributee. See
Cummins’ Adm’r v. Walker’s Comm., 66 SW2d 48, 51 (Ky 1933).
PRACTICE TIP: Seeking the appointment of a conservator for an estate
beneficiary is not a step that should be taken without a lot of process.
Statutory priorities and requirements, and many other considerations, should
be taken into account. The personal representative can consider other
options, such as getting the beneficiary to legal counsel, trusts, etc.
§ 11.9 DISCHARGE OF PERSONAL REPRESENTATIVE

§ 11.9-1 Procedure for Discharge of Personal Representative
Upon filing receipts or other evidence showing that distribution has been
made as ordered in the general judgment (including the receipt from the
Department of State Lands if required, see §11.8-4(c)), the court will discharge the
personal representative by supplemental judgment, and the estate is closed. ORS
116.213. See Form 11-11.
A supplemental judgment of discharge generally bars any action against the
personal representative and his or her surety. ORS 116.213. But see §11.9-2 for
exceptions.
§ 11.9-2 Exceptions to Release of Personal Representative and Surety
Although a supplemental judgment of discharge generally bars any action
against both the personal representative and the surety of the personal
representative (see §11.9-1), there are exceptions to this general rule.
Within one year after the entry of the supplemental judgment of discharge,
the court may permit an action to be brought against a personal representative and
the personal representative’s surety if the supplemental judgment of discharge was
taken either (1) through fraud or misrepresentation of the personal representative or
the surety, or (2) through the claimant’s mistake, inadvertence, surprise, or
excusable neglect. ORS 116.213. But see §§7.2-4(a)(3) and 10.8-4 to 10.8-4(d)
regarding a personal representative’s liability for environmental contamination.
Furthermore, a judgment “that is absolutely void is a mere nullity and may
be vacated by the court at any time.” Lothstein v. Fitzpatrick, 171 Or 648, 658, 138
P2d 919 (1943).
NOTE: ORS 116.213 is more restrictive than ORCP 71 B(1), which
allows for relief from a judgment for various reasons, including mistake,
inadvertence, surprise, or excusable neglect.
PRACTICE TIP: Although no specific procedure is mentioned, the
language of ORS 116.213 appears to provide that a claimant could petition
the court for authorization to file such an action setting forth the grounds,
and that the court, in its discretion and on such terms as it might direct, could
permit the action, if the petition is filed within one year after the entry of the
supplemental judgment of discharge.
§ 11.10 REOPENING THE ESTATE

§ 11.10-1 Grounds for Reopening an Estate
Even though an estate has been closed, the court may reopen a decedent’s
estate for any of the following reasons:
(1) If other property is discovered (see §§11.10-1(a)(1) to 11.10-1(a)(3));
(2) If any necessary act remains unperformed; or
(3) For “any other proper cause appearing to the court” (see §§11.10-
1(b)(1) to 11.10-1(b)(2)).
ORS 116.233.
See Wells v. Wells, 262 Or 44, 51, 496 P2d 718 (1972) (an estate may be
reopened subject to the court’s discretion, not as a matter of right).
§ 11.10-1(a) Subsequently Discovered Assets
§ 11.10-1(a)(1) In General
The discovery of property of the decedent that was not administered in the
original probate presents a clear case for reopening the estate. See, e.g., In re
Hattrem’s Estate, 170 Or 613, 648, 135 P2d 777 (1943).
The statute does not state a time limit for reopening an estate.
Once an estate is reopened, the provisions of the probate code applicable to
the original administration of the estate continue to apply to the reopened estate.
ORS 116.233.
PRACTICE TIP: If the original probate involved a solvent testate estate,
the lawyer should give notice to all devisees. If the original probate involved
a solvent intestate estate, the lawyer should give notice to all heirs at law. If
the original probate involved an insolvent estate, additional notice should be
given to all creditors whose claims were allowed, but not paid in full. See
ORS 113.145. The lawyer must exercise caution because of the possibility
that heirs, devisees, or creditors have died or changed addresses since the
original probate was closed. If an address cannot be determined with
reasonable diligence, notice should be published and an affidavit should be
filed documenting reasonable diligence in attempting to determine that
address. See ORS 111.215(1)(c).
Reopening an estate because additional assets are discovered does not allow
creditors to have a “second bite of the apple.” The probate code provides that
claims already adjudicated or barred may not be asserted in the reopened
administration. ORS 116.233. Assuming that notice to interested persons was
properly published in the original probate, all claims against the estate are barred
on filing the final account in the original probate. ORS 115.005.
The 2017 Legislature added a new provision to ORS 111.085 (probate
jurisdiction):
The distributees of an estate administered in Oregon are subject to the jurisdiction
of the courts of Oregon regarding any matter involving the distributees’ interests
in the estate. By accepting a distribution from an estate, the distributee submits
personally to the jurisdiction of the courts of this state regarding any matter
involving the estate.
ORS 111.085(2).
§ 11.10-1(a)(2) Small Estates
If the original probate was a small-estate proceeding (see ORS 114.505–
114.560), and assets later discovered exceed the dollar limitations applicable to
small estates, the proper procedure is the commencement of a probate in the same
manner as provided for the commencement of an entirely new probate. See ORS
114.515(2), (8); see also §§5.3-1 to 5.3-3(a).
Under the small-estate procedure, if a personal representative is not
appointed within four months after the affidavit is filed, “the interest of the
decedent in all of the property described in the affidavit is transferred to the person
or persons shown by the affidavit to be entitled” to that property, and any other
claims against the property are barred except as provided in the statute. ORS
114.555. However, a person to whom the property is transferred pursuant to the
small estate affidavit is personally answerable and accountable to a later-appointed
personal representative. ORS 114.545(2)(b). See §§5.3-1 to 5.3-8(d).
ORS 114.545(2)(b) was renumbered ORS 114.545(4)(b) (a person to whom
the property is transferred pursuant to the small-estate affidavit is personally
answerable and accountable to a later-appointed personal representative).
See Givan v. State by & through Dept. of Human Servs., 289 Or App 125,
135, 410 P3d 311 (2017) (the court “construe[d] ORS 114.555 to mean that, if
someone files an affidavit as authorized by ORS 114.515, and the court does not
appoint a personal representative within four months, then all claims must be
resolved and property distributed in the manner provided in ORS 114.555”).
§ 11.10-1(a)(3) Amending Tax Returns
The personal representative of the reopened estate should determine whether
amended federal estate tax and Oregon estate tax returns need to be filed or
amended in light of the new assets or facts.
§ 11.10-1(b) Intestate Estate—Will Later Discovered
§ 11.10-1(b)(1) In General
A petition to reopen an estate is the proper procedure if the original probate
was conducted as an intestate estate and a will of the decedent is later discovered.
The case of Goorman v. Heniken’s Estate, 244 Or 200, 205–206, 416 P2d 662
(1966), decided before the enactment of ORS 113.027 in 1973, stands for the
proposition that when a will is discovered after an intestate probate is completed,
the estate may be reopened. The probate code permits reopening an estate on the
petition of any interested person for “any other proper cause appearing to the
court.” ORS 116.233.
An estate may not be reopened to admit a will to probate more than one year
after the decedent’s estate has been administered in Oregon and closed. ORS
113.027.
COMMENT: The safest interpretation of ORS 113.027 is that the one-
year period begins to run when the supplemental judgment of discharge is
entered.
The probate code does not require that notice of reopening be delivered to
any particular person; instead, notice must be given as the court prescribes. ORS
116.233.
PRACTICE TIP: Notice should be given to all heirs at law and all
devisees named in the newly discovered will. Notice to unpaid creditors is
not necessary unless additional assets are discovered. The probate code
provides that claims already adjudicated or barred may not be asserted in the
reopened administration. ORS 116.233.
with the formalities of a validly executed will. See Supp § 8.2-6 (petition to admit
noncompliant writing as decedent’s will or a revocation or alteration of the will).
In light of the discussion in the 2012 text, when such a writing is discovered after
an intestate probate is completed, the estate probably may be reopened. See ORS
113.027 (“A will may not be admitted to probate or an estate reopened to admit a
will to probate more than one year after the estate of the decedent has been
administered in Oregon and closed.”).
§ 11.10-1(b)(2) Recovering Assets Already Distributed
The most difficult problem in reopening an estate because of a later-
discovered will is recovering the assets distributed in the original probate when the
devisees under the will are different from the heirs at law or the beneficiaries under
a previous will. Although the probate code provides that the judgment of final
distribution is a conclusive determination of the persons entitled to receive the
estate, the code also provides that that determination is subject to the right of
appeal and the power of the court to vacate the judgment. ORS 116.113(4).
Oregon case law appears to permit the recovery of assets from the mistaken
distributees if the distribution resulted from a mistake of fact, rather than a mistake
of law. See Scott v. Ford, 45 Or 531, 547, 78 P 742 (1904); Scott v. Ford, 52 Or
288, 295, 97 P 99 (1908). See also T. C. W., Annot, Right of Recovery Against
Person to Whom, by Mistake of Law, Property of Decedent's Estate Has Been
Improperly Distributed, 147 ALR 121 (Jan 1, 1943); 31 AM JUR2D, Executors and
Administrators §§1124–1179 (2002) (supplemented periodically).
Substantial and complicated legal questions also may arise concerning the
recovery of assets from transferees of the original distributees. See Comment, Title
Disputes After Probate or Administration, 29 ME L REV 278 (1978) (citation not
verified by publisher).
ORS 116.113(4) was renumbered ORS 116.113(3) (a judgment of final
distribution is conclusive determination, subject only to the right of appeal and the
power of the court to vacate the judgment).
§ 11.10-2 Personal Representative for Reopened Estate
When reopening an estate, the court may either reappoint the former
personal representative or appoint some other party as the personal representative,
based on the petition of the parties. ORS 116.233.
§ 11.10-3 Procedure for Reopening an Estate
The court may reopen an estate upon the petition of any interested person.
ORS 116.233. The petition must include a declaration under penalty of perjury in
the form required by ORCP 1 E. ORS 111.205. See Form 11-17.
The court will, by order, prescribe what notice, if any, need be given.
Following the appointment and the giving of such notice, the personal
representative may then proceed with the administration of the estate for the
purpose set forth in the petition. See Forms 11-12, 11-13, and 11-14.
The general provisions of the probate code regarding original administration
apply insofar as applicable to accomplish the purpose for which the estate is
reopened. ORS 116.233.
A petition to reopen an estate must include a declaration under penalty of
perjury in the form required by ORCP 1 E, “or an unsworn declaration under ORS
194.800 to 194.835, if the declarant is physically outside the boundaries of the
United States.” ORS 111.205. See Supp § 11.6-1(a) (discussing declarations).
See Price v. Lotlikar, 285 Or App 692, 705–06, 397 P3d 54 (2017) (the
decedent’s sisters were not “interested persons” entitled to reopen an estate under
ORS 116.233).
§ 11.10-4 Prior Claims
Any claim that has been previously adjudicated or barred may not be
reasserted in the reopened administration. ORS 116.233.
FORMS
Form 11-1 Annual or Other Accounting

Download MS Word
IN THE ______ COURT OF THE STATE OF OREGON


____________________, )
) [title, e.g., “FIRST
Deceased. ) ANNUAL” or other time
) period] ACCOUNTING
) [and any other relief
) requested, such as
) PETITION FOR INTERIM
) PERSONAL
) REPRESENTATIVE FEES
) AND ATTORNEY FEES]
_____________, the duly appointed and qualified personal representative of

the estate of ______________, deceased, presents this _______________[Title, e.g.,
“annual”] accounting, covering the period from __________, 20__, through
_________, 20__ (the “accounting period”).
1.
Bonding and Restrictions. No bond is required because the bond [was
waived by court order dated _____________, 20__ / is waived by ORS
___________________].
[or]
1.
Bonding and Restrictions. The current amount of the total bond, including
riders, is $__________.
[Complete the following information for annual accountings only.]
Value of the assets on last date of this accounting $_______
period:
Plus: estimated income for next accounting period: $_______
Total assets and income $_______
Less: value of restricted assets and income $_______
(Orders restricting assets or income are dated
_____________, 20__)
Unrestricted assets and income requiring bond or new $________
restrictions
The personal representative requests the following changes in the amount of

the existing bond or in restrictions on assets or income.
[Reduce / Increase] the bond to $________
Restrict the following assets: _______________________
Remove the restrictions from the _______________________
following assets:
2.
Asset Schedule. Attached hereto and marked as Exhibit 1 is the Asset
Schedule, which is a complete and accurate statement of all assets owned by the
estate at any time during the accounting period, together with the personal
representative’s estimate of the value of each asset.
[The asset schedule may be set forth in this document or attached as an
exhibit, using the format set forth in Form 9.160, UTCR Appendix of Forms. See
Appendix 11A. Creating a spreadsheet for the asset schedule will help minimize
mathematical errors in the asset schedule. For assets restricted by court order,
include the date and title of the order. For any asset acquired or disposed of during
the accounting period, include the date of acquisition or disposal.]
3.
Receipts and Disbursements. Attached and marked as Exhibits ____ through
____, are complete and accurate schedules of all funds received and disbursed from
the estate’s depository accounts.
[The schedules for receipts and disbursements may be set forth in this
document or attached as an exhibit, using the format set forth in Form 9.160, UTCR
Appendix of Forms. Using a spreadsheet or an accounting program (such as
Quickbooks or Quicken) to create attachments for receipts and disbursements will
help minimize errors. For each entry, show the date, the check number, the payee, an
explanation of the transaction, and the amount. Reconcile the difference, if any,
between the accounting ending balance and the depository statement. See Appendix
11B.]
4.
Vouchers and Depository Statements. The filing of vouchers and
depository statements was waived by [Court Order herein dated ____________,
20___/ the following statute or court rule: __________________].
[or]
4.
Vouchers and Depository Statements. The personal representative
requests that the Court waive the requirement of filing vouchers and depository
statements for this accounting. The vouchers and depository statements are located
at the following address: ______________. The vouchers and depository
statements will be available for examination by interested persons at that location
until one year after the approval of the final accounting.
[or]
4.
Vouchers and Depository Statements. The personal representative requests
that the vouchers and depository statements filed with this accounting be returned. A
self-addressed envelope with adequate postage is attached to the vouchers.
[Vouchers are documents evidencing each disbursement and showing the
name of the payee, date, and amount. Depository statements are statements from
banks, brokerage firms, insurance companies, and similar entities with which
estate assets are deposited, showing the balance in the depository account at the
beginning and end of the accounting period. If vouchers and depository statements
are filed with the account, use the third option above. Otherwise, use the first or
second option. Many financial institutions no longer return canceled checks to the
estate. Courts will often allow the personal representative to submit a screen shot
of checks from the estate online account, or a print of the screen shot from the
estate account, confirming that the check has cleared. The personal representative
should confirm what the local court will accept before submitting vouchers. When
opening the account, the personal representative should determine what options
are available to show proof that a check has cleared, as well as what the local
court will accept, rather than waiting to determine these matters until an
accounting is due.]
5.
Narrative Description of Changes During the Account Period. During the
accounting period, the following changes in the assets or financial circumstances
occurred:
[Describe all changes not clearly disclosed in the asset schedule, including,
without limitation, corrections to previously declared values, omitted assets, the
closing of an account, the sale or purchase of an asset, a significant change in
living expenses, or a stock split. Use as many subparagraphs as necessary to
separately describe each change. See the following examples.]
(a) The personal representative closed the decedent’s personal accounts held at
________________.
(b) The personal representative collected the decedent’s various refunds and
uncashed checks and deposited them into the estate checking account held at
___________________.
(c) The personal representative sold the decedent’s personal residence for
$_________. After payment of the decedent’s mortgage at ____________________
and closing costs, the net proceeds, in the amount of $_________, were deposited
into the estate checking account held at ____________________. Attached and
marked as Exhibit ___ is the Seller Final Closing Statement.
(d) The personal representative sold the decedent’s automobile and deposited the
proceeds into the estate checking account held at _____________.
(e) The personal representative sold some of the decedent’s personal effects and
deposited the proceeds into the estate checking account held at
___________________. The remaining personal effects were distributed to the sole
beneficiary, as shown in the Custody Receipt filed with the Court on
_____________, 20__.
6.
Fiduciary Disclosures. [Disclose and explain every transaction if the
transaction consisted of any of the following: (a) a gift; (b) a transaction with a
person or entity with whom the personal representative has a relationship that
could compromise or otherwise affect a decision made by the personal
representative; the disclosure must include, but is not limited to, payment for
goods, services, rent, reimbursement of expenses, and any other like transactions;
(c) a payment for goods or services provided either by a person not engaged in an
established business of providing similar goods or services to the general public or
at a rate higher than that ordinarily charged to the general public (if the personal
representative made any inappropriate distributions or paid any claims that should
not have been paid, that action should be disclosed and explained, as well as what
the personal representative did to remediate the action, e.g., paid back the amount
to the estate with interest).]
7.
Personal Representative’s Fees. The personal representative is entitled to
statutory compensation in the sum of $__________. The personal representative is
requesting partial payment of the fee in the sum of $__________, a sum equal to less
than 50% of the statutory personal representative’s fee.
[Most courts will not authorize full payment of fiduciary fees before the
filing of the final account. Most courts will not authorize even a partial payment of
personal representative fees unless a significant amount of the personal
representative’s duties have been fulfilled. The personal representative should
check local court policy before requesting partial payment of the fiduciary’s fee.]
8.
Attorney Fees and Costs. The personal representative represents that
[lawyer’s name] has rendered and will continue to render substantial services to this
estate; that the services are detailed in the Statement for Attorney Fees, Costs, and
Disbursements filed concurrently with this accounting; and that a partial payment of
a reasonable compensation for the services is the sum of $_________. The requested
sum is less than 80% of the anticipated attorney fees. The Law Offices of
____________________ has advanced costs in the amount of $__________ for
administration of this estate and should be reimbursed. Requested attorney fees and
costs total $___________.
[Most courts will not authorize full payment of attorney fees before the filing
of the final accounting. The personal representative should check local court
policy before requesting partial payment of attorney fees.]
9.
Notice. Notice, as required by statute, will be provided to those persons
entitled to notice.
10.
Other Matters. [Add as many additional paragraphs as may be needed to
justify requests for court orders included in the prayer of the accounting and to
comply with the requirements applicable to the particular accounting. If necessary,
indicate in the caption any additional relief requested. The personal representative
and the lawyer for the personal representative should identify and comply with all
requirements imposed by statute, rule, and court order.]
11.
Closing. The estate is not ready for final settlement and distribution because
[state the reason why the estate is not ready to close].
WHEREFORE, the personal representative prays for an order:
1. Approving this accounting [generally, annual accounts in decedent’s
estates will not be approved by the court until the final account is approved];
2. Setting the amount of the bond at $_________ [include this provision

only if a change of the bond amount is requested];
3. Changing the asset restrictions as follows: ______________ [include
this provision only if a change of the asset restrictions is requested];
4. Directing the partial payment to ___________________of
$___________ as a reasonable personal representative’s fee [if applicable];
5. Directing the partial payment of $____________to ____________,
attorneys for the personal representative, representing $___________ as reasonable
attorney fees, and $________ for costs incurred [if applicable]; and
6. [Set forth any additional relief requested.]
DATED: _______________, 20____.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: This form illustrates the accounting format required by UTCR 9.160;
see also UTCR Form 9.160, UTCR Appendix of Forms. Each accounting must
also comply with all other applicable statutes and court rules. An accounting need
not include instructions in the form shown in bracketed italics, or portions of the
form inapplicable to the individual accounting.
COMMENT: See §11.2. See also ORS 116.083, 111.205; UTCR 9.160, UTCR
9.170, UTCR 5.080; ORS 116.173. See UTCR 2.010 and UTCR 9.030 for the
form of documents.
case.” UTCR 2.010(7).
this form.
NOTE: See Supplement § 11.4-1 for a summary of the format of an
accounting.
See Supp § 11.6-1(b) (contact information required on court documents
pursuant to UTCR 2.010(7), UTCR 1.110, and UTCR 9.030).
In lieu of a “declaration under penalty of perjury in the form required by
ORCP 1 E,” an accounting may include “an unsworn declaration under ORS
194.800 to 194.835, if the declarant is physically outside the boundaries of the United
States.” See Supp § 11.6-1(a) (discussing such declarations).
21.040 (format) and UTCR 21.090 (electronic signatures).
Form 11-2 Final Accounting and Petition for General Judgment of
Final Distribution
Download MS Word
IN THE ________ COURT OF THE STATE OF OREGON


____________________, )
) FINAL ACCOUNTING AND
Deceased. ) PETITION FOR GENERAL
) JUDGMENT OF FINAL
) DISTRIBUTION
__________________, personal representative of the estate of

__________________, presents this Final Accounting and Petition for General
Judgment of Final Distribution, covering the period from ___________, 20__
through _____________, 20___ (the “accounting period”).
1.
Bonding. No bond has been required in this estate because the bond was
waived by [the decedent’s will / court order dated _____________, 20__].
[or]
1.
Bonding. The current amount of the total bond, including riders, is
$____________. The personal representative will request that the Court exonerate
the bond after the entry of the Supplemental Judgment Discharging Personal
Representative and Closing Estate.
2.
Restricted Assets. The limited judgment dated ____________, 20__,
restricted assets of the estate. The assets are restricted in an account held at
__________________. The personal representative requests that the Court remove
the restriction on that account.
3.
Asset Schedule. Attached hereto and marked as Exhibit 1 is the Asset
Schedule, which is a complete and accurate statement of all assets owned by the
estate at any time during the accounting period, together with the personal
representative’s estimate of the value of each asset.
[The asset schedule may be set forth in this document or attached as an
exhibit, using the format set forth in Form 9.160, UTCR Appendix of Forms. See
Appendix 11A. Creating a spreadsheet for the asset schedule will help minimize
mathematical errors in the asset schedule. For assets restricted by court order,
include the date and title of the order. For any asset acquired or disposed of during
the accounting period, include the date of acquisition or disposal].
4.
Receipts and Disbursements. Attached hereto and marked as Exhibits __
through __ are complete and accurate schedules of all funds received and disbursed
from the estate’s depository accounts.
[The schedules for receipts and disbursements may be set forth in this
document or attached as an exhibit, using the format set forth in Form 9.160, UTCR
Appendix of Forms. See Appendix 11B. Using a spreadsheet or an accounting
program (such as Quickbooks or Quicken) to create attachments for receipts and
disbursements will help minimize errors. For each entry, show the date, the check
number, the payee, an explanation of the transaction, and the amount. Reconcile the
difference, if any, between the accounting ending balance and the depository
statement.]
5.
Vouchers and Depository Statements. The filing of vouchers and
depository statements was waived by [court order herein dated ____________,
20___/ the following statute or court rule: __________________].
[or]
Vouchers and Depository Statements. The personal representative
requests that the Court waive the requirement of filing vouchers and depository
statements for this accounting. The vouchers and depository statements are located
at the following address: ______________. The vouchers and depository
statements will be available for examination by interested persons at that location
until one year after the approval of the final accounting.
[or]
Vouchers and Depository Statements. The personal representative requests
that the vouchers and depository statements filed with this accounting be returned. A
self-addressed envelope with adequate postage is attached to the vouchers.
[Vouchers are documents evidencing each disbursement and showing the
name of the payee, date, and amount. Depository statements are statements from
banks, brokerage firms, insurance companies, and similar entities with which
estate assets are deposited, showing the balance in the depository account at the
beginning and end of the accounting period. If vouchers and depository statements
are filed with the account, use the third option above. Otherwise, use the first or
second option. Many financial institutions no longer return canceled checks to the
estate. Courts will often allow the personal representative to submit a screen shot
of checks from the estate online account, or a print of the screen shot from the
estate account, confirming that the check has cleared. The personal representative
should confirm what the local court will accept before submitting vouchers. When
opening the account, the personal representative should determine what options
are available to show proof that a check has cleared, as well as what the local
court will accept, rather than waiting to determine these matters until an
accounting is due.]
6.
Narrative Description of Changes during the Account Period. During the
accounting period, the following changes in the assets or financial circumstances
occurred:
[Describe all changes not clearly disclosed in the asset schedule, including,
without limitation, corrections to previously declared values, omitted assets, the
closing of an account, the sale or purchase of an asset, a significant change in
living expenses, or a stock split. Use as many subparagraphs as necessary to
separately describe each change. See the following examples.]
(a) The personal representative closed the decedent’s personal accounts
held at ________________.
(b) The personal representative collected the decedent’s various refunds
and uncashed checks and deposited them into the estate checking account held at
_________.
(c) The personal representative sold the decedent’s personal residence for
$___________________. After payment of the decedent’s mortgage at
____________________ and closing costs, the net proceeds, in the amount of
$___________________, were deposited into the estate checking account held at
________________. Attached and marked as Exhibit __ is the Seller Final Closing
Statement.
(d) The personal representative sold the decedent’s automobile and
deposited the proceeds into the estate checking account held at _____________.
(e) The personal representative sold some of the decedent’s personal
effects and deposited the proceeds into the estate checking account held at
___________________. The remaining personal effects were distributed to the
sole beneficiary, as shown in the Custody Receipt filed with the Court on
_____________, 20__.
7.
Fiduciary Disclosures. [Disclose and explain every transaction if the
transaction consisted of any of the following: (a) a gift; (b) a transaction with a
person or entity with whom the personal representative has a relationship that could
compromise or otherwise affect a decision made by the personal representative; the
disclosure must include, but is not limited to, payment for goods, services, rent,
reimbursement of expenses, and any other like transactions; (c) a payment for
goods or services provided either by a person not engaged in an established business
of providing similar goods or services to the general public or at a rate higher than
that ordinarily charged to the general public (if the personal representative made
any inappropriate distributions or paid any claims that should not have been paid,
that action should be disclosed and explained, as well as what the personal
representative did to remediate the action, e.g., paid back the amount to the estate
with interest).]
8.
Creditors. Other than attorney fees and accountant fees and income tax
returns still due for the final year of the estate, no remaining claims or expenses of
administration are due from this estate, and all creditors of the decedent and of this
estate have been paid in full.
[or]
8.
Creditors. Except for those claims set forth below, all creditors of the
decedent and of this estate have been paid in full.
(a) [Use as many subparagraphs as necessary to list unpaid creditors.]
9.
Taxes. The personal representative has satisfied the decedent’s individual,
fiduciary, and estate tax obligations. All Oregon income, estate, and personal
property taxes due have been paid, and all required tax returns have been filed within
the period required by law. The personal representative represents that no final
formal determination has been made regarding the decedent’s income tax liability,
and the Oregon Department of Revenue and the Internal Revenue Service have three
years to recover any tax due from the beneficiaries.
10.
Reserve. The personal representative requests authorization to establish a
reserve in the sum of $_______ for the costs of preparing the fiduciary income tax
returns, and the sum of $_______ for attorney fees for completion of the Final
Accounting and other closing documents and distribution of the estate’s assets. Any
balance remaining in the reserve will be distributed to the [remainder beneficiaries /
heirs of the decedent] in their distributive shares.
11.
Personal Representative’s Fee. The personal representative [is entitled to
statutory compensation in the sum of $________ / has waived his personal
representative fee].
12.
Attorney Fees and Costs. The personal representative represents that [name]
has rendered substantial legal services to this estate and that the services are detailed
in the Statement for Attorney Fees, Costs, and Disbursements filed concurrently with
this accounting. Reasonable compensation for the services is $_____, plus $____ for
costs incurred, for a total of $_______.
13.
Remaining Assets. The remaining estate assets are ready for distribution.
14.
Distribution. The remaining assets are distributable in accordance with the
[decedent’s will / laws of intestacy] to the following [beneficiaries / heirs]: [List
beneficiaries and method of distribution, i.e., specific devises and/or percentage of
residue of estate.]
15.
Notice. Notice, as required by statute, will be provided to those persons
entitled to notice.
16.
Other Matters. __________________[Add as many additional paragraphs
as may be needed to justify requests for court orders included in the prayer of the
accounting, and to comply with the requirements applicable to the particular
accounting. If necessary, indicate in the caption any additional relief requested.
The personal representative and the lawyer for the personal representative should
identify and comply with all requirements imposed by statute, rule, and court
order.]
17.
Closing. The estate is ready for final settlement and distribution.
WHEREFORE, the personal representative prays for a General Judgment of

Final Distribution:
1. Approving this accounting;
2. Directing ________________ to remove the restriction on the estate’s
assets held on deposit in savings account #_________________;
3. Directing the payment of $________ as the statutory personal
representative’s fee;
4. Directing the payment of $_______ to ________________, representing
$_______ as reasonable attorney fees, and $________ for costs incurred;
5. Directing that the personal representative reserve the sum of $________
for the costs of preparing the fiduciary income tax return and the payment of any tax
due, and the sum of $______ for attorney fees for completion of the final accounting
and other closing documents and distribution of the estate’s assets; any balance
remaining in the reserve shall be distributed to the [residual beneficiaries / decedent’s
heirs] in their percentage shares.
6. Directing distribution of the remaining assets of the estate to the
[devisees and beneficiaries / heirs of the decedent] entitled to them as set forth in
paragraph ____ above.
7. [Set forth any additional relief requested.]
8. On filing receipts for the distribution, the personal representative will
submit a supplemental judgment to discharge the personal representative, exonerate
the bond, if any, and close the estate.
DATED:____________________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: This form illustrates the accounting format required by UTCR 9.160;
see also UTCR Form 9.160, UTCR Appendix of Forms. Each accounting must
also comply with all other applicable statutes and court rules. An accounting need
not include instructions in the form shown in bracketed italics, or portions of the
form inapplicable to the individual accounting.
COMMENT: See §§11.2, 11.3 to 11.6-7. See also ORS 116.083, 116.173,
ORS 111.205; UTCR 9.160, UTCR 9.170, UTCR 5.080. See UTCR 2.010 and
UTCR 9.030 for the form of documents.
this form.
Paragraphs 9 and 11 of the form in the 2012 text should now read as
follows:
9.
Estate Tax Return; Taxes. The personal representative has filed an estate
tax return. The personal representative has paid all Oregon income taxes, estate
taxes, and personal property taxes that are due, and has filed all required tax
returns currently due. The personal representative represents that no final formal
determination has been made regarding the decedent’s income tax liability, and the
Oregon Department of Revenue and the Internal Revenue Service have three years
to recover any tax due from the beneficiaries.
11.
Personal Representative’s Fee. The personal representative [is entitled to
statutory compensation in the sum of $________ pursuant to ORS 116.173(3) [and
$______ as further compensation for extraordinary and unusual services pursuant
to ORS 116.173(4)] / is entitled to compensation as set forth in the decedent’s will
/ has waived the personal representative fee / is entitled to compensation to be
determined by the method described in the petition for appointment pursuant to
ORS 113.038].
Item 3 of paragraph 17 should now read as follows:
17.
....
3. Directing the payment of $________ [as the statutory personal
representative’s fee pursuant to ORS 116.173(3) [and $______ as further
compensation for extraordinary and unusual services pursuant to ORS 116.173(4)]
/ as compensation for the personal representative as set forth in the decedent’s will
/ as compensation for the personal representative determined by the method
described in the petition for appointment pursuant to ORS 113.038];
NOTE: When the estate is ready for final settlement and distribution,
ORS 116.083(3) now provides that the account must also include additional
information. See Supp § 11.6-2(b) (final accounting), Supp § 11.6-4 (request to
retain a reserve).
See Supplement § 11.6-5(a) and Supplement § 5.2-2(b) regarding ORS
113.038, which provides that a petition for the appointment of a personal
representative under ORS 113.035 may include “a request for the compensation of
the personal representative to be determined by a different method than as
provided in ORS 116.173(3).”
See Supplement § 11.4-1 for a summary of the format of an accounting.
See Supp § 11.6-1(a) (declaration under penalty of perjury).
Form 11-3 Notice for Filing Objections to Final Accounting and
Petition for General Judgment of Final Distribution
Download MS Word


____________________, )
) NOTICE OF TIME
Deceased. ) FOR FILING
) OBJECTIONS TO
) FINAL ACCOUNTING
) AND PETITION FOR
) GENERAL JUDGMENT
) OF FINAL DISTRIBUTION
Notice is hereby given that the personal representative for the estate of the
above-named decedent has filed the Final Accounting and Petition for General
Judgment of Final Distribution.
Any objections to the Final Accounting and Petition must be filed in the estate
proceeding in the above court on or before ________, 20__.
DATED: ________________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §§11.2, 11.3-4(a), 11.6-2(b). See also ORS 116.093; UTCR
9.160, UTCR 2.010, UTCR 9.030.
NOTE: The notice may be filed by the personal representative or the personal
representative’s lawyer. “All documents must include the author’s name, address,
telephone number, fax number, if any, and, if prepared by an attorney, the name, e-
mail address, and the Bar number of the author and the trial attorney assigned to
try the case.” UTCR 2.010(7).
this form.
See Supp § 11.6-2(b) (persons entitled to notice of the final account and
petition for judgment and notice of the time set for objections).
See UTCR chapter 21 (filing and service by electronic means).
Form 11-4 Statement under ORS 116.083(4) in Lieu of Final
Accounting and Petition for Judgment of Final Distribution
Download MS Word


____________________, )
) STATEMENT UNDER ORS
Deceased. ) 116.083(4) IN LIEU OF
) FINAL ACCOUNTING
) AND PETITION FOR
) GENERAL JUDGMENT OF
) FINAL DISTRIBUTION
___________, personal representative of the estate of ___________,

presents this Statement in Lieu of Final Accounting pursuant to ORS 116.083(4)
and Petition for General Judgment of Final Distribution, covering the period from
___________, 20__, through __________, 20__ (the “accounting period”).
1.
No bond has been required in this estate because the bond was waived by
[the decedent’s will / court order dated ____________, 20__].
[or]
1.
The current amount of the total bond, including riders, is $_______. The
personal representative requests that the court exonerate the bond upon the entry of
the Order Discharging Personal Representative and Closing Estate.
2.
The limited judgment dated ___________, 20__, restricted assets of the
estate. The assets are restricted in an account held at ______________. The
personal representative requests that the court remove the restriction on that
account.
3.
All creditors of the decedent and of this estate have been paid in full.
4.
All Oregon income taxes, estate taxes, and personal property taxes that are
due, if any, have been paid, and all tax returns currently due have been filed. All
federal estate and income taxes, if any, due from this estate or on account of this
decedent have been paid, and all tax returns currently due have been filed.
5.
The personal representative requests authorization to establish a reserve in
the sum of $_______ for the costs of preparing the final fiduciary income tax
returns, and the sum of $_______ for attorney fees for completion of the estate’s
closing documents and distribution of the estate’s assets. Any balance remaining in
the reserve will be distributed to the [heirs / devisees] of the decedent in their
distributive shares.
6.
The personal representative is entitled to statutory compensation in the sum
of $_______, calculated in accordance with ORS 116.173 as follows:
Value of property inventoried $__________
Income and realized gains during probate $__________
Total for statutory fee $_________
Fee on first $50,000 $1,630.00
2% on balance $ _________
1% of nonprobate assets (excluding life $__________
insurance)
Total fee $ __________
The personal representative has incurred expenses on behalf of the estate in

the sum of $_______. Those expenses are listed on the attached Exhibit ____.
[or]
6.
The personal representative has waived the personal representative fee.
7.
The personal representative represents that _____________ has rendered
substantial legal services to this estate and that the services are detailed in the
Statement of Attorney Fees and Costs, filed concurrently with this accounting.
Reasonable compensation for the services is $_______, plus $_______for costs
incurred, for a total of $_______.
8.
The remaining assets of the estate are ready for distribution.
9.
The remaining assets are distributable in accordance with the [decedent’s
will / laws of intestacy] to the following [beneficiaries / heirs] of the decedent: [list
beneficiaries and method of distribution, i.e., specific devises and/or percentage of
residue of estate].
10.
No notice is required because the beneficiaries entitled to notice have
waived the requirement that they be served with notice and have signed a Waiver
of Notice and Consent to Immediate Entry of Judgment. The Waiver and Consents
are filed concurrently with this Statement under ORS 116.083(4).
11.
The estate is ready for final settlement and distribution.
WHEREFORE, the personal representative prays for a General Judgment of
Final Distribution:
(a) Approving this Statement under ORS 116.083(4);
(b) Directing ________________ to remove the restriction on the estate’s
assets held on deposit in savings account #______________ at [name and location
of bank or other institution];
(c) Directing the payment of $_______ as the statutory personal
representative’s fee;
(d) Directing the payment of $_______ to _______________,
representing $_______ as reasonable attorney fees, and $_______ for costs
incurred;
(e) Directing that the personal representative reserve the sum of
$_______ for the costs of preparing the fiduciary income tax return and the
payment of any tax due, and the sum of $_______ for attorney fees for completion
of the estate’s closing documents and distribution of the assets of the estate; any
balance remaining in the reserve will be distributed to the [residual beneficiaries /
decedent’s heirs] in their percentage shares;
(f) Directing distribution of the remaining assets of the estate to the
[devisees and beneficiaries / decedent’s heirs] entitled to them as set forth in
paragraph ____ above.
(g) Directing the personal representative, on filing receipts for the
distribution, to submit a supplemental judgment to discharge the personal
representative, exonerate the bond, if any, and close the estate.
DATED: ________________, 20____.
/s/__________________________
[name]
[address]
[telephone no.]
[fax no.]
[email address]
NOTE: See ORS 116.083(4), which is discussed in Supplement § 11.3-4(b)

(consent accounting). See also Supp § 11.6-1(b) (contact information required on
court documents pursuant to UTCR 2.010(7), UTCR 1.110, and UTCR 9.030).
COMMENT: If the personal representative is outside of the country, an
unsworn declaration may be made under the Uniform Unsworn Foreign
Declarations Act (UUFDA) (ORS 194.800–194.835) and must be in substantially
the form set forth in ORS 194.825. See Supplement § 11.6-1(a) regarding the
UUFDA.
this form.
Form 11-5 Receipt for Partial Distribution
Download MS Word


____________________, )
) RECEIPT FOR
Deceased. ) PARTIAL DISTRIBUTION
I, _______________, acknowledge receipt from the personal representative of

this estate of the following property:
[description of property]
DATED: ________________, 20____.
[or]
I, ________________, acknowledge receipt of the sum of $_________,
representing a partial distribution from the estate, as authorized by the Order
Authorizing Partial Distribution signed by Judge __________ on ________, 20__.
DATED: ________________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]
[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-1. See also ORS 116.013; UTCR 9.160. See UTCR
2.010 and UTCR 9.030 for the form of documents.
case.” UTCR 2.010(7).
this form.
NOTE: See Supp § 11.6-1(b) (contact information required on court
documents pursuant to UTCR 2.010(7), UTCR 1.110, and UTCR 9.030).
Form 11-6 Deed of Personal Representative
Download MS Word
_________, Personal Representative,

Estate of _________________, Grantor
_________________________, Grantee
After recording return to:

[name]
[address]
[telephone no.]
Until a change is requested, all tax statements must be sent to the following address:
_________________________
_________________________
_________________________
DEED OF PERSONAL REPRESENTATIVE

________________, the duly appointed, qualified, and acting personal
representative of the estate of _________, deceased, __________ County probate
number __________, grantor, hereby conveys to ________, grantee, that real
property situated in _______ County, Oregon, described as follows:
_________________________.
This property is free from encumbrances except for those of record.
The true consideration for this conveyance is $ None (Estate distribution).
DATED: ____________, 20__.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE
PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE
PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300–195.336, AND 2007 OR
LAWS CH 424, §§5–11, AND 2009 OR LAWS CH 855, §§2–9, 17. THIS
INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED
IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS
AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY
SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY
PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING
TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS
DEFINED IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES
OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS
AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930,
AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY
OWNERS, IF ANY, UNDER ORS 195.300, 195.301, AND 195.305–195.336,
AND 2007 OR LAWS CH 424, §§5–11, AND 2009 OR LAWS CH 855, §§2–9.
ESTATE OF ________________
__________________________,
Personal Representative,
Grantor
STATE OF __________ )
) ss.
County of __________ )
This instrument was acknowledged before me on ____________, 20__, by

________, personal representative.
/s/__________________________
COMMENT: See §§11.8-2(a) to 11.8-2(b). See also ORS 116.223; UTCR
9.160; ORS 114.305(4), 114.325, 92.027. See UTCR 2.010 and UTCR 9.030.
case.” UTCR 2.010(7).
this form.
NOTE: ORS 93.040(1), regarding the statement concerning uses of land, fire
protection districts, and special assessments, now provides as follows:
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S
RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336
AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS
2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2
TO 7, CHAPTER 8, OREGON LAWS 2010. THIS INSTRUMENT DOES NOT
ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN
VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE
APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO
VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A
LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS
92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR
PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST
FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO
INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS,
IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND
SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO
9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7,
CHAPTER 8, OREGON LAWS 2010.
Form 11-7 Final Distribution Receipt
Download MS Word

FOR THE COUNTY OF _________

____________________, )
) FINAL DISTRIBUTION
Deceased. ) RECEIPT AND RELEASE
I, ______________, an [heir / devisee] of ___________, deceased,

acknowledge receipt of my full distributive share from the estate of ___________,
deceased, and release and forever discharge the estate of ___________, its personal
representative, attorneys, the decedent, and their heirs, administrators, agents, and
assigns, and all other persons, firms, or corporations who are connected therewith,
from any and all claims, demands, damages, actions, causes of actions, or suits of
any kind or nature whatsoever.
I further acknowledge that if any personal income taxes, estate taxes, or
fiduciary income taxes are assessed against the decedent, the estate, or the personal
representative for which the personal representative is liable, I agree to indemnify
and hold the personal representative harmless for such taxes to the extent that I
have received assets of the estate.
DATED: _______________, 20____.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-2(b). See also ORS 116.213; UTCR 9.160. See UTCR
case.” UTCR 2.010(7).
this form.
Form 11-8 Report of Unclaimed Assets
Download MS Word


____________________, )
) REPORT OF
Deceased. ) UNCLAIMED ASSETS
__________________, personal representative of the above estate, reports as

follows:
1.
The following property is distributed to __________________ pursuant to
the Judgment of Final Distribution herein:
2.
[Payment of / Delivery of] the property to ________________ cannot be
made because _______________________ [refuses to accept the property / cannot
be found].
WHEREFORE, the personal representative prays for an order directing [him
/ her / it] to [pay / deliver] the property to the Department of State Lands, to be
placed in the escheat funds of the state.
DATED: _______________, 20___.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-4(b); see also ORS 116.203, 111.205; UTCR 9.160,
UTCR 2.010, UTCR 9.030.
case.” UTCR 2.010(7).
this form.
Form 11-9 Order of Escheat (of Unclaimed Assets)
Download MS Word
IN THE ________COURT OF THE STATE OF OREGON

FOR _______________ COUNTY

____________________, )
) ORDER OF ESCHEAT
Deceased. )
It appears to the Court that:

1.
__________________ died intestate on ______________, 20___, in
_________________ County, Oregon.
2.
Four months have elapsed since the first publication of the notice of
administration of this estate, and there is no known person to take the net intestate
estate by descent. Therefore it is
ORDERED that:
3.
The entire net estate escheat to the state of Oregon, and the personal
representative is hereby directed to distribute all assets remaining after payment of
claims, taxes, and expenses of administration, including just and reasonable
compensation to the personal representative, to the Department of State Lands.
DATED: _______________, 20____.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-4(b). See also UTCR 9.160. See UTCR 2.010 and
The last page of every order must also include the name, address, and
telephone number of the personal representative. UTCR 9.030(2). See also UTCR
2.010(7), (12).
this form.
submitted to the court.” (Emphasis added.) UTCR 9.030(2) provides that “[t]he
name, address, and telephone number of the guardian, conservator, or personal
representative must be typed or printed on the last page of every proposed order
submitted to the court.” (Emphasis added.)
See UTCR chapter 21 (filing and service by electronic means).
Form 11-10 Receipt for Unclaimed Assets
Download MS Word


____________________, )
) RECEIPT FOR
Deceased. ) UNCLAIMED ASSETS
The Department of State Lands hereby acknowledges receipt of the

following property from the personal representative of this estate:
_____________________________________________.
The person entitled to the above property pursuant to order of the Court
entered in the probate proceeding of decedent’s estate is
________________________.
DATED: _______________, 20____.
DEPARTMENT OF STATE LANDS
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]
[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-4(c). See also ORS 116.203; UTCR 9.160. See UTCR
case.” UTCR 2.010(7).
this form.
Form 11-11 Supplemental Judgment Discharging Personal
Representative and Closing Estate
Download MS Word

FOR THE COUNTY OF__________

____________________, )
) SUPPLEMENTAL JUDGMENT
Deceased. ) DISCHARGING PERSONAL
) REPRESENTATIVE AND CLOSING
) ESTATE
IT APPEARING to the Court that pursuant to a general judgment entered on

___________, 20___, the personal representative has paid the remaining expenses
of administration and has distributed the remaining property in accordance with the
general judgment, and a receipt for the property being on file with the Court, and
IT FURTHER APPEARING that the personal representative has performed all
of the acts required, and that this estate has been fully administered, it is hereby
ORDERED AND ADJUDGED that the personal representative of the above
estate is hereby discharged, any bond provided is exonerated, and the estate is closed.
DATED: _______________, 20____.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[lawyer’s name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
case.” UTCR 2.010(7).
this form.
NOTE: UTCR 9.030(2) provides that “[t]he name, address, and telephone
(Emphasis added.)
See UTCR 2.010(12) (judgments). See also UTCR chapter 21 (filing and
service by electronic means).
Form 11-12 Order Directing Notice of Petition to Reopen Estate
Download MS Word

FOR THE COUNTY OF ___________

____________________, )
) ORDER DIRECTING NOTICE OF
Deceased. ) PETITION TO REOPEN ESTATE
)
IT APPEARS TO THE COURT from the petition of ____________ that

further administration of the above estate is necessary.
THEREFORE, AN ORDER OF THIS COURT IS ENTERED AS
FOLLOWS:
1. ____________________ is directed to give notice of the filing of a
petition to reopen the estate to __________________.
2. The notice given by ____________________ shall provide that, if
written objections to that petition are not filed with this Court on or before
_______________, 20___, this Court will order that the estate be reopened and that
____________________ be appointed as the personal representative of the reopened
estate to serve without bond.
DATED: _______________, 20____.
/s/__________________________
[name]
Judge
PETITIONER:
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
2.010(7), (12).
this form.
(Emphasis added.)
Form 11-13 Notice of Petition to Reopen Estate
Download MS Word

FOR THE COUNTY OF ____________

____________________, )
) NOTICE OF PETITION TO
Deceased. ) REOPEN ESTATE
To: ____________________
NOTICE IS GIVEN THAT:
1.
___________________ has filed a petition to reopen this estate. A true copy of
that petition is enclosed with your copy of this notice.
2.
If you object to the entry of an order by the Court reopening the estate and
appointing ______________ as personal representative to serve without bond, then
you must file your written objections to the petition with the Court on or before
__________, 20___. A copy of your objections must be served on the lawyers for
_________________ named in the enclosed petition on or before that date.
3.
If you do not file objections in the manner and within the time stated above, an
order of the Court may be entered reopening the estate and appointing
_______________ as the personal representative to serve without bond.
DATED: _______________, 20____.
/s/________________________
[name]
Attorney for Petitioner
PETITIONER:
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.10-3. See ORS 116.233. See also UTCR 2.010 and
case.” UTCR 2.010(7).
this form.
Form 11-14 Order Reopening Estate
Download MS Word
IN THE _________ COURT OF THE STATE OF OREGON


____________________, )
) ORDER
Deceased. ) REOPENING ESTATE
IT APPEARS TO THE COURT THAT:

1.
Further administration of the above estate is necessary because property was
discovered that was not administered in the above proceeding.
2.
All claims presented to the personal representative in the above proceeding
and allowed were paid in full before the closing of the estate.
3.
Petitioner and _______________ are the only devisees under the decedent’s
will admitted to probate in the above proceeding. Notice of the petition to reopen this
estate has been given in the manner required by law to _______________ and no
further notice of that petition is required. There is no just reason for delay in entering
judgment.
THEREFORE, IT IS ORDERED that:
1. The estate is reopened for the purpose of administering the interest of
the decedent in __________;
2. ____________________ is appointed as the personal representative to
serve without bond;
3. Letters testamentary shall be issued to the personal representative in the
manner provided by law.
DATED: _______________, 20____.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
2.010(7), (12).
this form.
(Emphasis added.)
Form 11-15 General Judgment Approving Final Account and
Authorizing Final Distribution
Download MS Word
IN THE _________ COURT OF THE STATE OF OREGON


____________________, )
) GENERAL JUDGMENT
Deceased. ) APPROVING [FIRST AND] FINAL
) ACCOUNTING AND
) AUTHORIZING FINAL
) DISTRIBUTION
The personal representative having filed the [First and] Final Accounting and
Petition for General Judgment of Final Distribution on __________________,
20___, and the time for filing objections having passed with no objections filed, the
Court finds that:
1.
All Oregon income, estate, and personal property taxes that have become due
have been paid.
[or]
1.
Payment of Oregon income, estate, and personal property taxes has been
secured by [bond / deposit / other].
2.
The personal representative requested authorization to establish a reserve in
the sum of $_________________for the costs of preparing the fiduciary income tax
returns and in the sum of $__________ for attorney fees for completion of the final
accounting and distribution of the estate’s assets.
3.
The personal representative is entitled to compensation from the estate in the
amount of $_________, as provided in ORS 116.173.
[or]
3.
The personal representative has waived the personal representative’s fee.
4.
Remaining unsatisfied expenses of administration are accountant fees and
attorney fees payable to _________________ in the amount of $________,
representing $_________, as reasonable attorney fees and $__________ as
reimbursement for actual costs.
5.
The remainder of the estate assets, after payment of the expenses set forth
above, is vested in the following [heirs pursuant to the laws of intestate succession /
devisees under the decedent’s will / persons pursuant to agreement approved by this
Court]:
_______________________________________________________
[Here include findings concerning any advancement; election against the will
by the surviving spouse; renunciation; lapse; adjudicated controversies; partial
distributions (to be confirmed or modified); retainer; claims for which a special fund
is set aside; contingent claims that have been allowed and are still unpaid; and
approval of the final account in whole or in part.]
6.
Proof of Mailing the Notice for Filing Objections to the [First and] Final
Accounting and Petition for General Judgment of Final Distribution has been filed.
Therefore, it is hereby ORDERED AND ADJUDGED as follows:
1. The [first and] final accounting [and all interim accounts filed herein] [is
/ are] approved [except as may be modified by this judgment];
2. The personal representative is authorized to establish a reserve in the
sum of $_____________ for the costs of preparing the fiduciary income tax returns,
and the sum of $_____________ for attorney fees and costs to complete the estate
proceeding and distribute the estate’s assets; any balance remaining in the reserve
shall be distributed to the remainder beneficiaries in their distributive shares;
3. The personal representative is directed to pay the remaining expenses of
administration as set forth above;
4. The personal representative is allowed the sum of $_______ as just and
reasonable compensation for [his / her / its] services;
5. The personal representative is directed to pay ________________ the
sum of $_______, representing reasonable attorney fees in the amount of $________,
and reimbursement of expenses in the amount of $__________;
6. The personal representative is directed to make distribution of the
remaining estate assets as follows: _________________________; and
7. Upon filing receipts showing payment and distribution as herein
directed, the Court will enter a supplemental judgment discharging the personal
representative and exonerating the personal representative’s bond, if any.
DATED: _______________, 20____.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.8-2(a). See also ORS 116.113. See UTCR 2.010 and
case.” UTCR 2.010(7).
this form.
A new paragraph 1 should be added to the form in the 2012 text, and the
paragraphs that follow it should be renumbered accordingly:
1.
An estate tax return has been filed.
See also UTCR 2.010(12) (judgments).
COMMENT: Regarding paragraph 3 in the form in the 2012 text, the 2017
Legislature enacted a new statute (ORS 113.038), which allows a petition for the
method than as provided in ORS 116.173(3).” See Supp § 11.6-5(a) (personal
representative’s statutory fee). If the petition requested a different method of
compensation, paragraph 3 should be revised accordingly. See, for example,
paragraph 17 (item 3) in Supplement Form 11-2 (final accounting and petition for
general judgment of final distribution). See also Supp § 11.8-2(a) (general
judgment of final distribution).
Form 11-16 Statement for Attorney Fees and Costs
Download MS Word


____________________, )
) STATEMENT FOR ATTORNEY
Deceased. ) FEES AND COSTS
I, ____________________declare:
1.
I am a member of the Oregon State Bar. I practice estate planning law and
trust and estate administration law, and I offer the following facts in support of an
award of reasonable and necessary attorney fees and costs.
The personal representative is entitled to recover attorney fees, costs, and
disbursements pursuant to the following facts, statute, or rule: ORS 116.183(1)
(which states that “[a] personal representative shall be allowed in the settlement of
the final account all necessary expenses incurred in the care, management and
settlement of the estate, including reasonable fees of . . . attorneys”) and ORS
116.183(2) (which states that “[a]n award of reasonable attorney fees under this
section shall be made after consideration of the customary fees in the community
for similar services, the time spent by counsel, counsel’s experience in such
matters, the skill displayed by counsel, the result obtained, any agreement as to
fees between the personal representative and the counsel of the personal
representative, the amount of responsibility assumed by counsel considering the
total value of the estate, and other factors as may be relevant. No single factor is
controlling.”).
2.
I make this statement in support of the Final Accounting and Petition for
General Judgment of Final Distribution, pursuant to which the personal
representative prays for a General Judgment Approving the Final Accounting and
Authorizing Final Distribution directing payment of attorney fees in the amount of
$_______, and reimbursement of costs advanced in the amount of $_______, for a
total of $_______. Legal fees, including the number of hours and services provided
in this matter by each attorney, clerk, and legal assistant and the hourly rates for
each, are set forth in detail in Exhibit 1. The total sum of these fees is $_______.
Exhibit 1 is summarized as follows:
Number
Name Position Hourly Rate of Hours Fees
This amount constitutes reasonable attorney fees for legal services rendered
and for the customary services necessary in the administration of an estate of this
size and complexity, based upon fees for similar services performed in the
[location of probate] area.
3.
The specific factors supporting an award and the amount of legal fees
pursuant to ORS 116.183 are set forth below. Our attorneys, paralegals, and legal
assistants have performed customary services involved in the administration of the
estate, including the following [provide a short description of the customary
services provided, for example]:
(a) Conferred with the personal representative regarding the nature of estate
assets, size of the estate, names and addresses of devisees and those persons who
would have been decedent’s heirs had the decedent died intestate, and gathered the
information needed to prepare the Petition for Probate of Will and Appointment of
Personal Representative;
(b) Established a file for the probate estate;
(c) Sent the Petition for Probate to the personal representative for execution
and filed same with the Court;
(d) Prepared and submitted to the Court the form of Limited Judgment
Admitting Will to Probate and Appointment of Personal Representative;
(e) Prepared and delivered or mailed information to the heirs, devisees,
interested persons, the Oregon Department of Human Services, and the Oregon
Health Authority;
(f) Prepared and filed Proof of Mailing to heirs, devisees, interested
persons, the Oregon Department of Human Services, and the Oregon Health
Authority;
(g) Filed the Affidavit of Publication;
(h) Prepared and filed the Inventory of the Estate’s assets [and an
Amended Inventory];
(i) Prepared and filed the Proof of Compliance Regarding Search for
Claims;
(j) Prepared the Statement under ORS 116.083(4) in Lieu of Final
Accounting and Petition for Judgment, this statement supporting attorney fees
requested, and a proposed General Judgment Approving Statement under ORS
116.083(4) and Authorizing Final Distribution; and
(k) Prepared drafts of the Final Distribution Receipt and Release and the
Supplemental Judgment Discharging Personal Representative and Closing Estate.
4.
Our attorneys, paralegals, and legal assistants have performed the following
extraordinary services: [Provide a longer and more expansive narrative of the
extraordinary services performed, or the complicating factors for customary
services performed. The award of attorney fees is based on reasonableness, and
the Court needs facts specific to the particular probate in order to determine
reasonableness. The explanation should include why tasks were performed and
provide details regarding those tasks. Multnomah Supplementary Local Rule
9.095(1)(b) provides a helpful list of what types of tasks are extraordinary, and
what sorts of details the Court would like to know regarding those tasks.]
5.
The personal representative is very familiar with the complexities involved
in this estate, and has worked closely with us at every juncture during the
administration of this estate and the valuation of the decedent’s assets. The
personal representative has carefully reviewed our statement of fees, and has
approved them. After doing so, the personal representative signed the Petition for
Court Approval to pay the amount of attorney fees as requested in the Final
Accounting and Petition for General Judgment of Final Distribution.
6.
I have spent, together with other attorneys in our office, ___ hours from
________, 20__, through _________, 20__, in connection with the probate of this
estate, and my legal assistants and paralegals have spent ____ hours in connection
with the probate of this estate, totaling $_______. In addition, it is estimated that
the fees for preparing and completing the estate closing documents and distribution
of assets will be $_______, representing legal, paralegal, and legal assistant’s time.
The total legal fees equal the sum of $_______. We also expended costs from
_______, 20__, through _____________, in the amount of $_______, representing
costs advanced for the estate filing fee, appraisals of the decedent’s real property,
publication of Notice to Interested Persons, valuation of securities, and mail
charges. [On _____________, 20__, the personal representative reimbursed
_________________ in the amount of $_______.] Current unpaid costs equal the
sum of $_______. I also estimate that additional costs for judgment fees, recording
fees, photocopies, and mail charges will be approximately $_______ to the date of
closing of this probate. Total legal fees and costs will equal the sum of $_______.
The legal services rendered and costs advanced are described on the attached
billing statements. This statement reflects all time and costs from _______, 20__,
through ______, 20__.
7.
I have requested that a reserve in the amount of $_______ be established for
payment of any additional attorney fees and costs incurred to complete the estate
closing documents and to distribute the estate’s assets. Any balance remaining in
the reserve will be distributed to the beneficiary of the estate and an accounting
will be provided to the Court at the time the Supplemental Judgment Closing the
Estate is submitted for signing.
DATED: _______________, 20___.

/s/__________________________
[name]
[name]
[address]
[telephone no.]
[email address]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[email address]
COMMENT: See ORS 116.183(2); UTCR 5.080, UTCR 9.060(2), UTCR

9.160; UTCR Form 5.080, UTCR Appendix of Forms.
COMMENT: If the personal representative files a statement under ORS
116.083(4) in lieu of a final accounting, Paragraph 2 of Form 11-16 should be
revised accordingly. In lieu of a final accounting, the personal representative may
file a statement under ORS 116.083(4) if (1) “[t]he distributees, other than
distributees whose only distribution is a cash or specific bequest that will be paid
or satisfied in full, consent in writing”; and (2) “[a]ll creditors of the estate, other
than creditors owed administrative expenses that require court approval, have been
paid in full.” ORS 116.083(4)(a). A statement under ORS 116.083(4) must include
the information set forth in ORS 116.083(4)(b), as well as a “statement under
penalty of perjury in the form required by ORCP 1 E, or an unsworn declaration
under ORS 194.800 to 194.835, if the declarant is physically outside the
boundaries of the United States.”
NOTE: See ORS 116.183(2)(b) (“Before the court awards attorney fees in an
amount less than the amount requested by the personal representative, the court must
allow the attorney an opportunity to submit additional materials supporting the
requested amount.”).
this form.
Form 11-17 Petition to Reopen Estate
Download MS Word


____________________, )
) PETITION TO REOPEN ESTATE
Deceased. )
____________________, Petitioner, petitions and represents to the Court:

1.
Petitioner has an interest in this estate because Petitioner acted as the personal
representative of the estate in the above proceeding (the “Original Probate”) and is a
devisee under the will of the decedent.
2.
Further administration of the estate is necessary because [for example,
petitioner has discovered stock certificate no. 1234 representing _________ shares
of the no par value common stock of ____________ issued in the name of the
decedent. The interest of the decedent in _________________ was not administered
in the Original Probate].
3.
All claims presented to the personal representative and allowed in the Original
Probate were paid in full before the closing of the Original Probate.
4.
The names, relationships, and post-office addresses of the devisees of the
decedent are:
NAME RELATIONSHIP POST-OFFICE
ADDRESS
5.
Petitioner is nominated as personal representative to serve without bond under
the decedent’s will and is not disqualified to serve under the provisions of ORS
113.095.
6.
Petitioner has employed the law firm of ____________________ as lawyers to
represent the personal representative in the administration of the reopened estate.
WHEREFORE, Petitioner prays for an order:
1. Reopening the administration of the Estate;
2. Appointing _________________ as personal representative of the
reopened estate to serve without bond; and
3. Directing that notice of the filing of this petition be delivered by the
Petitioner to ____________________ and directing that no further notice of the filing
of this petition is required.
DATED:____________________, 20___.

/s/__________________________
[name]
Petitioner
PETITIONER:
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §11.10-3. See also ORS 116.233; UTCR 9.160; ORS
111.205. See UTCR 2.010 and UTCR 9.030 for the form of documents.
this form.
APPENDIXES
Appendix 11A Asset Schedule
ASSET SCHEDULE
EXHIBIT 1
Estate of __________________
Date of Death: __________________
DESCRIPTION BEGINNING VALUE OF VALUE AT CURRENT

OF ASSET VALUE LATER DISPOSITION ENDING
ACQUIRED VALUE
ASSET
TOTALS $ $ $ $
COMMENT: See §§11.5-3 to 11.5-3(c). See UTCR 9.160(2); Form 9.160,

UTCR Appendix of Forms.
NOTE: The asset schedule may be included in either the accounting narrative
or an exhibit to the accounting. See Form 9.160, UTCR Appendix of Forms.
COMMENT: Creating a spreadsheet for the asset schedule, and attaching it as an
exhibit, will help minimize mathematical errors in the asset schedule.
CAVEAT: This appendix is illustrative only. Each lawyer must depend on his
or her own legal research, knowledge of the law, and expertise in using or
modifying this appendix.
NOTE: See § 11.4-1 (form of accounting).
Appendix 11B Receipts and Disbursements
THE ESTATE OF ____________________

[type of accounting, e.g., Annual or Final] Accounting
____________, 20__ through ________________, 20__
[name of depository], Checking Account #_________
Receipts:
Date: Source of Explanation: Amount:

Receipt:
Total Receipts: $
Disbursements:
Date: Payee: Explanation: Amount: Check No.

Total $
Disbursements:
Reconciliation:
Total Receipts $
Less:
Total $
Disbursements
Ending Balance: $
COMMENT: See §§11.5-4(a) to 11.5-4(e). See also UTCR 9.160(3); Form

9.160, UTCR Appendix of Forms.
NOTE: The schedules of receipts and disbursements may be included in
either the accounting narrative or an exhibit to the accounting. See Form 9.160,
UTCR Appendix of Forms.
COMMENT: Using a spreadsheet or an accounting program (such as
Quickbooks or Quicken) to create attachments for receipts and disbursements will
help minimize errors.
CAVEAT: This exhibit is illustrative only. Each lawyer must depend on his or
this exhibit.
UTCR 9.160 sets forth in detail the requirements for accounting of receipts
and disbursements for each depository account.
Chapter 12: FEDERAL ESTATE TAX
STEVEN A. NICHOLES, B.A., B.B.A., Oregon State University (1975); J.D., Gonzaga University
School of Law (1980); LL.M. (Taxation), University of Florida (1981); admitted to the
Oregon State Bar in 1980; partner, Duffy Kekel LLP, Portland.
We acknowledge Richard W. Miller for his work on the prior edition of this chapter.
The author wishes to acknowledge the exceptional and long-standing contributions made to this
chapter by his deceased partners, Donald J. Georgeson (1931–1984) and David A. Kekel (1938–
1999). Their careful and valuable insight continues to provide meaningful guidance many years
after the chapter was first written.
2018 Supplement Co-Author
VANESSA A. USUI, B.A., Reed College (1996); J.D., Lewis & Clark Law School (2005); partner,
Duffy Kekel LLP, Portland.
§ 12.1 FEDERAL ESTATE TAX—SUBSTANTIVE ASPECTS

In computing the federal estate tax, the lawyer should first prepare a list of
all property that will be subject to the tax in the decedent’s estate. This property
includes all property owned by the decedent at the time of his or her death (usually
reflected in the probate estate), IRC §2033; insurance transferred by the decedent
within three years of death, IRC §2035; property that the decedent transferred
during life in which the decedent retained certain rights (which includes most
revocable trusts created by the decedent and used as will substitutes), IRC §§2036–
2038; certain annuities, IRC §2039; property held jointly with right of
survivorship, IRC §2040; property over which the decedent had a general power of
appointment, IRC §2041; and life insurance, IRC §2042. Property in which the
decedent held an income interest created by his or her deceased spouse for which
the marital deduction was elected in the spouse’s estate (a so-called QTIP trust,
IRC §2044; see §12.1-5(c)(3)) and federal gift taxes that the decedent paid on gifts
made within three years before the decedent’s death (IRC §2035(c); see §12.1-
3(c)) are also subject to the estate tax.
The total value of the property listed above constitutes the decedent’s “gross
estate.” Listing all the property to be taxed to arrive at the gross estate is very much
like listing all income to arrive at “gross income” under the income tax laws.
To arrive at the “taxable estate,” the following items are deducted from the
gross estate:
(1) Administration expenses (to the extent not taken as income tax
deductions), IRC §2053(a)(2);
(2) Funeral expenses, IRC §2053(a)(1);
(3) Certain debts owing on the date of the decedent’s death, IRC
§2053(a)(3)–(4);
(4) Losses sustained during the administration of the estate, if not claimed
as income tax deductions, IRC §2054;
(5) A charitable deduction for interests in property transferred to charity,
IRC §2055;
(6) A marital deduction that exempts from estate taxation all property
passing to a surviving spouse, IRC §2056; and
(7) A deduction for the amount of any estate taxes actually paid to a state,
IRC §2058.
Effective January 1, 1977, the federal gift tax rate and estate tax rate were
combined into a single-rate schedule, with a single, unified credit available to
offset gift taxes otherwise payable and, to the extent not used to offset gift taxes, to
offset estate taxes payable.
NOTE: The unified credit is now known as the “applicable credit
amount.” IRC §2010(c); see §12.1-6(b).
For estates of decedents dying after 1976, the total amount of the taxable
gifts made by the decedent after 1976 is added to the taxable estate to arrive at the
tax computation base. The term tax computation base, although not used in the
Internal Revenue Code, means the amount to which the tax rates from the unified
tax rate schedule are applied. The Internal Revenue Code refers to this amount thus
calculated as “taxable amount.” IRC §2001(b)–(c). The gross-estate tax, computed
from the tables (as set forth in the instructions for Form 706, the federal estate tax
return, available at www.irs.gov/Forms-&-Pubs), is the difference between the
tentative tax amount on the tax computation base minus the taxes actually paid on
the taxable gifts included in the tax computation base (i.e., net gifts after 1976).
NOTE: The subtraction for gift taxes on post-1976 gifts is the gift tax
that would have been paid on such post-1976 gifts if the current gift tax
schedules had been in effect at the time of such gifts. Because the gift tax
calculation includes gifts made before 1977 in the tax calculation base, the
tax paid on equal amounts of taxable gifts will vary from decedent to
decedent, depending on the respective amount of pre-1977 gifts.
PRACTICE TIP: If a donor elects gift-splitting with a spouse, the taxable
gift attributed to that donor is halved, so that only one-half of the gift in
excess of the annual exclusion will be added to the gross estate of each
spouse in determining the federal estate tax of either. This approach can be
advantageous because gift-splitting provides a method for depleting the
applicable credit amount available to the spouse with the smaller estate. See
IRC §2012; see also §12.1-6(d). This can also be advantageous for gifts
made in contemplation of a spouse’s death because such gifts, with the
exception of insurance, are not added back to the estate. One-half of the gift
is effectively removed from the tax computation base of the spouse expected
to die.
After determining the gross-estate tax, the last step is to subtract any
allowable credits against the gross-estate tax. The statutes provide for four possible
credits:
(1) The “applicable credit amount” (formerly known as the unified
credit), IRC §2010(c); see §12.1-6(b);
(2) The credit for federal gift taxes (this credit is allowable only for gifts
made before January 1, 1977), IRC §2012; see §12.1-6(d);
(3) The credit for taxes on prior transfers, IRC §2013 (this credit is
allowed in a decedent-transferee’s estate if the decedent-transferee dies within two
years before or 10 years after the death of a decedent-transferor from whom the
decedent-transferee acquired the property previously taxed, IRC §2013(a)); and
(4) The credit for foreign death taxes paid, IRC §2014; see §12.1-6(f).
Under the Taxpayer Relief Act of 1997 (“TRA 1997”), Pub L No 105-34,
111 Stat 788, the maximum amount that is protected from the federal estate tax at
death by reason of the applicable credit amount was increased from $600,000 to $1
million in a phased schedule during the years 1998 through 2006. Former IRC
§2010(c). This amount was previously referred to as the “exemption amount” and
is now called the “applicable exclusion amount.” The schedule for the applicable
exclusion amount was revised again by the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), Pub L No 107-16, 115 Stat 38, to
accelerate and substantially increase the amount exempt from federal estate tax.
EGTRRA provided that the federal estate tax would expire for deaths occurring in
2010 (essentially an unlimited “exemption amount”), but with the further caveat
that the exemption amount would revert to $1,000,000 for deaths occurring after
December 31, 2010. The “plan” when EGTRRA was adopted in 2001 was that
Congress would re-address the federal estate tax system before January 1, 2010,
and the tax would never actually expire. This did not occur and the federal estate
tax expired as of January 1, 2010, for deaths occurring during calendar year 2010,
although the gift tax continued to apply with a lifetime exemption of $1,000,000.
In December of 2010, Congress enacted and the President signed into law
the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
2010, Pub L No 111-312, 124 Stat 3296 (“the 2010 Tax Act”). For deaths
occurring in 2010, the personal representative of the decedent’s estate is permitted
to choose between the law as it existed on January 1, 2010 (unlimited federal estate
tax exemption and modified carry-over income tax basis rules) or, alternatively, to
be subject to federal estate tax with a $5,000,000 federal estate tax exemption and
date-of-death income tax basis (i.e., the so-called fresh-start income tax basis,
which applied in the case of deaths before 2010).
For deaths occurring in 2011 and 2012, the 2010 Tax Act reunifies the
federal gift tax and estate tax exemptions at $5,000,000, establishes the tax rate on
amounts in excess of the applicable credit amount at 35%, and restores the fresh-
start basis rules as they applied to deaths occurring in 2009. IRC §2010(c)(3).
Any portion of the gift tax exemption used before 2011 “eats into” the
$5,000,000 exemption available under the 2010 Tax Act. In addition to the
relatively liberal exemption amounts, the 2010 Tax Act includes a “portability”
provision, which permits the surviving spouse of a decedent who dies after 2010 to
include the unused exemption of his or her deceased spouse on the surviving
spouse’s federal estate tax return. IRC §2010(c)(4). Only the unused estate tax
exemption of the last deceased spouse of the surviving spouse can be used. In other
words, a surviving spouse who remarries several times cannot bank the unused
exemptions of his or her predeceasing spouses.
PRACTICE TIP: The special carryover-tax-basis election available to
decedents who died during 2010 is made on Form 8939. For the special rules
and procedures applicable to this election, see IRS Notice 2011-66,
www.irs.gov/irb/2011-35_IRB/ar09.html, and IRS Publication 4895,
www.irs.gov/pub/irs-pdf/p4895.pdf.
An unfortunate element of the 2010 Tax Act is the inclusion of a December
31, 2012, sunset date for the 2010 Tax Act changes to the federal estate and gift tax
provisions. Unless further modified or extended by Congress, after December 31,
2012, the estate and gift tax exemption returns to $1,000,000, the tax rate increases
to a maximum marginal rate of 55%, and the portability of a prior deceased
spouse’s unused exemption is lost.
The following table reflects the applicable exclusion amount resulting from TRA
1997, EGTRRA, and the 2010 Tax Act:
Decedents Dying Applicable Exclusion Amount:
in Year:
1997 $600,000
1998 $625,000
1999 $650,000
2000 and 2001 $675,000
2002 and 2003 $1,000,000
2004 and 2005 $1,500,000
2006, 2007, and $2,000,000
2008
2009 $3,500,000
2010 Election of:
(i) Unlimited Applicable Exclusion Amount and Modified
Carryover Basis Rules; or
(ii) $5,000,000 Applicable Exclusion Amount and “Fresh
Start” Basis Rules
2011 and 2012 $5,000,000
2013 $1,000,000
PRACTICE TIP: For estates of decedents dying after 2010, portability of

the decedent’s unused exemption is available to a surviving spouse only if a
federal estate tax return was filed on a timely basis in the predeceasing
spouse’s estate, even if no return would otherwise be required. Thus, in
appropriate cases, the lawyer should be careful to explain to a surviving
spouse the possible benefit of filing an estate tax return in cases in which a
return would not otherwise be needed, and let the surviving spouse decide if
the potential benefits of future use of the decedent’s remaining exemption
outweigh the cost and additional complexity of completing the return.
NOTE: Unless the law is changed, the unused (portable) exemption
otherwise available to a surviving spouse from his or her predeceased spouse
expires on December 31, 2012.
PRACTICE TIP: In view of the potentially unlimited federal estate tax
exemption applicable for 2010 deaths, and the large exemption available for
deaths after 2010, lawyers should carefully review estate plans of existing
clients for dispositive provisions defined in terms of the “maximum amount
which can pass free of federal estate tax” or similar language. For example,
many plans have been drafted to leave to a testamentary trust (often called a
“credit shelter trust” or sometimes a “family trust”) the maximum amount
that can pass free of federal estate tax on the first death. This plan, which
may have made perfect sense for a couple when the federal estate tax
exemption was $600,000, may not make so much sense with a $5,000,000
exemption.
A revenue-reconciliation act, introduced and commonly known as the Tax
Cuts and Jobs Act of 2017 (TCJA), essentially doubled the applicable exclusion
amount for estates or gifts after 2017. See Pub L 115-97, 131 Stat 2054. For estates
of decedents dying or gifts made after December 31, 2017, and before January 1,
2026, the basic exclusion amount is $10 million, as adjusted annually for inflation
according to the statute. IRC § 2010(c)(3)(A), (C).
For 2018, the exclusion amount is $11,180,000 after application of the
inflation adjustment. See Rev Proc 2018-18, 2018-10 IRB 392, modified by Rev
Proc 2018-22, 2018-18 IRB 524. The TCJA includes a sunset provision, which
provides that the exclusion amount will revert to $5 million effective January 1,
2026, unless Congress acts in the interim to extend or modify it. Practitioners
should monitor Congressional activity as to this issue and will likely be well-
advised to draft their taxable estate plans to accommodate a possible reduction in
the applicable exclusion amount if Congress fails to address the sunset provision.
IRS Notice 2011-66 is available at www.irs.gov/pub/irs-drop/n-11-66.pdf.
IRS Publication 4895 is available at www.irs.gov/pub/irs-prior/p4895--2011.pdf.
The following table reflects the applicable exclusion amounts and maximum
federal estate tax rates through the TCJA:
Decedents Dying Applicable Exclusion Amount: Maximum
in Year: Federal Estate
Tax Rate:
2001 $ 675,000 55%
2002 $1,000,000 50%
2003 $1,000,000 49%
2004 $1,500,000 48%
2005 $1,500,000 47%
2006 $2,000,000 46%
2007 $2,000,000 45%
2008 $2,000,000 45%
2009 $3,500,000 45%
2010 Election of: 35%
(a) Unlimited Applicable
Exclusion Amount and Modified
Carryover Basis Rules; or
(b) $5,000,000 Applicable
Exclusion Amount and “Fresh Start”
Basis Rules
2011 $5,000,000 35%
2012 $5,120,000 35%
2013 $5,250,000 40%
2014 $5,340,000 40%
2015 $5,430,000 40%
2016 $5,450,000 40%
2017 $5,490,000 40%
2018 $11,180,000 40%
§ 12.1-2 Valuation of Property Included in Gross Estate
Sections 12.1-2(a) to 12.1-2(b) set forth general valuation rules that apply to
all items making up the gross estate. See §§12.2-12 to 12.2-12(j) for discussions on
the valuation of particular assets and information concerning completion of the
various schedules of the federal estate tax return (IRS Form 706, available at
www.irs.gov/Forms-&-Pubs).
§ 12.1-2(a) Date for Valuation
Two possible dates may be used for valuing property included in the
decedent’s gross estate—the date of the decedent’s death or the alternate valuation
date. The alternate valuation date is six months after the date of the decedent’s
death or, if earlier, the date that the estate or trust disposes of the property. IRC
§§2031–2032.
If the personal representative elects to use the alternate valuation date, all
property in the gross estate must be valued as of the alternate date. In other words,
all the property must be valued at either its date-of-death value or its value on the
alternate valuation date.
If the alternate valuation date is elected and some property is disposed of by
sale, exchange, or other disposition within six months after the decedent’s death,
that property is valued at the date of such disposition instead of at the alternate
valuation date. IRC §2032(a). The date of distribution is the earliest of (1) the date
of actual distribution, (2) the date of the court order authorizing distribution (if the
order subsequently becomes final), or (3) the date the property is irrevocably
segregated from the other estate assets. Treas Reg §20.2032-1(c)(2).
The election to use the alternate valuation date must be made on the first
estate tax return filed by the personal representative of the estate. The election may
be made on a return filed late, as long as it is the first return filed and is not more
than one year late. IRC §2032(d). The election, once made, is irrevocable. IRC
§2032(d)(1). The irrevocability of the election may make the decision whether to
use the alternate valuation date difficult for the personal representative, who may
not know whether the Internal Revenue Service or the courts will accept the
submitted valuations or whether all the decedent’s property has been discovered
and identified.
Under IRC §2032(c), the alternate valuation date election may not be made
unless the effect of the election is to reduce both the value of the decedent’s gross
estate and the estate’s federal estate tax liability. Consequently, the alternate
valuation date election may not be made for the sole purpose of achieving a higher
income tax basis under IRC §1014.
PRACTICE TIP: Use of the alternate valuation date should be analyzed
in terms of both the impact on the decedent’s federal estate tax liability and
the impact on the estate’s income tax basis in the property subject to the
election. In periods of volatile marginal income tax rates, the use or
forbearance of the election could have a dramatic impact on income taxes
payable with respect to property included in the gross estate and sold shortly
after the decedent’s death.
§ 12.1-2(b) Standard of Valuation
All property included in the decedent’s gross estate must be listed at its fair
market value. The fair market value is the price at which the property would be
sold by a willing seller to a willing buyer, neither being under a compulsion to sell
or buy, and both being relatively informed regarding all facts influencing value.
The valuation is to be made in the normal market for the asset, that is, generally the
retail market. Treas Reg §20.2031-1(b).
The asset must be valued even though no market may exist for the asset. The
standard excludes the use of forced-sale prices. This standard further excludes the
use of any subjective standard, such as the property’s sentimental value to a
particular person. The fair-market-value standard may be vague and general, but it
still must be applied to every item included in the decedent’s gross estate. Treas
Reg §20.2031-1(b).
As a practical matter, the use of this standard of valuation often results in
bargaining between the government and the taxpayer, with the question finally
resolved through compromise. Further discussion of valuation procedures can be
found in §§12.2-12 to 12.2-12(r).
§ 12.1-3 Items to Include in the Gross Estate
The two basic categories of items that must be included in the decedent’s
gross estate are (1) property that the decedent owned at the time of his or her death
and that is transferred by will or intestacy and (2) interests that the decedent did not
“own” on the date of death but are statutorily included anyway. See Treas Reg
§20.2031-1. In this latter category are a number of property transfers that might
otherwise be attempted to avoid taxes that are applied only to testamentary
dispositions. Thus, while IRC §2033 taxes the value of property owned by the
decedent at the time of his or her death, IRC §§2034–2045 deal with dower or
curtesy interests, certain transfers within three years of death, transfers with a
retained life estate, transfers taking effect at death, revocable transfers, annuities,
joint interests, property subject to powers of appointment, proceeds of life
insurance, transfers for insufficient consideration, and “qualified terminable
interests” elected for the marital deduction in the estate of a previously deceased
spouse. The Internal Revenue Code prevents avoidance of the estate tax by
requiring that the gross estate include money or property transferred by the
decedent before death in a manner that is closely akin to a testamentary
disposition.
§ 12.1-3(b) Property Owned by Decedent
For property to be includable in the decedent’s gross estate under IRC
§2033, the decedent must own an interest in the property at the time of his or her
death. Section 2033 taxes interests in land and interests in tangible and intangible
chattels. Included are such property interests as promissory notes (even though
they have not matured), income tax refunds, bonuses or commissions, stocks and
bonds, debts due the decedent, and any other choses in action that the decedent
owned at the time of his or death.
Under IRC §2033, property cannot be taxed in the estate of a decedent if the
decedent did not own the property at the time of his or her death. In other words,
any awards received under an action for wrongful death are not taxable to the
decedent’s estate because the decedent had no interest in the right of action during
his or her life. Rev Rul 54-19, 1954-1 CB 179, obsoleted in part by Rev Rul 2007-
14, 2007-1 CB 747 (the later ruling revised the income tax conclusions of the prior
ruling). However, recovery of damages for the decedent’s pain and suffering under
survival statutes is includable. Rev Rul 69-8, 1969-1 CB 219. See §§15.3-1 to
15.3-8.
Municipal bonds that a decedent owned that are exempt from federal income
taxation are taxed under IRC §2033 because the tax is a transfer tax, not a tax on
the securities themselves.
The lawyer must remember that a future interest in property must be
transferable to another person upon the decedent’s death to be includable under
IRC §2033. If the interest terminates upon the decedent’s death, no interest exists
to pass or transfer, so no interest is included in the gross estate. However, this rule
must be carefully distinguished from the rules described in §§12.1-3(d) to 12.1-
3(d)(4), relating to transfers of property by the decedent coupled with a retention of
certain rights or powers in the property transferred.
Any income that was accrued at the time of the decedent’s death, such as
interest on a bond or note, must be included in the decedent’s gross estate. Using
the alternate valuation date does not normally require inclusion of income accrued
between time of death and the alternate valuation date. See IRC §2032. Dividends
on stocks are includable if the right to the dividends has become vested before the
decedent’s death, that is, if the record date coincides with or precedes the date of
death. If the date of death precedes the record date but is after the stock has gone
ex-dividend, the dividend must be added back to the mean quoted price to arrive at
the fair-market value as of the date of death (but is not added to the alternate
valuation date value). A similar adjustment may be required for the alternate
valuation date value if the stock was ex-dividend at that date. See Treas Reg
§20.2033-1.
The purpose of IRC §§2033–2045 is to tax not only transfers made by will
and intestacy, but also any other transfers of property that might have been used in
an attempt to avoid the estate tax. IRC §2033 taxes the transmission of property at
death, while subsequent sections tax the related transfers. Some of the sections
following IRC §2033 tax completed inter vivos transfers and some tax transfers in
which the decedent has retained a partial interest in the property that has been
transferred. It is possible that some of these interests could be taxed under IRC
§2033 even without the special treatment in IRC §§2034–2045.
State law determines what interests in property a decedent held at the time of
his or her death, including interests created by trust, ownership interests the
decedent had in insurance policies, and the nature of future interests and powers of
appointment. Once the interest determination is made, however, the manner of
taxation is a question of federal law. In determining or applying local law concepts,
the federal court is bound by decisions of the highest state court, but not by
decisions of lower courts. If no decision has been issued by the highest state court,
the federal court must make its own determination of applicable state law, giving
due regard to lower court decisions. See, e.g., Comerica Bank, N.A. v. United
States, 93 F3d 225, 228 (6th Cir 1996). A determination of rights by a lower state
court will not necessarily be binding for federal estate tax purposes. C.I.R v.
Bosch’s Estate, 387 US 456, 464–465, 87 S Ct 1776, 18 L Ed2d 886 (1967).
§ 12.1-3(c) Gifts Made Within Three Years Before Death
Under federal law, adjustments are made to the decedent’s gross estate to
add back the value of certain gifts or transfers made within three years of the
decedent’s death. IRC §2035(a), (d). The statute applies if:
(1) The decedent transferred the property (or an interest in it), or
relinquished a power with respect to the property, for less than full and adequate
consideration (see IRC §2035(d));
(2) The transfer (or relinquishment of power) was made within the three-
year period ending on the date of the decedent’s death; and
(3) The value of the property (or interest in it) would have been included
in the decedent’s gross estate under IRC §2036, IRC §2037, IRC §2038, or IRC
§2042 “if such transferred interest or relinquished power had been retained by the
decedent on the date of [his or her] death” (IRC §2035(a)).
NOTE: For deaths occurring before 1982, former IRC §2035(a)–(b)
required the inclusion of all post-1976 gifts (plus federal gift taxes paid) if
the decedent died within three years of the gift, whether or not the gift was
in contemplation of death. Former IRC §2035(c) continues to apply only for
purposes of determining special tax treatment of distributions in redemption
of stock to pay death taxes (IRC §303(b)), special valuations of certain real
property (IRC §2032A), extensions of time for payment of the estate tax
when the estate consists largely of interest in a closely held business (IRC
§6166), and certain tax liens.
PRACTICE TIP: Under IRC §2035, it is possible to remove rapidly
appreciating property from the donor’s estate even though the donor’s death
may be likely to occur within three years of the gift. Although a gift tax may
be due on the gift, the amount of the tax will usually be less than the estate
tax that would result at death on the higher valuation of the appreciating
property. Additionally, a substantial amount of money or assets can be
removed from the estate by a series of deathbed gifts of $13,000 ($26,000 if
gift-splitting is elected) to each donee (the annual exclusion in effect during
2012). Under IRC §2035, these annual-exclusion gifts will not be brought
back into the donor’s estate and will not be added to the tax computation
base for purposes of calculating the federal estate tax.
For decedents dying after 1981, the Economic Recovery Tax Act of 1981,
Pub L No 97-34, 95 Stat 172, imposes a limitation on the IRC §1014 stepped-up
basis provision in connection with the more liberal IRC §2035 provision. Under
this rule, IRC §1014 does not apply to appreciated property acquired by the donee-
decedent as a gift within one year before death if, on death, such property passes
from the donee-decedent to the original donor or the donor’s spouse. IRC
§1014(e). In this case, the basis of the property in the decedent’s hands is carried
over to the original donor or the donor’s spouse. IRC §1014(e)(1). This provision
is intended to prevent individuals from transferring appreciated property in
contemplation of the donee’s death solely to obtain a stepped-up basis on receipt of
the property from the decedent’s estate.
In the Taxpayer Relief Act of 1997, Pub L No 105-34, 111 Stat 788,
Congress added IRC §2001(f), which prohibits the Internal Revenue Service (IRS)
from revaluing prior taxable gifts for estate tax purposes after the statute of
limitations has expired for gift tax purposes. Before this change, the IRS could wait
for the grantor to die before questioning the valuation of gifts made by the
decedent during life, and adjust the amounts of those gifts on the decedent’s estate
tax return, at least as to gifts for which the applicable credit amount was used but
the gift tax was not actually paid. Under the current rule, the value of the gift
reported by the decedent on a gift tax return will be fixed for federal estate tax
purposes, but only if the value of the gift shown on the gift tax return is presented
in a manner adequate to apprise the IRS of the nature of the gift, and the gift tax
statute of limitations has expired as of the date of death.
The practice tip in the 2012 text discusses removing assets from an estate by
making deathbed gifts. The annual exclusion in effect during 2018 is $15,000
($30,000 if gift-splitting is elected) to each donee. See IRC § 2503.
§ 12.1-3(d) Transfers Taking Effect at Death
Interests in property includable in the gross estate as transfers taking effect
upon the decedent’s death are generally of three distinct types:
(1) Transfers with a reservation of a life interest includable under IRC
§2036 (see §12.1-3(d)(1));
(2) Transfers dependent on survivorship includable under IRC §2037 (see
§12.1-3(d)(4)); and
(3) Revocable transfers includable under IRC §2038 (see §12.1-3(d)(5)).
Each of these sections of the Internal Revenue Code, however, excludes
transfers that, although otherwise falling within the terms of the particular section,
are made for adequate and full consideration in money or money’s worth.
§ 12.1-3(d)(1) Transfers with a Reservation of a Life Interest
The decedent’s gross estate includes any property transferred by the
decedent in which the decedent directly or indirectly retains (1) possession or
enjoyment of the property, (2) the right to the income from the property, or (3) the
right to designate the persons who may possess or enjoy the property or the income
from it. IRC §2036.
The simplest of such transfers is when the grantor reserves a life estate in the
property transferred. However, IRC §2036(a) also includes transfers in which the
transferor reserves an interest “for any period not ascertainable without reference
to [the decedent’s] death or for any period which does not in fact end before [the
decedent’s] death.” Treasury Regulation §20.2036-1(b)(1)(ii) gives an example in
which the transferor grants a life estate in property to a third party, reserves the
right to receive the income or other payment from the property, or to use the
property, after the death of the current recipient, and then predeceases the holder of
the first life estate. In such a case, all but the value of the first life estate would be
includable in the transferor’s estate.
If parents convey their residence to their children, reserving the right to
occupy the house rent-free for life, the transfer is taxable, and the value of the
property transferred must be included in the parents’ gross estate. If a person
creates a trust reserving the unqualified power to require the trustee to pay that
person the income from the trust for his or her lifetime, the transfer creating the
trust is taxable, resulting in all property in the trust being included in the
decedent’s estate. Use of the property after the transfer to discharge a legal
obligation of the decedent, such as for a dependent’s support, makes the transfer
includable in the decedent’s gross estate. Treas Reg §20.2036-1(c). Under the
Uniform Transfers to Minors Act (UTMA), if the donor names himself or herself
as custodian, the powers given to the custodian under the UTMA are sufficient to
make the gifted property includable in the donor’s estate. Treas Reg §20.2041-1(c);
see ORS 126.805–126.886.
PRACTICE TIP: It is generally not desirable to have the transferor serve
as trustee unless the trustee is given absolutely no discretionary powers.
A retained power to designate or determine the beneficiaries who are to
receive the income is sufficient to make the property includable in the transferor’s
estate under IRC §2036, even if the transferor’s right to exercise the power is
subject to a contingency beyond the transferor’s control that does not occur before
death. Rev Rul 73-21, 1973-1 CB 405. Even if the transferor retains the power to
appoint a successor trustee in the event of vacancy, and no specific provision
addresses the possible appointment of the transferor, this possibility has been held
to be sufficient retention of a power for purposes of IRC §2036. Estate of Farrel v.
U. S., 553 F2d 637 (Ct Cl Apr 20, 1977).
In Revenue Ruling 95-58, 1995-2 CB 191, the Internal Revenue Service
(IRS) revoked former Revenue Ruling 79-353, 1979-2 CB 325, which held that if
the settlor retains the powers to remove the corporate trustee and to appoint a
successor corporate trustee, all the trustee’s powers and discretion will be
attributed to the settlor. The premise of former Revenue Ruling 79-353 was that by
appointing successive corporate trustees, the settlor would eventually find a trustee
who was willing to bend to the settlor’s will to retain the appointment. Revenue
Ruling 95-58 modifies this result by holding that the settlor’s retention of the
powers to remove the trustee and to appoint a successor trustee, if limited to the
appointment of a trustee who is not related to or subordinate to the settlor, will not
result in attribution of the trustee’s powers to the settlor. This change in position
was a result of the rejection of the IRS’s position in several court decisions,
including Estate of Wall v. C.I.R., 101 TC 300 (1993), and Estate of Vak v. C.I.R.,
973 F2d 1409, 1414 (8th Cir 1992).
Much litigation has ensued regarding when a transferor has, in fact, retained
the right to the income from the trust, or whether or not the income is being used to
discharge the transferor’s legal obligations. Thus, in Estate of Sessoms v. Comm’r,
8 TCM (CCH) 1056, 1058 (1949), the Tax Court held that property was not
includable in the transferor’s gross estate even though the income from a trust
payable to the transferor’s wife could be used for the support of the wife and
children because the transferor could not compel such use. Also, if the power to
divert income is an exclusive discretionary power in the trustee, the transfer is not
taxable. C.I.R. v. Irving Trust Co., 147 F2d 946, 948 (2d Cir 1945).
As stated above, IRC §2036 also provides for inclusion if the transferor
retains the right to designate who will possess or enjoy the transferred property or
its income. If property is put in trust to accumulate the income during the minority
of certain named beneficiaries and the trustor reserves the right to add other
beneficiaries or to change shares, the transfer is subject to taxation under IRC
§2036(a)(2).
The United States Supreme Court, in U.S. v. Byrum, 408 US 125, 144–147,
92 S Ct 2382, 33 L Ed2d 238 (1972), held that the donor’s retention of voting
rights in gifted stock was not a sufficient retention of enjoyment to require
inclusion of the stock in the donor’s estate under IRC §2036. This holding has been
reversed by statute. IRC §2036(b)(1) now provides that the retention of voting
rights with respect to shares of stock of a “controlled corporation” must be
considered to be retention of the enjoyment of the transferred property, with the
result that the property would be includable in the transferor’s estate under IRC
§2036. For this purpose, the term controlled corporation means a corporation over
which the decedent, at any time after the transfer of such stock, or during the three
years before the decedent’s death, had actual or constructive ownership of stock
possessing at least 20% of the combined voting power of all the classes of stock of
the corporation. IRC §2036(b)(2).
The rule of IRC §2036(b) applies to the direct or indirect retention of the
right to vote shares of stock of a “controlled corporation.” For example, retention
of voting rights may be found when the decedent transferred the shares to a trust of
which the decedent is the trustee, or when a relative is the trustee and there is
evidence of an arrangement to follow the decedent’s directions.
When a transfer is includable in the transferor’s estate under IRC §2036,
generally the property’s entire value is includable in the gross estate at its date-of-
death value, rather than the value of the retained interest alone. Exceptions to this
occur when the decedent grants an interest in the property preceding his or her life
interest and then predeceases the first tenant. In this situation, the value of the
preceding estate must be subtracted from the total value of the property taxable to
the decedent’s estate. If the decedent reserves the right to the possession of, or
income from, only part of the transferred property, only that part will be includable
in the decedent’s gross estate. See Treas Reg §20.2036-1.
In recent years, limited partnerships and limited liability companies have
been used routinely by estate planners as vehicles to hold assets for distribution to
younger-generation beneficiaries. The flexibility inherent in these entities permits
creative planning by passing ownership of the entity to family members at
discounts from the underlying asset values, while enabling the older generation to
retain significant control over the entity. The IRS has been persistent in attacking
the more egregious examples. Although the challenges have largely been
unsuccessful, the IRS has been gaining traction in recent years. See, e.g., Strangi v.
C.I.R., 417 F3d 468 (5th Cir 2005), in which the Court of Appeals for the Fifth
Circuit affirmed the Tax Court’s decision (TC Memo 2003-145), which had
concluded that the powers the senior generation retained through their control of
the corporate general partner in a family limited partnership were sufficient to
cause estate inclusion under IRC §2036 of the assets held in the limited
partnership. See also Kimbell v. United States, 371 F3d 257 (5th Cir 2004); Estate
of Schauerhamer v. C.I.R., 73 TCM (CCH) 2855 (TC 1997); Estate v.
Commissioner, TC Memo 1997-242 (1997); Estate of Reichardt v. C.I.R., 114 TC
144 (2000).
For further discussion of Oregon’s Uniform Transfers to Minors Act, see
Guardianships, Conservatorships, and Transfers to Minors ch 5 (OSB Legal Pubs
2018).
Regarding the last paragraph in the 2012 text, limited partnerships and
limited liabilities companies have been used routinely by estate planners as
vehicles to hold assets for distribution to younger-generation beneficiaries. The
flexibility inherent in these entities permits creative planning by passing ownership
of the entity to family members at discounts from the underlying asset values,
while enabling the older generation to retain significant control over the entity. The
IRS has been persistent in attacking the more egregious examples. Although a
thorough discussion of this rapidly changing area of law is outside the scope of this
chapter, John W. Porter’s recent continuing legal education materials, Current
Issues in Estate & Gift Tax Audits and Litigation (Mar 31, 2017), provides a good
overview of recent cases. See www.bakerbotts.com/thought-
leadership/publications/2017/03/current-issues-estate-gift-tax-audits-litigation.
§ 12.1-3(d)(2) Federal Transfer Taxes and Estate Freezes—
Background
For a number of years, transactions have been entered into that have the
effect of limiting the value of property held by an older generation at its current
value and passing any appreciation in the property to a younger generation. This is
known as an estate freeze. In the most common type of freeze, the older generation
transfers common stock or similar interests in a partnership to the younger
generation while retaining an interest with a preferred right to dividends, income,
or a limited right to share in the assets on liquidation. The preferred interest
holder’s estate would not include the company’s growth in value because his or her
interest in the company’s assets is frozen at a set value. In this way, the older
generation enjoys a steady income stream while transferring the entity’s growth in
value to the younger generation.
The Internal Revenue Service perceived this practice as an abuse, and
prevailed on Congress to add IRC §2036(c) in the Revenue Act of 1987, Pub L No
100-203, 101 Stat 1330-382. The statute was significantly amended by the
Technical and Miscellaneous Revenue Act of 1988, Pub L No 100-647, 102 Stat
3342. The section was designed to be an “anti-freeze” provision to prevent what
was perceived to be an avoidance of the transfer-tax system. The approach of the
section was to treat an estate-freeze transaction as inherently testamentary and,
therefore, it included the value of the transferred interest in the donor’s gross estate
for federal estate tax purposes. The section adopted an incomplete gift approach
that leaves open the final transfer-tax consequences of the transaction until the time
of death.
Many people viewed IRC §2036(c) as being overly broad and unfair in its
reach. It was repealed retroactively by the Revenue Reconciliation Act of 1990, but
this act adopted another method of eliminating certain potential advantages of
freeze transactions. See Pub L No 101-508, §11601(a), 104 Stat 1388. These
provisions are contained in chapter 14 of subtitle B of the Internal Revenue Code,
IRC §§2701–2704. See §12.1-3(d)(3).
§ 12.1-3(d)(3) Overview of IRC Chapter 14 of Subtitle B
Chapter 14 of the Internal Revenue Code has rules relating to transfers of
interests in corporations and partnerships, transfers of interests in trusts, the effect
of buy-sell agreements, and the effect of certain lapsing rights.
Section 2701 sets forth rules for valuing gifts of common stock and
partnership interests. Transferring an interest in a family-owned corporation or
partnership to a member of the transferor’s family (as defined) and retaining an
applicable retained interest having a distribution right (as defined) by an applicable
family member (as defined) results in the retained interest being valued at zero
unless a qualified payment (as defined) is the type of interest retained. IRC §2701.
Section 2702 provides that any retained interest in a GRIT (grantor-retained
income trust) or similar arrangement is valued at zero unless it is structured in the
form of an annuity or unitrust interest similar to the form for retained payments
used for qualified charitable remainder trust gifts. IRC §2702.
Section 2703 provides that a value set by a buy-sell agreement will be
disregarded unless (1) it is a bona fide business arrangement, (2) it is not a device
to transfer property for less than full consideration, and (3) the terms are
comparable to those typically used in an arm’s-length transaction. IRC §2703.
Section 2704 provides that a gift occurs when voting or liquidation rights
lapse, but the family retains “control” of the entity. It also provides that the tax
value of property is determined without regard to any restriction that limits the
ability of the business to liquidate and the restriction either lapses after transfer or
the transferor or a family member can remove it. IRC §2704.
The foregoing is only a very brief summary of chapter 14. The chapter is
extremely complex and, like IRC §2036(c), many questions arise about its proper
application. It should be noted, however, that although IRC §2036(c) had
significant application in the determination of federal estate tax, its replacement in
chapter 14 primarily affects the determination of gift tax liability.
§ 12.1-3(d)(4) Transfers Dependent on Survivorship
Transfers dependent on survivorship are included in the transferor’s gross
estate. IRC §2037. Section 2037 provides that the value of the gross estate must
include the value of property transferred if (1) the possession or enjoyment of the
property can be obtained only by surviving the decedent and (2) the decedent has
retained a reversionary interest in the property that is worth more than 5% of the
property’s value immediately before the decedent’s death.
Inclusion of property under this section requires both a retention of a
reversionary interest and a survivorship element. The interest is not included unless
the beneficiary must survive the decedent in order to take. If the survivorship
requirement is present, the interest still is not included unless the decedent has
retained a reversionary interest by the express terms of the transfer instrument or,
for transfers after October 7, 1949, by the express or implied terms. Finally, the
reversionary interest retained must be valued at more than 5% of the value of the
property immediately before the decedent’s death. IRC §2037. This valuation is
made according to the usual methods of valuation, including the use of mortality
tables and actuarial principles. Treas Reg §20.2031-7.
Treasury Regulation §20.2037-1(e), example (3), illustrates the operation of
this section of the Internal Revenue Code:
The decedent transferred property in trust with the income payable to his wife for
life and with the remainder payable to the decedent or, if he is not living at his
wife’s death, to his daughter or her estate. The daughter cannot obtain possession
or enjoyment of the property without surviving the decedent. Therefore, if the
value of the decedent’s reversionary interest immediately before his death
exceeded 5 percent of the value of the property, the value of the property, less the
value of the wife’s outstanding life estate, is includible in the decedent’s gross
estate.
On the other hand, if the “decedent transferred property in trust with the
income payable to his wife for life and, at her death, remainder to the decedent’s
then surviving children or, if none, to the decedent or his estate,” no part of the
property is includable in the decedent’s gross estate because each beneficiary may
possess or enjoy the property without surviving the decedent. Treas Reg §20.2037-
1(e), example (1).
The regulations concede that the term reversionary interest does not
“include the possibility that the decedent during [the decedent’s] lifetime might
have received back an interest in transferred property by inheritance through the
estate of another person” or as dower, curtesy, or a statutory substitute from the
spouse. See Treas Reg §20.2037-1(c)(2).
§ 12.1-3(d)(5) Revocable Transfers
The transferor’s gross estate must include revocable transfers, that is,
transfers in which the transferor has directly or indirectly reserved the power to
alter, amend, revoke, or terminate the transfer. IRC §2038. However, the power
must be in existence at the time of the decedent-transferor’s death unless it was
relinquished in contemplation of death (for relinquishment before 1977) or within
three years of death (if relinquished after 1976). (Note that the rules of former IRC
§2035 continue to apply for this purpose.) The existence of the power results in the
value of the property covered by the trust being included in the transferor’s gross
estate.
The transfers includable under IRC §2038 are usually referred to as
“revocable trusts,” but the section includes transfers by “trust or otherwise.” IRC
§2038(a).
In addition, the section applies not only when the transferor holds a power to
revoke, but also when the enjoyment of the transfer is subject to any change
through the exercise of a power to alter, amend, revoke, or terminate. IRC
§2038(a). To have a taxable transfer, it is not required that the trustor have all these
powers (to alter, amend, revoke, and terminate); it is sufficient if only one of these
powers is held. All that is required is that the donor have the power to change the
beneficial enjoyment of the property. At the same time, a power to revoke or alter
only part of the trust causes inclusion of only that part, and not the entire trust.
Laura B. Alexander Est., 2 TCM (CCH) 1156, 1158–1159 (1943). Although a
contingent power to alter, amend, or revoke is not covered by IRC §2038, it may
possibly be taxed under IRC §2037, discussed in §12.1-3(d)(4).
The power to change the ultimate beneficiaries or to vary the distribution of
shares is a power to alter; it makes the property includable in the transferor’s gross
estate. Guggenheim v. Helvering, 117 F2d 469, 475 (2d Cir 1941).
In Lober v. United States, 346 US 335, 336–337, 74 S Ct 98, 98 L Ed 15
(1953), the Supreme Court held that the power to terminate a trust causes
inclusion, even if the power is to be exercised by the decedent only as a trustee and
only in the best interests of the beneficiaries. In the Lober case, the decedent
created a trust in favor of his child that would be terminated and the principal paid
over to the child when the child reached age 25. However, the decedent retained
the power to pay all or any part of the principal to the child before the termination
date, thus allowing the decedent to terminate the trust either completely or partially
at an earlier date. Lober, 346 US at 336.
The property subject to the power to alter, amend, revoke, or terminate is
valued as of the date of the decedent’s death or as of the alternate valuation date.
Any accumulated income and capital gains accruing after the trust’s creation are
also includable. Guggenheim, 117 F2d at 475.
§ 12.1-3(e) Annuities
§ 12.1-3(e)(1) Generally
Section 2039 taxes annuities and individual retirement accounts or other
payments receivable by any beneficiary by reason of surviving the decedent. IRC
§2039. If the annuity purchased by the decedent is a straight life annuity resulting
from a bona fide purchase for adequate and full consideration, nothing is taxed to
the decedent’s estate at death, since there is no residual value. IRC §2039(a). If the
annuity is a refund annuity, any refund due at the annuitant’s death is taxable either
as property that was owned on the date of the decedent’s death, under IRC §2033,
or as a transfer over which the decedent retained the power to alter or amend,
under IRC §2038.
However, if a decedent purchases an annuity that is to be paid to the
decedent during the decedent’s life and to a survivor after the decedent’s death,
IRC §2039 requires that the decedent’s gross estate include the amount allocable to
the consideration paid for the annuity by the decedent or by the decedent’s
employer if paid by reason of the decedent’s employment. IRC §2039(b). Thus, the
amount includable is the proportion of the annuity receivable by the beneficiary
that the contribution paid by the decedent (or the decedent’s employer) bears to the
total purchase price of the annuity.
§ 12.1-3(e)(2) Exclusions
PRACTICE TIP: The former $100,000 federal estate tax exclusion is
generally not applicable to decedents dying after December 31, 1984.
However, any retirement benefits the decedent was receiving at the time of
death should be reviewed carefully. To the extent it can be shown that the
decedent’s retirement benefit was in pay status on December 31, 1984,
pursuant to an irrevocable election made before July 18, 1984, the $100,000
exclusion may be available to the estate. The exclusion is important because
it could result in substantial savings. See former IRC §2039(e) (prior to
being amended by §525 of the Tax Reform Act of 1984, Pub L No 98-369,
98 Stat 494).
§ 12.1-3(e)(3) Rollover of Lump-Sum Distributions to IRAs
If the decedent-employee’s surviving spouse is the beneficiary of a lump-
sum distribution from a qualified plan or a distribution from the decedent’s
individual retirement account (IRA), it may be possible to roll over the distributed
amount into an IRA established by the surviving spouse and to thereby obtain an
exclusion from gross income for the proceeds rolled over (for income tax
purposes). For a distribution from a qualified plan (IRC §402(c)(9)) and a
distribution from an IRA (IRC §408(d)(3)), this special rollover provision applies
only to the decedent’s surviving spouse, and only to a distribution paid after the
employee’s death. The income tax exclusion applies only to the portion of the
amount rolled over that is attributable to contributions by someone other than the
decedent. In addition, the rollover to the IRA must occur within 60 days of the
receipt of the lump-sum distribution by the decedent’s surviving spouse. IRC
§408(d)(3)(A). The portion of the lump-sum distribution not qualifying for rollover
treatment will be taxable to the beneficiary on receipt. IRC §408(d)(1), IRC §72(a).
§ 12.1-3(f) Joint Interests with Right of Survivorship
Because property held in a tenancy by the entirety or in joint tenancy with
right of survivorship automatically passes to the surviving tenant or tenants rather
than to the estate of a deceased tenant, a favorite way to avoid probate costs and
delay is to hold property in one of these two ways. However, because the
survivorship characteristic of joint ownership has an effect similar to that of a
testamentary disposition, IRC §2040 provides for the taxation of such joint
interests.
Section 2040 taxes only joint interests involving the “survivorship”
characteristic and therefore does not tax tenancies in common, in which the interest
of each tenant passes as part of the estate and not automatically to the joint tenant.
The decedent’s interest as a tenant in common is taxed under IRC §2033.
Except for property held jointly between husband and wife (see IRC
§2040(b)), IRC §2040(a) requires that the entire property held in joint tenancy be
included in the estate of the first tenant to die, subject to the right of the surviving
tenant to show that he or she contributed part of the property or the consideration
for the property. If this can be shown, then part of the property proportionate to the
survivor’s contribution is excluded from the decedent’s gross estate. The amount
that is excluded from the estate of a deceased joint tenant (or tenant by the entirety)
because of the surviving tenant’s contribution is not the amount that the survivor
contributed, but the part of the property that is proportionate to the surviving
tenant’s contribution.
Proving the amount of a surviving tenant’s contribution may be a difficult
task. The burden is on the decedent’s estate to prove which part of the jointly held
property was contributed by the survivor. This is particularly difficult in the case of
joint bank accounts because it must be shown not only that the survivor deposited
funds in the account but that the deposited funds were not withdrawn.
For estates of decedents dying after 1982, IRC §2040 provides special
treatment for “qualified joint interests.” The term qualified joint interest includes
any interest in property held by the decedent and his or her spouse as tenants by the
entirety or joint tenants with right of survivorship, but only if the decedent and his
or her spouse are the only joint tenants. IRC §2040(b)(2). The effect of the 1981
amendment to IRC §2040 is to remove the element of contribution when dealing
with a spousal joint interest with right of survivorship. Thus, as long as a qualified
joint interest is present, the personal representative will simply include in the
decedent’s estate one-half of the value of the entire property without regard to the
respective contributions of each spouse.
NOTE: By including only one-half of the joint interest in the
decedent’s gross estate, a stepped-up tax basis is acquired only in that half.
The other one-half interest retains the basis existing before death.
In a series of cases interpreting the effect of the automatic 50% inclusion
rule under IRC §2040 to joint interests created before 1977, taxpayers have
successfully argued that the Economic Recovery Tax Act of 1981 (ERTA 1981),
Pub L No 97-34, 95 Stat 172, did not expressly or impliedly repeal the effective
date of the 50% inclusion rule. Therefore, joint property acquired before January 1,
1977, is not covered by the automatic 50% rule. See Gallenstein v. United States,
975 F2d 286, 290–291 (6th Cir 1992); Patten v. United States, 116 F3d 1029 (4th
Cir 1997); Hahn v. C.I.R., 110 TC 140, 143–144 (1998) acq., 2001-42 IRB 319,
2001-2 CB XV (2001), and acq. recommended by 2001 WL 1249964 (Oct 15,
2001).
By its acquiescence in the Hahn decision, the Internal Revenue Service has
announced that it will no longer challenge this treatment of joint interests acquired
before January 1, 1977. To qualify under this rule, the property must have been
owned as of the date of death by the decedent and a surviving spouse (with no
other persons) as joint tenants with right of survivorship, and the spouses must
have acquired the property in that joint form before January 1, 1977. If these
requirements are met, the rule results in the inclusion in the first spouse’s estate of
a proportionate share of the property based on contribution, but it does not result in
any additional estate tax because the value is covered by the marital deduction,
while providing a larger adjusted basis in the property for income tax purposes.
PRACTICE TIP: When gathering information for the federal estate tax
return of the first spouse to die, the lawyer should look for real property that
the spouse may have acquired before 1977, and consider whether it would be
beneficial to calculate the includable interest based on the pre-ERTA 1981
principles of contribution.
§ 12.1-3(g) Powers of Appointment
Powers of appointment are divided into those created on or before October
21, 1942, and those created after that date. IRC §2041. For powers of appointment
created on or before October 21, 1942, only the exercise of a general power of
appointment now results in inclusion in the decedent’s gross estate. The
nonexercise or release of such a power is not taxed. For powers of appointment
created after October 21, 1942, the interest is includable if the general power is
exercised or released by a transfer in contemplation of death or by a transfer that
takes effect at death. In addition, a tax is imposed when the general power is in
existence at the time of the donee’s death, whether or not it is exercised by the
decedent’s testamentary will or trust. IRC §2041(a)(2). The possession, not the
exercise, of the general power now controls.
PRACTICE TIP: Although powers of appointment predating October 21,
1942, are not very common, such powers exist, and the right to exclude the
property by nonexercise of the power can result in substantial tax savings.
Section 2041 provides for the inclusion of interests subject to a general
power of appointment because the donee of such a power has substantial incidents
of ownership in that property. The statute defines general power of appointment as
a power over property that may be appointed to the donee, the donee’s estate, the
donee’s creditors, or the creditors of the donee’s estate. IRC §2041(b)(1).
Exceptions exist to the taxability of such a general power of appointment. Thus, a
power allowing the donee to invade or consume property that is limited by an
ascertainable standard relating to the health, education, support, or maintenance of
the donee is not regarded as a general power. IRC §2041(b)(1)(A).
If a power gives the income beneficiary of a trust the right to withdraw
principal to the extent needed for the beneficiary’s support and the power is limited
by an ascertained standard related to the purposes set forth in IRC §2041(b)(1)(A),
it is not a taxable general power of appointment. Yet if the power is limited by a
standard that uses such words as comfort, welfare, or happiness, the assets subject
to the power are includable in the gross estate. Treas Reg §20.2041-1(c)(2).
PRACTICE TIP: This provision can be dangerous if a trustee is given
the power to invade principal for his or her own benefit. The language of the
trust should not broaden the standard for invasion beyond that permitted by
the statute if the trust assets are to be excluded from the trustee’s estate.
If the power of appointment exists with respect to only a part of a group of
assets, or as to a limited interest, only that part or interest is includable in the gross
estate. Treas Reg §20.2041-1(b)(3).
If the decedent and other persons hold a power of appointment jointly, the
flexibility of the power depends on the rights held by the other persons. If the
power may be exercised only by the decedent jointly with the creator of the power,
it is not a taxable power. Nor is it a taxable power if it may be exercised only with
the consent or approval of a person having a substantial interest in the property that
is adverse to the exercise of the power in favor of the decedent, the decedent’s
creditors, the decedent’s estate, or the creditors of the decedent’s estate. IRC
§2041(b)(1)(C).
§ 12.1-3(h) Life Insurance
Under IRC §2042(1), the decedent’s gross estate includes the value of
amounts receivable by the executor as insurance on the life of the decedent.
The gross estate also includes the value of amounts receivable by other
beneficiaries under insurance policies on the decedent’s life with respect to which
the decedent possessed at the time of death any incidents of ownership, exercisable
by the decedent alone or in conjunction with any other person. IRC §2042(2). For
this purpose, a reversionary interest exceeding 5% of the value of the policy
immediately before the decedent’s death is deemed to be an incident of ownership.
However, the fact that the decedent might receive a policy or its proceeds by
inheritance through the estate of another person does not constitute a reversionary
interest. Treas Reg §20.2042-1(c)(3).
Life insurance includes accidental-death policies, as well as war risk
insurance, and proceeds from life insurance policies issued under the World War
Veterans’ Act of 1924, 38 USC §1988, the National Service Life Insurance Act of
1940, 38 USC §1901 et seq., and the Servicemen’s Indemnity Act of 1951, 38
USC §1301 et seq. The amount to be included in the decedent’s gross estate is the
full amount receivable under the policy.
If an agreement exists in which insurance on the decedent’s life is purchased
by a business associate and the proceeds of such insurance are to be used as
payment for the decedent’s share of the business, the interest included in the gross
estate is the decedent’s share of the business, not the value of the insurance,
although the amount of the insurance may affect the value of the business. Rev Rul
56-397, 1956-2 CB 599 (1956).
The current test for inclusion of insurance proceeds in the decedent’s estate
is whether the decedent held any incidents of ownership in the policy (such as the
right to change the beneficiary or the right to borrow on the policy). For insurance
policies transferred by a decedent within three years before death, the entire
proceeds are includable under IRC §2035.
In IRS Action on Decision 1991-012, 1991 WL 771258 (July 3, 1991), the
Internal Revenue Service (IRS) announced its acquiescence to the result in Estate
of Headrick v. C.I.R., 918 F2d 1263 (6th Cir 1990). In Estate of Headrick, the
Sixth Circuit held that the proceeds of a life insurance policy were not includable
in the decedent’s gross estate when the decedent never owned the policy,
notwithstanding the fact that the policy was purchased at the decedent’s instance,
the decedent paid the premiums, and the decedent died within three years after the
policy was issued. The decedent had established an irrevocable life insurance trust
within three years of death, and the independent trustee used the decedent’s
contributions to the trust to purchase a new life insurance policy on the decedent’s
life. Estate of Headrick, 918 F2d at 1266–1268.
PRACTICE TIP: When establishing an irrevocable life insurance trust,
the lawyer should attempt to come within the protection afforded by the
IRS’s acquiescence in the Estate of Headrick case. Thus, the trustee (rather
than the insured) should apply for the policy, and pay all premiums and costs
associated with the policy, even though the funds to do so are derived from
contributions by the settlor of the trust.
The IRS previously took the position that life insurance owned by a
corporation in which the insured was either the sole or a controlling shareholder
would be includable in the decedent’s estate as a policy in which the decedent held
an incident of ownership, that is, the control of economic benefits. The regulations
now provide that proceeds on policies payable to the corporation or payable to a
third person for a valid business purpose, such as satisfaction of business debts of
the corporation, will not be taxed in the estate, but those proceeds are to be
considered as nonoperating assets of the corporation for purposes of determining
the value of the stock owned by the decedent. If the proceeds are not paid to the
corporation or to third persons for valid business purposes, the incidents of
ownership are attributed to the decedent and the policy proceeds are included in the
decedent’s gross estate. Treas Reg §20.2042-1(c)(6).
Group insurance in which the decedent held any incident of ownership is
includable in the decedent’s gross estate under IRC §2042. Treas Reg §20.2042-
1(c)(6). The question of includability in regard to an employee’s assignment of all
the employee’s incidents of ownership in a group policy was considered by the IRS
in Rev Rul 69-54, 1969-1 CB 221 (1969), which recognizes the possibility of
complete assignment of all incidents of ownership, but only if the transfer is
permitted under state law and is allowed under the policy. However, this ruling
suggests that state law must specifically permit assignment of conversion rights
under the policy. It holds that any of these rights constitutes an incident of
ownership, which, if retained by the insured, results in inclusion of the proceeds in
the insured’s estate under IRC §2042. After this ruling, many states passed laws
specifically permitting the insured to assign all rights under a group policy. Oregon
law permits assignment if the assignment is provided for in the policy. ORS
743.043. In a subsequent ruling, the IRS considered this issue and determined that
if a decedent transferred all the incidents of ownership in a group policy, retaining
only the right to convert the policy to an individual policy should the decedent
cease employment, the retained conversion rights will not result in inclusion under
IRC §2042. Rev Rul 84-130, 1984-2 CB 194 (1984).
§ 12.1-4 Deductions from the Gross Estate
To arrive at the taxable estate (to which adjusted taxable gifts are added to
arrive at the tax computation base used to calculate the tentative tax amount), any
of the following applicable deductions must first be applied:
(1) Expenses, indebtedness, and taxes (see §§12.1-4(b) to 12.1-4(g));
(2) Losses (see §12.1-4(h));
(3) Transfers for public, charitable, and religious uses (see §§12.1-4(i) to
12.1-4(i)(2)); and
(4) The marital deduction (see §§12.1-5(a) to 12.1-5(d)).
These deductions are described in IRC §§2053–2056.
§ 12.1-4(b) Expenses, Indebtedness, and Taxes
Several items are deductible from the decedent’s gross estate under IRC
§2053, including funeral expenses, administration expenses, claims against the
estate, and unpaid mortgages or any indebtedness in respect of property included in
the gross estate. IRC §2053(a). These deductions are subject to some limitations,
such as the requirement that the deduction must be allowed by the laws of the
jurisdiction where the estate is being administered. IRC §2053(a). Also, the
deductions may not exceed the value of the property included in the gross estate
that is subject to the claims, except to the extent that such deductions represent
amounts paid “before the expiration of the period of limitation for assessment
provided in section 6501” (within three years after the date for filing the return,
i.e., normally three years and nine months after the date of death). IRC §2053(b);
see IRC §6501.
If a decedent had transferred most of his or her property to an inter vivos
trust that was includable in the decedent’s gross estate, then funeral expenses,
debts, and other expenses that were, in fact, paid by beneficiaries, as well as
expenses of administering the trust that were paid out of the trust assets, are
allowed as deductions if paid within three years after the date for filing the return.
The term property subject to claims is defined as property includable in the
decedent’s gross estate that would “bear the burden of the payment of such
deductions in the final adjustment and settlement of the estate.” IRC §2053(c)(2).
In an estate consisting entirely of joint tenancy property, none of the property is
legally subject to claims, but under the statute, the surviving joint tenant would not
lose the ability to take the deductions, as long as the amounts are actually paid
within the period provided.
In 2009, the Internal Revenue Service (IRS) issued final regulations
detailing the circumstances under which contingent or unpaid claims may be
deducted. The regulations (Treas Reg §20.2053-1) apply to decedents dying on or
after October 20, 2009, Treas Reg §20.2053-1(f), and provide detailed guidance.
The lawyer should review the regulations if a deduction is sought for a claim or
expense that has not been paid before the filing of the federal estate tax return.
Generally, the amount that may be deducted as a claim, expense, or debt must
either be paid by the date the federal estate tax return is filed or meet one of several
alternate tests. If the claim, expense, or debt does not qualify for deduction as of
the date the federal estate tax return is filed, the executor may file a protective
claim for refund to preserve the estate’s right to claim a deduction under IRC
§2053(a). Treas Reg §20.2053-1(d)(4)(ii), (5). An amount that remains contingent
or unascertainable as of the close of the statute of limitations for filing a refund
claim is not deductible.
Some of the key points addressed in the regulations permitting a deduction
for amounts that have not been paid by the date of the filing of the federal estate
tax return include the following:
(1) The amount of an expense, claim, or debt may be determined by a
final decision of a court of competent jurisdiction over the administration of an
estate that reviews and approves the expenditure if the court actually considers and
rules on the facts upon which deductibility depends, Treas Reg §20.2053-1(b)(3);
(2) A consent decree may establish the amount if the consent “resolves a
bona fide issue in a genuine contest,” Treas Reg §20.2053-1(b)(3)(iii);
(3) The amount of a claim, expense, or debt may be established by a
settlement that “resolves a bona fide issue in a genuine contest and is the product
of arm’s-length negotiations by parties having adverse interests” with respect to the
subject matter of the claim or expense, Treas Reg §20.2053-1(b)(3)(iv);
(4) No deduction is allowed to the extent that the claim or expense “is or
could be compensated for by insurance or otherwise could be reimbursed,” Treas
Reg §20.2053-1(d)(3);
(5) An amount may be deducted as an expense or claim if the IRS is
satisfied that “the amount to be paid is ascertainable with reasonable certainty and
will be paid,” Treas Reg §20.2053-1(d)(4)(i) (for example, a personal
representative’s fee that has not yet been paid may be deducted if the amount
ultimately to be paid is ascertainable with reasonable certainty despite the fact that
the fee has not been paid by the time the federal estate tax return is filed); and
(6) The amount of interest on a deductible claim is also deductible as a
claim to the extent of interest accrued as of the date of the decedent’s death and
that is actually paid or ascertainable with reasonable certainty; the deduction
includes only interest accrued through the date of death even if the executor elects
the alternate valuation date, Treas Reg §20.2053-4(e)(1).
§ 12.1-4(c) Mortgages
A mortgage on an indebtedness on property is deductible from the
decedent’s gross estate only if the decedent’s interest in the property is included in
the gross estate without first being reduced by such mortgage or indebtedness. IRC
§2053(a)(4). If the decedent and others are jointly and severally liable, the amount
to be deducted is the portion of the total debt for which the decedent is liable.
Parrott v. C.I.R., 30 F2d 792, 793 (9th Cir 1929).
Indebtedness that is secured by property included in the decedent’s gross
estate but that exceeds the value of such property is not deductible unless the
decedent was personally liable for such indebtedness. Estate of Malkin v. C.I.R, 98
TCM 225 (TC 2009). Thus, nonrecourse indebtedness is generally deductible only
to the extent of the fair-market value of the property that secures such
indebtedness.
§ 12.1-4(d) Funeral Expenses
Funeral expenses deductible under IRC §2053 include reasonable amounts
for a tombstone, monument, or mausoleum; the cost of a burial lot for the decedent
or the decedent’s family; and the cost of transporting the person bringing the body
to the place of burial. Treas Reg §20.2053-2.
§ 12.1-4(e) Administration Expenses
According to the regulations, administration expenses under IRC §2053(a)
are expenses that “are actually and necessarily, incurred in the administration of
the decedent’s estate; that is, in the collection of assets, payment of debts, and
distribution of property to the persons entitled to it.” Treas Reg §20.2053-3(a).
§ 12.1-4(e)(1) Executors’ Commissions and Attorney Fees
Expenses of administration allowed under local law that are deductible from
the decedent’s gross estate include executors’ commissions and attorney fees. IRC
§2053(a). At the time of filing the return, the exact amounts of commissions and
fees may not be known, but a deduction may be claimed in an estimated amount,
subject to the requirements set forth in Treasury Regulation §20.2053-1(d)(4) that
the amounts will be paid and the amount of the fees is reasonably ascertainable. If
the commissions and fees have not been finally determined at the time of audit, the
Internal Revenue Service agent will require (1) an affidavit from both the executor
and the lawyer regarding the amount of commissions and fees that will be claimed
in the estate and (2) an agreement to future adjustment if the amounts are not later
paid. The amount of the commissions and attorney fees claimed as a deduction
must be in accordance with the usually accepted standards and practice of allowing
such an amount in estates of similar size and character. Treas Reg §20.2053-3.
If litigation ensues regarding the amount of the estate tax, additional attorney
fees will be incurred for services rendered in connection with this dispute. The
amount of these attorney fees may not be known until the estate tax liability is
finally settled, and a deduction for additional attorney fees will be allowed only if
the petition or complaint includes a prayer for the additional fees. Cleveland v.
Higgins, 148 F2d 722, 724 (2d Cir 1945); Bohnen v. Harrison, 232 F2d 406, 409–
410 (7th Cir 1956).
PRACTICE TIP: In all claims for a refund or petitions to the Tax Court,
the lawyer must include a deduction for attorney fees to be incurred in the
dispute. It is not necessary to estimate the amount of fees at the time of filing
the claim or petition.
§ 12.1-4(e)(2) Estate Tax Versus Income Tax Deductions
Administration expenses may be claimed as estate tax deductions on the
estate tax return or as income tax deductions on the return in the year paid, but not
on both returns. IRC §642(g). Amounts allowable under IRC §2053 and IRC
§2054 as deductions in computing the taxable estate are not allowed as deductions
in computing the taxable income of the estate unless a statement is filed (1) stating
that the amounts claimed have not been allowed as deductions in computing the
taxable estate and (2) waiving the right to have such amounts allowed as estate tax
deductions at any time. IRC §642(g).
PRACTICE TIP: The above statement must be filed in duplicate. See
Treas Reg §1.642(g)-1. It is not essential that the statement be filed with the
income tax return, but it must be filed before the expiration of the statutory
period of limitation applicable to the taxable year for which the deduction is
sought. Rev Rul 53-240, 1953-2 CB 79.
NOTE: The lawyer should determine the effective estate tax rate before
deciding whether to take a particular deduction on the estate tax return or on
the estate’s income tax return. Depending on the year of the decedent’s
death, the effective federal estate tax rates on estates in excess of the
applicable credit amount ranges from 35% to a maximum rate of 55%. See
§12.1-6(b). In cases in which the federal estate tax rate is higher than the
income tax rate, it is probably desirable to claim the expenses on the federal
estate tax return.
When a marital deduction is allowable (see §§12.1-5(a) to 12.1-5(d)), the
effective estate tax rate may actually be zero for decedents dying after 1982. Note,
however, that administration expenses, as a charge against principal, could reduce
the principal passing to the surviving spouse and thus the allowable marital
deduction, so that some estate tax could result from deducting administration
expenses for income tax purposes, unless protected by the exclusion equivalent
amount. In many cases, an advantage may exist in electing to waive
administration-expense deductions as estate tax deductions, and to claim the
deductions against estate income, when the income tax savings may exceed any
extra estate tax cost. If the deductions exceed income in the final income tax period
of the estate, the excess income tax deductions are carried over to the beneficiaries
to be deducted by them on their own returns. IRC §642(h).
In response to the decision in Comm’r v. Estate of Hubert, 520 US 93, 117 S
Ct 1124, 137 L Ed2d 235 (1997), the Treasury Department issued new regulations
under IRC §2056. In Estate of Hubert, 520 US at 105–107, the Court held that the
administrator of an estate that had incurred sizable litigation expenses could
properly charge a portion of the expenses to income earned during the proceedings,
and could also claim the entire amount of expense on the federal estate tax return.
The final regulations separate expenses of administration into “estate transmission
expenses” and “estate management expenses.” Treas Reg §20.2056(b)-4(d). Estate-
transmission expenses (whether charged to the income or principal of the marital
portion of the estate) will reduce the value of the marital property. Treas Reg
§20.2056(b)-4(d)(2). Estate-management expenses, on the other hand, will not
reduce the value of the marital property even if claimed as an income tax
deduction. Treas Reg §20.2056(b)-4(d)(3). The regulations take the position that
estate-transmission expenses are “but for” expenses: these expenses would not
have occurred but for the decedent’s death. Treas Reg §20.2056(b)-4(d)(1)(ii). The
regulations also include a catchall definition by classifying as estate-transmission
expenses “any administration expense that is not a management expense.” Treas
Reg §20.2056(b)-4(d)(1)(ii).
Estate-management expenses are those expenses “incurred in connection
with the investment of estate assets or with their preservation or maintenance
during a reasonable period of administration.” Treas Reg §20.2056(b)-4(d)(1)(i).
Examples provided in the regulations include “investment advisory fees, stock
brokerage commissions, custodial fees, and interest.” Treas Reg §20.2056(b)-
4(d)(1)(i). Litigation expenses that would have been incurred irrespective of the
decedent’s death should qualify as management expenses; litigation expenses
resulting from the decedent’s death (e.g., expenses of a will contest) would be
classified as transmission expenses.
PRACTICE TIP: In an estate in which the expenses of administration are
expected to be significant, the lawyer should consider the potential
advantage of classifying the expenses into the estate-management and estate-
transmission categories. The normal rule prohibiting a deduction for both
income and estate tax purposes does not apply to the extent that particular
expenses can be shown to be estate-management expenses.
PRACTICE TIP: The prudent lawyer will determine where the greatest
tax advantage will be achieved with the administration-expense deductions.
To do so, the lawyer must determine the estate’s effective estate tax rate, the
estate’s income tax rates, and the anticipated income tax rates of the estate’s
residuary beneficiaries. Generally, administration expenses must be paid
during the tax year to be claimed as income tax deductions for that year.
If the personal representative’s fees are waived, they may not be deducted
unless the waiver is withdrawn at a later time and the fees are, in fact, paid, or
unless the waiver by one personal representative does not affect other personal
representatives who receive payment. The decision to waive fees payable to a
personal representative who is also a residuary beneficiary of the estate should be
made only after carefully comparing the marginal income and estate tax rates. With
the reduction in estate tax rates in recent years, combined with the increase in the
applicable exclusion amount, waiver of fees by the personal representative will
likely be significant in a larger number of estates (since the larger applicable
exclusion amount will likely result in fewer estates being subject to estate tax).
PRACTICE TIP: If the personal representative is an individual and an
estate beneficiary, the lawyer should compare the income tax cost to estate
tax savings in determining whether the personal representative’s commission
should be waived.
§ 12.1-4(e)(3) Miscellaneous Administration Expenses
Miscellaneous administration expenses that may be deducted from the
decedent’s gross estate under IRC §2053 include such expenses as court costs,
accountants’ fees, appraisers’ fees, and clerks’ compensation. Treas Reg §20.2053-
3(d)(1).
Expenses necessarily incurred in preserving and distributing the estate are
deductible, “including the cost of storing or maintaining property of the estate if it
is impossible to effect immediate distribution to the beneficiaries.” Treas Reg
§20.2053-3(d)(1). “Expenses for preserving and caring for the property may not
include outlays for additions or improvements, nor will such expenses be allowed
for a longer period than the executor is reasonably required to retain the property.”
Treas Reg §20.2053-3(d)(1).
A brokerage fee for selling property of the estate is deductible “if the sale is
necessary in order to pay the decedent’s debts, expenses of administration, or
taxes, to preserve the estate, or to effect distribution.” Treas Reg §20.2053-3(d)(2).
Other expenses attending the sale are deductible, “such as the fees of an auctioneer
if it is reasonably necessary to employ one.” Treas Reg §20.2053-3(d)(2).
However, expenses of sale are subject to the rules disallowing a double deduction
of expenses and requiring an election in claiming the deduction for income tax
purposes or estate tax purposes. IRC §642(g).
PRACTICE TIP: When the estate is liable for estate taxes, the deduction
for expenses of selling estate property should generally be taken for estate
tax purposes, because the current maximum tax rate on capital gains, for
income tax purposes, is lower than the lowest federal estate tax rate.
§ 12.1-4(e)(4) Interest on Estate or Income Tax Liabilities
Interest expenses incurred by the estate to pay income tax liabilities of the
decedent or death tax liabilities of the estate are deductible to the extent allowable
under local law, unless waived as an estate tax deduction and claimed as an income
tax deduction. Rev Rul 69-402, 1969-2 CB 176 (1969); Rev Rul 78-125, 1978-1
CB 292. In Revenue Ruling 78-125, the Internal Revenue Service (IRS) acquiesced
in a Tax Court decision, Estate of Bahr v. Comm’r of Internal Revenue, 68 TC 74,
82 (1977), acq., 1978-2 CB 1 (1978), which held that interest on the unpaid
balance of estate taxes deferred under IRC §6161 is deductible as an administration
expense under IRC §2053(a)(2). Note that in Estate of Bahr, 68 TC at 83, the Tax
Court permitted the estate to claim a deduction for “projected” interest that the
estate expected to pay during the administration of the decedent’s estate. Treas Reg
§20.2053-1, Treas Reg §20.2053-4. The regulations now limit those deductions to
the amounts actually paid, necessitating the filing of periodic claims for refund
during the estate-administration process. Treas Reg §20.2053-1(d), Treas Reg
§20.2053-4(a).
In Lasarzig v. C.I.R., 78 TCM (CCH) 448 (TC 1999), the Tax Court upheld
the IRS’s determination that the estate would not be entitled to deduct, as an
administration expense, interest paid on a loan secured by property received from
the estate, even though the purpose of the loan was to pay federal estate tax. The
Tax Court held that to be deductible as an administration expense, the interest must
be incurred and paid pursuant to a deferral agreement (e.g., an agreement under
IRC §6166). Lasarzig v. C.I.R., 78 TCM (CCH) at 449–452.
For decedents dying after December 31, 1997, interest on the portion of
federal estate tax deferred under IRC §6166 is not deductible for estate tax or
income tax purposes. IRC §163(k), IRC §2053(c)(1)(D). Interest on other taxes
payable (e.g., interest on federal estate taxes deferred under IRC §6161) may be
deducted as such interest is accrued and paid, if such amounts otherwise qualify
under Treasury Regulation §20.2053-1 and Treasury Regulation §20.2053-4.
§ 12.1-4(f) Claims Against the Estate
To be deductible, a claim against the decedent’s estate must be a “personal
obligation of the decedent existing at the time of the decedent’s death.” Treas Reg
§20.2053-4; see also IRC §2053(a)(3). Property of the estate subject to claims is
not limited to the assets of the probate estate. In Estate of Snyder v. U.S., 84
AFTR2d 5963, 5964–5965 (Fed Cl 1999), the Internal Revenue Service (IRS)
attempted to limit a $750,000 deduction for an environmental-liability claim
(which was not determined until approximately 10 years after the decedent’s death)
to the amount of $6,500, which was the value of the estate’s probate assets. The
bulk of the decedent’s estate was in a revocable trust. The court disagreed with the
IRS, saying that “property subject to claims” did not distinguish between probate
assets and nonprobate assets, and that the term was meant to include any property
includable in the decedent’s gross estate that was required to bear the payment of
the claim. Snyder, 84 AFTR2d at 5965. Any obligations of the estate arising after
the decedent’s death are not deductible. However, the claim does not have to be
mature at the time of the decedent’s death to be deductible, as long as it is an
enforceable claim and otherwise meets the requirements of Treasury Regulation
§20.2053-1.
The claim must actually be enforceable against the estate to be deductible.
Treas Reg §20.2053-4. Therefore, if a claim is barred by the statute of limitations
or the statute of frauds, it is not deductible. A claim founded on a promise or
agreement is deductible only to the extent that the promise or agreement was “bona
fide and in exchange for adequate and full consideration in money or money’s
worth.” Treas Reg §20.2053-4(d)(5). Thus, promissory notes given to the
decedent’s children that were unpaid at the time of the decedent’s death were not
allowable in determining the decedent’s net estate, since they were not “claims or
indebtedness contracted for consideration in money or money’s worth.” Lang’s
Estate v. Comm’r of Internal Revenue, 97 F2d 867, 872 (9th Cir 1938).
Postmortem events are irrelevant regarding the date-of-death valuation of a
claim against the estate. In Propstra v. United States, 680 F2d 1248, 1253 (9th Cir
1982), the Court of Appeals for the Ninth Circuit held that specific and enforceable
claims against an estate are to be valued as of the date of the decedent’s death and
without regard to postmortem events. The estate was allowed a deduction for the
full amount of a lien against the decedent’s property on the date of the decedent’s
death, even though the claim was settled later at an amount much lower than the
full amount reported on the decedent’s federal estate tax return. Propstra, 680 F2d
at 1253.
The opinion in Lindberg v. United States, 164 F3d 1312 (10th Cir 1999),
illustrates the principle that a claim, to be deductible, must be a personal obligation
owing at the time of the decedent’s death, and must not be in the nature of a claim
for a share of the decedent’s estate. Lindberg involved claims made two months
before the decedent’s death based on tortious interference with the claimants’
inheritance, a cause of action based on common-law principles that the federal
appellate court assumed would be recognized by the Colorado state courts if asked
to do so. Lindberg, 164 F3d at 1319. The cases were resolved after the decedent’s
death, and resulted in approximately $2,270,000 of estate assets being distributed
to the claimants. Lindberg, 164 F3d at 1315–1316. The district court’s decision
was upheld on appeal in its determination that the subject claims were in the nature
of a claim for an inheritance and, therefore, not deductible for estate tax purposes.
Lindberg, 164 F3d at 1318–1319.
Charitable pledges made by a decedent during life and paid out of the estate
after death are deductible as claims against the estate because the statute provides
that such pledges may be deducted irrespective of the requirement of adequate and
full consideration in money or money’s worth. IRC §2053(c)(1)(A).
§ 12.1-4(g) Taxes
Taxes are generally deductible as claims against the decedent’s estate. Treas
Reg §20.2053-6(a); IRC §2053. To be deductible, taxes must represent obligations
of the decedent at the time of his or her death, rather than liabilities of the
decedent’s estate arising after death. Thus, both income taxes and property taxes
accruing before the decedent’s death are deductible, but those accruing after death
are not. A property tax has accrued before death if it has become a lien or a
personal liability before death. Treas Reg §20.2053-6(b). Oregon real property
taxes become a lien on July 1, the beginning of each tax year. If taxes are
delinquent and have become a lien on estate property, those amounts, including
penalties and accrued interest up to the date of death, are deductible.
The amount of estate taxes actually paid to any state are deductible from the
decedent’s gross estate. IRC §2058; see Treas Reg §20.2053-9. A deduction is also
allowed for any inheritance tax “imposed by and actually paid to any foreign
country, in respect of any property situated within such foreign country and
included in the gross estate of a citizen or resident of the United States, upon a
transfer by the decedent for public, charitable, or religious uses” described in IRC
§2055. IRC §2053(d); see Treas Reg §20.2053-10.
NOTE: For decedents dying before January 1, 2005, a credit was
allowed against the federal estate tax for state death taxes and foreign death
taxes. Former IRC §2011; see §12.1-6(c).
Unpaid gift taxes on gifts made by the decedent before death are deductible,
Treas Reg §20.2053-6(d), even though the decedent’s spouse may have consented
to having one-half of the gifts treated as gifts made by him or her. Unpaid federal
gift taxes on gifts made within three years before death are also deductible. Treas
Reg §20.2053-6(d). This result may appear to be strange and inconsistent with the
required add-back of gift taxes paid or payable on such gifts. However, the
deduction offsets the add-back, placing the estate in the same position that it would
have been in had the tax been paid before death (thus lowering the gross estate)
and added back as required by IRC §2001.
When the decedent’s final income tax return is filed as a joint return with the
spouse, the deductible portion of income taxes must be determined. The deductible
income tax is the amount attributable to the income of the decedent included in that
return for which the decedent would be liable under local law. In the absence of
contrary evidence, the portion deductible would be the ratio to the joint total tax
liability that the income tax for which the decedent would have been liable had the
decedent filed a separate return bears to the total tax liability of both spouses had
each filed separate returns, after giving effect to the amounts previously paid on
account of the tax by the decedent. Treas Reg §20.2053-6(f).
§ 12.1-4(h) Losses
Casualty losses and losses from theft that are sustained during the
administration of the estate may be deducted from the decedent’s gross estate, but
losses due to shrinkage in values are not deductible except to the extent that they
are reflected by using the alternate valuation date. IRC §2054. Casualty losses are
deductible only if the loss is not compensated for by insurance, and losses incurred
after distribution of the estate may not be deducted. Note that an election may be
made to deduct such items on the estate’s income tax return instead of the estate
tax return under IRC §642(g).
§ 12.1-4(i) Transfers for Public, Charitable, and Religious Uses
Under IRC §2055, a deduction is allowed for transfers to charity. The
beneficiary must be one of the following:
(1) The “United States, any State, any political subdivision thereof, or the
District of Columbia, for exclusively public purposes,” IRC §2055(a)(1);
(2) Any “corporation organized and operated exclusively for religious,
charitable, scientific, literary, or educational purposes, including the
encouragement of art, or to foster national or international amateur sports
competition” (other than the provision of athletic equipment or facilities), “and the
prevention of cruelty to children or animals,” IRC §2055(a)(2);
(3) A trustee of a “fraternal society, order, or association operating under
the lodge system,” but only if the transfer is to be used by the transferee
exclusively for “religious, charitable, scientific, literary, or educational purposes,”
IRC §2055(a)(3);
(4) Any veterans’ organization incorporated by act of Congress or of its
departments or local chapters or posts, IRC §2055(a)(4); or
(5) An “employee stock ownership plan if such transfer qualifies as a
qualified gratuitous transfer of qualified employer securities” within the meaning
of IRC §664(g), IRC §2055(a)(5).
A recipient named in items (2) and (3) above must not be disqualified for tax
exemption under IRC §501(c)(3) by reason of attempting to influence legislation.
IRC §2055(a)(2)–(3). The deduction is not limited to transfers to be used in, or to
organizations in, the United States. Also, it is not necessary to specify particular
charities if a valid charitable trust is created. Estate of Boyles v. C. I. R., 4 TC
1092, 1095 (1945).
If a will provides for specific bequests to named beneficiaries with the
residue to charity, and the estate tax is directed to be paid out of the residue, a
problem arises in determining what the charitable deduction should be. This is
because the amount going to charity depends on the amount of the residue used to
pay the tax, and the amount of the tax depends on the amount of the residue going
to charity. A similar problem frequently exists with respect to computation of the
marital deduction.
The deduction is allowable for “bequests, legacies, devises, or transfers” to
public, charitable, and religious uses. IRC §2055(a). This includes gifts by will,
gifts resulting from the exercise of a power of appointment in favor of a charity, or
transfers to charity resulting from irrevocable disclaimers. If the decedent leaves
property to his or her child for life with the remainder to a charity, and the child
timely disclaims the life estate, the decedent’s estate may deduct the value of the
entire interest, as long as the life estate interest does not pass to another in the
event of the child’s disclaimer. Any such disclaimer must be made before the due
date of the return and before acceptance of the interest. Treas Reg §20.2055-2(c).
To be effective, the disclaimer must be filed within nine months after the later of
the date of the decedent’s death or the day on which the disclaimant attains age 21.
IRC §2518(b)(2). A complete termination of a power to appoint for a noncharitable
purpose before the due date of the return and before the power is exercised is
treated as a disclaimer. IRC §2055(a).
See §12.1-4(i)(1) regarding remainder interests and §12.1-4(i)(2) regarding
charitable lead trusts.
§ 12.1-4(i)(1) Remainder Interests
A remainder interest to a charitable beneficiary (other than a remainder
interest in a personal residence or farm) does not qualify for the charitable
deduction unless the charitable interest qualifies as a “charitable remainder annuity
trust” or a “charitable remainder unitrust” (as those terms are defined in IRC §664)
or as a remainder interest in a “pooled income fund” (as defined in IRC
§642(c)(5)). IRC §2055(e)(2)(A). Thus, a clause in a will providing for a life
interest to an individual for life, with the remainder to charity, will not allow a
charitable deduction to be taken for the remainder interest.
A charitable remainder annuity trust is defined as a trust from which a sum
certain (not less than 5% of the initial fair-market value of the property) is to be
paid annually or more frequently to one or more persons (in the case of individuals,
only those who are living at the creation of the trust) for a term of 20 or fewer
years or for life. The remaining interest at the expiration of such period must be
held for, or be distributed to, a qualified charity. Treas Reg §1.664-2.
A charitable remainder unitrust is defined as a trust having provisions like
the charitable remainder annuity trust except that, instead of annual or more
frequent payment of a sum certain, the trust, with one exception, must provide for
an annual or more frequent distribution of a fixed percentage (not less than 5%) of
the net fair-market value of the trust assets, valued annually. Treas Reg §1.664-3.
The exception permits a provision limiting payment to actual trust income if this
amount is less than the fixed percentage amount and permitting payment of trust
income in excess of the fixed percentage amount to the extent that the aggregate of
amounts paid in prior years was less than the aggregate of fixed percentage
amounts for such prior years. IRC §664(d)(3).
A pooled income fund is a trust maintained by a charitable organization to
which a transfer is made with an income interest retained or created for the life of
one or more living beneficiaries and the remainder interest passing to the charity
maintaining the fund. Such a trust must contemplate the commingling of the
contributed assets with those contributed by others making similar transfers and for
distribution to the lifetime beneficiaries of income in accordance with the rate of
return earned by the trust during each year. To qualify, it must be a trust that
cannot have investments in tax-exempt securities. IRC §642(c)(5).
These so-called charitable split-interest trusts must meet certain very
technical rules if they are to qualify for the federal estate tax charitable deduction
under IRC §2055. In the Tax Reform Act of 1984, Pub L No 98-369, 98 Stat 494,
Congress established a permanent procedure for reforming a defective charitable
split-interest trust. Under the revised procedures, judicial reformation proceedings
must be commenced within 90 days after the due date of the federal estate tax
return or, if no federal estate tax return is required, within 90 days after the due
date of the trust’s first income tax return. IRC §2055(e)(3)(C)(iii). The trust,
however, may not be reformed to qualify for a deduction unless it provides for an
annuity or unitrust payment. IRC §2055(e)(2).
PRACTICE TIP: In light of the relatively narrow window of opportunity
to reform a defective charitable split-interest trust, the lawyer should
carefully review the terms of any such trust well before the due date of the
federal estate tax return.
§ 12.1-4(i)(2) Charitable Lead Trusts
If the charitable interest is other than a remainder interest, it will not qualify
for the charitable deduction unless the charitable interest is either in the form of a
guaranteed annuity to the charity or in the form of an annually distributed fixed
percentage of the fair-market value of the property (determined yearly). IRC
§2055(e)(2)(B). This second category of split-interest trusts is referred to as
“charitable lead trusts” or “lead trusts.”
In a charitable lead trust, the property is devised to a trust, the terms of
which require that a charity be paid either a guaranteed annuity or a unitrust
amount over a fixed period of years. At the expiration of the charitable period, the
trust terminates and the remaining property is distributed to the noncharitable
devisees as set forth in the will. To qualify the interest for the charitable deduction,
the annual payments to charity must be expressed either as a fixed dollar amount (a
guaranteed annuity) or as a fixed percentage of trust assets. See IRC §170, IRC
§2522, and IRC §2055 for the statutory requirements applicable to the income tax,
estate tax, and gift tax charitable deductions. See also www.irs.gov/irb/2003-
27_IRB/ar13.html. The advantage of the annuity method of payment is that annual
valuations of the trust property are not required as with the unitrust method,
although the unitrust method permits the charity to share in any appreciation that
occurs in the trust property.
Generally, the guaranteed annuity is to be preferred if it is anticipated that
the trust assets will significantly appreciate in value. The value of the charitable
gift is to be computed by application of the factors set forth in Table B of Treasury
Regulation §20.2031-7. This table establishes a variable rate of interest that
fluctuates with changes in market interest rates. Noncharitable beneficiaries of a
charitable lead trust will ultimately receive a greater share of the trust property (as
compared to the value deemed to have passed to charity) to the extent that the
actual growth rate exceeds the rate established under the table. Additionally, the
trust is entitled to an income tax deduction for the amounts distributed annually to
charity and will be taxed only to the extent that its annual income exceeds the
amounts required to be distributed to charity. The trust property will be included in
the decedent’s gross estate only to the extent that the date-of-death value of trust
property exceeds the date-of-death value of the interest passing to charity (i.e., it is
not the actual value of the property that will eventually pass to the noncharitable
beneficiary that is included).
PRACTICE TIP: All wills and trusts for living persons containing partial
charitable interest provisions should be drafted to meet the technical
requirements of IRC §2055(e)(2).
§ 12.1-4(j) Deduction for Qualified Family-Owned Business Interests
In the Taxpayer Relief Act of 1997, Pub L No 105-34, 111 Stat 788,
Congress added IRC §2033A to permit an exclusion from the gross estate for the
value of certain family-owned business interests for estates of decedents dying
after 1997. Congress redesignated IRC §2033A as IRC §2057 (Internal Revenue
Service Restructuring and Reform Act of 1998, Pub L No 105-206, §6007(b), 112
Stat 685) and then repealed IRC §2057 for estates of decedents dying after
December 31, 2003 (Economic Growth and Tax Relief Reconciliation Act of 2001,
Pub L No 107-16, §521(d), 115 Stat 38). The complexity of rules to obtain and
qualify for this deduction, combined with the scheduled increase in the applicable
exclusion amount for decedents dying after December 31, 2003, led to the demise
of this little-used deduction.
§ 12.1-5 The Marital Deduction
In a community-property state, when a married person dies, only one-half of
the community property is included in his or her estate even though the other
spouse did not contribute to the accumulation of the property. In a common-law
state, under the same circumstances, all the property is taxed in the estate. When
the marital deduction (IRC §2056) was first introduced, the stated purpose was to
eliminate the unequal treatment between common-law states and community-
property states by permitting the estate of a deceased taxpayer a deduction for
property passing to a surviving spouse. To achieve this end, the marital deduction
was limited to one-half of the adjusted gross estate and was not available with
respect to community property passing to the surviving spouse.
The ceiling on the marital deduction was removed for decedents dying after
1981. An entire estate may currently qualify for the marital deduction. Since an
unlimited marital deduction is available for decedents dying after 1981, there is no
longer any estate tax advantage to holding community property. As a result,
Congress eliminated the provisions that denied a marital deduction for community
property passing to a surviving spouse. The stated purpose for this liberalization of
the marital deduction was to neutralize the impact of the federal estate tax with
respect to transfers of property between spouses.
Property that meets the requirement that it pass to the surviving spouse will
nevertheless not qualify for the marital deduction if:
(1) It is not included in the gross estate, IRC §2056(a);
(2) It is in satisfaction of an obligation for which a deduction is allowed
under IRC §2053, dealing with expenses, indebtedness, and taxes; or
(3) It is a terminable interest not falling within one of the exceptions to
the terminable-interest rule, IRC §2056(b); see §§12.1-5(c) to 12.1-5(c)(5).
The deduction applies irrespective of which spouse dies first, and nothing in
the statute prevents the marital deduction from operating successively with respect
to the same property if the surviving spouse remarries and leaves the same property
to a new spouse at death.
The marital deduction is limited to the value of the property that the
surviving spouse actually receives. If any estate or inheritance taxes must be paid
from the property received by the surviving spouse, these taxes must be subtracted
from the property left to the surviving spouse to determine the amount qualifying
for the deduction. IRC §2056(b)(4). Similarly, administration expenses or debts
payable from the spouse’s share will result in a reduction of the allowable marital
deduction.
PRACTICE TIP: In drafting a will designed to utilize a marital
deduction in a specific amount, the lawyer should consider providing that
the taxes are to be paid from other portions of the estate. The will should
clearly provide that no death taxes are to be charged against the marital
share. Otherwise, the estate will not get the exact marital deduction desired.
PRACTICE TIP: From a tax standpoint, it may not be desirable to use
the full marital deduction. For example, with an estate of $1,200,000 in a
year in which the applicable exclusion amount is $1 million, only $200,000
of marital deduction would be needed to reduce the federal estate tax to zero.
If the will used the marital deduction for the full $1,200,000, there would be
an overqualification of $1 million, potentially resulting in an unnecessary tax
on the surviving spouse’s estate to the extent that the spouse’s estate
exceeded the applicable exclusion amount in effect at the time of his or her
death.
Full use of the unlimited marital deduction may result in a waste of the
unused portion of the applicable credit amount. A full tax deferral in the first estate
may be obtained by a bequest (either outright or in trust) of an amount equal to the
applicable exclusion amount in effect for the year of death, followed by a bequest
of the remainder to the surviving spouse. When calculating the applicable
exclusion amount, it is important for the lawyer to take into account any amounts
of the applicable credit amount previously used with respect to gifts made by the
decedent. Through the use of an applicable exclusion amount bequest, it is assured
that the full amount of the applicable credit amount then available will be used, and
the unlimited marital deduction will offset the balance of the decedent’s estate that
passes under the residuary clause.
In enacting the unlimited marital deduction provisions in 1981, Congress
was concerned with the effect that the amendment would have on existing wills.
The concern was that some persons may not have intended or desired any greater
amount to pass to the surviving spouse than the original limitation of the marital
deduction—the greater of $250,000 or one-half of the adjusted gross estate. HR
Rep No 97-215, 97th Cong, 1st Sess 195, reprinted in 1981 USCCAN 105, 285.
Thus, Congress included in the amendment a transitional rule limiting the
application of the unlimited marital deduction when the computation of the marital
deduction in the will is pursuant to a formula clause. The transitional rule provides
that the unlimited marital deduction will not be available if (1) the decedent dies
after 1981, (2) the formula clause in the will was not amended at any time after
September 13, 1981, to refer specifically to the unlimited marital deduction, and
(3) there is no state law that would construe the formula clause in the will as
referring to the unlimited marital deduction. Pub L No 97-34, as amended by Pub
L No 97-448, Title I, §104(a)(10), 96 Stat 2381. To date, no such legislation has
been enacted in Oregon, and it is highly questionable whether such a statute should
be enacted considering the destruction it would do to the intentions of testators
who desired the more limited marital bequest.
PRACTICE TIP: All “maximum” marital deduction bequests in wills
executed before September 14, 1981, will result in the limitation of the
marital deduction to the ceilings under prior law. To avoid this result, and if
the unlimited marital deduction is desired, the will must be executed again,
or a codicil signed, specifically referring to the maximum marital bequest
provision.
A relatively modern Tax Court case provides a stark reminder that the
Economic Recovery Tax Act of 1981 (ERTA 1981), Pub L No 97-34, 95 Stat 172,
transitional rule concerning the unlimited marital deduction still applies. In Amiel
v. C.I.R., 74 TCM (CCH) 239 (TC 1997), the Tax Court was presented with the
decedent’s 1980 will, which included language claiming the “maximum marital
deduction allowable” under federal law. After 1982 but before his death, the
decedent executed several codicils to his will, but none of those codicils referred to
or modified the marital deduction language. The Internal Revenue Service limited
the marital deduction to the 50% of adjusted gross estate under pre-ERTA 1981
law, and the Tax Court agreed, holding that the ERTA 1981 unlimited marital
deduction is available only if a pre-ERTA 1981 will or trust is reformed to request
the maximum marital deduction.
§ 12.1-5(b) Requirements to Qualify for the Marital Deduction
The seven requirements to qualify for the marital deduction follow:
(1) The decedent must have died after December 31, 1947;
(2) The decedent must have been a citizen or a resident of the United
States at the time of his or her death, Treas Reg §20.2056(a)-1;
(3) The decedent must have been married at the time of death and must
have been survived by a spouse, IRC §2056(a); see §12.1-5(b)(1);
(4) An interest in property must have passed from the decedent to the
surviving spouse, IRC §2056(a); see §12.1-5(b)(2);
(5) This interest must be included in the decedent’s gross estate, IRC
§2056(a); see §12.1-5(b)(3);
(6) The interest must not be a “terminable” interest unless it satisfies one
of the exceptions to the terminable-interest provision (see §§12.1-5(c) to 12.1-
5(c)(5)), IRC §2056(b); see §§12.1-5(b)(4) to 12.1-5(c)(5); and
(7) The surviving spouse must be a United States citizen unless the
property passes to a trust that meets the requirements of a qualified domestic trust,
IRC §2056(d); see §12.1-5(c)(4).
The IRS issued Revenue Ruling 2013-17 after the Supreme Court’s decision
in United States v. Windsor, 570 US 744, 133 S Ct 2675, 2013-2 US Tax Cas
(CCH) ¶ 50400, 186 L Ed 2d 808 (2013). Rev Rul 2013-17, 2013-38 IRB 201. In
Windsor, the Supreme Court struck down section 3 of the Defense of Marriage
Act, which restricted the terms marriage and spouse to apply only to opposite-sex
unions. Revenue Ruling 2013-17 confirmed that, for federal tax purposes, the
terms spouse, husband and wife, husband, and wife include individuals married to
a person of the same sex, but do not include unmarried individuals who are in a
registered domestic partnership or civil union. See 26 CFR § 301.7701–18.
§ 12.1-5(b)(1) Married at Time of Death with Surviving Spouse
A person is considered married at the time of his or her death if he or she is
survived by a living spouse from whom he or she has not been divorced. When the
husband and wife die simultaneously, or under conditions that it cannot be
established which of them survived, and if the will is silent on the subject, local
law controls. Treas Reg §20.2056(b)-3(c).
Under Oregon’s Uniform Simultaneous Death Act, ORS 112.570–112.590,
“if a governing instrument contains a provision the operation of which is
conditioned on whether a specified person survives the death of another person,”
the specified person is deemed to have died before the other person “unless it is
established by clear and convincing evidence that the specified person survived the
other person . . . by at least 120 hours.” ORS 112.578. However, this presumption
does not control if otherwise provided by will. ORS 112.578, 112.586.
PRACTICE TIP: When a marital deduction is desirable in any event (this
will usually be true when one spouse owns the bulk of the family wealth),
the will should contain a simultaneous-death clause, reversing the statutory
presumption regarding a portion of the estate. If there is no marital
deduction, that is, if the other spouse is not presumed to have survived the
spouse with the larger estate, substantial federal estate tax may be incurred.
PRACTICE TIP: To save the marital deduction in the event of
simultaneous death, the will of the spouse having the larger estate should
provide, “In the event that my [wife / husband] and I die under such
circumstances such that no sufficient evidence establishes who survived the
other, I hereby declare that my [wife / husband] will be deemed to have
survived me and this will and all its provisions will be construed upon that
assumption and basis.”
Any beneficiary who survives the decedent by less than 120 hours is deemed
to have predeceased the decedent, in the absence of a will provision to the
contrary. ORS 112.572. Because of this, the marital deduction would be lost if the
surviving spouse does not survive the decedent by at least 120 hours, in the
absence of a provision reversing this statutory presumption.
PRACTICE TIP: To save the marital deduction in the event of the death
of the spouse within 120 hours, the will should provide, “In addition, my
spouse will be deemed to have survived me if [he / she] dies within 120
hours of my death, notwithstanding the provisions of ORS 112.572 or any
similar statutory presumption.”
See 26 CFR § 301.7701–18(c) (“The terms spouse, husband, and wife do not
include individuals who have entered into a registered domestic partnership, civil
union, or other similar formal relationship not denominated as a marriage under the
law of the state, possession, or territory of the United States where such
relationship was entered into, regardless of domicile.”). See also Supp § 12.1-5(b)
(requirements to qualify for the marital deduction).
For further discussion of Oregon’s Uniform Simultaneous Death Act, see
§ 4.1-3(b).
§ 12.1-5(b)(2) Property Must Pass from Decedent to Surviving
Spouse
The requirement in IRC §2056(a) that property pass from the decedent to the
surviving spouse comprehends passing a beneficial interest in property to the
surviving spouse, not only under a will or by a prior transfer, but also by election
against the will or in settlement of a will contest. Treas Reg §20.2056(c)-2(c)–(d).
Qualified terminable interest property (QTIP) included in a donee-spouse’s gross
estate is also treated as property passing from that spouse. IRC §2044(c). This
characterization is important to assure that marital and charitable deductions are
available to the donee-spouse with respect to such property.
§ 12.1-5(b)(3) Property Must Be Included in Decedent’s Gross
Estate
Interests in property that pass from a decedent to a surviving spouse qualify
for the marital deduction only to the extent that they are included in the decedent’s
gross estate. IRC §2056(a). Any item of property that passes to the surviving
spouse, but that is not taxed in the decedent’s estate, cannot be deducted from that
estate. Thus, property passing to the surviving spouse through the exercise of a
nontaxable power of appointment or property representing the surviving spouse’s
vested interest in community property would not only be excluded from the
decedent’s estate, but also could not, for that reason, be deducted from the estate as
part of the marital deduction.
§ 12.1-5(b)(4) Nondeductible Terminable Interests
Even though an interest in property passes from the decedent to the
surviving spouse and is included in the decedent’s gross estate, it will still not
qualify for the marital deduction if it takes the form of a nondeductible terminable
interest. IRC §2056(b). A terminable interest in property is an interest that may
terminate or fail due to the lapse of time, the occurrence of a contingency, or the
failure of a contingency to occur. IRC §2056(b)(1). Life estates, terms for years,
annuities, patents, and copyrights are terminable interests, but not all terminable
interests are nondeductible interests. Treas Reg §20.2056(b)-1(b).
A terminable interest is nondeductible only if:
(1) An interest in the property passes without full consideration to a
person other than the surviving spouse and, by reason of its passing, the other
person may possess or enjoy part of the property after the termination or failure of
the spouse’s interests (unless the surviving spouse’s interest is in property that
meets the definition of qualified terminable interest property added to IRC §2056
by the Economic Recovery Tax Act 1981, Pub L No 97-34, 95 Stat 172), IRC
§2056(b)(1)(A)–(B); Treas Reg §20.2056(b)-1(c)(1); or
(2) The decedent directs his or her executor or trustee to acquire a
terminable interest, or the interest can be satisfied out of a group of assets that
includes nondeductible interests. IRC §2056(b)(1)(C); Treas Reg §20.2056(b)-
1(c)(2).
PRACTICE TIP: It often makes sense to provide in the will that no
properties will be allocated for purposes of the marital deduction that would
not qualify for the marital deduction under federal estate tax law.
In Estate of Walsh v. C.I.R., 110 TC 393 (1998), the marital deduction was
lost as to a trust intended to qualify under IRC §2056(b)(5) as a life interest with
power of appointment when the trust included boilerplate language cutting off the
interest of a beneficiary if the beneficiary should be determined to be incompetent.
PRACTICE TIP: The lawyer should review form language to assure that
well-intended provisions do not create tax problems or risks, especially
regarding the marital and charitable deductions. The drafter in the Walsh
case probably intended to protect and preserve the property available to the
spouse, but the language used destroyed the marital deduction for federal
estate tax purposes.
§ 12.1-5(c) Exceptions to Terminable-Interest Rule
There are four exceptions (applicable to U.S. citizens) to the rule that a
terminable interest will not qualify for the marital deduction. Terminable interests
that may be deducted are as follows:
(1) A bequest to the spouse conditioned on survivorship for a period that
will end within six months after the decedent’s death or conditioned on the
spouse’s not dying as a result of a common disaster and such termination date does
not in fact occur, IRC §2056(b)(3); see §12.1-5(c)(1);
(2) A bequest of a life interest, coupled with a general power of
appointment, IRC §2056(b)(5); see §12.1-5(c)(2);
(3) Life insurance proceeds paid under settlement options, if the spouse is
given the equivalent of a general power of appointment, IRC §2056(b)(6); see
§12.1-5(c)(5); and
(4) A life estate in qualified terminable interest property (QTIP), IRC
§2056(b)(7); see §12.1-5(c)(3).
See §12.1-5(c)(4) for the exception applicable to noncitizen spouses.
§ 12.1-5(c)(1) Bequest to Spouse Conditioned on Survivorship
Period Less than Six Months
A bequest to the surviving spouse is not a nondeductible terminable interest
merely because it is conditioned on survivorship, if the period of survivorship does
not exceed six months or if it will fail because the spouse dies as a result of a
common disaster. Of course, if the condition does occur, then the marital deduction
will be denied. IRC §2056(b)(3).
The six-month survival requirement may well be desirable to save probate
costs and taxes (if both spouses have substantial estates). If the required time
period of survivorship could exceed six months, the marital deduction would be
disallowed. Thus, a bequest conditioned on the spouse’s surviving admission of the
will to probate, surviving the filing of the final account, or surviving to receive
distribution of the bequest, would result in disqualification even though the spouse
did survive. Treas Reg §20.2056(b)-3(d), example (4); United States v. Mappes,
318 F2d 508, 512–513 (10th Cir 1963).
Even though the interest may not qualify for the marital deduction, the assets
still pass to the surviving spouse in a manner that will be subject to estate taxes at
the spouse’s subsequent death (unless disposed of before the survivor’s death).
§ 12.1-5(c)(2) Life Interest with Power of Appointment
An interest in a trust will ordinarily be a terminable interest. Nevertheless, it
will often be desirable not to leave property outright to a surviving spouse.
Property left in trust for a surviving spouse will qualify for the marital deduction if
certain conditions are met. This is the second exception to the terminable interest
rule—the life estate/power of appointment exception. IRC §2056(b)(5). Under
Treasury Regulation §20.2056(b)-5(a), the interest passing to the surviving spouse
is a deductible terminable interest if all five of the following conditions are met:
(1) “The surviving spouse must be entitled for life to all of the income
from the entire interest or a specific portion of the entire interest, or to a specific
portion of all the income from the entire interest,” Treas Reg §20.2056(b)-5(a)(1);
(2) “The income payable to the surviving spouse must be payable
annually or at more frequent intervals,” Treas Reg §20.2056(b)-5(a)(2);
(3) “The surviving spouse must have the power to appoint the entire
interest or the specific portion to either herself [or himself] or her [or his] estate,”
Treas Reg §20.2056(b)-5(a)(3);
(4) “The power in the surviving spouse must be exercisable by [the
surviving spouse] alone (whether exercisable by will or during life) and must be
exercisable in all events,” Treas Reg §20.2056(b)-5(a)(4); and
(5) “The entire interest or the specific portion must not be subject to a
power in any other person to appoint any part to any person other than the
surviving spouse,” Treas Reg §20.2056(b)-5(a)(5).
The interest or the specific portion is deductible whether the surviving
spouse has a legal life estate or the interest is in trust, if the above conditions are
met.
Before 1992, case law had interpreted the term specific portion used in IRC
§2056 to permit a marital deduction to be claimed based or defined in terms of a
specific dollar amount of annual income, with the election thereafter treated as
being made with respect to a sufficient amount of assets in the fund to produce that
income. Congress addressed this issue in the Energy Policy Act of 1992 (Pub L No
102-486, §1941(a), 106 Stat 3036) by adding IRC §2056(b)(10). That section
defines specific portion to include only “a portion determined on a fractional or
percentage basis.” Under the amended statute, a qualified terminable interest
property (QTIP) election regarding less than a surviving spouse’s entire interest in
property or a fund (e.g., a partial QTIP election) will not qualify for the marital
deduction unless the election applies to a fractional or percentile share of the
property interest.
If a trustee has the power to invade all income or principal for the benefit of
persons other than the surviving spouse, the spouse does not have a sufficient
interest to qualify the property for the marital deduction. Estate of Weisberger v.
C.I.R., 29 TC 217, 220–221 (1957), acq., 1958-2 CB 8 (1958).
However, if the right of invasion is limited to a portion of the property, the
estate is entitled to a marital deduction for the remaining portion held for the
spouse’s benefit. If the property provides little or no expected income, and if the
trustee has no duty to make the property income-producing, and the spouse cannot
require disposal of unproductive property and investment of the proceeds in
income-producing property, the property will not qualify for the marital deduction.
Treas Reg §20.2056(b)-5(f)(5).
Even the usual power to allocate receipts between income and principal may
make the trust a nondeductible interest if this power may be used to prevent the
production of income for the benefit of the surviving spouse. However, Revenue
Ruling 66-39, 1966-1 CB 223, holds that the power to allocate between principal
and income will not affect qualification as long as local law requires the trustee to
treat all beneficiaries fairly.
Provisions of the usual spendthrift clause restricting the power of alienation
of the income do not disqualify the trust for the marital deduction. Also, the
provision that the surviving spouse cannot have income during the administration
of the estate does not make the property a nondeductible terminable interest, unless
the executor may delay distribution beyond the period reasonably necessary for
administration of the estate. Treas Reg §20.2056(b)-5(f)(9). However, the value of
the marital deduction may have to be discounted accordingly. Treas Reg
§20.2056(b)-4(a).
Only if the power of appointment in the surviving spouse is exercisable in
favor of the surviving spouse or the surviving spouse’s estate, alone and in all
events, is the interest deductible. If the power may be defeated by the happening of
any contingency, such as remarriage, it is not exercisable in all events and would
not qualify the property for marital deduction. Treas Reg §20.2056(b)-5(g)(3).
For valuation purposes, a life estate coupled with a general power of
appointment is treated as equivalent to actual ownership of the property. This fact
can result in valuation results that are at odds with the outcome were the interest to
be structured as a QTIP interest. Estate of Mellinger v. C.I.R., 112 TC 26, acq.,
1999-35 IRB 314 (1999), and Estate of Fontana v. Commissioner, 118 TC 318
(2002), illustrate these differences. In both cases, the estate owned a minority
interest in a closely held business, with an additional interest owned by a QTIP
trust in the Mellinger case, and a general power of appointment trust in the
Fontana case.
In Mellinger, 112 TC at 35–36, the Tax Court held that the stock owned by
the QTIP trust would not be aggregated with the stock owned directly by the estate
and, therefore, the estate was entitled to claim appropriate minority-interest
discounts on both blocks. However, in Estate of Fontana, 118 TC at 322, the Tax
Court held that stock held in trust subject to a power of appointment was
sufficiently equivalent to the outright ownership of the property to treat those
assets as actually owned by the decedent. Thus, the estate’s actual ownership of
stock was aggregated with the stock held in trust over which the decedent had a
power of appointment, resulting in both blocks of stock being deemed to possess a
control element and, thus, not eligible for minority-interest discounts. Estate of
Fontana, 118 TC at 322–323.
PRACTICE TIP: If aggregation of stock ownership is to be avoided, it is
preferable to structure the marital deduction trust arising on the first death as
a QTIP trust rather than a general power-of-appointment trust. See §12.1-
5(c)(3) regarding QTIP trusts.
§ 12.1-5(c)(3) QTIP Trusts
Another exception to the terminable interest rule was added to IRC §2056 by
the Economic Recovery Tax Act of 1981 (ERTA 1981), Pub L No 97-34, 95 Stat
172, in the form of “qualified terminable interest property,” commonly referred to
by lawyers as “QTIP trusts.” IRC §2056(b)(7).
For estates of decedents dying after 1981, Congress believed that individuals
should have more flexibility in planning the devolution of their property. A
common example of a problem under the old law is as follows: At the time of
death, the decedent was married to a second or third spouse and, not uncommonly,
that spouse had children of a prior marriage who were not related to the decedent.
If the decedent desired the property to eventually pass to his or her own children
(by a prior marriage), the decedent was faced with a dilemma. If the property were
left to the surviving spouse for life, then to the children of the first marriage, the
bequest would not qualify for the marital deduction. To qualify for the marital
deduction, the property would have to be left to the surviving spouse for life, and
the surviving spouse would have to be given a general power of appointment over
the property. Thus, there was no guarantee that that property would eventually find
its way to the children of the first marriage. Congress provided a way out of the
dilemma for estates of decedents dying after 1981 by adding “qualified terminable
interest property” to the list of exceptions to the terminable interest rule.
The term qualified terminable interest property is defined as property that
“passes from the decedent, . . . in which the surviving spouse has a qualifying
income interest for life, and . . . to which an election under [IRC §2056(b)(7)(B)]
applies.” IRC §2056(b)(7)(B)(i). A qualifying income interest for life exists if (1)
“the surviving spouse is entitled to all the income from the property,” (2) the
income is payable at least annually, and (3) “no person has a power to appoint any
part of the property to any person other than the surviving spouse” during his or
her lifetime. IRC §2056(b)(7)(B)(ii). Finally, the election under IRC §2056(b)(7)
must be filed. IRC §2056(b)(7)(B)(v).
PRACTICE TIP: To assure that the right to income has substance, a
provision giving the spouse the right to compel the trustee to convert non-
income-producing property to income-producing property should be
included.
The parties entitled to make the election in various borderline circumstances
are defined in Treas Reg §20.2056(b)-7(b)(3). The regulations generally provide
that if a personal representative has been appointed, then that person makes the
QTIP election for all the property in the estate, not just the property in his or her
possession (e.g., the probate estate). If no personal representative has been
appointed, then the election may be made by any person who is in actual or
constructive possession of property qualifying for the election. That person may
also make the election for property that is not in his or her actual possession if the
person who is in possession of the property does not make the election.
EXAMPLE: On the date of the decedent’s death, several revocable
trusts were in effect and included in the decedent’s gross estate. A personal
representative was not appointed to administer the decedent’s estate. One of
the trustees could then make the election on behalf of all trusts, even though
the particular electing trustee was not in actual or constructive possession of
the other trust property.
PRACTICE TIP: If any conflict exists among the various instruments
concerning the QTIP election, or whether an election made with respect to
certain property will affect other property, a personal representative should
be appointed to make the election on behalf of all property includable in the
decedent’s gross estate.
A significant requirement for QTIP treatment is that the surviving spouse is
entitled to all the income from the property for life. IRC §2056(b)(7)(B). The final
QTIP regulations reject the concept of a “specified dollar amount of income” when
defining property subject to the QTIP election. Treas Reg §20.2056(b)-7(b)(1)(ii).
When a single trust is desired, the regulations provide flexibility by permitting a
partial QTIP election to be made to qualify a portion of the trust for the marital
deduction. Treas Reg §20.2056(b)-7(2).
The final QTIP regulations also clarify the procedure for dividing a single
trust into separate trusts on a partial QTIP election. Treas Reg §20.2056(b)-7(b)(2).
Because of the application of the “specific portion” rule, a partial election
regarding a single trust will result in the election applying to a fractional or
percentage share of the assets. This result may be undesirable when administering
a trust with different beneficiary and investment needs. The final regulations
permit the governing instrument to provide that a single trust may be separated into
two separate trusts on a partial QTIP election. Treas Reg §20.2056(b)-7(b)(2)(ii).
Under this approach, the assets of one trust would be fully covered by the QTIP
election, and the assets of the other would not be covered at all by the election.
PRACTICE TIP: The governing instrument should grant to the personal
representative or trustee, as appropriate, a general administrative power to
separate the assets otherwise subject to a QTIP election into separate trusts
in the event of a partial QTIP election.
A “qualified terminable interest” is considered to pass to the surviving
spouse and qualifies for the marital deduction if the personal representative elects
to claim the marital deduction in the decedent spouse’s estate. In that event, it is
included in the surviving spouse’s estate at his or her death. IRC §2044. In
addition, the Technical Corrections Act of 1982, Pub L No 97-448, 96 Stat 2365,
makes clear that the QTIP property required to be included in the surviving
spouse’s gross estate obtains a step-up in basis under IRC §1014 when the
surviving spouse dies. IRC §1014(b)(10).
The final QTIP regulations permit protective QTIP elections for estate tax
purposes, but only under limited circumstances. A protective QTIP election may be
made only if, at the time the estate tax return is filed, a bona fide issue is presented
that either concerns whether an asset is includable in the decedent’s gross estate or
questions the amount or nature of the property that the surviving spouse is entitled
to receive. Treas Reg §20.2056(b)-7(c)(1). A protective QTIP election, once made,
is irrevocable. Treas Reg §20.2056(b)-7(c)(2).
The final regulations published in 1994 continued the position adopted in the
proposed regulations that a valid QTIP election could not be made with respect to
property when the surviving spouse’s income interest is contingent on the personal
representative’s electing QTIP treatment. Former Treas Reg §20.2056(b)-7(3)
(prior to amendment by TD 8779, 1998-2 CB 280 (1998)). The Tax Court agreed
with the position of the Internal Revenue Service (IRS), but several federal circuit
courts of appeal reversed the Tax Court on this issue. Estate of Clayton v. C.I.R.,
976 F2d 1486 (5th Cir 1992), rev’g 97 TC 327 (1991); Estate of Robertson v.
C.I.R., 15 F3d 779, 781 (8th Cir 1994), rev’g 98 TC 678 (1992); Estate of Spencer
v. C.I.R., 43 F3d 226 (6th Cir 1995), rev’g 64 TCM (CCH) 937 (1992). In final
regulations published in 1998 (the so-called Clayton QTIP Regulations), the IRS
relented and now allows a marital deduction for a qualifying terminable property
trust even though the assets will pass to the trust only if the fiduciary elects QTIP
treatment for the trust, and notwithstanding the fact that the property will pass to a
beneficiary other than the surviving spouse if the election is not filed. See Treas
Reg §20.2056(b)-7(d).
Concurrently with the addition of this provision to the estate tax sections of
the Internal Revenue Code, IRC §2519 was added to the gift tax sections to
provide that any disposition of all or part of a qualifying income interest in QTIP
property is treated as a transfer of that property. Thus, if a decedent leaves his or
her surviving spouse a life estate in a qualified terminable interest trust, and the
surviving spouse later assigns, without consideration, that interest during the
surviving spouse’s lifetime, the surviving spouse is deemed to have made a gift of
a life estate interest under IRC §2512 and of a remainder interest under IRC §2519,
based on the value of the trust property at the date of assignment.
Many states have adopted new statutes, or liberalized existing statutes,
permitting otherwise irrevocable and nonamendable trusts to be modified.
Oregon’s provisions are set forth in ORS 130.240. Although it seems that these
statutes might be employed to modify trust language that contains provisions
inconsistent with the marital deduction, the IRS and the federal courts take a fairly
restrictive approach in these cases, as illustrated by the Ninth Circuit’s decision in
Rapp v. C.I.R., 140 F3d 1211 (9th Cir 1998).
In the Rapp case, a state proceeding was commenced in the local probate
court to reform the decedent’s trust agreement to require that all the income of the
trust estate be distributed to the decedent’s surviving spouse during her lifetime, a
requirement to elect QTIP marital deduction treatment. A guardian ad litem was
appointed to protect the interests of the decedent’s minor children, but few
witnesses were called, and the IRS was not notified of the proceeding. Rapp, 140
F3d at 1213. The probate court ordered that the trust be modified retroactively to
the date of the decedent’s death, to require annual distribution of income to the
widow. The IRS disallowed the marital deduction, and the estate placed the issue
before the Tax Court. Rapp, 140 F3d at 1214.
The Tax Court and the Court of Appeals for the Ninth Circuit upheld the
IRS’s determination, concluding that the decision of the local probate court would
be given due consideration but would not be binding for tax purposes (only a
decision of the highest court of a state is binding for federal tax purposes). Rapp,
140 F3d at 1215–1216. The courts in the Rapp case held that the decedent’s “will
was not ambiguous and there was little or no evidence that [the decedent] intended
to create a QTIP trust.” Rapp, 140 F3d at 1214. The IRS is understandably
suspicious of proceedings in local courts that involve parties who may be
“friendly” rather than adverse, and when the only real issues involved are tax
issues.
The Oregon legislature has adopted provisions designed to salvage the
marital deduction when it may be possible to do so. The 2003 Legislature enacted
ORS 128.398, which was renumbered ORS 130.240 in 2005. The statute, which
applies to trusts containing “marital deduction gifts,” provides that (1) the
provisions of the trust, including any discretionary powers granted to the trustee,
“must be construed as necessary to comply with the marital deduction provisions
of the Internal Revenue Code,” (2) the trustee may take no action or possess any
power that impairs the marital deduction, and (3) the “marital deduction gift may
be satisfied only with property that qualifies for the tax deduction.” ORS
130.240(2).
In 1988, Congress added IRC §2056(b)(7)(C) to provide that an annuity
payable only to a surviving spouse during the spouse’s lifetime must be treated as
qualifying for QTIP treatment. The personal representative of the decedent
spouse’s estate must elect out of such treatment if another result is desired. IRC
§2056(b)(7)(C)(ii).
Revenue Ruling 2006-26, 2006-1 CB 939, confirms the ability to claim a
marital deduction for an individual retirement account (IRA) owned by the
decedent, and having a beneficiary designation of a testamentary QTIP trust
following the decedent’s death. The QTIP trust gave the decedent’s surviving
spouse the right to all the trust income, and the power to order the trustee to
withdraw and distribute all earnings on the IRA, at least annually. The IRS ruled
that the decedent’s estate may claim a QTIP marital deduction when (1) the
surviving spouse may compel withdrawal and distribution of the income of the
IRA and (2) no person has a power to appoint any part of the trust property to
anyone other than the surviving spouse.
ERTA 1981 added IRC §2207A to allow the surviving spouse’s executor to
recover from the recipients of the QTIP property the amount of federal estate tax
incurred as a result of the property’s being included in the surviving spouse’s
estate. IRC §2207A(a)(1). The decedent is given discretion to direct otherwise by
will. IRC §2207A(a)(2). A similar rule applies with respect to gift tax liability that
a surviving spouse incurs if he or she transfers a QTIP interest during his or her
lifetime. IRC §2207A(b).
PRACTICE TIP: The lawyer should exercise care in selecting the tax
clause for the will. In most cases, a clause providing for the payment of
taxes from the residue should probably exclude the taxes, if any, attributable
to the QTIP property.
The decedent’s estate is entitled to only one deduction for a qualified
terminable interest. IRC §2056(b)(9). Thus, if the decedent were to grant the
surviving spouse an income interest in property for his or her life with the
remainder passing to charity on the spouse’s death, the donor-decedent’s estate
would be entitled to a marital deduction, but not a charitable deduction, because
the property is deemed to have passed from the decedent’s estate to the surviving
spouse. The surviving spouse’s estate would be entitled to a charitable deduction
for the value of property passing to charity on his or her death.
PRACTICE TIP: These rules allow the creation of a trust to pay all
income to the spouse for life, with the remainder going to charity, without
the necessity of structuring the spouse’s interest to qualify the trust as a
charitable remainder annuity trust or unitrust.
The QTIP trust is an extremely important estate planning tool when the
decedent wants to assure that the surviving spouse will have adequate resources for
the remainder of his or her life, with the remainder going to beneficiaries selected
by the decedent.
§ 12.1-5(c)(4) Qualified Domestic Trusts
The Technical and Miscellaneous Revenue Act of 1988 (TAMRA 1988),
Pub L No 647, 102 Stat 3342, disallowed a marital deduction for property passing
to a non-U.S. citizen spouse of the decedent unless the transfer was to a special
kind of trust. IRC §2056(d), IRC §2056A. Thus, with the result that for estates of
decedents dying after November 10, 1988, property passing to a surviving spouse
who is not a U.S. citizen is not eligible for the estate tax marital deduction unless
the property passes to the alien spouse through a qualified domestic trust
(sometimes referred to as a “QDOT”). To be considered a qualified domestic trust:
(1) The applicable trust instrument must require that “at least 1 trustee of
the trust be an individual citizen of the United States or a domestic corporation”
and that “no distribution (other than a distribution of income) may be made from
the trust unless a trustee who is an individual citizen of the United States or a
domestic corporation has the right to withhold from such distribution the tax
imposed by this section on such distribution,” IRC §2056A(a)(1);
(2) The trust must meet the requirements of regulations prescribed by the
Internal Revenue Service to ensure the collection of any tax imposed, IRC
§2056A(a)(2); and
(3) The trustee must file an appropriate election to be treated as a QDOT,
IRC §2056A(a)(3).
Treasury Regulation §20.2056A-3 specifies rules relating to the time and
manner of making the QDOT election.
Congress enacted the QDOT rules to make certain that any property
qualifying for the federal estate tax marital deduction in the resident spouse’s
estate is subject to a federal estate tax if distributions are made to, or for the benefit
of, an alien surviving spouse. Congress was concerned that such property could
otherwise effectively be removed from the reach of the federal estate tax.
Under the QDOT rules, an estate tax is imposed on corpus distributions from
the trust that are made before the date of the surviving spouse’s death and on the
value of the property remaining in the QDOT on the date of the surviving spouse’s
death. IRC §2056A(b)(1). An exception exists if the surviving spouse becomes a
U.S. citizen and if (1) the spouse was a resident of the United States at all times
after the decedent died and before the spouse becomes a U.S. citizen, or (2) no tax
was imposed on a QDOT distribution before the spouse became a U.S. citizen, or
(3) the spouse elects to treat any distribution on which tax had been imposed as a
taxable gift made by the spouse (thereby reducing the applicable credit amount
available to the spouse). IRC §2056A(b)(12).
§ 12.1-5(c)(5) Life Insurance Proceeds
The final exception to the terminable-interest rule provides that life
insurance proceeds need not be paid over to a spouse in a lump sum to qualify for
the marital deduction. IRC §2056(b)(6). The insurance exception requires five
conditions to be met for the insurance or annuity contract to comply with the terms
of the exception:
(1) “The proceeds, or a specific portion of the proceeds, must be held by
the insurer subject to an agreement either to pay the entire proceeds or a specific
portion thereof in installments, or to pay interest thereon, and all or a specific
portion of the installments or interest payable during the life of the surviving
spouse must be payable only to [the surviving spouse]”;
(2) “The installments or interest payable to the surviving spouse must be
payable annually, or more frequently, commencing not later than 13 months after
the decedent’s death”;
(3) “The surviving spouse must have the power to appoint all or a specific
portion of the amounts so held by the insurer to either the [surviving spouse or the
surviving spouse’s] estate”;
(4) “The power in the surviving spouse must be exercisable by [the
surviving spouse] alone and . . . must be exercisable in all events”; and
(5) “The amounts or the specific portion of the amounts payable under
such contract must not be subject to a power in any other person to appoint any
part thereof to any person other than the surviving spouse.”
Treas Reg §20.2056(b)-6(a).
§ 12.1-5(d) Marital Deduction Disclaimers
The provisions regarding “qualified disclaimers” (discussed in §12.2-3) may
be used to affect property interests available for the marital deduction. Thus, if
more taxes will ultimately result by using the full marital deduction on the death of
the first spouse, a qualified disclaimer by the surviving spouse may prevent the
higher tax exposure. Similarly, if another beneficiary under the decedent’s will
disclaims in favor of the surviving spouse, the property is deemed to have passed
to the surviving spouse and qualifies for the marital deduction, as long as the
disclaimer satisfies the conditions of a qualified disclaimer.
§ 12.1-6 Credits Against the Tax
Once the deductions have been subtracted from the decedent’s gross estate
to determine the taxable estate, the adjusted taxable gifts made after 1976 are
added to the taxable estate to arrive at the tax computation base.
Adjusted taxable gifts means the total amount of the taxable gifts made by
the decedent after 1976, other than gifts already included in the decedent’s gross
estate (such as a gift of remainder interests with the income retained by the donor).
IRC §2001(b).
The gross tax is determined by first applying the tax rates to the tax
computation base and then subtracting the taxes paid or payable on the taxable
gifts made by the decedent after 1976. For estates of decedents dying after
December 31, 1987, and before January 1, 2002, Congress added a 5% surtax on
gifts and transfers at death in excess of $10 million, but less than $21,040,000.
Former IRC §2001(c). This surtax erased the benefit of the graduated rates,
resulting in what amounted to a flat effective tax rate of 55% on large estates.
For estates of decedents dying after December 31, 2001, the Economic
Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Pub L No 107-16,
115 Stat 38, reduced the top marginal federal estate and gift tax rates to 50% by
eliminating the 5% surtax and replacing the 53% and 55% brackets with a 50%
bracket. The maximum estate and gift tax rates are further reduced to 49% for
2003, 48% for 2004, 47% for 2005, 46% for 2006, 45% for 2007–2009, 0%
(federal estate tax eliminated) for 2010, and 35% for 2011–2012. IRC
§2001(c)(2)(B). Unless Congress acts to revise this schedule, the maximum federal
estate tax rate is scheduled to return to 55% for deaths after December 31, 2012.
The credit was formerly called the “unified credit” but is now referred to as
the “applicable credit amount,” and any other credits that may apply are then
subtracted from the gross tax to determine the estate tax payable. The tax rates are
found in a table included in the instructions for the federal estate tax return.
There are four credits against the tax:
(1) The applicable credit amount, IRC §2010; see §12.1-6(b);
(2) The credit for the federal gift tax (applies only to gifts made before
1977), IRC §2012; see §12.1-6(d);
(3) The credit for the estate tax on prior transfers, IRC §2013; see §12.1-
6(e); and
(4) The credit for foreign death taxes, IRC §2014; see §12.1-6(f).
The purpose of all the credits (other than the first) is to reduce the effect of
double taxation on the same transfers or the same property. These credits are
discussed in detail in §§12.1-6(b) to 12.1-6(f).
The Tax Cuts and Jobs Act of 2017 (Pub L 115-97, 131 Stat 2054)
essentially doubled the applicable exclusion amount for estates or gifts after 2017
and before 2026, and set the estate and gift tax rate at a flat rate of 40 percent. See
the discussion in Supplement § 12.1-1 (introduction).
§ 12.1-6(b) Applicable Credit Amount
Every estate is allowed a credit, known as the applicable credit amount
(formerly known as the unified credit), against estate tax due. IRC §2010(c). The
credit is applied to gift taxes first and, to the extent not used to offset gift taxes on
post-1976 gifts, against estate taxes. The credit replaces the old $30,000 lifetime
gift tax exemption and the $60,000 specific exemption for estate tax. The
allowable credit is available to offset gift tax or estate tax. The credit has the effect
of offsetting the lowest portion of the estate, whereas the old specific exemption
would reduce the estate tax at the highest marginal rate of the estate. As amended
by the Economic Growth and Tax Relief Reconciliation Act of 2001, the credit is
defined to be the credit necessary to offset tax on the applicable exclusion amount
in accordance with the following schedule:
Calendar Estate Tax GST Tax Gift Tax Highest Gift
Year Exclusion Exemption Exclusion and Estate
(in millions) Amount Amount Tax Rates
(IRC §2010(c)) (in millions) (in millions) (IRC
(IRC §2631(c)) (IRC §2505(c)) §2001(c))
2002 $1.0 $1.06 $1.0 50%
2003 $1.0 $1.06 $1.0 49%
2004 $1.5 $1.5 $1.0 48%
2005 $1.5 $1.5 $1.0 47%
2006 $2.0 $2.0 $1.0 46%
2007 $2.0 $2.0 $1.0 45%
2008 $2.0 $2.0 $1.0 45%
2009 $3.5 $3.5 $1.0 45%
2010 N/A (estate tax N/A (GST tax $1.0 35% (gift tax
repealed) repealed) only)
OR $5.0 if $5.0 $1.0 35% (both)
elected
2011 $5.0 $5.0 $1.0 35%
2102 $1.0 $1.0 $1.0 35%
2013 $1.0 $1.0 $1.0 55%
NOTE: The allowable credit must be reduced by an amount equal to
20% of any portion of the old $30,000 gift tax exemption claimed for 1976
gifts made after September 8, 1976. IRC §2010(b).
PRACTICE TIP: In planning the use of the credit for gift tax or estate
tax purposes, the lawyer should not overlook the possible reduction resulting
from the use of any portion of the $30,000 exemption to offset 1976 gifts
made after September 8, 1976.
The Tax Cuts and Jobs Act of 2017 (see Supp § 12.1-1) doubled both the
applicable exclusion and the lifetime gift tax exemption amounts for tax years after
2017 and before 2026. The following table summarizes the various exclusion or
exemption amounts for calendar years 2011 through 2018:
GST Tax Gift Tax Highest Gift
Estate Tax Exemption Exemption and Estate
Calendar Exclusion Amount Amount Tax Rates
Year (§ 2010(c)) (§ 2631(c)) (§ 2505(c)) (§ 2001(c))
2011 $5,000,000 $5,000,000 $5,000,000 35%
2012 $5,120,000 $5,120,000 $5,120,000 35%
2013 $5,250,000 $5,250,000 $5,250,000 40%
2014 $5,340,000 $5,340,000 $5,340,000 40%
2015 $5,430,000 $5,430,000 $5,430,000 40%
2016 $5,450,000 $5,450,000 $5,450,000 40%
2017 $5,490,000 $5,490,000 $5,490,000 40%
2018* $11,180,000 $11,180,000 $11,180,000 40%
*NOTE: Unless modified by Congress, the applicable exclusion

amount (and associated gift and GST exemption amounts) are scheduled to
receive annual inflation adjustments through calendar year 2025, after which
they are scheduled to revert to the rates in effect for calendar year 2017,
adjusted for inflation. See Supp § 12.1-2 (introduction).
§ 12.1-6(c) Credit for State Death Taxes Under Prior Law
Under former IRC §2011, a credit was allowed against the federal estate tax
for any state inheritance or estate taxes paid for property in the decedent’s gross
estate. The Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA), Pub L No 107-16, 115 Stat 38, phased out the state death tax credit for
estates of decedents dying after 2004. The credit was reduced to 25% for decedents
dying in 2002, 50% in 2003, and 75% in 2004. IRC §2011(b)(2).
For decedents dying in 2005 and thereafter, the credit is replaced by an
unlimited deduction for state death taxes actually paid. IRC §2058; Treas Reg
§20.2053-9. See §12.1-4(g).
§ 12.1-6(d) Credit for Federal Gift Taxes
If a federal gift tax has been paid on any pre-1977 transfer and the property
transferred is included in the decedent’s gross estate for federal estate tax purposes,
a credit is provided against the estate tax for all or a portion of the gift tax paid in
respect of the transfer. IRC §2012(a). The amount of the gift tax credit is limited to
the lesser of (1) the gift tax allocable to the property included in the gross estate or
(2) the estate tax allocable to such property. See Treas Reg §20.2012-1(b). The
credit will usually give complete relief from double taxation with respect to the
property transferred.
Under IRC §2012(e), there is no credit for federal gift taxes on gifts made
after 1976, because the unification of gift taxes and estate taxes under the Tax
Reform Act of 1976 allows deduction of the gift taxes paid on post-1976 gifts to
arrive at the gross-estate tax. The credit applies only to transfers made before 1977.
In substance, IRC §2012 relates to property that the decedent has transferred
inter vivos but that is now held to be includable in the decedent’s gross estate for
estate tax purposes. Typical examples are pre-1977 transfers included in the estate
as transfers of remainder interest with a life estate retained, or other transfers with
retained interests.
Some difficulties in the computation may arise because of the split-gift tax
provisions of the gift tax law, which allow a gift to be treated as made one-half by
each spouse. IRC §2012(c). In this situation, the gift tax allocable to the property
must be computed separately with respect to each half of the gift.
Generally, the gift tax allocable to the property is determined by multiplying
the total gift tax paid for the years (or quarter) by the adjusted gift tax value of the
gift at the time of the gift, and dividing this product by the sum of the total taxable
gifts for the years (or quarter) and the gift tax specific exemption allowed for the
years (or quarter). This computation establishes the amount of the first limitation
referred to above, the gift tax allocable to the property included in the gross estate.
See Treas Reg §20.2012-1(c).
The second limitation is the amount of the estate tax attributable to the
inclusion of the gift in the decedent’s gross estate. If a gift was made by the
decedent and treated by consent of the spouse as made one-half by the decedent
and one-half by the spouse, the estate tax attributable to the inclusion of the gift is
computed with respect to the sum of the two halves of the gift. The estate tax
attributable to the inclusion of the gift is determined by multiplying (1) the gross-
estate tax, minus the applicable credit amount and state inheritance tax credit, by
(2) the adjusted value of the included gift (i.e., the lower of the gift tax value or
estate tax value of the gift, reduced by all or a part of any gift tax annual exclusions
allowed, by any estate tax charitable deduction allowed for the property, and by
any estate tax marital deduction allowed in respect thereof), and (3) dividing this
product by the value of the gross estate, reduced by the estate tax charitable
deduction and the estate tax marital deduction. See Treas Reg §20.2012-1(d).
Examples of these computations are provided in Treasury Regulation
§20.2012-1.
§ 12.1-6(e) Credit for Tax on Prior Transfers
In an effort to prevent the federal estate tax from operating on property that
was immediately received by a decedent from another estate, IRC §2013 allows the
estate of the second decedent a credit for the estate tax paid on the property
transferred by the estate of the prior decedent. The credit applies to decedents who
acquired property from a prior decedent who died within 10 years before or two
years after the decedent died. IRC §2013(a). The decedent’s estate is allowed to
credit against its estate tax the proportionate part of the estate tax paid by the prior
decedent’s estate on the transferred property. IRC §2013(b).
The maximum credit equals the amount of the tax paid in the transferor’s
estate, but not to exceed the amount of tax by which the current decedent’s estate
would have been reduced if the property were not in the second estate at all. IRC
§2013(c). In other words, the amount of the maximum credit is the lower of the
proportionate part of the tax paid on the transferred property by the prior
decedent’s estate or the amount by which the transferred property might increase
the estate tax of the transferee. When the transferor dies within two years before or
after the current decedent, the credit will be the full amount so determined. If the
transferor died within the third or fourth year before the current decedent’s death,
the credit is only 80% of the maximum; if within the fifth or sixth year, 60%; if
within the seventh or eighth year, 40%; if within the ninth or tenth year, 20%. IRC
§2013(a). Treasury Regulation §20.2013-6 contains several examples of the
computation of the credit for tax on prior transfers.
A credit is allowable for the value of a life estate, with the value determined
as of the death of the transferor. See Treas Reg §§20.2013-1 to 20.2013-6.
PRACTICE TIP: In providing for a life estate in a nonmarital deduction
residuary trust for the surviving spouse, the lawyer should not require that
the spouse survive the decedent by any period, such as six months, to be
entitled to income for life. The value of the spouse’s life estate will be
actuarially determined as of the decedent’s death. If the surviving spouse
should die within a short period thereafter, and a marital deduction is not
claimed, the credit for tax paid on prior transfers would be available in his or
her estate to offset, to some extent, the federal estate tax payable by the
surviving spouse’s estate.
§ 12.1-6(f) Credit for Foreign Death Taxes
A credit is allowed for any inheritance, legacy, or succession taxes actually
paid to a foreign country with respect to property situated within the country and
that is included in the decedent’s gross estate. IRC §2014.
NOTE: The credit is not available when a deduction for inheritance
taxes paid to a foreign country is allowed under IRC §2053(d). IRC
§2014(f). See §12.1-4(g).
The credit is allowed only to a citizen or resident of the United States and is
intended to reduce the burden of double taxation when property is taxed under the
federal estate tax law and also in the foreign country in which the property is
situated. The credit for foreign death taxes is subtracted from the gross estate tax
after the applicable credit amount and the credit for gift taxes have been deducted,
but before any credit for tax on prior transfers is taken.
Bilateral death tax conventions are in effect between the United States and
several other countries, which provide for foreign tax credits on a mutual basis.
When such conventions exist, the executor of the estate may elect either the credit
allowed by IRC §2014 or the credit allowed by the convention, “whichever is the
more beneficial to the estate.” Treas Reg §20.2014-4(a)(1). It will not necessarily
be more beneficial to take the larger of the two available credits because the credit
for tax on prior transfers (under IRC §2013) may differ, depending on whether the
credit for foreign death taxes is taken under the convention or under IRC §2014.
Thus, in cases involving both a credit for foreign death taxes and a credit for prior
transfers, the advantages of taking the larger foreign death tax credit may be more
than offset by a resulting smaller credit for the tax on prior transfers.
The credit allowed by IRC §2014 is limited to the smaller of (1) the foreign
death tax attributable to the qualifying property or (2) the federal estate tax
attributable to the qualifying property. IRC §2014(b). The first limitation is the
amount of the foreign death tax attributable to the qualifying property, which is
determined by multiplying (1) the total tax paid to the foreign country by (2) a
factor determined by dividing the value of the property subject to the foreign tax
(and included in the gross estate) by the value of all property subject to the foreign
tax. Treas Reg §20.2014-2. The second limitation is the amount of the federal
estate tax attributable to the qualifying property, which is determined by
multiplying (1) the gross federal estate tax (minus the gift tax credit) by (2) a factor
equal to the ratio of the adjusted value of the qualified property to the adjusted
value of the total gross estate. Examples of these computations are presented in the
regulations. Treas Reg §20.2014-3.
The foreign death tax credit is allowed only if the executor submits
information on (1) the amount of taxes actually paid to the foreign country, (2) the
amount and date of each payment, (3) the description and value of the property
subject to the foreign tax, and (4) “all other information necessary for the
verification and computation of the credit.” IRC §2014(d). Generally, this evidence
is submitted on Form 706-CE, available at www.irs.gov/pub/irs-pdf/f706ce.pdf,
which is certified by the foreign government. The credit is allowed only if the tax
is actually paid and credit for it is claimed within four years after the return is filed,
except that (1) if a petition is filed with the Tax Court, then the tax must be paid
and the credit for it must be claimed within such four-year period or before the
expiration of 60 days after the decision of the Tax Court becomes final, or (2) if an
extension of time for payment has been granted under IRC §6161, within such
four-year period or before the date of expiration of the extension period. IRC
§2014(e).
§ 12.2 FEDERAL ESTATE TAX—PROCEDURAL ASPECTS

Federal estate tax laws apply to the estates of decedents when the value of
the gross estate equals or exceeds the minimum established amount for filing a
return. See §12.2-5(a). When a federal estate tax return is required, the steps
involved include preparing and filing the estate tax return, paying the tax, and, if
necessary, following appeal procedures.
NOTE: See chapter 14 for a discussion of Oregon’s estate tax laws and
the requirements for filing a return under them. Oregon’s estate tax, which is
now separate from the federal estate tax, may necessitate the filing of an
Oregon tax return in estates that are below the federal filing threshold.
Oregon’s estate tax was formerly known as an inheritance tax.
§ 12.2-2 Gathering the Facts
For many estates, the nature and extent of assets or transfers that may be
includable in the decedent’s gross estate are not fully known. In such cases, the
executor or lawyer must assemble and develop such information by reference to
collateral documents and papers. Income tax returns filed by the decedent for the
years immediately preceding death may be an important source of information
concerning the nature and extent of assets held by the decedent. Dividend, interest,
and rental schedules provide information about income-producing assets.
Deductions claimed for real property taxes and expenses may disclose the
existence and location of land and buildings and, possibly, the existence of other
assets not currently producing income.
§ 12.2-3 Disclaimers
In 1976, provisions were adopted to establish a uniform national rule for
qualified disclaimers, to be effective for both federal estate tax and gift tax
purposes. These changes are found in IRC §2046 and IRC §2518, respectively. The
stated purpose was to introduce uniformity among the various state disclaimer
laws. See Pub L No 94-455, §2009(b)(1), 90 Stat 1893.
A qualified disclaimer is defined as “an irrevocable and unqualified refusal
by a person to accept an interest in property,” IRC §2518(b), but only if:
(1) The refusal is in writing;
(2) The writing is received by the transferor of the interest, the
transferor’s legal representative, or the holder of legal title to the property;
(3) Such person receives the writing within nine months after the later of
the date of the transfer creating the interest or the day on which the disclaimant
attains the age of 21;
(4) The disclaimer is made before the disclaimant has accepted the
interest or any of its benefits; and
(5) As a result of the disclaimer, the interest passes to the decedent’s
spouse or to a person other than the disclaimant, without any direction by the
disclaimant.
IRC §2518(b).
For interests created after 1981, the Economic Recovery Tax Act of 1981,
Pub L No 97-34, 95 Stat 172, has simplified the requirements for obtaining a
qualified disclaimer by providing that a written transfer of the transferor’s entire
interest in the property that meets conditions (3), (4), and (5) above will be treated
as a qualified disclaimer. IRC §2518(c)(3). It is no longer necessary for the
disclaimer to be valid under local law to be effective for federal estate tax
purposes, but local law continues to apply to determine the identity of the
transferee.
If a surviving spouse disclaims an interest under the will of his or her
deceased spouse under terms such that the disclaimed property will pass to a trust
in which the surviving spouse has an interest, the disclaimer is valid if it is
otherwise qualified and the disclaimed interest passes to the surviving spouse, or to
a person other than the person disclaiming the interest, without any direction by the
surviving spouse. IRC §2518(b). Under this provision, it is permissible for a
surviving spouse to disclaim an interest in property with the result that such
disclaimed property passes to a qualified terminable interest property (QTIP) trust.
The disclaimer provision clearly recognizes the right to make partial
disclaimers. IRC §2518(c)(1). In 1986, the Internal Revenue Service issued final
regulations under IRC §2518, liberalizing the permissible use of partial
disclaimers. Under the regulations as originally proposed, a disclaimer of a partial
interest in property is not qualified unless the disclaimant also disclaimed all other
interests in the subject property. Under the final regulations, a qualified disclaimer
may be made for part of an interest in property if the part disclaimed is severable
from the part accepted. Treas Reg §25.2518-3(a)(1)(ii). Thus, for example, a
portion of a pecuniary bequest or a bequest of shares of stock could be the subject
of a qualified disclaimer.
PRACTICE TIP: The use of partial disclaimers is useful as a postmortem
estate planning tool to cut down the marital bequest to the minimum amount
needed to reduce the federal estate tax to zero or to balance the estates of the
husband and the wife to minimize overall taxes.
§ 12.2-4 Valuation of Assets
For purposes of determining whether the estate is large enough to require
filing a federal estate tax return or an Oregon estate tax return, the assets includable
in the gross estate for federal estate tax purposes must be valued as of the date of
the decedent’s death. See IRC §2031. The assets must be valued at the gross fair-
market value, that is, without reduction for liens or encumbrances that may exist
against the property. For valuation procedures to be applied in determining the
value of specific assets, see §§12.2-12 to 12.2-12(j). If doubt exists regarding
whether an asset is includable or excludable from the gross estate, and the gross
estate would exceed the minimum limits if the doubtful asset is included, a return
should be filed to avoid the possible imposition of penalties and to protect the
validity of any elections that are dependent on a timely filed estate tax return.
§ 12.2-5 Federal Estate Tax Return—IRS Form 706
§ 12.2-5(a) When a Federal Return Is Required
An estate tax return must be filed on IRS Form 706 (available at
www.irs.gov/Forms-&-Pubs) for the estate of a deceased citizen or resident of the
United States whose gross estate exceeds a minimum value. IRC §6018(a). This
minimum value varies, depending on the year of the decedent’s death and certain
prior gifts.
PRACTICE TIP: Form 706 is routinely revised to reflect applicable
changes in the statute or regulations and, consequently, the attorney must be
sure that he or she is using the correct form, based on the decedent’s date of
death. See the Internal Revenue Service’s Web site, at
www.irs.gov/formspubs, for up-to-date forms. In addition, the first page of
the instructions to a current Form 706 contains a table showing the
appropriate revision of Form 706 to use based on the decedent’s date of
death.
The unadjusted gross-estate amounts requiring the filing of an estate tax
return for a deceased citizen or resident are as follows (see IRC §6018(a)(1), IRC
§2010(c); see also former IRC §2010(c) for the law predating the Economic
Growth and Tax Relief Reconciliation Act of 2001, Pub L No 107-16, 115 Stat
38):
Year of Death Applicable Exclusion Amount
1997 $600,000
1998 $625,000
1999 $650,000
2000 and 2001 $675,000
2002 and 2003 $1,000,000
2004 and 2005 $1,500,000
2006, 2007, and 2008 $2,000,000
2009 $3,500,000
2010 N/A (tax repealed)
or $5,000,000 if elected
2011 and 2012 $5,000,000
2013 $1,000,000 (see the note below)
NOTE: For deaths occurring in 2013 and thereafter, the applicable
exclusion amount reverts to $1,000,000 (indexed for inflation) unless
Congress and the President act to modify the statute.
If the value of the decedent’s gross estate on the date of the decedent’s death
exceeds the applicable exclusion amount under IRC §2010 for the year of death,
IRS Form 706 must be filed. The value of the gross estate on the date of death sets
the filing requirement. See IRC §2031. The filing threshold is reduced, however,
by the amount of post-1976 taxable gifts and by the amount of any pre-1976
lifetime gift tax exemption allowed with respect to gifts made after September 8,
1976, but before January 1, 1977. See IRC §2010(b).
EXAMPLE: The decedent dies in 2004 owning real estate that is valued
at $1,700,000 but that is encumbered by mortgages totaling $500,000. The
decedent would have no net taxable estate, but IRS Form 706 must still be
filed because the gross estate is over the threshold filing limit of $1,500,000.
EXAMPLE: The decedent dies in 2004 owning, with his spouse as joint
tenants with right of survivorship, investment securities with a value of
$2,000,000 on the date of death. IRS Form 706 need not be filed because the
decedent’s gross estate is only $1,000,000. Under IRC §2040(b)(1), only
one-half of the qualified joint spousal interests is included in the decedent’s
gross estate.
For nonresident aliens, IRC §6018(a)(2) requires that a return be filed if the
gross estate situated in the United States exceeds $60,000, minus any adjustment
required under IRC §6018(a)(3).
The value at the date of death governs, regardless whether a tax is due or
whether alternate valuation is elected by the executor. Treas Reg §20.6018-1(a).
To file a complete return, the attorney must file a properly signed copy of
the first three pages of IRS Form 706, Schedule F, and any schedules needed to
support the recapitulation on page 3 of Form 706.
For deaths occurring in 2013 and thereafter, the requirement to file a federal
estate tax return is triggered when the gross estate of the decedent equals or
exceeds the applicable exclusion amount in effect at the time of the decedent’s
death. IRC § 6018(a)(1). The following schedule summarizes those filing
thresholds:
Year of Death Applicable Exclusion
Amount
2013 $5,250,000
2014 $5,340,000
2015 $5,430,000
2016 $5,450,000
2017 $5,490,000
2018* $11,180,000
*NOTE: Unless modified by Congress, the applicable exclusion

amount is scheduled to receive annual inflation adjustments through
calendar year 2025, after which it is scheduled to revert to the rates in effect
for calendar year 2017, adjusted for inflation. See Supp § 12.1-2
(introduction).
§ 12.2-5(b) Where to File a Federal Return
If the decedent was a resident of the United States, the estate tax return
should be filed with the Internal Revenue Service Center in Cincinnati, Ohio. Treas
Reg §20.6091-1(a). See Instructions for IRS Form 706. Note, however, that the
return may also be filed by hand-delivery to any IRS office in the district in which
the decedent was domiciled. Treas Reg §20.6091-1(b). Hand-delivery is often the
preferred method when a large tax payment is owed because a receipt can be
obtained for delivery of both the return and the check in payment of the tax. IRC
§6091(b)(3)–(4); Instructions for IRS Form 706, p 3 (available at
www.irs.gov/Forms-&-Pubs).
If the decedent was a nonresident, the regulations provide that the return
(IRS Form 706-NA) should be filed with the Internal Revenue Service Center in
Philadelphia, or as designated in the Instructions for Form 706-NA. Treas Reg
§20.6091-1(b). The 2012 Instructions for Form 706-NA indicate that the return
should be filed with the Internal Revenue Service in Cincinnati, Ohio.
§ 12.2-5(c) Who Must File the Return
The duly qualified executor or administrator of a decedent’s estate must file
the estate tax return. Treas Reg §20.6018-2. If there is more than one executor or
administrator, the return must be verified and signed by each one. See the
Instructions for IRS Form 706, at www.irs.gov/Forms-&-Pubs. If there is no
executor or administrator, every person in actual or constructive possession of any
property of the decedent situated in the United States is deemed to be an executor
for estate tax purposes and must make and file a return. Treas Reg §20.6018-2. For
example, if the will is not admitted to probate because, before the decedent’s death,
the decedent’s property was conveyed to a revocable probate-avoidance trust, the
trustees of the trust must sign and file IRS Form 706.
Instructions for Form 706 (rev 2017) are available at
www.irs.gov/instructions/i706.
§ 12.2-5(d) Due Date of Return
In the absence of an extension of time for filing, the federal estate tax return
must be filed within nine months after the date of the decedent’s death. IRC
§6075(a). In other words, the due date is “the day of the ninth calendar month after
the decedent’s death numerically corresponding to the day of the calendar month
on which death occurred.” Treas Reg §20.6075-1. “However, if there is no
numerically corresponding day in the ninth month,” the due date is “the last day of
the ninth month” after the decedent’s death, unless the person responsible for filing
the return requests an extension of time for filing before the normal due date. Treas
Reg §20.6075-1. For example, if the decedent died on May 31, the return would be
due on February 28 (or 29) of the following year, in the absence of an extension of
time. Treas Reg §20.6075-1; IRC §6075(a). See Treasury Regulation §20.6081-1
and IRS Form 4768 regarding applications for an extension of time to file a return.
See also §12.2-7(b)(1).
Timely mailing is deemed to be timely filing. IRC §7502. However, if the
return is received after the due date, the executor has the burden of establishing
that the return was timely mailed.
PRACTICE TIP: If the return is to be filed by mail on the due date or a
day or two preceding the due date, the executor should obtain a certified
mail receipt with the postmark stamped at the post office to establish the
mailing date with certainty.
Timely filing is important because certain elections are available only on
timely filed returns, such as the election for alternate valuation date. Treas Reg
§20.2032-1(b). The failure to timely file a return may result in the imposition of a
penalty equal to 5% of the tax for each month or fraction thereof that the return is
delinquent, to a maximum total penalty of 25% of the tax. IRC §6651(a). In
addition, delinquency may result in a failure-to-pay penalty of ½% per month of
the amount of tax or fraction thereof that the payment is delinquent. IRC §6651(a).
See §12.2-8(a).
If it is impossible or impractical for the executor to file a reasonably
complete return within the nine-month period described above, the executor should
apply for an extension of time before the due date of the return. This application
may be made on Form 4768 (available at www.irs.gov/Forms-&-Pubs) and is filed
with the Internal Revenue Service Center in Cincinnati, Ohio. Regulations issued
in 2001 provide that a six-month extension timely requested on Form 4768 will be
automatically granted without the need to show reasonable cause. Treas Reg
§20.6081-1(b). The extension request must be accompanied by an estimate of the
amount of estate tax liability and GST tax liability with respect to the estate. Treas
Reg §20.6081-1(a); see Treas Reg §20.6075-1.
PRACTICE TIP: The attorney should apply for an extension of time to
file (and an extension to pay, if indicated) before the due date of the return.
The failure to do so will forfeit available elections and probably result in
penalties.
§ 12.2-5(e) Alternate Valuation Election
The alternate valuation election is made by checking the box on page 2 of
the federal estate tax return, Form 706 (available at www.irs.gov/Forms-&-Pubs).
See IRC §2032. The election must be made within the time permitted for filing the
federal estate tax return, including extensions, or on a late-filed return, but only if
the return is the first return filed and is no more than one year late. IRC
§2032(d)(2).
Once made, and after the filing date has passed, the election is irrevocable.
Treas Reg §20.2032-1(b); IRC §2032(d)(1). Similarly, if the election is not made
within the period for filing the return, the estate must use the valuations as of the
date of the decedent’s death and may not thereafter elect to use the six-month
alternate valuation date. Even though a return has been filed using date-of-death
values, an amended return may be filed electing the alternate valuation method, as
long as it is filed within the period allowed for filing the estate tax return, and as
long as the estate is not estopped from making the election because of the
discharge of the personal representative of the estate from personal liability
pursuant to a request for early determination of tax (see §12.2-6). Treas Reg
§20.2204-1.
An alternate valuation election can be extremely important in an estate in
which the postdeath asset values may be expected to fluctuate significantly. Under
IRC §1014, the executor of the decedent’s estate takes a basis in the estate property
equal to the fair-market value on the applicable valuation date.
The personal representative of the estate should consider filing the alternate
valuation election if a lower valuation is desired to reduce the federal estate tax
attributable to the property. For example, if the marginal estate tax rate attributable
to a particular piece of property is 50%, while the marginal income tax rate of the
devisee of the property is only 28%, it may be beneficial to seek a lower valuation
for federal estate tax purposes at a cost of a lower basis to the devisee. The
combination of tax deferral plus lower effective federal estate tax rates often
militates in favor of selecting the valuation date that results in the lowest gross-
estate value.
Additionally, because the alternate valuation election applies to all estate
property, the personal representative should consider the overall effect of the
election before selecting the valuation date.
Both the 1984 and 1986 tax acts imposed some restrictions on IRC §2032.
The Tax Reform Act of 1984, Pub L No 98-369, 98 Stat 494, added IRC §2032(c),
which permits the election only if it will decrease both the value of the gross estate
and the net estate tax on the gross estate. The Tax Reform Act of 1986, Pub L No
99-514, 100 Stat 2085, added the requirement that the election under IRC §2032
must also decrease any generation-skipping tax due. IRC §2032(c)(2). These
amendments reaffirm the purpose of a §2032 election as a relief provision and
preclude its use solely for the purpose of increasing the value of the estate’s assets
to establish a higher basis for income tax purposes when no tax liability will result.
§ 12.2-5(f) Documents to Accompany Form 706
As set forth in Treasury Regulation §20.6018-4 and the Instructions for IRS
Form 706 (available at www.irs.gov/Forms-&-Pubs), a number of documents must
be submitted with the estate tax return. See §12.2-12(s).
§ 12.2-5(g) Tax-Basis Reporting Rules (new)
If a federal estate tax return is filed on or after July 31, 2015, IRC section
1014(f) and IRC section 6035 now require that information pertaining to the tax
basis of property distributed to estate beneficiaries be delivered to the IRS and the
estate beneficiaries. Fiduciaries who file estate tax returns on or after July 31,
2015, are now required to report valuation information to the beneficiaries and to
the IRS within 30 days after filing an estate tax return. IRC § 6035(a). The IRS has
issued Form 8971 (Information Regarding Beneficiaries Acquiring Property from a
Decedent) to be used for reporting basis information. IRS forms are available at
www.irs.gov/forms-instructions.
IRS Form 8971 (and instructions) requires a separate Schedule A for each
beneficiary, which must be attached to Form 8971 filed with the IRS. Each
beneficiary must be provided with a copy of his or her Schedule A, showing
exactly what assets that beneficiary received from the estate and the value (e.g., tax
basis) reported to the IRS as to each such asset. Each beneficiary will receive his or
her own Schedule A, but will not receive a copy of Form 8971, nor will they
receive copies of the Schedules A distributed to the other beneficiaries.
Beneficiaries who later file tax returns using a tax basis other than as described on
Exhibit A may subject themselves to a 20 percent accuracy-related penalty under
IRC section 6662. Treasury Regulations set forth additional requirements (and
exceptions to reporting requirements) pertaining to Form 8971. See Treas Reg
§ 1.1014-10; Treas Reg § 1.6035-1; Treas Reg § 1.6035-2.
§ 12.2-6 Request for Early Audit, Determination of Tax, and Release
The personal representative of a decedent’s estate may request a
determination of the estate tax and discharge from personal liability. IRC §2204.
The request must be made by written application and be signed by the
personal representative, not by the lawyer for the estate. No particular form exists
for requesting discharge from personal liability under IRC §2204. Such a request is
usually made in the form of a letter, which must be signed by the personal
representative. The following language would be sufficient:
The undersigned, as personal representative of the estate of
____________, pursuant to IRC §2204, hereby requests a determination of the
amount of federal estate tax due by the above-entitled estate and a discharge from
personal liability for any deficiency thereafter found to be due.
If such a request is filed, the Internal Revenue Service (IRS) is to determine
the tax liability and notify the personal representative of the amount of tax due
within nine months after receiving the request or, if the request is made before the
return is filed, within nine months after the return is filed, whichever is later. IRC
§2204(a).
Upon paying the amount of tax determined or, with respect to any portion
qualifying for extended payment, upon posting a bond or giving the special lien
provided by IRC §6324A, the personal representative is discharged from personal
liability for any deficiency in tax thereafter found to be due. Treas Reg §20.2204-
1(b).
The request for determination of tax and discharge from personal liability
under IRC §2204 relates only to the personal representative’s liability as personal
representative. Treas Reg §20.2204-1(a). If the personal representative is also a
beneficiary of the estate, he or she may still be liable as a transferee of the estate
for any additional deficiency to the extent of the interest he or she receives. See
Rev Rul 64-305, 1964-2 CB 503.
An application for discharge from personal liability under IRC §2204 may
be made at any time.
PRACTICE TIP: As a practical matter, the audit division generally
ignores requests for early audit when the personal representative is also a
beneficiary of the estate and would remain subject to transferee liability. In
those cases, the only benefit from filing an application for early audit is to
practically assure an audit of the estate tax return, although such a request
would not guarantee that the audit will be commenced within the nine-month
period.
§ 12.2-7 Payment of Estate Tax
§ 12.2-7(a) Due Date
Unless an extension of time for payment is obtained (see §12.2-7(b)(1)), the
federal estate tax is due and payable on “the day of the ninth calendar month after
the decedent’s death numerically corresponding to the day of the calendar month
on which death occurred.” Treas Reg §20.6075-1. However, if no date in the ninth
month numerically corresponds to the date of death, the tax is due and payable on
the last day of the ninth month. IRC §6075, IRC §6151; Treas Reg §20.6075-1.
§ 12.2-7(b) Extensions of Time for Payment of Tax
§ 12.2-7(b)(1) Generally
Under IRC §6161(a)(2), the Internal Revenue Service may extend the time
for payment of the estate tax for a reasonable period up to 10 years. As a practical
matter, extensions are generally not granted for more than one year at a time,
requiring annual requests for further extensions, if necessary. Treas Reg §20.6161-
1. An extension may be granted on a showing that payment of the tax on the date it
is due “would impose undue hardship upon the estate.” Treas Reg §20.6161-
1(a)(2). Treasury Regulation §20.6161-2(b) recognizes that the sale of property at a
sacrifice price or during a severely depressed market constitutes an “undue
hardship,” which is a stricter test than that for reasonable cause. Also, the
regulations recognize that the forced sale of an interest in a family business to
unrelated persons constitutes an undue hardship even though the sale could be
effected at a price equal to current fair-market value. Treas Reg §20.6161-
1(a)(2)(ii), Ex. (1).
§ 12.2-7(b)(2) Tax on Reversionary or Remainder Interests
Under IRC §6163, payment of the portion of the federal estate tax that may
be attributable to the taxation of the value of a reversionary or remainder interest
may be postponed. To obtain an extension of time under this section, the personal
representative must make the election before the date prescribed for payment of the
tax (normally within nine months of the decedent’s death). Treas Reg §20.6163-
1(b). Payment of the tax attributable to the future interest may be deferred until six
months after the interest vests in possession. IRC §6163(a).
§ 12.2-7(b)(3) Tax on Interests in Closely Held Businesses—Deaths
After 1981
Effective for decedents dying after 1981, the Economic Recovery Tax Act of
1981, Pub L No 97-34, 95 Stat 172, consolidated former IRC §6166 and former
IRC §6166A into a new IRC §6166 and repealed IRC §6166A. Under IRC §6166,
as amended, the qualification rules for extending the time for payment of the estate
tax are fairly liberal.
The estate may qualify for deferment of estate taxes if the value of an
interest in a closely held business exceeds 35% of the decedent’s adjusted gross
estate as defined in IRC §6166(b)(6). IRC §6166(a)(1). In addition, the rules for
aggregating two or more closely held businesses for purposes of meeting the 35%
requirement are somewhat more liberal than under prior law. If the interests in two
or more closely held businesses are included in the decedent’s gross estate, the
interests may be aggregated for purposes of meeting the 35% requirement if the
value of each interest was at least 20% of the total value of each such business.
IRC §6166(c).
The interest rate on the estate tax attributable to the first $1,000,000
(adjusted for inflation, $1,430,000 for estates of decedents dying in 2013) in the
value of the closely held business will be subject to a special interest rate of 2%.
IRC §6601(j); see Rev Proc 2012-41, 2012-45 IRB 539 (2012). Any remaining
estate tax attributable to the closely held business interest will be subject to a
special rate of interest calculated as 45% of the interest rate charged by the Internal
Revenue Service (IRS) on tax deficiencies. IRC §6601(j). In return for these more
favorable interest provisions, estates will no longer be able to deduct interest
deferred under IRC §6166 as an expense of administration under IRC §2053, or as
an interest deduction under IRC §163. IRC §2053(c)(1)(D), IRC §163(k). The
deferred tax is subject to interest-only payments for the first four years and
thereafter payment of the tax balance in up to 10 annual installments of principal
and interest.
The Internal Revenue Code allows the withdrawal or disposition of up to
50% of the value of the decedent’s interest in a closely held business before
acceleration of unpaid taxes occurs. IRC §6166(g)(1)(A). Dispositions and
withdrawals are aggregated for this purpose. Additionally, acceleration of unpaid
taxes is not triggered by the death of the original heir or the death of any
subsequent transferee if the decedent’s interest in the closely held business passes,
as a result of such death, only to a family member of the preceding transferor
(within the meaning of IRC §267(c)(4)). IRC §6166(g)(1)(D). Redemptions that
qualify under IRC §303 are not counted for purposes of the 50% disposition test.
IRC §6166(g)(1)(B).
The failure to timely pay a tax installment no longer automatically
accelerates payment of the unpaid balance. The principal portion of the late
payment is not eligible for the special 2% interest rate, however, and a penalty of
5% per month on the amount of the payment is imposed. IRC §6166(g)(3)(B). If
the full delinquent amount is not paid within six months of the date it was
originally due, the entire unpaid tax and interest is accelerated and payable
immediately. IRC §6166(g)(3)(A). Conforming amendments were also made to
IRC §303 regarding stock redemptions to pay death taxes and funeral and
administration expenses. IRC §303(a). The more liberal rules for aggregation of
business interests may be used, and the estate qualifies for IRC §303 treatment, if
the aggregate value of the decedent’s interest in closely held corporations
comprises at least 35% of the decedent’s adjusted gross estate. IRC §303(b)(2).
The Taxpayer Relief Act of 1997, Pub L No 105-34, 111 Stat 788, also
modified the procedural provisions to permit an estate to seek judicial review of
eligibility under IRC §6166 to make installment payments. The personal
representative may seek a declaratory judgment from the Tax Court concerning the
estate’s eligibility under IRC §6166. IRC §7479. This procedural avenue is
available to estates of decedents dying after August 5, 1997. The Tax Technical
Corrections Act of 1998, Pub L No 105-206, 112 Stat 790, amended IRC §7479 to
make clear that estates may pursue a refund action in federal district court or the
Court of Federal Claims, only if no case is pending in the Tax Court regarding the
estate tax and no declaratory judgment proceeding is pending regarding the estate
tax installment payments.
Deficiencies, when determined, may also qualify for installment payments
on the same basis. However, the portion of the deficiency prorated to installments
already paid or past due must be paid upon notice from the IRS. IRC §6166(e).
Finally, Revenue Ruling 2006-34, 2006-1 CB 1171, provides helpful
guidelines and explains the circumstances under which the decedent’s interest in a
real estate business may qualify as an interest in a closely held business qualifying
for deferral under IRC §6166.
PRACTICE TIP: If the estate’s interest in a closely held business is close
to the 35% threshold, the attorney should consider filing a protective
election under IRC §6166. In this way, the estate preserves the ability to take
advantage of the benefits of IRC §6166 if the IRS later revalues the business
interest with the result that the value, as determined by the IRS, exceeds the
35% threshold.
PRACTICE TIP: Unlike the elections available under IRC §2032A
(special-valuation election) and IRC §2057 (a qualified terminable interest
property election), the election under IRC §6166 must be made on a timely
filed federal estate tax return.
IRC section 2057 (the qualified family owned business interest election) was
repealed in 2014.
Regarding the third paragraph of the 2012 text, the interest rate on the estate
tax attributable to the first $1 million (adjusted for inflation, $1,520,000 for estates
of decedents dying in 2018) in the value of the closely held business will be subject
to a special interest rate of 2 percent. IRC § 6601(j); Rev Proc 2017-58, 2017-45
IRB 489, modified and superseded by Rev Proc 2018-18, 2018-10 IRB 392.
§ 12.2-7(c) Interest
Interest on extensions for payment of estate taxes on grounds of reasonable
cause under IRC §6161(a)(2) and installment payments allowed under IRC §6166,
as attributable to interests in closely held businesses, accrues at the same rate as
interest on all other underpayments and delinquent payments, except that for
payments under IRC §6166, the rate will be 2% on the portion attributable to the
first $1,000,000 ($1,430,000 in 2013 adjusted for inflation) in closely held business
value and 45% of the federal deficiency interest rate on the balance. IRC §6601(j).
The underpayment rate is defined in IRC §6621(a)(2) to be the federal short-term
rate, plus three percentage points, and is adjusted semiannually. Beginning January
1, 1983, the interest rate on unpaid federal tax deficiencies and on overpayments is
compounded daily. IRC §6622. This provision was added by Congress in the Tax
Equity and Fiscal Responsibility Act of 1982, Pub L No 97-248, 96 Stat 324, in an
effort to generate more revenue and speed up the collection of deficiencies.
For payments under IRC section 6166, the interest rate will be 2 percent on
the portion attributable to the first $1 million ($1,520,000 in 2018 adjusted for
inflation) in closely held business value and 45 percent of the federal deficiency
interest rate on the balance. IRC § 6601(j); Rev Proc 2017-58, 2017-45 IRB 489,
modified and superseded by Rev Proc 2018-18, 2018-10 IRB 392.
§ 12.2-7(d) Method of Paying Tax
The personal representative may pay the estate tax by various methods.
Payment may be by check or money order, made payable to “United States
Treasury.” According to the Instructions for IRS Form 706, writing the decedent’s
name and Social Security number and “Form 706” on the check will help ensure
that the check is posted to the proper account. Payment of the tax may be made at
the district office if the return is hand-delivered to that office for filing. If the
return is mailed, it should be addressed to the Internal Revenue Service. Payment
should accompany the return.
PRACTICE TIP: When mailing the return and payment on the last day
or only a few days before the due date, the personal representative should
consider sending the return by certified mail and having the certified mail
receipt postmarked at the post office to establish the date of mailing.
The Instructions for IRS Form 706 (available at
www.irs.gov/instructions/i706/ch01.html) state that the personal representative
“can use certain private delivery services designated by the IRS to meet the ‘timely
mailing as timely filing/paying’ rule for tax returns and payments.” These private
delivery services include those listed in the Instructions for Form 706. “Payment of
the tax due shown on Form 706 may be submitted electronically through the
Electronic Federal Tax Payment System (EFTPS). EFTPS is a free service of the
Department of Treasury.” Instructions for IRS Form 706.
COMMENT: Although it is technically correct that the Instructions for
IRS Form 706 now permit delivery by private delivery services, most tax
attorneys still prefer to rely on the U.S. postal service for delivery. It is less
expensive than the private courier services. Also, not all of the private
couriers are approved, and the attorney must take care to use the correct
delivery options from those available by the private courier. A large body of
law has affirmed the “mailbox” rule as it applies to the postal service; there
is little opportunity for mistake as long as the attorney takes care to obtain
proof of mailing by a “round date” stamp on the receipt.
The IRS will no longer accept the payment of federal estate or gift taxes at
their local offices. Instead, these should be made solely in accordance with the
payment methods described in the instructions in IRS Form 706.
Instructions for Form 706 (rev 2017) are available at
www.irs.gov/instructions/i706.
§ 12.2-8 Penalties for Failure to File Tax Return or to Pay Tax
§ 12.2-8(a) Failure to File Timely Return
In the absence of a showing of reasonable cause, the failure to file a timely
estate tax return results in the imposition of a delinquency penalty equal to 5% of
the amount of tax for each month or fraction of a month that such delinquency
exists (to a maximum of 25%). IRC §6651(a)(1). Thus, a two-day delinquency
could result in the imposition of a penalty of 5% of the tax determined.
To avoid the imposition of the penalty, the personal representative must
show that the failure to file a timely return was “due to reasonable cause and not
due to willful neglect.” IRC §6651(a)(1). The question is one of fact. Ferrando v.
United States, 245 F2d 582, 587–588 (9th Cir 1957). Reliance on an accountant or
a lawyer has been held not to constitute reasonable cause. Ferrando, 245 F2d at
589. But see Estate of Collino v. C.I.R., 25 TC 1026, 1036 acq., 1956-2 CB 4
(1956).
If the personal representative believes that reasonable cause exists, an
affirmative showing of the facts must be made in the form of a written statement
signed under penalties of perjury. The “statement should be filed with the district
director or the director of the service center with whom the return is required to be
filed.” Treas Reg §301.6651-1(c).
§ 12.2-8(b) Accuracy-Related Penalty
If the Internal Revenue Service finds an underpayment of tax required to be
shown on a return, and such underpayment is attributable to a substantial valuation
understatement, a penalty is imposed equal to 20% of the portion of the
underpayment attributable to “a substantial estate or gift tax valuation
understatement.” IRC §6662(a), (b), (g). A “substantial estate or gift tax valuation
understatement” exists if the value of any property claimed on a federal estate tax
return or gift tax return is 65% or less of the amount determined to be the correct
amount of such valuation. IRC §6662(g)(1). In addition, if the undervaluation is
determined to be 40% or less of the correct amount finally determined, a “gross
valuation misstatement” exists and the penalty increases to 40% of the portion of
the underpayment attributable to the valuation understatement. IRC §6662(h).
This penalty creates a significant area of exposure for the personal
representative in view of the uncertainty inherent in valuing assets that have
traditionally been difficult to value, such as stock in a closely held corporation, real
estate interests, and other assets for which no ready market exists. In most cases, it
will be necessary to engage the services of a qualified appraiser to furnish the
estate with a valuation appraisal. Note, however, that the exercise of due diligence
by the personal representative in obtaining an independent determination of value
does not necessarily avoid the penalty if the appraisal otherwise results in a
valuation understatement.
§ 12.2-8(c) Failure to Pay Tax
An additional penalty is imposed for the failure to pay the estate tax when
due or the failure to pay a deficiency when assessed, unless the failure is shown to
be for reasonable cause. This penalty is ½% per month of the amount of the tax for
the period of delinquency to a maximum of 25%. IRC §6651(a)(2).
§ 12.2-8(d) Underpayment
If the estate tax is underpaid due to fraud, a penalty results in an amount
equal to 75% of the underpayment. IRC §6663.
§ 12.2-8(e) Willful Failure to File; False Statements
Criminal penalties are provided for the willful failure to file an estate tax
return, or for knowingly making any false statement in the return. IRC §7203.
§ 12.2-9 Collection of Tax
§ 12.2-9(a) Personal Liability of Personal Representative
The personal representative has primary liability for paying the federal estate
tax, including the portion of the tax imposed on property that does not come into
the possession of the personal representative, and regardless of the applicable local
law or the decedent’s direction on apportionment of death taxes. The personal
liability is limited, however, to the value of the property in the actual or
constructive possession of the personal representative. Under 31 USC §3713(b),
the personal representative is personally liable to the extent any portion of the
estate in the personal representative’s actual or constructive possession is used to
pay debts or is distributed to estate beneficiaries. The means by which the personal
representative may be relieved of personal liability are discussed in §12.2-6.
§ 12.2-9(b) Liability of Possessor of Decedent’s Property
If no personal representative is appointed and acting in the United States,
any other person in actual or constructive possession of the decedent’s property
must pay the entire tax to the extent of the value of the property in that person’s
possession. To the extent of the value of that property, such person may be held to
be personally liable for the estate tax as if that person were an executor. IRC
§2203.
§ 12.2-9(c) Transferee’s Liability
An estate beneficiary (using the term in a broad sense to include all persons
in receipt of property includable in the decedent’s gross estate, whether as a
surviving joint owner, a beneficiary under an insurance policy, or otherwise) is
liable for any portion of the federal estate tax that is not paid when due, to the
extent of the property received by that beneficiary. IRC §6901.
Any underpayment of federal estate tax may be assessed against the
transferee within one year after the expiration of the period of limitation for
assessment of the federal estate tax against the estate. IRC §6324(a), (c), IRC
§6901(a); Field v. C.I.R., 32 TC 187, 206 (1959), aff’d sub nom. Field, Gold,
Camtin, Daniels, Baskin, Bilton, Daniels v. C.I.R., 286 F2d 960 (6th Cir 1960).
A request for prompt assessment does not shorten the length of time of the
transferee’s liability. Rev Rul 64-305, 1964-2 CB 503.
§ 12.2-9(d) General Lien
Upon the assessment of the federal estate tax, a lien arises—to the extent the
tax has not been paid—against all property owned by the persons liable for
payment of the tax until the liability is satisfied or becomes unenforceable by lapse
of time. IRC §6321, IRC §6322. The lien is effective to establish prior rights over
certain other claimants, even though a notice of lien has not been filed. The
priorities of a nonfiled lien are established by the Federal Tax Lien Act of 1966,
Pub L No 89-719, §101(a), 80 Stat 1125. See IRC §§6321–6327.
Generally, purchasers, judgment lien creditors, mechanic’s lienors, and
holders of security interests are accorded priority over a nonfiled tax lien. IRC
§6323. In addition, certain third-party interests arising after the filing of the tax lien
are accorded priority over the tax lien (in some cases, even if the third party had
actual notice of the lien’s existence). The interests accorded these “superpriorities”
under certain conditions include purchases of stocks or other securities, motor
vehicles, certain retail purchases, purchases of exempt property in a sale for less
than $1,000, possessory liens, mechanic’s liens against real property, real property
taxes, attorney liens, loans on insurance contracts, and passbook loans. IRC
§6323(b).
The lien is to be filed in a lien index established at the district office of the
Internal Revenue Service for the district in which the property is situated. Real
property is situated where physically located. Personal property is situated at the
residence of the taxpayer at the time the lien notice is filed. IRC §6323(f).
§ 12.2-9(e) Special Lien for Estate Tax
Under IRC §6324, a lien for estate taxes is imposed on all property
includable in the decedent’s gross estate, except the portion used for payment of
charges against the estate and expenses of administration. This special lien exists
for 10 years from the date of the decedent’s death, unless the estate tax is paid
sooner or unless the liability becomes unenforceable because the statute of
limitations has run for collection (usually six years after assessment).
This statute also provides for a lien on any property that was included in the
gross estate and transferred to a transferee if the federal estate tax is not paid when
due. IRC §6324(a)(2). The lien is limited to the transferee’s liability under IRC
§6324, which is generally limited to the value, at the time of the decedent’s death,
of the transferred property. If the transferee receives property to which a lien under
IRC §6324 has attached, and subsequently transfers that property to a purchaser or
holder of a security interest, the lien is divested from the transferred property, but a
like lien then attaches to all property of the person making the transfer, except for
property transferred to a bona fide purchaser or holder of a security interest for
adequate and full consideration. IRC §6324(a)(2).
This statute specifically provides that IRC §2204, relating to the release of
the personal representative from personal liability, cannot operate as a release of
the lien on any estate property. IRC §6324(a)(3). The priorities of third-party
interests over the special lien are generally the same as under the general lien
provisions.
A special lien is allowed when payment of the estate tax has been deferred
under IRC §6166. IRC §6324A. The special lien may be elected by the executor by
filing an agreement signed by all persons having an interest in the designated IRC
§6166 lien property, consenting to the creation of the lien and designating an agent
for the beneficiaries. By designating IRC §6166 lien property in this manner, the
executor avoids the need to post a bond as a condition to his or her release under
IRC §2204. IRC §6324A(d).
§ 12.2-10 Statute of Limitations
In the absence of fraud or the substantial omission of assets from the
decedent’s gross estate, the period of limitations for the assessment of a deficiency
in the federal estate tax is three years from the due date of the return or the actual
filing date, whichever is later. IRC §6501(a). The filing of the return before the due
date does not accelerate the running of the period of limitations, since such returns
are deemed to have been filed on the due date. IRC §6501(b)(1). If no return is
filed, or if a false or fraudulent return is filed, the tax may be assessed at any time
(i.e., such assessment is not subject to any period of limitations). IRC §6501(c).
When assets having a value in excess of 25% of the gross estate stated in the
return are omitted from the return, the period of limitations is extended to a period
ending six years after the due date of the return or the date the return is filed,
whichever is later. IRC §6501(e)(2).
§ 12.2-11 Audit and Review Procedures
§ 12.2-11(a) Mathematical Verification
After it receives IRS Form 706, the Internal Revenue Service (IRS) checks
the calculations (e.g., 1,000 shares of XYZ stock at $10 per share equals $10,000),
totals, and computations of the tax for mathematical accuracy. If a mathematical
error on the estate tax return results in the IRS’s determining that a deficiency in
tax exists, it will send the personal representative a notice of demand for payment
of the deficiency. IRC §6211(a), IRC §6212(a). If an overassessment results,
refund of the overpayment is made.
COMMENT: It should not be assumed that a determination made at this
stage indicates that the balance of the return has been accepted as filed. Any
determination at this stage is based solely on the mathematical determination
from the amounts shown in the return.
§ 12.2-11(b) Classification
After checking tax returns for mathematical accuracy, the Internal Revenue
Service (IRS) classifies the returns in the IRS Service Center to determine whether
the return should be accepted as filed or assigned for audit. Although no fixed rules
exist for selecting returns for audit, the following factors, in varying degrees,
probably tend to weigh in favor of an audit:
(1) A request for an early audit and release of the personal representative
from personal liability under IRC §2204;
(2) An incomplete return and the failure to include sufficient information;
(3) Estate assets of indefinite value, such as real estate, stocks in closely
held businesses, or partnership or sole proprietorship interests in businesses;
(4) The failure to reduce the marital deduction or charitable deduction by
the amount of death taxes charged against the interest; and
(5) Will provisions that give rise to questions about the qualification of an
interest for the marital deduction or charitable deduction.
When the return, on classification, is not selected for audit, the IRS mails a
closing letter (IRS Form L-154) to the personal representative, stating that the
amount of tax shown on the return is determined to be the correct tax. Note,
however, that the issuance of this letter does not estop the government from
reopening the case, since the closing letter means only that the return, as filed, is
acceptable. A closing letter does not have the binding effect of a closing
agreement. For practical purposes, however, and in the absence of unusual
circumstances, the case will not be reopened after a closing letter is issued.
Regarding the last paragraph of the 2012 text, for a return filed after June 1,
2015, the IRS no longer automatically sends a closing letter (IRS Form L-154)
notifying the personal representative that a return has been accepted as filed.
Instead, the personal representative (or an individual with a filed IRS power of
attorney, but not his or her paralegal) can request a closing letter by facsimile to, or
by calling, the IRS. Note that the IRS will only mail the closing letter to the
personal representative and not to the representative under the power of attorney.
Alternatively, an account transcript can be used in lieu of a closing letter. An
account transcript can be requested via IRS Form 4506-T (Request for Transcript
of Tax Return).
The IRS requests that the personal representative wait at least six months
after the filing of the return to make a request for a closing letter or an account
transcript.
Procedures regarding IRS closing letters are available at
www.irs.gov/irm/part4/irm_04-004-007. IRS forms are available at
§ 12.2-11(c) Audit
If an estate tax return is classified for audit, the estate’s lawyer will be
contacted by an Internal Revenue Service (IRS) estate tax lawyer assigned to
review the return. Although the time lag between the filing of the return and the
initiation of the audit varies considerably (depending to a large extent on the
workload and the availability of personnel), the audit is normally commenced
between six and 15 months after the return has been filed. Until recently, the IRS
typically assigned estate tax lawyers from the district where the return was filed.
However, the IRS now assigns estate tax lawyers from a nationwide pool, so there
is no guaranty that the assigned IRS representative will be local.
Before contacting the estate’s lawyer, the estate tax lawyer will have made a
thorough review of the return to determine the issues to be considered. The estate
tax lawyer may make a preliminary investigation of the valuations reported on
closely held businesses or real estate, review the probate file at the court, and
contact others for facts concerning issues suggested by the return. The valuation of
the market securities will have been verified as well.
If the assigned IRS lawyer is local, the estate tax lawyer may contact the
personal representative’s lawyer and arrange for an appointment at the lawyer’s
office, or may conduct the audit from his or her office. If the assigned IRS lawyer
is not local, these discussions and review of documents will be by telephone, with
documents typically being exchanged by fax and e-mail. At the time of audit, the
estate tax lawyer may wish to review the decedent’s income tax returns and gift tax
returns, the estate fiduciary income tax returns, the decedent’s bank records, and
other documents relating to the decedent and the estate.
When the audit has been completed, the estate tax lawyer advises the estate’s
lawyer about whether the return is to be accepted as filed or whether adjustments
are proposed. If adjustments are proposed, the estate representative will have the
opportunity to discuss the proposed adjustments with the estate tax lawyer, to
present additional arguments or evidence, and to settle the differences of opinion
that may exist. Furthermore, the opportunity may be extended to discuss the
differences with the IRS Estate and Gift Tax Manager, who is in charge of the
estate tax lawyers.
If proposed adjustments are agreed on, or if the estate’s lawyer does not
wish to take advantage of the opportunities for administrative review, including the
Tax Court, a waiver (IRS Form 890) agreeing to the assessment of the deficiency
(or in the unusual case, an overassessment) may be presented to the personal
representative for signature. The personal representative’s signing this waiver
permits assessment of a deficiency without delay and requires payment of the
deficiency so determined. The waiver does not waive the personal representative’s
right to file a claim for refund for the amount of tax paid or to file an action for
refund in the United States District Court or the Claims Court. By signing this
waiver, however, the personal representative waives the right to use the Tax Court
as a forum for determining the issues without payment of the tax. See IRC
§6213(d). By waiving his or her rights, the taxpayer stops the accrual of interest on
the deficiency during the period from 30 days after filing the waiver to the date of
notice and demand for payment. IRC §6601(c).
§ 12.2-11(d) Appeals Office Conference
If the estate representatives and the estate tax lawyer do not agree on the
proposed adjustments, and the estate representatives wish to use the available
administrative review procedures, the estate representatives should advise the
estate tax lawyer that the estate does not agree with the proposed adjustments and
that the estate representatives are not willing to sign the IRS Form 890 waiver. A
complete Revenue Agent’s Report (commonly known as an RAR) is then
prepared. It sets forth, in detail, all the proposed adjustments, and the resulting
deficiency or overassessment is determined. This report is first sent to the District
Review Staff of the Internal Revenue Service (IRS) for a technical and procedural
review. After review, a copy of the RAR is mailed to the personal representative or
the personal representative’s lawyer with a form letter (commonly known as a 30-
day letter), which requests that the IRS be advised within 30 days regarding
whether the personal representative wishes to request a hearing in the Appeals
Office of the IRS or will sign the waiver.
If the personal representative desires a hearing in the Appeals Office, he or
she must file a written protest with the local IRS Appeals Office. The written
protest must set forth the facts, the issues, the estate’s position, and a legal
argument. The personal representative must sign the protest, stating that it is true
under the penalties of perjury. If a lawyer prepares and signs the protest for the
personal representative, the lawyer must substitute a declaration stating that he or
she submitted the protest and accompanying documents and “[w]hether he or she
knows personally that the facts stated in the protest and accompanying documents
are true and correct.” IRS Publication 5, available at
http://apps.irs.gov/app/picklist/list/formsPublications.html.
The protest must be filed in duplicate within the 30-day period or within an
extended time as may be granted. Extensions for filing are granted on request if a
plausible basis exists for delay. A power of attorney, if not previously filed, should
be executed and a copy filed with the protest. A printed power-of-attorney form,
IRS Form 2848, may be obtained from the IRS on request or from the IRS Web
site at www.irs.gov/Forms-&-Pubs.
If a hearing before the Appeals Office is requested, the case is transferred to
it and an appeals officer is assigned to the case. The hearing before the Appeals
Office is informal and usually consists simply of a conference between the appeals
officer and the lawyer for the estate. The appeals officer, however, has greater
authority than the estate tax lawyer for settling disputed matters, considering in
particular the risk of litigation. A hearing before the Appeals Office may be waived
if the estate so elects.
§ 12.2-11(e) Ninety-Day Letter; Tax Court
If the estate elects to waive a hearing before the Appeals Office of the
Internal Revenue Service (IRS) (see §12.2-11(d)) or if the estate and appeals
officer are unable to reach a settlement of the issues, a 90-day letter is mailed to the
personal representative. A 90-day letter includes an audit report setting forth the
basis for the computation of the proposed deficiency, and states that the proposed
deficiency will be assessed unless, within the 90-day period, a petition is filed with
the Tax Court of the United States. See IRC §6213. To avoid assessment, the
personal representative must file a petition with the Tax Court in Washington,
D.C., before the 90-day period expires. See IRS Publication 5, available at
http://apps.irs.gov/app/picklist/list/formsPublications.html.
An extension of time for filing this petition is not available. If the petition is
filed after the 90-day period expires, the United States Tax Court does not have
jurisdiction to hear the dispute. Timely mailing is timely filing, but the mail must
be postmarked by the due date. Deposit in a mailbox or even at a post office on the
last day is not sufficient if postmarking does not occur until the next day.
PRACTICE TIP: If the petition is filed by mail but is not likely to be
received by the Tax Court within the 90-day period, it is desirable to mail
the petition at the post office and to obtain a postmark on the certified mail
receipt so that, if necessary, the estate can establish that the return was
timely filed.
The day the notice is mailed is not counted in fixing the 90-day period, but
the day the petition is filed is counted. If the last day is a Saturday, a Sunday, or a
legal holiday in the District of Columbia, it is not counted as the 90th day. IRC
§6213(a). If the United States Tax Court receives the petition after the 90th day
expires, the burden rests on the estate to establish that the petition was timely
mailed.
A small claims procedure is available for deficiencies of $50,000 or less, and
the Tax Court commissioners, rather than judges, may hear cases. IRC §7463.
The petition to the United States Tax Court must set forth the name of the
estate, the name and address of the personal representative, the amount of the
asserted deficiency (or overassessment), the asserted errors made by the IRS in the
RAR (see §12.2-11(d)), and the facts on which the estate relied. The petition may
be signed by the lawyer for the personal representative and generally must be
verified by the personal representative. The original and four conformed copies of
the petition, together with a filing fee of $60, must be filed with the United States
Tax Court, 400 Second St. NW, Washington, DC 20217. IRC §7451; Tax Court
Rules 20, 23. See the filing instructions, as well as a sample petition, at
www.ustaxcourt.gov/forms/Petition_Kit.pdf.
Under the Tax Reform Act of 1969, Pub L No 91-172, 83 Stat 487), the
United States Tax Court is no longer an administrative court. It is now a court
under Article I of the United States Constitution and has the same powers as a
federal district court. A case before the Tax Court is conducted in much the same
manner as a case before any other court. An answer to the petition must be filed by
the government. A reply may be filed by the petitioner. After the case is at issue, it
is set for trial at the next session of the Tax Court to be held in the area. Usually,
one or two sessions of the Tax Court are held in Portland, Oregon, every year.
Decisions of the Tax Court may be appealed by either party to the United States
Circuit Court of Appeals. IRC §7482(b)(2).
After the case is at issue, an opportunity is provided for a conference on the
issues and on settlement possibilities with representatives from the Appeals Office
and from the regional counsel’s office.
§ 12.2-11(f) Other Forums
At any time before filing a petition in the Tax Court, the personal
representative may elect to waive further administrative hearings by paying the
asserted deficiency. After payment, the personal representative may file a claim for
refund, setting forth the basis on which the claim of overpayment is predicated. A
claim for refund is generally made on IRS Form 843 (available at
www.irs.gov/Forms-&-Pubs), although an overassessment agreement (IRS Form
890) may be considered a claim for refund. Treas Reg §301.6402-2; Rev Rul 68-
65, 1968-1 CB 555.
Attorney fees incurred in the estate tax controversy are deductible in the
final calculation of the tax due (unless claimed as an income tax deduction). Treas
Reg §20.2053-3(c)(2). To be allowed as an estate tax deduction, the regulation also
provides that the attorney fee deduction should be raised as an issue in the claim
for refund to the extent not previously included in the estate tax return.
Normally, the refund claim is assigned to the estate tax lawyer who
originally audited the return. Unless the claim raises new issues or unless new
evidence is presented, it may be expected that the estate tax lawyer will summarily
reject the claim as not involving new matters for consideration. Nevertheless, the
lawyer for the personal representative should prepare the claim with care because,
if it is rejected and suit is brought, the personal representative is generally
precluded from advancing grounds for recovery not stated in the claim. United
States v. Felt & Tarrant Mfg. Co., 283 US 269, 272, 51 S Ct 376, 75 L Ed 1025
(1931); Rogan v. Ferry, 154 F2d 974, 976 (9th Cir 1946). However, the claim for
refund may be amended or supplemented during the time within which to file a
claim. See IRC §6511(a); Treas Reg §301.6511(b)-1.
On receipt of a formal notice of rejection of the claim for refund, the
personal representative may bring a suit for refund in the United States District
Court for the district in which the return is filed or, in the alternative, may file a
petition with the United States Court of Federal Claims in Washington, D.C. If the
Internal Revenue Service does not take action on the refund claim within six
months from the date it is filed, the claim may be deemed rejected, and the suit for
refund may be filed without waiting for the formal notice of rejection. After formal
notice of rejection of the claim, the estate has a period of two years within which to
file a suit for refund in the United States District Court or the United States Court
of Federal Claims. IRC §6532(a).
Decisions of the United States District Court may be appealed to the United
States Circuit Court of Appeals for the circuit in which the district court is located.
Decisions of the United States Court of Federal Claims may be appealed to the
United States Court of Appeals for the Federal Circuit. A decision in a refund suit
is res judicata regarding any subsequent proceedings involving the same claim and
the same year. United States v. C.C. Clark, Inc., 159 F2d 489, 490 (5th Cir 1947).
§ 12.2-11(g) Choice of Forum
If settlement of a disputed tax adjustment cannot be reached at the
conference level (see §12.2-11(d)), the lawyer for the personal representative must
then determine the forum for the litigation. Many factors influence the choice of
forum.
First, and perhaps foremost, is the requirement of prior payment of the
asserted deficiency before a suit may be filed in the United States District Court or
in the United States Court of Federal Claims. See IRC §7422. If the asserted
deficiency is substantial, this requirement alone may necessitate the use of the Tax
Court, since a petition to the Tax Court may be filed without first paying the
asserted deficiency. See §12.2-11(e). If the asserted deficiency is paid before
receipt of the 90-day letter, the Tax Court is not available as a forum. See §12.2-
11(f).
Before selecting the forum, the lawyer should research the issue involved to
determine what courts, if any, have already considered and decided the issue. If,
for example, a particular issue has already been decided by the Tax Court in favor
of the Internal Revenue Service, the choice of the Tax Court as a forum would not
be indicated.
Another consideration could be the desirability of a jury trial on factual
questions, which is available only in the United States District Court. 28 USC
§2402, 28 USC §1346. Also, if the issue in dispute involves applying local law,
litigation in the local district court might be desirable.
§ 12.2-12 Completion of Form 706, Schedules, and Valuation of Particular
Assets
In general, property includable in the decedent’s gross estate must be valued
at its fair-market value as of the valuation date. See IRC §2031, IRC §2032.
The fair-market value has been defined as the price at which the property
would change hands between a willing buyer and a willing seller, neither being
under any compulsion to buy or sell, and both having reasonable knowledge of
relevant facts. The assets are to be valued as of the date of the decedent’s death
unless an election is made to use the alternate valuation method. Treas Reg
§20.2031-1(b).
The alternate valuation date is six months after the date of the decedent’s
death or the date of disposition of the property by the estate or trust, whichever is
earlier. IRC §2032. If the personal representative elects to use the alternate
valuation date, then all property of the gross estate must be valued at its alternate
value.
For further discussion of these general valuation principles, see §§12.1-2 to
12.1-3(b). See also §§12.2-12(a) to 12.2-12(q).
§ 12.2-12(a) Schedule A—Real Estate
As discussed in §§12.2-5(a) to 12.2-5(f), an estate tax return must be filed on
IRS Form 706 (and must be the version released by the IRS for the period that
includes the decedent’s date of death). See www.irs.gov/Forms-&-Pubs. If any real
estate is included in the decedent’s gross estate, Schedule A must be filed with the
return.
The instructions for Schedule A provide that real estate must be described
“in enough detail so that the IRS can easily locate it for inspection and valuation.”
A legal description and, if available, a street address should be included. The full
market value of the property should be reported notwithstanding the fact that the
decedent may have been personally liable for a mortgage on the property. The
unpaid balance of any mortgage is shown as a deduction on Schedule K of the
return (see §12.2-12(l)).
Joint tenancy interests and real estate owned by trusts are not disclosed on
Schedule A. They are disclosed on Schedule E (jointly owned property; see §12.2-
12(f)) and Schedule G (transfers during the decedent’s lifetime; see §12.2-12(h)).
PRACTICE TIP: The values for land and improvements should be
shown separately for income tax cost-basis purposes. Timber or crops on the
land should be valued and separately stated.
PRACTICE TIP: The value of livestock, farm machinery, and other
personal property should be listed as separate assets on Schedule F. See
§12.2-12(g). Mineral rights and oil and gas royalty interests are treated as
real property and should be listed on Schedule A. See IRS Gen Couns Mem
39,767 (Feb 12, 1985).
PRACTICE TIP: It is advisable for the personal representative to obtain
a written appraisal from a qualified appraiser. A purchase price for a sale
occurring within a reasonable time from the date of death is a strong
indication of fair-market value. Before using the county assessor’s valuation,
the lawyer should make certain that it is a correct indicator of true market
value. At times, it has been too low, and at other times, it has been too high.
PRACTICE TIP: The personal representative should avoid using the
county assessor’s valuation for agricultural property when the property has
been taxed as exclusive farm-use property. In such circumstances, no
relationship exists between the assessor’s value and market value for highest
and best use.
Procedures for a special-use value for certain business and agricultural
property are set forth in IRC §2032A. See §§12.2-12(b) to 12.2-12(b)(4).
§ 12.2-12(b) Special-Use Value for Certain Farm and Business Property
The tax code permits an executor to elect to value certain qualifying real
property at its actual-use value, rather than at its highest-and-best-use value or fair-
market value (subject to a maximum value reduction of $1,070,000 for decedents
dying in 2013 as described below). IRC §2032A.
The election is available only for property that meets the numerous
requirements of IRC §2032A, including that the property was being used “as a
farm for farming purposes” or was being used “in a trade or business other than the
trade or business of farming,” IRC §2032A(b)(2). See §12.2-12(b)(1).
Once the election is made, the family must continue to use the real property
in the same manner for the next 10 years, or an additional estate tax will be
imposed. IRC §2032A(c)(1).
COMMENT: The numerous technical requirements of IRC §2032A can
be understood only by a thorough reading of both the Internal Revenue Code
and the regulations. This chapter does not provide a detailed discussion of
this subject. See Section 2032A—Special Use Valuation, 833-3rd Estate Tax
Mgmt (BNA) (citation not verified by publisher).
PRACTICE TIP: Two separate appraisals will be needed if the election
is made. The property must be appraised at its highest and best use to
determine whether the estate meets the percentage tests for qualification
described in IRC §2032A(b). Also, because the special valuation cannot
reduce the value by more than a specified amount (IRC §2032A(a); see
§12.2-12(b)(1)), the taxpayer must also have an actual-use value or a
production-use value determined in order to ascertain the difference between
the values.
For decedents dying in 2018, the limitation on the valuation reduction under
IRC section 2032A is $1,140,000. See Rev Proc 2017-58, 2017-45 IRB 489,
§ 12.2-12(b)(1) Requirements for Special-Use Valuation
If the requirements of IRC §2032A are satisfied, IRC §2032A(a)(3) permits
the fair-market value of the qualifying property to be reduced to its special-use
value, subject to a maximum value reduction of $750,000, as indexed for inflation.
For decedents dying in 2013, the indexed amount is $1,070,000. See Rev Proc
2012-41.
For real property to qualify for the special-use valuation provided by IRC
§2032A, the following requirements must be satisfied:
(1) The real property included in the decedent’s gross estate must be
“qualified real property” located in the United States;
(2) On the date of the decedent’s death, the property must have been
devoted to a “qualified use,” that is, the property was being used “as a farm for
farming purposes” or was being used “in a trade or business other than the trade or
business of farming,” IRC §2032A(b)(2); and
(3) The property must be acquired from or passed from the decedent to a
“qualified heir” (see IRC §2032A(e)(1)–(2)).
IRC §2032A(b)(1).
In addition, the following requirements must be met:
(1) The “adjusted” value of the real property used for the farming or
business purpose must equal or exceed 25% of the adjusted value of the decedent’s
gross estate, IRC §2032A(b)(1)(B);
(2) The “adjusted” value of the real and personal property used for the
farming or business purpose must comprise at least 50% of the adjusted value of
the decedent’s gross estate, IRC §2032A(b)(1)(A); and
(3) An appropriate election must be filed by the executor, IRC
§2032A(a)(1)(B).
NOTE: The 25% and 50% tests above are each subject to a “qualified
use” test, which is described below.
The “adjustment” required is the reduction for any amounts allowed as
deductions under IRC §2053(a)(4), which permits deductions for mortgages and
liens. IRC §2032A(b)(3).
Property is “considered to have been acquired from or to have passed from
the decedent” if the property is so considered under IRC §1014(b). Thus, only
property receiving a basis adjustment under IRC §1014(b) would be eligible,
except that property acquired from a trust is also eligible to the extent that the
property was includable in the decedent’s gross estate. Finally, the Economic
Recovery Tax Act of 1981 (ERTA 1981), Pub L No 97-34, 95 Stat 172, amended
IRC §2032A to allow property purchased from the estate of the decedent by a
“qualified heir” to be considered as acquired from the decedent. IRC
§2032A(e)(9). This provision is effective for estates of decedents dying after 1976.
NOTE: The repeal of IRC §2035 by ERTA 1981 does not apply for
purposes of IRC §2032A. Thus, transfers within three years of the
decedent’s death must continue to be taken into account when calculating
the “adjusted” gross estate for purposes of determining whether the 25% and
50% tests have been met.
Regarding what is included in the term real property for purposes of the
special-use valuation, IRC §2032A(e)(3) specifies that residential buildings and
related improvements on such real property that are occupied on a regular basis by
the owner or the lessee of the real property (or by persons employed by either the
owner or the lessee) must be included, as well as “roads, buildings, and other
structures and improvements functionally related to the qualified use.” Timber that
is merchantable and growing crops do not constitute qualified real property, except
that for a decedent whose death occurred after 1981, the executor may elect to have
growing trees excluded from classification as crops if the trees relate to timber
operations for which records are normally maintained as to distinct areas. See IRC
§2032A(e)(13).
As noted above, the 25% and 50% tests are each subject to a “qualified use”
test. Both of the following tests must be satisfied:
(1) With respect to the 50% test, the real and personal property to which
the test is applied must have been used on the date of the decedent’s death by the
decedent or a member of the decedent’s family either for farming purposes or in a
trade or business other than farming, IRC §2032A(b)(1)(A)(i); and
(2) With respect to the 25% test, the real property to which the test is
applied must have been used as a farm or in a trade or business other than farming
for periods aggregating five years or more during the appropriate eight-year
observation period; during this five-year period, the decedent or a member of the
decedent’s family must have “materially participated” in operating the farm or
business activity. IRC §2032A(b)(1)(C).
NOTE: For decedents dying after 1981, the eight-year observation
period is to be the eight-year period ending on the earliest of (1) the date of
the decedent’s death, (2) the date the decedent became disabled, or (3) the
date the decedent retired. IRC §2032A(b)(4).
The determination of material participation under IRC §2032A is similar to
such determination under IRC §1402(a)(1), which relates to self-employment. IRC
§2032A(e)(6). ERTA 1981 expanded the definition of material participation to
include “eligible qualified heirs” who “actively manage” the farm or business. IRC
§2032A(c)(7)(B). This expanded definition permits certain members of the
decedent’s family to meet the material-participation requirement even though they
are not actually operating the farm or business. Thus, the period of a surviving
spouse’s “active management” may be aggregated with that of the decedent for the
purpose of meeting the five-year test. The active-management provisions seem to
permit less required involvement in the day-to-day operations as long as general
managerial or consultation activities are carried on with the farm operator. An
“eligible qualified heir” is a “qualified heir” who (1) is the surviving spouse of the
decedent, (2) has not attained the age of 21, (3) is disabled, or (4) is a student. IRC
§2032A(c)(7)(C).
PRACTICE TIP: For estates of farm owners leasing their property on a
crop-share basis, the terms of the lease should be such as to enable the lessor
to be determined to be materially participating in the operation, if the
benefits of IRC §2032A are sought. Note, however, that “material
participation” may cause some of the income to be self-employment income,
subject to self-employment taxes.
The term qualified heir is defined as a member of the decedent’s family.
IRC §2032A(e)(1). Before ERTA 1981, the term member of the family included
the person’s ancestral or lineal descendant, a lineal descendant of the person’s
grandparent, his or her spouse, the spouse of any such descendant, and the legally
adopted child of the person. Effective for estates of decedents dying after 1981,
ERTA 1981 expanded the definition to include stepchildren by a former marriage
and the spouse of any of the above-described persons. IRC §2032A(e)(2).
For decedents dying in 2018, the limitation on the valuation reduction under
IRC section 2032A is $1,140,000. See Rev Proc 2017-58, 2017-45 IRB 489,
§ 12.2-12(b)(2) Election and Filing
The procedure for electing special-use valuation under IRC §2032A is as
complex as the requirements for qualifying for the election. The election is made
on Schedule A-1 of IRS Form 706. The qualified real estate should also be
identified by a notation of “IRC §2032A Valuation” on the applicable property
schedule. The personal representative must answer part 1 of Schedule A-1 by
marking it as either “regular election” or “protective election,” as the case may be.
Part 2 and part 3 of Schedule A-1 must then be completed. Part 2 includes all items
required by Treas Reg §20.2032A-8(a)(3) and is called the “Notice of Election.”
Part 3 of Schedule A-1 contains the agreement to use special valuation, which must
be signed by all qualified heirs and other interested parties.
To make certain that all requirements have been met for the election,
taxpayers should use the checklist published in the Instructions for IRS Form 706
(available at www.irs.gov/Forms-&-Pubs). The checklist covers the requirements
for the notice of election and a fully executed agreement.
If the qualification-percentage tests are close, the personal representative can
make a protective election by checking the box on line 2 in part 3 of page 2 of
Form 706 and by also checking the box marked “Protective Election” in part 1 of
Schedule A-1. The personal representative must also complete part 2, line 1, and
column A of lines 2 and 3 of part 2 of Schedule A-1. If on audit it is determined
that IRC §2032A applies, then within 60 days of receipt of the notice of
qualification, the personal representative must file an amended Form 706 with all
of the required attachments and a fully completed Schedule A-1. Treas Reg
§20.2032A-8(b).
An IRC §2032A election may be made on a late-filed Form 706, but a
protective election must be made on a timely filed Form 706. See Treas Reg
§20.2032A-8(b). Once made, the §2032A election is irrevocable. IRC
§2032A(d)(1).
The person making the election under IRC §2032A should keep in mind the
following:
(1) The family must continue to use the real estate in the same manner for
the next 10 years, IRC §2032A(c)(1);
(2) Use of the special election will result in a lower basis for income tax
purposes;
(3) Use of the election may cause the loss of the IRC §6166 installment-
payment election because it will cause a direct reduction of the closely held
business interest that must exceed 35% of the adjusted gross estate for IRC §6166
to apply, see §12.2-7(b)(3);
(4) All qualified heirs and other interested parties must sign part 3 of
Schedule A-1 of IRS Form 706, IRC §2032A(d)(2);
(5) Schedule A-1 provides for the appointment of a representative agent
as the party to deal with the Internal Revenue Service; this agent must also sign the
Schedule A-1;
(6) Both a legal description of the property and an appraisal of the
property should be attached to Schedule A-1; without these attachments, the
schedule is not complete and the election may be lost;
(7) If an election is made for “qualified woodlands,” the notice of election
must include a statement explaining why the estate is entitled to make the election,
see IRC §2032A(e)(13)(D);
(8) Schedule A-1 requires that the executor attach affidavits “describing
the activities constituting material participation and the identity and relationship to
the decedent of the material participants”;
(9) The executor must attach to Schedule A-1 a description of the method
used to determine the special-use value as required by Treasury Regulation
§20.2032A-8(a)(3)(viii); and
(10) If a qualified heir is also a “skip person” for purposes of the
generation-skipping transfer tax, additional schedules must be completed and filed
with Schedule A-1.
PRACTICE TIP: All persons having an interest in the property must sign
the election agreement, whether or not such an interest is a possessory
interest. IRC §2032A(d)(2). See Treas Reg §20.2032A-8(c). This could
mean that consents of minor children may be required. An executor who will
be making an election under IRC §2032A should make an early
determination of the signatures required on the agreement. The executor
should take steps (including initiating guardianship proceedings, if required)
to obtain all the required signatures in time to file the agreement before the
applicable period of time expires for filing the election.
Treasury Regulation section 20.2032A-8(b) was held invalid in Finfrock v.
United States, 860 F Supp 2d 651, 2012-1 US Tax Cas (CCH) ¶ 60641 (CD Ill
2012).
Regarding item (7) in the 2012 text, IRC section 2032A(e)(13)(D) was
renumbered IRC section 2032A(e)(13)(E) (qualified woodland).
§ 12.2-12(b)(3) Special-Use Valuation
If the requirements of IRC §2032A are satisfied (see §12.2-12(b)(1)) so that
the property qualifies for the special-use valuation, including the proper and timely
filing of both the election by the executor and the agreement of all persons having
interests in the property (see §12.2-12(b)(2)), the property may be valued for
federal estate tax purposes at its farm-use value or business-use value, instead of at
its fair-market value. IRC §2032A(a)(3).
A special method available for valuing farms may be used if elected by the
executor. IRC §2032A(e)(7). For this purpose, the executor must determine (1) the
“average annual gross cash rental for comparable land,” (2) the average annual
property taxes on such comparable land, and (3) the “average annual effective
interest rate for all new Federal Land Bank loans” in the area. IRC
§2032A(e)(7)(A). The averages are all to be established on the basis of “the 5 most
recent calendar years ending before the date of the decedent’s death.” IRC
§2032A(e)(7)(A). Applying this valuation method, the average tax amount is
subtracted from the average rent amount to determine the rental income net of
taxes. This amount is then divided by the average interest figure to arrive at the
special farm value. The statute precludes this method if no data on comparable
land exists. IRC §2032A(e)(7)(C).
For all qualifying real property other than farms (and also for farms, if the
special method described above is not used), the special value is to be determined
by applying the following factors:
(1) The capitalization of expected income from the property under
“prudent management,” IRC §2032A(e)(8)(A);
(2) The “capitalization of the fair rental value of the land,” IRC
§2032A(e)(8)(B);
(3) If the land is assessed at its special-use value under state law, the
assessed land values under state law, IRC §2032A(e)(8)(C);
(4) Comparable sales of like property in “the same geographical area far
enough removed from a metropolitan or resort area so that nonagricultural use is
not a significant factor in the sales price,” IRC §2032A(e)(8)(D); and
(5) “Any other factor which fairly values the farm or closely held
business value of the property,” IRC §2032A(e)(8)(E).
PRACTICE TIP: From the above list, it is apparent that no exact method
is provided in the statute for determining special value. The final value
depends on the preparation made by the estate to support its approach.
The reduction in value of qualified real property because of special valuation
cannot exceed the inflation indexed value reduction determined under IRC
§2032A(a)(2) ($1,070,000 for deaths in 2013).
PRACTICE TIP: In estates holding large amounts of real property that
could qualify for special valuation, the tracts with the largest percentage-
reduction possibilities and the tracts most likely to be retained for the full
recapture period should be designated for special valuation.
The reduction in value of qualified real property because of special valuation
cannot exceed the inflation indexed value reduction determined under IRC
section 2032A(a)(2) ($1,140,000 for decedents dying in 2018). See Rev Proc 2017-
58, 2017-45 IRB 489, modified and superseded by Rev Proc 2018-18, 2018-10
IRB 392.
§ 12.2-12(b)(4) Recapture of Tax Savings Realized by Special-Use
Valuation
Recapture or recovery of the estate tax savings realized by election of the
special-use valuation results if either the qualified heir disposes of the property to
nonfamily members within the recapture period or the property ceases to be used
for the qualified use within such period. IRC §2032A(c)(1). Generally, the Internal
Revenue Service (IRS) may recover 100% of the tax savings if the triggering event
occurs within 10 years after the decedent’s death.
In one situation, the recovery period may exceed the 10-year period noted
above. The Economic Recovery Tax Act of 1981, Pub L No 97-34, 95 Stat 172,
added a provision to IRC §2032A to allow a qualified heir a grace period of up to
two years before he or she must begin to use the property in a qualified use. IRC
§2032A(c)(7)(A). The 10-year recapture period is extended by the portion of the
two-year period that expired before commencement of the qualified use. IRC
§2032A(c)(7)(A)(ii). This provision is apparently intended to give the qualified
heir sufficient time to arrange his or her affairs before the heir must commence the
qualified use or suffer the imposition of the recapture tax.
Active management by an eligible qualified heir during the recapture period
satisfies the postdeath material-participation requirement in the same manner as
discussed in §12.2-12(b)(1) with respect to the predeath material-participation
requirement. IRC §2032A(c)(7)(B).
The recapture tax is not triggered when a qualified heir disposes of qualified
real property and receives qualified real property in an exchange that qualifies
under IRC §1031 (relating to like-kind exchanges), IRC §2032A(i), or if the
acquisition results in the nonrecognition of gain under IRC §1033 (relating to
certain involuntary conversions), IRC §2032A(h). The property received must be
used in the same qualified use as was the original property. IRC §2032A(h)(3)(B),
(i)(3).
By signing the original consent agreement, each interested person is
personally liable for the tax to be recovered. The additional tax is payable within
six months after the triggering event. IRC §2032A(c)(5).
PRACTICE TIP: A sale by one qualified family member to another
qualified family member will not trigger the recovery of tax, but the
purchasing qualified family member will step into the position of the seller
and will be personally liable for any additional tax even though the
purchaser paid full consideration for the property. See IRC §2032A(c).
When appropriate, indemnification of the purchaser by the seller should be
sought at the time of purchase, particularly if the purchase price is
determined by the fair-market value of the property.
A special lien is imposed on specially valued real property for the possible
additional tax. The lien exists until the IRS is satisfied that no further liability for
the additional tax may arise, or, if liability has arisen, until the tax is paid. IRC
§6324B(b). Note, however, that the statute provides that “the furnishing of security
may be substituted for the lien.” IRC §6324B(d). The statute of limitations for
assessing this tax does not expire until three years after the IRS is notified of the
disposition of the property or the cessation of the qualified use. IRC §2032A(f)(1).
The Tax Reform Act of 1984 added IRC §2032A(d)(3), which provides for
the modification of a special-use election or agreement. After filing the election
and the required agreement, the personal representative of the estate has a
reasonable period of time, not exceeding 90 days, in which to cure any technical
defects in them. IRC §2032A(d)(3). The 90-day period commences after IRS
notification to the estate that a defect exists. An example of a technical defect is the
failure to include the signatures of all persons having an interest in the qualifying
property.
PRACTICE TIP: In some cases, the use of IRC §2032A is indicated. In
most cases, however, either the strict qualification requirements cannot be
met, the consent of all heirs cannot be obtained, the reduction in value is
insignificant, the risks of personal liability among a group outweigh any
advantage from tax savings, or the value-reduction ceiling and other
complications built into IRC §2032A militate against use of the election
under the statute.
PRACTICE TIP: In deciding whether or not to make an election under
IRC §2032A, the executor should consider the effect that the reduced
valuation might have on meeting the percentages required for an extension
of payment under IRC §6166 and the resulting lower increase in tax basis
under the basis-adjustment provisions of IRC §1014.
PRACTICE TIP: Schedule A-1 of IRS Form 706 is used to report the
additional information that must be submitted to support the election. To
make a valid election, Schedule A-1 must be completed and must be
accompanied by all the required statements and appraisals. Part 3 of
Schedule A-1 contains the form of agreement required to be completed if the
election is made.
IRC section 2032A(h)(3)(B) and (i)(3), cited in the fourth paragraph of the
2012 text, has been amended and renumbered as IRC section 2032A(e)(14)(C)(i).
§ 12.2-12(c) Schedule B—Stocks and Bonds
If the decedent’s gross estate contains any stocks or bonds, Schedule B must
be filed with the estate tax return. See IRS Form 706, at www.irs.gov/Forms-&-
Pubs.
See §§12.2-12(c)(1) to 12.2-12(c)(7).
§ 12.2-12(c)(1) Stocks and Bonds Listed on an Exchange or Sold
OTC
Stocks and bonds sold on a stock exchange or over the counter are to be
valued at “the mean between the highest and lowest quoted selling prices on the
valuation date” or the mean between the highest and lowest bid-and-ask quotations
on the valuation date. Treas Reg §20.2031-2(b)(1).
If no sales occurred on the valuation date, “the fair market value is
determined by taking a weighted average of the means between the highest and
lowest sales on the nearest [trading] date before and the nearest [trading] date after
the valuation date.” Treas Reg §20.2031-2(b)(1). “The average is to be weighted
inversely by the respective numbers of trading days between the selling dates and
the valuation date.” Treas Reg §20.2031-2(b)(1). Thus, if a decedent died on
Sunday and the nearest available quotations consisted of a mean price of $10 on
the previous Friday (the nearest preceding trading day) and $13 on the following
Monday (the nearest following trading day), the fair-market value of the stock as
of the Sunday valuation date would be $12.50.
CAVEAT: The executor should take care in valuing many of the federal
government’s securities, which are often listed in 32nds rather than in
decimals. For instance, a quote of 101.8 is not 101 and 8/10; it is 101-8/32
(101.25 in decimals).
§ 12.2-12(c)(2) Stocks and Bonds When Prices Do Not Reflect Fair-
Market Value
The available selling price or bid-and-ask prices for stocks and bonds may
not reflect fair-market value because of the nature of the decedent’s holding. For
example, if the decedent’s stock interest constitutes a majority holding in a
company, the valuation based on a sale or an offer of sale of a minority stock
ownership would not necessarily establish the fair-market value of the decedent’s
interest. Likewise, if the decedent’s holding is so large as to require unusual
underwriting methods for disposition, a selling price or quoted price for the sale of
a substantially lesser volume of stock would not necessarily indicate the fair-
market value of the block of stock held by the decedent. Treasury Regulation
§20.2031-2(e) provides as follows:
If the executor can show that the block of stock to be valued is so large in relation
to the actual sales on the existing market that it could not be liquidated in a
reasonable time without depressing the market, the price at which the block could
be sold as such outside the usual market, as through an underwriter, may be a
more accurate indication of value than market quotations.
When a value other than the quoted bid-and-ask price or selling price is to be
used, the executor must submit complete information with the return to justify the
valuation used. Treas Reg §20.2031-2(f). This valuation problem, as it relates to
letter stock or other restricted stock, is discussed in Revenue Ruling 77-287, 1977-
2 CB 319.
§ 12.2-12(c)(3) Stock in Closely Held Businesses
When selling prices or bid-and-ask prices are unavailable, as in closely held
businesses, the valuation of stock must be determined by considering all factors
influencing the value of stock ownership. Those factors include, but are not limited
to, the “economic outlook in the particular industry”; “the company’s position in
the industry and its management”; corporate earnings; the value of underlying
assets; the “goodwill of the business”; and the value of stocks of comparable
corporations engaged in the same or a similar line of business and that are quoted
on a stock exchange. Treas Reg §20.2031-2(f). Revenue Ruling 59-60, 1959-1 CB
237, contains a thorough and complete discussion of the valuation guidelines to be
used in valuing the stock of closely held businesses. See also Rev Rul 65-193,
1965-2 CB 370.
PRACTICE TIP: In all cases involving stock in a closely held business,
the executor should consider obtaining an independent appraisal.
COMMENT: For purposes of federal gift and estate taxes, the valuation
of interests in closely held businesses continues to occupy much of the time
and attention of taxpayers and their representatives, the Internal Revenue
Service (IRS), and the Tax Court. The potential tax savings through
discounting the value of minority interests in closely held businesses has
been the subject of many articles describing these benefits, and the IRS has
taken notice.
PRACTICE TIP: Although there is no requirement that an independent
appraisal of an interest in a closely held business be obtained except for
certain charitable gifts, it is advisable to obtain an appraisal in many cases.
The appraisal, if prepared correctly, will often resolve many questions or
issues that the IRS might otherwise wish to raise regarding the values
reported on the federal estate tax return. In addition, an appraisal may
provide protection against the imposition of the accuracy-related penalties
discussed in §12.2-8(b) in the event that the values as finally determined for
federal estate tax purposes are substantially higher than the values reported
on the federal estate tax return.
PRACTICE TIP: The executor should keep in mind that these discounts
can be a two-edged sword. Consider an estate that owns 66% of a business
entity. In most cases, the valuation of that 66% ownership will result in
relatively low discounts based on the value of the business as a whole. Now
consider a will that disposes of the decedent’s ownership by two bequests,
one to charity of 33% of the outstanding shares (e.g., one-half of the estate’s
ownership), with the other 33% going to a qualified terminable interest
property (QTIP) trust established for the decedent’s surviving spouse. The
bequests passing to charity and the QTIP trust are minority interests,
although together they comprise the estate’s entire interest. The federal
estate tax provisions applicable in this situation would require that the
estate’s interest in the business be valued as a majority interest (with little
valuation discounts), while the interests passing from the estate to the
charitable and marital devisees would be minority interests (resulting in
substantial valuation discounts when computing). This scenario could occur
when the estate planning lawyer assumed that no tax would be due because
all interests would pass in a manner that qualifies for either the marital
deduction or the charitable deduction.
The valuation principles described in this practice tip are illustrated in
Estate of Mellinger v. C.I.R., 112 TC 26, acq., 1999-35 IRB 314 (1999), in
which the Tax Court held that the estate’s ownership of shares in Frederick’s
of Hollywood would not be combined with the shares taxed in the estate
through a QTIP trust established on the prior death of the decedent’s
husband. The Tax Court held that the two interests would be valued
independently and, because each constituted a minority interest, each would
be valued as such, notwithstanding the facts that the decedent effectively
controlled both interests and the two interests combined would be sufficient
to control the corporation. This was a beneficial result for this taxpayer, but
as this practice tip illustrates, the IRS may apply these principles in other
cases in which the result will favor the government. See also Estate of
Bonner v. United States, 84 F3d 196 (5th Cir 1996); Estate of Schwan v.
C.I.R., 82 TCM (CCH) 168, 171–173 (2001).
§ 12.2-12(c)(4) Dividends
The proper treatment of dividends requires the executor to collect sufficient
information before preparing the tax return.
PRACTICE TIP: The executor must determine the following four dates:
(1) the declaration date, (2) the ex-dividend date, (3) the record date, and (4)
the payment date. The declaration date is the date on which the dividend is
declared by a corporation’s board of directors. The record date is the date on
which a person must be a shareholder according to the corporation’s records
to receive the dividend. The payment date is the date of the dividend check
and is usually the date on which the dividend is mailed. The ex-dividend
date falls between the date of declaration and the record date, and is set by
the stock exchange on which the security is traded. Stock trades “ex-
dividend” between those two dates and the amount of the per-share dividend
is usually reflected in the trading value of the stock. Information concerning
these dates may be obtained from Standard & Poor’s Annual Dividend
Record, Moody’s Dividend Record, dividend checks and quarterly
statements that accompany those checks, or the decedent’s stockbroker.
If the date of the decedent’s death falls between the ex-dividend date and the
record date, then the amount of the dividend is generally reflected in the quoted
stock prices. If not, then the dividend should be added to the fair-market value of
the stock.
If the decedent’s death falls between the record date and the payment date,
then the amount of the dividend is reported separately as an accrued dividend and
is described as a separate item on Schedule B of IRS Form 706 (available at
www.irs.gov/Forms-&-Pubs). It should be listed under the stock to which it
applies. If the alternate valuation is elected, this same dividend amount is reported.
Uncashed dividend checks received by the decedent before his or her death
are reported as miscellaneous property on Schedule F of IRS Form 706 (see §12.2-
12(g)).
§ 12.2-12(c)(5) Interest on Bonds
Interest on each bond accrued from the date of the last payment to the date
of the decedent’s death is separately itemized on the tax return. This same amount
is used notwithstanding the fact that alternate valuation is elected.
EXAMPLE: Assume that the decedent owned $30,000 worth of 3½%
bonds. The counted number of days between regular interest payments is
184. The counted number of days between the last interest payment and the
date of redemption is 65.
The calculation of interest to the date of redemption is:
$30,000 × .035 × 65 = $185.46
2 184
§ 12.2-12(c)(6) United States Savings Bonds
United States savings bonds are issued by the United States Treasury.
Different types or “Series” of bonds have been issued in various periods of time.
For example, Series E bonds were issued before 1980; Series HH bonds are no
longer sold; and Series EE bonds have been issued in various time periods, with
different rules for each time period. See http://invest-faq.com/articles/bonds-us-
savings.html.
Ownership of United States savings bonds is determined by reference to the
federal savings bonds regulations. Bond values are determined by published
redemption tables (available at most banks). Bonds have different maturity dates,
and some bonds can be cashed after a certain period of time. Most commercial
banks will redeem these bonds. U.S. Series E and EE bonds are valued by a
government redemption table, which is updated monthly and is available at any
commercial bank. The U.S. Treasury Department publishes several online tools
that may be used to determine the value of bonds. See www.treasurydirect.gov
/indiv/research/indepth/ebonds/res_e_bonds_eeredeem.htm.
Series E bonds cease drawing interest exactly 40 years from their issue dates
and Series EE bonds cease drawing interest exactly 30 years from their issue dates.
Series E and EE bonds that reach final maturity should be cashed since interest
accruals stop after the final maturity date.
If the decedent was the only registered owner of the bonds, the bonds may
be collected by presenting them to a bank, completing the appropriate form, and
furnishing the decedent’s death certificate.
PRACTICE TIP: For information regarding what to do on the death of a
savings-bond owner, see www.treasurydirect.gov/indiv/research/indepth
/ebonds/res_e_bonds_eedeath.htm.
United States savings bonds and accrued interest are reported on Schedule B
of the estate tax return, except for bonds that both the decedent and the decedent’s
spouse held in the form of a true joint tenancy, which are reported on Schedule E
(see §12.2-12(f)). The accrued interest may be reported on the decedent’s final
income tax return. If this is done, accrued interest is not shown as interest on the
estate tax return. The full redemption value, however, must be reported.
Bonds payable to the decedent “or” the decedent’s wife may be collected at
any bank, or through the electronic Treasury Direct system, by either named party
without any legal requirements, even when one of the named persons is deceased.
Payable-on-death (POD) bonds (for example: John Doe, payable on death, or POD,
to Jane Doe) may also be collected at a bank by the named survivor. The
decedent’s death certificate is required.
Series EE bonds are registered accrual-type bonds. Their purchase price is
equal to the face amount of the bond.
The alternate valuation provisions apply to United States savings bonds in
the same manner as other interest-bearing instruments. Thus, the bonds are valued
at their face amount and interest is accrued through the date of death, even if the
alternate value election is filed under IRC §2032. Treas Reg §20.2032-1(d)(1).
§ 12.2-12(c)(7) Mutual Fund Shares
Open-end mutual funds are valued at the public-redemption price on the
valuation date or on the date that the last redemption price was quoted before the
valuation date. Treas Reg §20.2031-8(b). This valuation differs from the valuation
of closed-end mutual funds and all other securities in which the average of the high
and low (or bid and asked) quotes before and after the valuation date controls.
Treas Reg §20.2031-2. Open-end mutual funds have a market with only the mutual
fund’s home office and, thus, they are valued at their redemption value.
§ 12.2-12(d) Schedule C—Mortgages, Notes, and Cash
If the total gross estate contains any mortgages, notes, or cash, Schedule C
must be completed and filed with the federal estate tax return. See IRS Form 706,
at www.irs.gov/Forms-&-Pubs. Such items should be listed in a certain order. See
Instructions for IRS Form 706, Schedule C.
See §§12.2-12(d)(1) to 12.2-12(d)(2).
§ 12.2-12(d)(1) Mortgages, Notes, and Contracts
Mortgages and notes payable to the decedent at the time of death are
reported on IRS Form 706, Schedule C. However, mortgages payable by the
decedent are reported on Schedule K. See §12.2-12(l).
The fair-market value of mortgages, notes, and contracts receivable is
presumed to be the amount of the unpaid principal, plus interest accrued to the date
of the decedent’s death, unless the personal representative can establish a lower
value by satisfactory evidence. See Treas Reg §20.2031-4.
The valuation placed on estate assets affects the basis of the asset to the
estate for income tax purposes determined under the basis rules. If an item is
valued at less than face value and later collected in full, the difference between the
basis and the total amount collected is taxable as ordinary income.
As a general rule, if an alternate valuation date is selected, both the value of
a note and the amount of accrued interest are the same as on the date of death. The
only exception to this rule is when the note was reported at the unpaid balance on
one date and was discounted on the other date. In either event, the amount of
accrued interest is the amount accrued to the date of death.
PRACTICE TIP: Mortgages, notes, and contracts may be discounted if
the stated interest rate is less than the current rate on similar obligations, if
the maturity date is long-term, or if the payments are in arrears. A demand
note, however, may not be discounted because of a low interest rate. Once a
determination has been made regarding what an appropriate interest rate
yield should be, the discounted value of the obligation can be determined.
§ 12.2-12(d)(2) Cash and Bank Deposits
All checking accounts, savings accounts, time certificates of deposit, and
cash held separately in the decedent’s name should be reported on IRS Form 706,
Schedule C. Interest accrued from the last payment date to the date of the
decedent’s death on each of these accounts should be reported as a separate item.
PRACTICE TIP: It is often helpful to enlist the bank’s assistance in
determining the accrued interest to the date of the decedent’s death.
PRACTICE TIP: Any checks issued before the date of the decedent’s
death that clear after the date of death should either be taken as a deduction
on Schedule K (see §12.2-12(l)), or be used to reduce the date-of-death
balance of the account on Schedule C.
PRACTICE TIP: Bank accounts held jointly with right of survivorship
should not be reported on Schedule C unless the personal representative can
show that (1) the surviving joint owner’s name was on the account for the
convenience of the decedent and (2) the account was not meant to pass to the
surviving joint owner. Jointly owned property is reported on Form 706,
Schedule E (see §12.2-12(f)).
PRACTICE TIP: Money market accounts at brokerage houses and
mutual funds are generally considered stocks and should be reported on
Form 706, Schedule B.
§ 12.2-12(e) Schedule D—Insurance
Every life insurance policy on the life of the decedent must be listed on
Schedule D of IRS Form 706, whether or not the policy is part of the decedent’s
gross estate. See Instructions for Form 706, Schedule D; www.irs.gov/Forms-&-
Pubs.
Proceeds of all insurance policies payable to the decedent’s estate, whether
or not owned by the decedent, must be included in the gross estate. IRC §2042.
Proceeds of all insurance policies owned by the decedent or in which the
decedent possessed “incidents of ownership” must be included in the gross estate
regardless of the named beneficiary. IRC §2042(2). Incidents of ownership include
the power to change the beneficiary, the power to surrender or cancel the policy,
the power to assign the policy, the power to pledge the policy for a loan, a
reversionary interest of more than 5% of the value of the policy, or the right to
economic benefits. IRC §2042(2); see Instructions for Form 706, Schedule D.
Life insurance policies on the life of the decedent owned by a business or a
person other than the decedent and payable to someone other than the decedent’s
estate must also be disclosed on Schedule D. The proceeds of the policy, however,
are not included as part of the gross estate.
Insurance policies listed on Schedule D should include the name of the
insurance company, the policy number, the beneficiary, and the amount of the
proceeds. The proceeds included are equal to the sum of the face value of the
policy, minus any indebtedness, plus accrued dividends, and any returned
premiums. The check made payable to the beneficiary frequently includes interest
earned on the proceeds after the date of death, which is not part of the taxable
estate, and should be reported as income on the fiduciary income tax return for the
estate. These are usually labeled as “postmortem dividends.”
For every life insurance policy listed on Schedule D, the personal
representative must request a statement on IRS Form 712 from the company that
issued the policy, and a copy of each form must be attached to the estate tax return.
The insurance company must provide this form on request.
Insurance includable on this schedule includes relevant accident insurance,
flight insurance purchased at air terminals, national service life insurance, group
insurance, and double-indemnity proceeds. Death benefits voluntarily paid by an
employer customarily are not treated as insurance proceeds reported on Schedule
D.
If a decedent owns life insurance on the life of another person, the cost of
the replacement value of the policy is reported on Schedule F of the estate tax
return (see §12.2-12(g)). This value may be obtained from the insurance company.
If the value is not readily ascertainable, it may be approximated by adding the
interpolated terminal reserve value of the policy to the unearned gross premium
last paid. Treas Reg §20.2031-8(a)(2). See §12.1-3(h) for further discussion.
§ 12.2-12(f) Schedule E—Jointly Owned Property
Property in which the decedent at the date of death held an interest as a joint
tenant or as a tenant by the entirety with right of survivorship is reported on
Schedule E of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs). All forms
of jointly owned property are reportable on Schedule E, including real estate,
personal property, and bank accounts.
Property held by the decedent as a tenant in common with another person
should not be reported on this schedule, but the decedent’s interest should be listed
on other appropriate schedules for separately held property.
For decedents dying after 1981, only one-half of the property held jointly
between husband and wife is subject to tax without regard to which spouse actually
contributed to acquiring the property. IRC §2040(b). However, Schedule E
requires that 100% of the value of such property must first be reported on line 1a
of the schedule, with the total of all properties listed reduced by one-half at line 1b.
As discussed in §12.1-3(f), joint interests between a husband and wife
created before 1977 are not subject to the automatic 50% inclusion rule, and in
some cases it may be desirable to trace contributions to establish ownership of such
property as other than equal.
If indebtedness exists against property held jointly with a spouse, such as a
mortgage on a residence held as tenants by the entirety, the personal representative
may wish to show the mortgage as a reduction in the value of the property before
the division by one-half. If the mortgage is to be listed as a deduction on Form 706,
Schedule K (see §12.2-12(l)), only one-half is deductible. If mortgage-cancellation
insurance will pay the indebtedness, the full amount of the insurance proceeds
should be shown on Schedule D (see §12.2-12(e)) because the insurance pays off
both spouses’ indebtedness, and the surviving spouse’s interest is thereby
enhanced.
Property owned jointly with the surviving spouse is reported on part 1 of
Schedule E. Property held jointly with right of survivorship with a person other
than the surviving spouse is reported on part 2 of the schedule. The full value of
the property is reportable under part 2, unless the surviving joint tenant can show
contribution toward acquisition of the property through purchase or inheritance
from someone other than the decedent. Proof of contribution must be
demonstrated. See §12.1-3(f) for further discussion of this topic.
§ 12.2-12(g) Schedule F—Miscellaneous Property
Schedule F of the federal estate tax return (IRS Form 706, available at
www.irs.gov/Forms-&-Pubs) is used to report various assets and interests of the
decedent that are not reportable on any of the other schedules. The more common
assets reported on Schedule F are as follows:
(1) Household furniture and furnishings;
(2) Federal and state individual income tax refunds;
(3) Insurance policies on the life of another person;
(4) Cars, boats, and trailers;
(5) Jewelry and watches;
(6) Coin, stamp, and other collections; and
(7) Business interests in a partnership or other unincorporated business.
See Instructions for Form 706, Schedule F.
The approach to valuing an unincorporated business interest is similar to that
used in valuing the stock of a closely held corporation. The net value must be
determined on the basis of all relevant factors, including goodwill, earning
capacity, economic outlook for the industry and business, etc. Treas Reg §20.2031-
3.
If the decedent had a qualifying income interest for life under a qualified
terminable interest property (QTIP) trust, the trust corpus is included in the
decedent’s gross estate under IRC §2044. The QTIP property is reported on
Schedule F, and question 6 on page 2 of IRS Form 706 must be answered in the
affirmative. Trusts created by the decedent are reported on Form 706, Schedule G
(see §12.2-12(h)).
If the decedent owned items with artistic or collectible value (e.g., jewelry,
furs, antiques, and collections), and if any one item or collection of items is valued
at more than $3,000, then the personal representative must attach to Schedule F an
appraisal by an expert given under oath, as well as the required statement regarding
the appraiser’s qualifications. See Treas Reg §20.2031-6(b); Instructions for IRS
Form 706, Schedule F.
§ 12.2-12(h) Schedule G—Transfers During Decedent’s Life
Schedule G of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs)
must be completed if the decedent made any of the following transfers:
(1) Transfers intended to take effect at death (see §§12.1-3(d));
(2) Transfers with the reservation of a life interest (see §12.1-3(d)(1));
(3) Transfers dependent on survivorship (see §12.1-3(d)(4));
(4) Revocable transfers, IRC §2038 (see §12.1-3(d)(5)); or
(5) Transfers made within three years before the decedent’s death
includable under IRC §2035 (see §12.1-3(c)).
Certain federal gift taxes paid by the decedent on gifts made by the decedent
or the decedent’s spouse within three years before the decedent’s death must also
be reported on line A of Schedule G. The personal representative must review the
federal gift tax returns filed by the decedent within the three-year period before his
or her death. See IRC §2035. The three-year period is measured between the date
of the gift and the date of the decedent’s death. Generally, no gift need be included
on Schedule G if no gift tax return was required because of the use of the annual
exclusion (see §12.1-3(c)). Gifts of insurance policies, however, must be reported.
Adjusted taxable gifts made after December 31, 1976, that have not been included
in the gross estate are included on page 1, line 4, of IRS Form 706. Special rules
are set forth when “split gifts” have been made. See §12.1-6(d).
A worksheet for determining the credit for gift taxes paid is set forth in the
Instructions for IRS Form 706, Worksheet TG. If gift taxes are paid after death, the
amount of the tax should be deducted on Form 706, Schedule K. See §12.2-12(l).
§ 12.2-12(i) Schedule H—Powers of Appointment
If the decedent possessed, exercised, or released any general power of
appointment, Schedule H must be filed with the federal estate tax return (IRS Form
706, at www.irs.gov/Forms-&-Pubs).
The value of all assets over which a decedent possessed a general power of
appointment at the time of his or her death is includable in the decedent’s gross
estate. IRC §2041. A general power of appointment is a power that may be
exercised by the holder of the power in favor of the holder, the holder’s creditors,
the holder’s estate, or the creditors of the holder’s estate. IRC §2041(b)(1). For
further discussion of what constitutes a power of appointment, see Treasury
Regulation §20.2041-1; see also §12.1-3(g).
If the power of appointment is limited by some ascertainable standard, or if
the power is exercisable only in conjunction with another person, the power may
not be a taxable power for death tax purposes, and a further review of the
regulations is required. See IRC §2041(b). If a general power of appointment was
created before October 21, 1942, the power will not be taxable in most cases unless
the decedent has exercised the power. IRC §2041(a)(1); see Treas Reg §20.2041-2.
PRACTICE TIP: The assets subject to a general power of appointment
take all the customary forms, and the personal representative should prepare
and submit a list of the assets subject to the power, valued as of the date of
the decedent’s death. A copy of the instrument creating the power must be
filed with the return. See Instructions for IRS Form 706, Schedule H.
§ 12.2-12(j) Schedule I—Annuities
The area of annuities has many rules and exceptions. For discussion, see
§§12.1-3(e)(1) to 12.1-3(e)(3). Schedule I of IRS Form 706 (available at
www.irs.gov/Forms-&-Pubs) is used for reporting both qualified and nonqualified
annuity contracts, including Keogh plans, IRC §401 plans, HR-10 plans, individual
retirement accounts, and other retirement plans.
Generally, if the benefits are paid in a lump sum, the taxable amount is the
amount paid. If, however, installment payments are made for the life of the
beneficiary or for a term certain, the value of the annuity is determined using
actuarial tables. If the payments are the result of a contract issued by an insurance
company, the value to be reported is the cost of an annuity contract as if purchased
at the decedent’s death. See IRC §§401–409A; see also Instructions for IRS Form
706, Schedule I.
§ 12.2-12(k) Schedule J—Funeral Expenses and Expenses Incurred in
Administering Property Subject to Claims
All funeral expenses and expenses of administration for which a deduction is
claimed should be listed on Schedule J of IRS Form 706 (available at
www.irs.gov/Forms-&-Pubs). For a discussion of funeral expenses, see §12.1-4(d).
For a discussion of expenses of administration, see §§12.1-4(e) to 12.1-4(e)(4).
PRACTICE TIP: Funeral expenses should be reduced by the amount of
any Social Security benefits, veterans’ benefits, or other benefits paid to the
estate or to the mortuary. Benefits paid directly to a surviving spouse need
not be considered.
Administration expenses may generally be allocated in any manner for
deduction on the estate tax return or the estate’s income tax return but not on both.
IRC §642(g). This rule permitting such expenses to be deducted on one return but
not on the other is subject to the limited exception discussed in §12.1-4(e)(2) for
estate-management expenses that are paid from income. Administration expenses
are not deductible, however, for income tax purposes to the extent that the estate
has tax-free or tax-exempt income. In preparing the fiduciary income tax return,
the preparer must allocate administration expenses between taxable income and
tax-exempt income. Interest determined on any estate tax deficiency is a deductible
administration expense. Rev Rul 79-252, 1979-2 CB 333. Interest incurred with
respect to estate taxes deferred under IRC §6166 is no longer a deductible
administration expense after the changes made to that section by the Taxpayer
Relief Act of 1997, Pub L No 105-34, 111 Stat 788.
PRACTICE TIP: If the estate tax rates exceed the income tax rates, it
may make sense for a family member to accept a fee for acting as the
personal representative of an estate. If, for example, the top estate tax rate is
45% and the top income tax rate of the family member/personal
representative is 31%, every dollar of the personal representative’s fee taken
by the family member results in a savings to the family member of 14 cents.
§ 12.2-12(l) Schedule K—Debts of Decedent
All valid debts of the decedent owing at the time of the decedent’s death
should be listed on Schedule K of IRS Form 706 (available at www.irs.gov/Forms-
&-Pubs). See §§12.1-4(b) to 12.1-4(c), 12.1-4(f) to 12.1-4(g).
PRACTICE TIP: In Oregon, real property taxes become a lien against
the property as of July 1 of each year, so such taxes are deductible only if
unpaid at death and the date of death falls after June 30.
The personal representative has an election with regard to taking a
deduction for medical expenses paid by the estate within one year of the date
of the decedent’s death. IRC §213(c). The expenses may be taken either as
an estate tax deduction or as a deduction on the decedent’s final individual
income tax return.
Balances owing on any notes or mortgages, together with interest
accrued to the date of the decedent’s death, are also deductible. If any
indebtedness is secured by property held jointly between husband and wife,
only half of the indebtedness is deductible. The decedent’s share of unpaid
income tax liability is also deductible.
§ 12.2-12(m) Schedule L—Casualty Losses
Schedule L of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs)
allows the personal representative to deduct losses from thefts, fires, storms, or
other casualties that occurred during the settlement of the estate. Amounts
reimbursed by insurance are not deductible. Expenses incurred in administering
property not subject to claims are also deductible on this schedule. This usually
includes expenses in connection with the administration of a trust created before
the decedent’s death or in connection with the disposition of other property that is
not subject to probate. Expenses incurred for the administration of property not
subject to claims (nonprobate property) are also deducted on Schedule L. The fees
for preparing Form 706 are also deducted if no probate estate exists to charge the
fees against. See §12.1-4(h) for further discussion of this topic.
§ 12.2-12(n) Schedule M—Bequests, etc., to Surviving Spouse
Schedule M of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs) is
used to calculate the marital deduction with regard to gifts and bequests to a
surviving spouse. For a discussion of the marital deduction, see §§12.1-5(a) to
12.1-5(d). A marital deduction for qualified terminable interest property (QTIP) is
possible only if a proper election has first been made on Schedule M of Form 706.
Great care should be taken in preparing this schedule, and each asset or interest for
which a marital deduction is claimed should be properly identified by item and
schedule number.
PRACTICE TIP: If a marital deduction is being claimed for QTIP
property, the appropriate boxes on Schedule M must be checked, and all
QTIP property must be identified and described in line 3 of Schedule M. See
§12.1-5(c)(3).
CAVEAT: If the decedent’s will was prepared before September 12,
1981, the marital deduction could be limited to the larger of (1) one-half of
the gross estate or (2) $250,000. See Amiel v. C.I.R., 74 TCM (CCH) 239
(TC 1997) (discussed in §12.1-5(a)), for evidence that the transitional rule
concerning the unlimited marital deduction still applies. See Economic
Recovery Tax Act of 1981, Pub L No 97-34, 95 Stat 172. This is the result
of a transitional rule for marital deduction clauses contained in wills and
other documents executed before that date. These formula clauses typically
give to the surviving spouse an amount of the estate equal to the maximum
marital deduction, with the rest of the estate passing to, or for the benefit of,
others. Because the maximum marital deduction is now unlimited, such a
provision causes the entire estate to pass to the spouse, while children and
others receive nothing. Congress chose to avoid this result by specifying that
the unlimited marital deduction does not apply to wills and trusts containing
formula clauses if those wills and trusts were executed on or before
September 12, 1981. If the decedent’s will was signed on or before that date
and has a formula marital deduction clause, the unlimited marital deduction
may not be available.
CAVEAT: If the decedent’s will provides that estate and inheritance
taxes are to be paid from the residue of the estate, any residual bequest to the
surviving spouse must be reduced by the sum of those taxes. Such a
reduction of a residual bequest usually results in an interrelated calculation
of the federal estate tax.
The interplay of the marital deduction and deduction for claims was
explained in Private Ruling I.R.S. TAM 200104008 (Jan 26, 2001). The decedent
and his spouse owned certain real property as tenants by the entirety, resulting in
one-half of the value of the property being included in the decedent’s gross estate
under IRC §2040(b). The property was also subject to a mortgage on which the
decedent and his spouse were jointly and severally liable. The Internal Revenue
Service stated that one-half of the gross value of the jointly owned property (not
reduced by the mortgage) would be included in the decedent’s gross estate, and
that one-half of the outstanding balance of the mortgage, as of the date of the
decedent’s death, would be deductible as a claim under IRC §2053(a)(3). The
estate would also be entitled to a marital deduction equal to the value of the
property included in the gross estate, minus one-half of the outstanding balance
due on the mortgage on the date of the decedent’s death.
§ 12.2-12(o) Schedule O—Charitable Bequest
Assets of the decedent passing to a qualified charity are listed on Schedule O
of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs) and are deductible
against the gross estate. For further discussion, see §§12.1-4(i) to 12.1-4(i)(2).
CAVEAT: If the decedent’s will provides that estate and inheritance
taxes are to be paid from the residue of the estate, any residual bequest to
charity must be reduced by the sum of those taxes. Such a reduction of a
residual bequest usually results in an interrelated calculation of the federal
estate tax.
If the charitable beneficiary is a residuary beneficiary, the preparer must
attach a computation showing how he or she arrived at the residuary value. This
computation must also show the reduction of all taxes charged to the charitable
residue portion. See Instructions for IRS Form 706, available at
www.irs.gov/Forms-&-Pubs.
§ 12.2-12(p) Schedule P—Credit for Foreign Death Taxes
Schedule P of IRS Form 706 (available at www.irs.gov/Forms-&-Pubs) is
used for claiming a credit for taxes paid to a foreign country when the credit has
been authorized by statute or treaty. See §12.1-6(f).
§ 12.2-12(q) Schedule Q—Credit for Tax on Prior Transfers
A credit is allowed against the decedent’s federal estate tax liability for
federal estate taxes that have been paid on the transfer of property to the decedent
from a transferor who died within 10 years before or two years after the date of the
decedent’s death. To claim such a credit, the executor must file Schedule Q with
the estate tax return (IRS Form 706, at www.irs.gov/Forms-&-Pubs). For further
discussion of this credit, see §12.1-6(e).
§ 12.2-12(r) Schedules R and R-1—Generation- Skipping Transfer Tax
Schedules R and R-1 of IRS Form 706 (available at www.irs.gov/Forms-&-
Pubs) are multipart forms used to determine the estate tax value of property
interests subject to the generation-skipping transfer (GST) tax and for calculating
and allocating available exemptions. For further discussion of the GST tax, see
chapter 13.
§ 12.2-12(s) Documents that Must Accompany Form 706
As set forth in Treasury Regulation §20.6018-4 and the instructions for IRS
Form 706 (available at www.irs.gov/Forms-&-Pubs), the following documents
must accompany the estate tax return:
(1) A certified copy of the will, if the decedent died testate;
(2) A certified copy of the death certificate;
(3) If a credit for foreign death taxes is claimed, a certificate on IRS Form
706-CE signed by the foreign government and evidencing the amount of the
foreign death tax paid (this form is completed by the personal representative and
mailed to the foreign government for certification);
(4) Life insurance statements: (a) For policies on the decedent’s life, the
tax preparer should obtain IRS Form 712 from the insurance company and file it
with the return; (b) in addition, the instructions for Schedule F (see §12.2-12(g))
indicate that when the decedent owned insurance on the life of another, the tax
preparer should obtain IRS Form 712 for each such policy and file each form with
the return; (c) the instructions for Schedule D (see §12.2-12(e)) also provide that
the estate representative must submit complete information for any insurance on
the decedent’s life that the representative believes is not includable in the gross
estate;
(5) If alternate valuation has been elected, evidence supporting statements
regarding sales or other dispositions during the six-month period following the
decedent’s death and, if applicable, a court-certified copy of any judgment of
distribution entered into during the six-month period;
(6) If a transfer has been made by written instrument, a copy of the
instrument (such as a trust agreement) must be filed with the return; if the
instrument is a public record, the copy must be certified; if the instrument is not a
public record, the copy must be verified;
(7) In the case of an estate of a nonresident citizen:
(a) A court-certified copy of any inventory of property and schedule of
liabilities as well as claims against the estate and administration expenses filed
with the foreign court of probate jurisdiction; and
(b) A certified copy of any foreign death tax returns filed;
(8) In the case of a nonresident alien, if deductions are claimed, a certified
copy of the inventory filed under the foreign law;
(9) A copy of any appraisal on which valuation of any real property is
based, together with an explanation of the basis of the appraisal (see Schedule A,
discussed in §12.2-12(a));
(10) Financial statements for closely held businesses for each of the five
years preceding the valuation date (see Schedule B, discussed in §§12.2-12(c)(1) to
12.2-12(c)(7));
(11) If the decedent possessed a power of appointment, a certified or
verified copy of the instrument granting the power, together with a certified or
verified copy of any instrument by which the power was exercised or released (see
Schedule H, discussed in §12.2-12(i));
(12) If executor’s commissions or attorney fees have not been paid at the
time of the final audit of the estate tax return, an affidavit or statement signed
under penalties of perjury of the executor or lawyer stating that the amount of the
claimed deduction for commissions or fees has been agreed on and will be paid
(see Schedule J, discussed in §12.2-12(k));
(13) If property interests passing by the decedent’s will are listed as
qualifying for the marital deduction, a certified copy of the order admitting the will
to probate must be included; in addition, if the court has entered any order or
judgment interpreting the will or has entered a judgment of distribution, a copy of
such an order or judgment and a copy of a renunciation, disclaimer, or election to
take against the will filed by the surviving spouse should also be included (see
Schedule M, discussed in §12.2-12(n)); and
(14) If an estate includes works of art or items with collectible value and
any item or collection of similar items is valued in excess of $3,000, the estate
representative must obtain a verified appraisal for filing with the return (see
Schedule F, discussed in §12.2-12(g)).
CAVEAT: It is difficult to set forth a definitive list of all the
documents, enclosures, and attachments that must accompany IRS Form
706. The preparer should consult the instructions for the current Form 706
for a review of the supplemental documents, attachments, and exhibits
required by the instructions for each schedule of the return.
The items listed below update the list of documents in the 2012 text that
must accompany the estate tax return:
(6) This item should now read as follows: A copy of all trust documents
for which the decedent was either the grantor or a beneficiary;
(10a) This item should be added: If valuation discounts were taken, a
statement listing the total effective discount taken;
(13) Note that this item also applies if property interests passing by the
decedent’s will are listed as qualifying for a charitable deduction;
(15) This item should be added: A copy of all federal gift tax returns (IRS
Form 709) filed by the decedent.
Chapter 13: GENERATION-SKIPPING TRANSFER TAX
RICHARD W. MILLER, B.A., Colorado College (1973); J.D., Willamette University College of
Law (1976); admitted to the Oregon State Bar in 1976; partner, Cosgrave Vergeer Kester
LLP, Portland.
The author wishes to thank Jay Richardson (partner, Cosgrave Vergeer Kester LLP, Portland)
for his assistance with this supplement.
A tax is imposed on a generation-skipping transfer (GST). IRC §2601. A
GST occurs when the ownership of certain property is transferred during the
transferor’s lifetime or at the transferor’s death in a manner that, for federal
transfer tax purposes, bypasses a generation below that of the transferor. See IRC
§2611. For example, a GST occurs when a person makes a gift directly to a
grandchild. A GST also occurs when a person gives to his or her child a life
interest in property, remainder to the grandchildren, because the child’s property
interest is not included in the child’s estate for federal transfer-tax purposes.
The law is found in IRC §§2601–2663. The tax is intended to ensure that a
federal gift or estate tax is assessed on wealth (in excess of a sizeable, specific
generation-skipping exemption) at each generation level.
A lawyer deals with the GST tax primarily by: (1) preventing a taxable GST
from occurring through the effective use of both the GST exemption and other
transfers that, although skipping a generation, are excluded from the applicability
of the GST tax; and (2) minimizing or eliminating the applicability of the tax by
taking certain remedial measures.
Because the tax is assessed at the maximum estate tax rate and necessarily
involves relatively large estates, a lawyer dealing with GST issues should closely
review the Internal Revenue Code, the Treasury Regulations (which are extensive
and contain many examples), and GST filing and reporting requirements. Many
private letter rulings issued in this area may also provide guidance.
Although the GST tax applies to any GST made after October 22, 1986 (see
IRC §2601), exceptions apply for GSTs made from certain wills and trusts in place
before that date (see §§13.7-1 to 13.7-2).
NOTE: The GST tax was significantly affected by the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010,
Pub L No 111-312, 124 Stat 3296 (the “2010 Act”). Under the sunset
provisions of the Economic Growth and Tax Reconciliation Act of 2001
(EGTRA), the GST tax was not in effect for most of 2010. The 2010 Act
reinstated the tax for years 2010 through 2012, but with a $5 million GST
exemption for all three years, and a maximum tax rate of 35% on all taxable
GSTs made in 2011 and 2012. IRC §2641; see also IRC §2001, IRC §2010.
However, the maximum tax rate for GST purposes in 2010 is 0%, meaning
that no GST tax applies to taxable transfers made in that year. See 2010 Act
§302(c).
The 2010 Act extended the sunset provisions of EGTRA by two years.
Consequently, in 2013, the GST tax continues, but with a $1 million exemption
and a maximum tax rate of 55%. 2010 Act §101(a)(1).
The Tax Cuts and Jobs Act of 2017 (TCJA), signed by President Trump on
December 22, 2017, increased the estate, gift, and generation-skipping tax
exemptions from $5,000,000 to $10,000,000 (adjusted annually for inflation) per
individual. See Pub L 115-97, 131 Stat 2054. Pursuant to Revenue Procedure 2018-
18, the exemption for 2018 is $11,180,000. Rev Proc 2018-18, 2018-10 IRB 392,
modified by Rev Proc 2018-22, 2018-18 IRB 524. The TCJA provides that the
exemption amount will revert to $5,000,000 (adjusted for post-2011 inflation) after
2025. See § 13.5-2 (amount of exemption).
The tax rate on transfers in excess of the GST exemption remains at 40
percent. See IRC § 2641; IRC § 2001; IRC § 2010.
§ 13.2 DEFINITIONS
Determining the existence of, or the potential for, a generation-skipping
transfer requires reference to a number of definitions found in the Internal Revenue
Code. See §§13.2-1 to 13.2-5.
§ 13.2-1 Transferor
A generation-skipping transfer (GST) is made by a “transferor” during the
transferor’s life or at his or her death. See IRC §2652(a). For a transfer that is also
subject to the federal estate tax, the transferor is the decedent. For a transfer subject
to the federal gift tax, the transferor is the donor. IRC §2652(a)(1). If a married
couple elects to split a gift that is also a GST, each spouse is treated as a transferor
of one-half of the gift. IRC §2652(a)(2).
If a trust contains qualified terminable interest property (QTIP—see chapter
12) the surviving spouse-beneficiary of the trust is thereafter considered to be the
transferor of the trust assets for GST purposes. If, however, the spouse who
establishes the trust, or the legal representative of that spouse, makes a “reverse”
QTIP election, that spouse, rather than the survivor, is treated as the transferor of
the QTIP property. IRC §2652(a)(3). The manner, timing, and effect of making the
election are covered in Treas Reg §26.2652-2(a)–(b).
No partial elections are allowed if a reverse QTIP election is desired for less
than all of the assets in a QTIP trust, because reverse QTIP treatment must be
elected “with respect to all of the property” in a QTIP trust. Treas Reg §26.2652-
2(a) (emphasis added). If the effect of a partial election is desired, the lawyer
should explore options for splitting up the trust. See §13.6-1(b)(4). The result
would be two smaller trusts, with reverse QTIP treatment elected for one of them.
PRACTICE TIP: Because a QTIP trust qualifies for the marital
deduction, making a reverse QTIP election for the trust is a customary
method of using the donor’s or the decedent’s unused GST exemption
without generating a gift or estate tax when the available GST exemption
exceeds the available exemption for a gift and estate tax.
EXAMPLE: A husband (H) has no remaining regular lifetime gift tax
exemption, but he has all of his remaining GST exemption. H establishes a
QTIP trust with income to his wife for life, the remainder to their
grandchildren. No gift tax is due because the QTIP trust qualifies in full for
the marital deduction. H makes a reverse QTIP election for the trust, and
becomes the transferor of the trust assets for GST purposes, and can allocate
his GST exemption to the transfer.
In the context of an irrevocable life insurance trust (see chapter 12), the
grantor is initially the transferor, but a Crummey withdrawal power holder who lets
the power lapse will be considered the transferor for GST purposes (as well as for
federal estate tax purposes) to the extent that the value of the assets affected by the
lapse exceeds the greater of $5,000 or 5% of the value of the trust estate. See
Crummey v. C.I.R., 397 F2d 82 (9th Cir 1968). This rule applies to any other
situation in which powers of appointment may lapse. Treas Reg §26.2652-1(a)(5),
Ex. 5.
§ 13.2-2 Trust
A generation-skipping transfer (GST) may be made not only to an
individual, but also (1) to a trust, (2) from a trust, and (3) when a trust terminates.
For GST purposes, a trust includes any arrangement that “has substantially the
same effect as a trust.” IRC §2652(b)(1). The Internal Revenue Code gives
examples of “life estates and remainders, estates for years, and insurance and
annuity contracts.” IRC §2652(b)(3). If the arrangement is considered a trust for
GST purposes, the trustee is “the person in actual or constructive possession of the
property subject to the arrangement.” IRC §2652(b)(2). Portions of a trust resulting
from GSTs from different transferors are treated as separate trusts for GST
purposes. IRC §2654(b)(1). Substantially separate and independent shares of
different beneficiaries in the same trust are also treated as separate trusts for GST
purposes. IRC §2654(b)(2).
A revocable trust electing to be part of an estate under IRC §645 is part of
the estate for purposes of the separate share rule. IRC §2654(b). The electing trust
is otherwise considered to be a trust for GST purposes.
§ 13.2-3 Interest
A person has an interest in property held in trust if that person:
(1) “[H]as a right (other than a future right) to receive income or corpus
from the trust,” IRC §2652(c)(1)(A);
(2) “[I]s a permissible current recipient of income or corpus from the trust
and is not [a charity] described in section 2055(a),” IRC §2652(c)(1)(B) (IRC
§2055(a) relates to transfers for public, charitable, and religious uses);
(3) Is a charity described in IRC §2055(a) and the trust is a charitable
remainder annuity trust, a charitable remainder unitrust, or a pooled income fund,
IRC §2652(c)(1)(C); or
(d) Is a charity that has a present, nondiscretionary right to receive trust
income or corpus, IRC §2652(c)(1)(B).
EXAMPLE: The following scenario exemplifies items (1) and (2)
above: A parent creates a trust providing for income for life to the child (C),
the remainder to the grandchild. C has an interest in the trust because of C’s
present right to trust income. C would have an interest even if the income
distributions were within the trustee’s discretion, because C would be
currently permitted to receive that income.
Any interests that are used primarily to postpone or avoid the tax on a
generation-skipping transfer (GST) are disregarded for purposes of the statute. IRC
§2652(c)(2). A person does not have an interest in a trust for GST purposes if the
income or corpus of the trust is used to satisfy that person’s obligation of support
and such use is both (1) discretionary and (2) pursuant to any state law
substantially equivalent to the Uniform Gifts to Minors Act. IRC §2652(c)(3). The
Oregon Uniform Transfers to Minors Act is found at ORS 126.805–126.886.
For discussion of the Oregon Uniform Transfers to Minors Act, see
Guardianships, Conservatorships, and Transfers to Minorsv ch 5 (OSB Legal Pubs
2018).
§ 13.2-4 Skip Person and Nonskip Person
A skip person is a person to whom a generation-skipping transfer (GST) is
or may be made, and may be either an individual or a trust. An individual is a skip
person if he or she is assigned to a generation that is two or more generations
below the generation assignment of the transferor. IRC §2613(a)(1). A charity is a
nonskip person. IRC §2651(f)(3).
EXAMPLE: Assuming that a parent (P) is the transferor, then the
grandchild and the great-grandchild of P are skip persons, because they are
two or more generations below that of P.
A trust is a skip person if (1) all of the interests in the trust are held by skip
persons or (2) no person holds an interest in the trust, and at no time after the
transfer may a distribution (including distributions on termination) be made from
the trust to a nonskip person. IRC §2613(a)(2).
EXAMPLE: A trust of which a parent (P) is the grantor provides for
income to the child (C) for C’s life, then income to the grandchild (GC) for
GC’s life, the remainder to the great-grandchild. The trust is not a skip
person because C, a nonskip person, has an interest in the trust and is only
one generation below P. If C had no interest in the trust, the trust would be a
skip person, because GC, a skip person, would have the only interest in the
trust.
A trust is also a skip person if “it can be ascertained by actuarial standards
that there is less than a 5 percent probability” that a distribution will be made to a
nonskip person. Treas Reg §26.2612-1(d)(2)(ii).
A nonskip person is “any person who is not a skip person.” IRC §2613(b).
§ 13.2-5 Executor
An executor for generation-skipping transfer (GST) purposes refers to the
definition of that term for estate tax purposes found in IRC §2203. IRC §2652(d).
The term includes an executor or administrator of a decedent, or, if none, “any
person in actual or constructive possession of any property of the decedent.” IRC
§2203. For GST purposes, however, if no executor or administrator is appointed,
then the executor is: (1) the person “who is primarily responsible for payment of
the decedent’s debts and expenses,” or, if none, (2) the person who possesses the
largest portion of the value of the decedent’s estate. Treas Reg §26.2652-1(d).
§ 13.3 GENERATION ASSIGNMENT

§ 13.3-1 General Rules
The applicability of the generation-skipping transfer (GST) tax depends on
the generation to which a particular beneficiary of a transfer belongs, and whether
that generation is more than one generation younger than that of the transferor. The
generation-assignment rules are set forth in the Internal Revenue Code.
A person who is a lineal descendant of a grandparent of the transferor is
assigned to the generation that “results from comparing the number of generations
between the grandparent and [the person] with the number of generations between
the grandparent and the transferor.” IRC §2651(b)(1). A person “who is a lineal
descendant of a grandparent of a spouse (or former spouse) of the transferor (other
than such spouse) [is] assigned to that generation [that] results from comparing the
number of generations between such grandparent and such [person] with the
number of generations between such grandparent and such spouse.” IRC
§2651(b)(2).
An individual who was married at any time to an individual described in the
foregoing rules is assigned to the generation of that individual. IRC §2651(c)(2).
A person who has been married at any time to the transferor is assigned to
the transferor’s generation. IRC §2651(c)(1).
A relationship by legal adoption is treated “as a relationship by blood,” and a
relationship by half-blood is treated “as a relationship of the whole-blood.” IRC
§2651(b)(3). The death of the biological parent moves an adopted child up one
generation for purposes of determining the applicability of the GST tax within the
relationships created by adoption. See Treas Reg §26.2651-1(c), Ex. 7.
EXAMPLE: A child (C) legally adopts the grandchild (GC). If the
parent (P) makes a gift to GC and GC’s biological parent is deceased, no
GST occurs, because GC is moved up to C’s generation.
An adopted person who is a minor is assigned to the generation below the
adopting parent if (1) the adopted person is a descendant of the parent of the
adopting parent or spouse or former spouse of the adoptive parent, and (2) the
adoption is not for the primary purpose of avoiding the GST tax. Treas Reg
§26.2651-2(b). So, if the adoptive parent (AP) is the brother of the biological
parent, an adopted child (AC) is assigned one generation below AP, regardless of
AP’s or AC’s ages. Treas Reg §26.2651-2(b).
If family relationships are not involved, a person’s birth date must be
compared with that of the transferor for purposes of generation assignment. A
person born not more than 12 1/2 years after the transferor’s birth date is assigned
to the transferor’s generation. IRC §2651(d)(1). A person born more than 12 1/2
years, but not more than 37 1/2 years, after the transferor’s birth date is assigned to
the first generation younger than the transferor. IRC §2651(d)(2). The same rules
are applied for a new generation every 25 years from the birth date of the
transferor. IRC §2651(d)(3).
Charitable organizations and governmental entities are assigned to the
transferor’s generation. IRC §2651(f)(3).
Any individual having a beneficial interest in any other entity having an
interest in the property including, but not limited to, an estate, trust, partnership, or
corporation, is treated as having an interest in the property and is assigned to a
generation under the foregoing rules. IRC §2651(f)(2).
A person assigned to more than one generation by virtue of the above rules
is deemed to be assigned to the youngest such generation. IRC §2651(f)(1).
§ 13.3-2 Predeceased-Ancestor Exception
A transfer that would otherwise be a generation-skipping transfer (GST)
might not be considered as such if, at the time of the taxable transfer that created
the GST or a potential GST, the parent of the lineal descendant who is the
transferee is deceased. In that event, the lineal descendant is moved up one
generation for GST purposes. The predeceased-ancestor exception applies to all
three types of GST transfers: taxable distributions, taxable terminations, and direct
skips. IRC §2651(e). See §§13.4 to 13.4-3.
EXAMPLE: A parent creates a trust for the sole benefit of the
grandchild (GC). If the child, GC’s parent, is deceased at the time of the
transfer, GC is moved up one generation and no GST occurs.
EXAMPLE: A parent creates a trust with income to child 1 (C1) for life,
the remainder to the children of child 2 (C2). If C2 is deceased when the
trust is created, C2’s children move up one generation, and, at the death of
C1, a taxable termination does not occur, because C2’s children are not skip
persons.
EXAMPLE: A parent creates a trust with the discretionary income to
child 1 (C1) or grandchild 2 (GC2), the child of child 2 (C2), and the
remainder to GC2. If C2 is deceased when the trust is created, no taxable
distributions can result from this trust, because GC2 has been moved up one
generation and is on the same level as C1.
If a transferor has no living lineal descendants at the time of the transfer,
transfers to grandnieces and grandnephews also qualify for the exception. IRC
§2651(e).
EXAMPLE: A transferor (T), who has no children, makes a transfer to
the grandniece (GN). If T’s niece (N), who is the parent of GN, is deceased
at the time of the transfer, no GST occurs, because GN moves up one
generation.
EXAMPLE: A transferor (T), who has no children, creates a trust with
income to niece 1 (N1) or grandniece 2 (GN2), the remainder to GN2. If
niece 2 (N2), the parent of GN2, is deceased when the trust is created, GN2
is moved up one generation, and no GSTs to or from that trust can occur.
The predeceased-ancestor exception also applies if the ancestor whose death
would move up generations is (1) living at the time of the GST, but dies within 90
days thereafter, and (2) treated as having predeceased the transferor either under
the terms of the governing instrument (i.e., the will or living trust) or under
applicable local law. Treas Reg §26.2651-1(a)(2)(iii)–(iv). This exception applies
to descendants of the transferor, of the transferor’s spouse, and of the transferor’s
former spouse. Treas Reg §26.2651-1(a)(2)(i).
EXAMPLE: A parent (P) leaves the Child (C) a lifetime interest in a
trust, the remainder to the Grandchild (GC). Assuming a natural sequence of
deaths, a GST will occur on C’s death. But if C dies within 90 days after P’s
death, and the will contains the requisite 90-day window provision, then GC
is moved up to C’s generation, and, because GC is then not a skip person
relative to P, no GST occurs.
PRACTICE TIP: Oregon law does not provide that a person dying
within 90 days after another person’s death is presumed to have predeceased
the latter. So if GSTs are part of an estate plan, such a presumption should
be written into a will or living trust.
A disclaimer by the ancestor within 90 days of the transferor’s death, which,
if made under local law, presumes that the ancestor has predeceased, does not
qualify for the 90-day window, because the ancestor is still alive. Treas Reg
§26.2651-1(a)(2)(iv).
§ 13.4 GENERATION-SKIPPING TRANSFERS

The definition of the term generation-skipping transfer (GST) includes three
types of GSTs:
(1) A “taxable distribution” (see §13.4-3);
(2) A“taxable termination” (see §13.4-2); and
(3) A“direct skip” (see §13.4-1).
See IRC §2611(a); see also IRC §2612.
Even if a transfer fits within one of these three categories, it will not be
considered a GST if it constitutes a “nontaxable gift.” See §13.4-4.
§ 13.4-1 Direct Skip
The term direct skip means “a transfer subject to [estate or gift tax] of an
interest in property to a skip person.” IRC §2612(c)(1).
EXAMPLE: A parent (P) makes a taxable gift of property, or bequeaths
property under P’s will, to the grandchild or the great-grandchild, or to a
trust solely for their benefit. All of the transfers are direct skips.
§ 13.4-2 Taxable Termination
The term taxable termination means the termination (by death, lapse of time,
release of a power of appointment, or otherwise) of an interest in property held in a
trust, unless (1) “immediately after such termination, a non-skip person has an
interest in such property” or (2) “at no time after such termination may a
distribution (including distributions on termination) be made from such trust to a
skip person.” IRC §2612(a)(1). A taxable termination does not occur if the
termination is subject to estate or gift tax. Treas Reg §26.2612-1(b)(1).
EXAMPLE: A parent sets up a trust with income for life to the child
(C), then income for life to C’s brother (B), then the remainder to grandchild
(GC). If B survives C, a taxable termination does not occur, because B, a
nonskip person, has an interest in the trust. A taxable termination occurs on
B’s subsequent death, because then only GC, a skip person, has an interest in
the trust. If B were given a testamentary general power of appointment in the
above example, no generation-skipping transfer would occur, because the
assets subject to the power would be included in B’s estate on his death.
This rule also applies when “a distribution of a portion of trust property is
made to a skip person by reason of a termination occurring on the death of a lineal
descendant of the transferor.” Treas Reg §26.2612-1(b)(2); see also IRC
§2612(a)(2).
EXAMPLE: A parent (P) creates a trust providing for discretionary
payments of income and principal among P’s children (C1 and C2), and
their descendants. The trust further provides that, on the death of the first
child to die, one-half of the trust assets is distributed to the deceased child’s
then-living descendants, and the other half remains in trust for the other
child and that child’s descendants. On C1’s death prior to C2, a taxable
termination occurs with respect to C1’s half of the assets even though a
nonskip person, C2, still has an interest in the trust. Treas Reg §26.2612-
1(b)(2), 1(f), Ex. 9.
§ 13.4-3 Taxable Distribution
The term taxable distribution means “any distribution from a trust to a skip
person (other than a taxable termination or a direct skip).” IRC §2612(b).
EXAMPLE: A parent creates a trust with income to the child (C) or the
grandchild (GC), the remainder to GC. An income distribution made from
the trust to GC while C is alive is a taxable distribution. The distribution is
not a direct skip, because it is not subject to estate or gift tax. It is not a
taxable termination, because C still has an interest in the trust.
§ 13.4-4 Nontaxable Gifts
A nontaxable gift is not a generation-skipping transfer (GST). See IRC
§2642(c)(1). A nontaxable gift means any gift to a skip person to the extent that it
is not taxable because it qualifies for either the annual gift-tax exclusion under IRC
§2503(b), or the exclusion under IRC §2503(e) for educational or medical
expenses. IRC §2642(c)(3). Contributions to qualified state tuition programs, so-
called §529 plans, are nontaxable gifts to the extent that they qualify for the annual
gift tax exclusion. See Prop Treas Reg §1.529-5(b).
A direct skip of a nontaxable gift to a trust benefiting an individual is also a
nontaxable gift, but only if (1) during the life of the individual, no portion of the
corpus or income of the trust may be distributed to, or for the benefit of, any
person other than the individual; and (2) if the individual dies before the trust is
terminated, the assets of the trust are includable in the individual’s gross estate.
IRC §2642(c)(2).
EXAMPLE: A parent (P) makes an annual-exclusion gift to a trust for
the grandchild (GC). The trust allows distributions to be made only to GC
during GC’s lifetime, and, if GC dies before the trust terminates, GC has a
general power of appointment over the trust assets. P’s gift is a nontaxable
gift, because the trust assets subject to the general power would be included
in GC’s estate. If GC had only a lifetime interest in the trust, with lower
generations as vested remaindermen, P’s gift would be a GST, and not a
nontaxable gift, because the trust assets would not be includable in GC’s
estate.
PRACTICE TIP: Because direct skips of nontaxable gifts to individuals
and certain qualified trusts are completely excluded from the GST tax and
require no use of the GST exemption, they are a particularly effective means
to transfer wealth to grandchildren and more distant generations.
The status of Proposed Treasury Regulation section 1.529-5 has not
changed—it is still proposed.
§ 13.4-5 Multi-Generational Skips and Multiple Skips
If a generation-skipping transfer (GST) skips more than one generation, only
one GST transfer takes place because the definition of “skip person” does not
distinguish between generation levels. See IRC §2613(a)(1). See also §13.2-4.
EXAMPLE: A parent (P), whose child, grandchild, and great-grandchild
of the same lineage are all living, makes a taxable direct skip to the great-
grandchild. Even though P’s transfer has skipped two generations, only one
GST has been made.
Multi-generational skips are different from multiple skips. If (1) a GST
occurs, and (2) immediately after the GST, the property subject to the transfer is
held in trust, the transferor of the property is “assigned to the first generation above
the highest generation of any person who has an interest in such trust immediately
after the transfer.” IRC §2653(a).
EXAMPLE: A parent (P) creates a trust in which the trustee can make
discretionary income distributions to the grandchild (GC) or the great-
grandchild (GGC) for GC’s life, the remainder to GGC. Because the only
persons with interests in the trust are skip persons, a direct skip occurs on the
initial transfer by P. Because the property remains in trust, P is thereafter
assigned to one generation above GC, meaning that GC is no longer a skip
person for purposes of all further trust distributions. GGC, who is deemed to
be two generations below P, is a skip person for such purposes, and
subsequent income distributed to GGC constitutes taxable distributions.
Treas Reg §26.2653-1(b), Ex. 1.
§ 13.4-6 Disclaimers
If, as a result of a qualified disclaimer, the disclaimed property skips a
generation, a generation-skipping transfer occurs. IRC §2518.
§ 13.5 THE GST EXEMPTION
The tax imposed on a generation-skipping transfer (GST) can be prevented
through the effective allocation of the GST exemption and the use of nontaxable
gifts. See IRC §§2631–2632. Total GSTs made during life and at death will not be
subject to the tax if their value does not exceed the GST exemption that is allocated
to them.
See §§13.5-1 to 13.5-3(b).
§ 13.5-1 Taxable Amount
The first step in using the generation-skipping transfer (GST) exemption is
determining the taxable amount of the transfer that the exemption is intended to
cover or partially cover. This depends on the kind of GST involved.
In the event of a direct skip, the taxable amount is equal to the value of the
property received by the transferee. IRC §2623.
In the event of a taxable termination, the taxable amount is equal to the value
of all of the property with respect to which the termination has occurred, minus any
administration expenses, indebtedness, and taxes attributable to that property. IRC
§2622.
For a taxable distribution, the taxable amount is equal to the value of the
property received by the transferee, minus “any expense incurred by the transferee
in connection with the determination, collection, or refund” of the GST tax. IRC
§2621(a). Because a transferee is liable for the GST taxes caused by a taxable
distribution (IRC §2603(a)(1)), the taxable amount is increased by the amount of
any tax paid out of the trust from which the taxable distribution was made. IRC
§2621(b).
In determining taxable amounts, the property is valued as of the date of the
GST. IRC §2624(a). If the alternate valuation date (under IRC §2032) or special-
use valuation (under IRC §2032A) is used for a direct skip of the property that is
included in the transferor’s estate, then that value is also used for determining the
value of the GST. IRC §2624(b). The alternate valuation date election is also
permitted for all of the property included in one or more taxable terminations with
respect to the same trust occurring at the same time as a result of the death of an
individual. IRC §2624(c).
The value of any property transferred is reduced by the amount of any
consideration provided by the transferee. IRC §2624(d).
§ 13.5-2 Amount of Exemption
Although IRC §2601 imposes a tax on every generation-skipping transfer
(GST), IRC §2631 provides for an exemption from the tax. Every individual is
allowed a GST exemption that can be used for lifetime transfers or at death.
Unlike the applicable credit amount for the federal estate tax (see IRC
§2010), the GST exemption is not portable. See chapter 12. If a predeceasing
spouse does not fully use that spouse’s $5 million GST exemption for lifetime and
testamentary transfers, the unused portion cannot be used by the surviving spouse
during life or at death.
The amount of the exemption available depends on the year in which the
GST occurs (see IRC §2631(a), (c)):
Year of Transfer GST Exemption

1986–1998 $1,000,000
1999 $1,010,000
2000 $1,030,000
2001 $1,060,000
2002 $1,100,000
2003 $1,120,000
2004–2005 $1,500,000
2006–2008 $2,000,000
2009 $3,500,000
2010–2011 $5,000,000
2012 $5,000,000 (adjusted for
inflation from 2010)

The GST exemption for 2018 is $11,180,000. Rev Proc 2018-18, 2018-10
IRB 392, modified by Rev Proc 2018-22, 2018-18 IRB 524. From 2019 through
2025, the GST exemption will be adjusted for inflation. Beginning in 2026, the
GST exemption will be $5,000,000, adjusted for post-2011 inflation. IRC
§ 2010(c). See IRC § 2001(c).
§ 13.5-3 Allocation of Exemption
The exemption from tax on a generation-skipping transfer (GST) is allocated
by the individual (or the individual’s executor) “to any property with respect to
which such individual is the transferor.” IRC §2631(a). Once made, the allocation
is irrevocable. IRC §2631(b).
Lifetime allocations of the exemption are made by a person on a timely filed
gift tax return, even if no return is required to be filed. IRC §2642(b)(1).
If a person makes a direct skip during his or her lifetime, any unused portion
of the person’s GST exemption is allocated to the property transferred to the extent
necessary to make that transfer free from the GST tax. If the amount of the direct
skip exceeds the unused portion of the exemption, the entire unused portion is
allocated to the property transferred. IRC §2632(b)(1).
Likewise, if a person makes an indirect skip during his or her lifetime, any
unused portion of the GST exemption is automatically allocated to lifetime indirect
skips, essentially meaning trusts (with some exceptions) from which taxable
distributions may occur or which may produce taxable terminations. IRC §2632(c).
Treas Reg §26.2632-1.
A transferor may elect in or out of the deemed-allocation rules on the gift tax
return. IRC §2632(b)(3); Treas Reg §26.2632-1(b)(2)(iii).
After the transferor’s death, the allocation of the transferor’s GST exemption
may be made at any time on or before the date prescribed for filing the decedent’s
estate tax return (determined with regard to extensions). IRC §2632(a)(1). Any
portion of the decedent’s GST exemption that has not been allocated within such
time is deemed to be allocated as follows:
(1) First, to the property that is the subject of a direct skip occurring on
the decedent’s death, IRC §2632(e)(1)(A); and
(2) “[S]econd, to trusts with respect to which such individual is the
transferor and from which a taxable distribution or a taxable termination might
occur at or after such individual’s death,” IRC §2632(e)(1)(B).
The Internal Revenue Code also provides for deemed allocations within the
above categories. See IRC §2632(e)(2).
If the property to which a GST exemption is to be allocated is held in trust,
the allocation is made to the entire trust rather than to specific trust assets. Treas
Reg §26.2632-1(a).
An allocation of the exemption may be made by a formula. Treas Reg
§26.2632-1(b)(4). For example, the allocation may be expressed in terms of an
amount that will be covered by the exemption so that no taxable transfer will
occur.
PRACTICE TIP: As shown in the table in §13.5-2, the GST exemption
has increased from $1 million to $5 million in the past 12 years.
Testamentary documents that provide for GSTs tied to the GST exemption
amount should be reviewed with the client to determine if the larger GST
amount is what the client intends to transfer.
An allocation of the exemption to a trust (except for a charitable lead annuity
trust) is void to the extent that the amount allocated exceeds the amount necessary
to obtain a trust inclusion ratio of zero. Treas Reg §26.2632-1(b)(4). A transferor
will have made a proper allocation of the GST exemption if there was substantial
compliance with the allocation rules. IRC §2642(g)(2).
Regarding the second paragraph of the 2012 text, In Private Letter Ruling
2016-40-013, the IRS concluded that a GST exemption-allocation election that
does not strictly comply with the instructions on a timely filed gift tax return will
nonetheless be considered valid if the information on the return shows that the
taxpayer intended to make the election.
Regarding the practice tip in the 2012 text, the GST exemption for 2018 is
$11,180,000. Rev Proc 2018-18, 2018-10 IRB 392, modified by Rev Proc 2018-22,
2018-18 IRB 524. Testamentary documents that provide for GSTs tied to the GST
exemption amount should be reviewed with the client to determine if the larger
GST amount is what the client intends to transfer. The GST exemption amount
should be checked annually for inflation adjustments. See § 13.5-2 (amount of
exemption).
§ 13.5-3(a) Allocation for Estate Tax Inclusion Period
Special rules apply to the allocation of the generation-skipping transfer
(GST) exemption (and so the determination of the applicable fraction) to lifetime
transfers that would be included in the transferor’s estate if the transferor died
immediately after the transfer. Examples of such lifetime transfers include a
qualified personal residence trust (QPRT) and a grantor-retained annuity trust
(GRAT). In that event, the allocation is effective no earlier than the termination of
the “estate tax inclusion period” (ETIP). IRC §2642(f).
The ETIP rule essentially prevents the leveraging of the GST exemption to
transfers that are includable in the transferor’s estate at some later date. Any
appreciation in the value of the property during the ETIP will be subject to the
GST tax, unless an additional GST exemption is allocated to the transfer.
EXAMPLE: A parent (P) establishes a QPRT, retaining a 10-year term
interest, the remainder to the grandchild. The end of the ETIP, and the first
time an allocation of the exemption to the QPRT is effective, is at the end of
the 10-year term, because if P dies before that time, the residence is
includable in P’s estate. The trust will have an inclusion ratio of zero only if
the value of the corpus of the QPRT at the end of the 10-year period is less
than or equal to the amount of P’s GST exemption that is allocated to it.
An ETIP is “the period during which, should death occur, the value of
transferred property would be includible in the gross estate of . . . the transferor . . .
or . . . the spouse of the transferor.” Treas Reg §26.2632-1(c)(2)(i). The ETIP rule,
however, does not apply to a qualified terminable interest property (QTIP) trust
with respect to which a reverse QTIP election has been made. Treas Reg §26.2632-
1(c)(2)(ii)(C).
The time at which an ETIP terminates is covered in detail in Treasury
Regulation §26.2632-1(c)(3).
§ 13.5-3(b) Retroactive Allocations
If certain lower-generation beneficiaries of a trust, to which insufficient or
no generation-skipping transfer (GST) exemption had been allocated, die before
the transferor, the transferor may retroactively allocate the transferor’s exemption
to the initial transfers made to the trust, valued as of the initial transfer date. IRC
§2632(d). This allocation is available if the deceased beneficiary is a child, niece,
nephew, or child of a first cousin of the transferor or the transferor’s spouse or
former spouse, or a descendant of a child, niece, or nephew who is treated as being
in the child’s generation because of the predeceased-ancestor exception of IRC
§2651(e). See §13.3-2.
EXAMPLE: A parent (P) sets up a trust with $100,000, providing
income to the child (C) for 10 years, then outright distribution to C; if C
does not survive the 10-year period, then the remaining trust assets go to the
grandchild (GC). If C dies within the 10-year period, a taxable termination
occurs. P may retroactively allocate $100,000 of P’s GST exemption to the
trust to cover the taxable termination in favor of GC.
The retroactive allocation is made by the transferor on a gift tax return filed
for the year of the beneficiary’s death. IRC §2632(d).
§ 13.6 IMPOSITION OF THE GST TAX

If the available generation-skipping transfer (GST) exemption equals or
exceeds the taxable amount (see §13.5-1) to which it is allocated, no GST tax is
due. If it does not, then the taxable amount (or portion thereof) not covered by the
GST exemption will be subject to the GST tax. The tax is equal to the taxable
amount, multiplied by the applicable rate.
§ 13.6-1 Applicable Rate
The term applicable rate means the maximum federal estate tax rate in
effect at the time that the generation-skipping transfer (GST) occurs, multiplied by
the “inclusion ratio with respect to the transfer.” IRC §2641. The inclusion ratio is
computed by reference to the value of the property subject to the GST, and the
amount of the exemption that has been allocated to it. IRC §2642(a).
§ 13.6-1(a) Maximum Federal Estate Tax Rate
For years 2011 and thereafter, the maximum federal estate tax rate is 35%,
but under the sunset provisions of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010, Pub L No 111-312, 124 Stat 3296
(the “2010 Act”; see §13.1), the maximum rate is scheduled to increase to 55% for
transfers made in 2013. IRC §2001(c)(2)(B). The maximum rate for GSTs in 2010
was 0%, meaning GSTs made in that year were tax-free.
The rate has steadily decreased since 2001:
Year Maximum rate
2001 55%
2002 50%
2003 49%
2004 48%
2005 47%
2006 46%
2007–2009 45%
2010 0% -No GST tax
2011–2012 35%

The maximum federal estate tax rate for 2018 is 40 percent. IRC § 2001.
The GST exemption for 2018 is $11,180,000. See Supplement § 13.1 for changes
to the GST exemption amounts in future years. The GST tax rate will remain a flat
40 percent under the Tax Cuts and Jobs Act of 2017 (see Pub L 115-97, 131 Stat
2054).
§ 13.6-1(b) Inclusion Ratio
§ 13.6-1(b)(1) General Rule
The inclusion ratio for any property transferred in a generation-skipping
transfer (GST) is equal to one minus the applicable fraction for such transfer. IRC
§2642(a)(1). For determining the applicable fraction of a direct skip, the numerator
is equal to the amount of the exemption allocated to such skip. For determining the
inclusion ratio of a taxable termination or a taxable distribution, the numerator of
the applicable fraction is the amount of the GST exemption allocated to the trust.
IRC §2642(a)(2)(A).
The denominator of the applicable fraction is the value of the property
transferred to the trust or that is involved in the direct skip, reduced by the sum of
(1) any federal estate tax or state death tax actually recovered from the trust that is
attributable to the property, plus (2) any charitable deduction allowed under IRC
§2055 or IRC §2522 with respect to that property. IRC §2642(a)(2)(B).
EXAMPLE: A parent (P) transfers property worth $6 million to a trust
that provides for income to the child (C), the remainder to the grandchild
(GC). P allocates his entire $5 million exemption to the trust. The applicable
fraction for the transfer is $5,000,000/6,000,000 or 5/6. The inclusion ratio
of the trust is one minus 5/6, or 1/6. At C’s death in 2012, when a taxable
termination occurs, the trust corpus is worth $10 million. The GST tax is
$700,000, computed as follows:
1/6 (inclusion ratio) x .35 (maximum federal estate tax rate)
= 7/100 (applicable rate)
7/100 (applicable rate) x $10 million (taxable amount)
= $700,000
§ 13.6-1(b)(2) Redetermination of Applicable Fraction
The applicable fraction for a trust must be redetermined whenever (1) an
additional exemption is allocated to the trust; (2) property is added to the trust; (3)
separate trusts created by one transferor are consolidated; (4) the value of the
property held in a trust created by the transferor is included in the transferor’s
gross estate, and an additional generation-skipping (GST) exemption is allocated to
the property; or (5) an additional estate tax is imposed under IRC §2032A.
In such cases, the regulations provide that:
the numerator of the redetermined applicable fraction is the sum of the
amount of GST exemption currently being allocated to the trust (if
any) plus the value of the nontax portion of the trust, and the
denominator of the redetermined applicable fraction is the value of the
trust principal, determined immediately prior to the event, by the then
applicable fraction.
Treas Reg §26.2642-4(a).
The “nontax” portion of the trust is the value of trust assets multiplied by the
applicable fraction immediately before the transfer. Treas Reg §26.2642-4(d)(3).
§ 13.6-1(b)(3) Valuation Rules
For purposes of computing the inclusion ratio, the value of the property
transferred in a generation-skipping transfer (GST), and to which an allocation of
the exemption is made, must be determined. If the allocation of the GST exemption
is made to property on a timely filed gift tax return, or if the exemption has not
been allocated, but is instead deemed to have been allocated, the value of such
property for purposes of determining the inclusion ratio is its gift tax value, or if
the transfer involves an “estate tax inclusion period” (ETIP), the value at the close
of the ETIP (see §13.5-3(a)). IRC §2642(b)(1).
If the allocation to a lifetime transfer is made after the date for filing a gift
tax return (and has not been deemed allocated), the value of the property is
determined as of the time such allocation is filed. IRC §2642(b)(3). If a transferor
makes a late allocation of a GST exemption to a trust on a federal gift tax return,
the transferor may, for purposes of determining the fair-market value of the trust
assets, elect to treat the allocation as having been made on the first day of the
month during which the late allocation is made. Treas Reg §26.2642-2(a)(2).
If the property is transferred as a result of the death of the transferor, the
value of the property is its value for estate tax purposes. IRC §2642(b)(2). Property
subject to the special-use-valuation election under IRC §2032A is valued at its fair-
market value unless the property is transferred by direct skip, and the recapture
agreement filed for the IRC §2032A election specifically provides for a recapture
of the GST tax. Treas Reg §26.2642-2(b). Certain conditions must also be met for
pecuniary amounts in satisfaction of a GST being made by means of a noncash
distribution, and for residual GSTs made after the payment of a pecuniary amount.
Treas Reg §26.2642-2(b)(2).
If a surviving spouse is deemed to be the transferor of any property from a
“qualified terminable interest property” trust, then the value of such property is its
value for estate tax purposes in the estate of the surviving spouse. IRC
§2642(b)(4).
For lifetime transfers, any value discussed above becomes final when the
value becomes final for gift tax purposes, or at and after the end of an ETIP. For
transfers at death, the value becomes final when the value shown on the estate tax
return is finally determined. IRC §2642(b).
§ 13.6-1(b)(4) Severance of Trusts to Achieve Desired Inclusion
Ratio
For ease of administration, and to prevent wasting the exemption from tax
on a generation-skipping transfer (GST), the lawyer should consider establishing a
trust that has either an inclusion ratio of zero (making it entirely exempt from the
tax) or an inclusion ratio of one (resulting in a nonexempt trust).
This result might be accomplished by dividing or severing a single trust into
two or more trusts. See IRC §2642(a)(3). To be a qualified severance for GST
purposes, (1) the division of the single trust and the creation of two or more trusts
must be accomplished pursuant to authority granted under either the governing
instrument or local law; (2) the single trust must be divided “on a fractional-share
basis”; and (3) the newly created trusts must “provide for the same succession of
interests of beneficiaries as are provided in the original trust.” IRC §2642(a)(3).
For trusts created after death, the severance must occur, or court proceedings
commenced for the severance, before the due date for filing the estate tax return,
and the supporting data must be submitted with the return. Treas Reg §26.2642-
6(e).
PRACTICE TIP: Although Oregon law specifically grants authority for a
fiduciary to separate trusts (ORS 130.230), the lawyer should consider
putting a provision to that effect in every will or trust instrument. Such a
provision should permit severance regardless of the tax consequences.
§ 13.6-2 Liability for Tax; Source of Payment
The liability for the tax imposed on a generation-skipping transfer (GST)
depends on the type of GST that has occurred. See §§13.4-1 to 13.4-3. For taxable
distributions, the transferee pays the tax. For taxable terminations or direct skips
from a trust, the trustee pays the tax. For direct skips other than from a trust, the
transferor pays the tax. IRC §2603(a).
Unless otherwise directed under the governing instrument by specific
reference to the GST tax, the GST tax is “charged to the property constituting such
transfer.” IRC §2603(b). A general clause providing that all death taxes are to be
paid from the residue is not a specific reference to the GST tax for purposes of IRC
§2603(b). Estate of Monroe v. C.I.R, 104 TC 352, 364–364 (1995), rev’d in part on
other grounds, 124 F3d 699 (5th Cir 1997).
PRACTICE TIP: When drafting tax clauses in wills and trusts of clients
for whom GST planning is appropriate, the lawyer should specifically
designate the assets that are to bear any GST tax that may be imposed.
PRACTICE TIP: If a “reverse QTIP election” has been made with
respect to a trust that is exempt from a GST tax, the lawyer should consider
having the estate tax attributable to the surviving spouse’s interest in that
trust paid from some other source, so that the GST exemption allocated to
that trust is not otherwise wasted. QTIP elections (i.e., qualified terminable
interest property elections) are discussed in §13.2-1. Even though the
surviving spouse’s executor has the right to recover from the recipients of
QTIP property the amount of federal estate tax incurred as a result of that
property being included in the surviving spouse’s estate (see §12.1-5(c)(3)),
that right does not apply to trusts for which a reverse QTIP election is made.
For GST purposes, the trust property is treated as not includable in the estate
of the surviving spouse, so no right of recovery arises under IRC §2207A.
Treas Reg §26.2652-1(a)(3), (5), Ex. 7.
§ 13.6-3 Payment of GST Tax on Lifetime Direct Skips
If a transferor pays the tax imposed on a generation-skipping transfer as a
result of a direct skip that is a taxable gift, the taxable gift is increased by the
amount of the tax so paid. IRC §2515.
§ 13.6-4 Credit for State Taxes
A credit against the tax imposed on a generation-skipping transfer (GST) is
available for state GST tax that is paid on taxable terminations and taxable
distributions that occur at the same time as, and as a result of, the death of an
individual. The credit cannot exceed 5% of the amount of the federal GST tax that
is paid. IRC §2604.
NOTE: Oregon does not have a GST tax.
IRC section 2604 was repealed effective December 19, 2014. The statute
allowed a credit against the federal GST for state GST tax that was paid on GST
transfers that occurred the same time as, and as a result of, the death of an
individual.
Oregon still has no GST tax.
§ 13.7 EFFECTIVE DATES AND CHANGES TO GRANDFATHERED
TRUSTS
§ 13.7-1 Effective Dates
The tax imposed on a generation-skipping transfer (GST) applies to any
GST made after October 22, 1986, the date that the Tax Reform Act of 1986 was
enacted.
The Internal Revenue Code provides several exceptions to this rule, the most
important of which is that a GST made from a trust that was irrevocable on
September 25, 1985, is generally exempt from the tax. Treas Reg §26.2601-
1(b)(1). This exception does not apply, however, to the extent that the transfer is
made out of corpus added (either actually or constructively) to the trust after that
date. For this purpose, a transfer is not grandfathered, and thus is subject to the tax,
if it is pursuant to the exercise, release, or lapse of a general power that is treated as
a taxable transfer for gift or estate tax purposes. Treas Reg §26.2601-1(b)(1)(v).
See Estate of Gerson v. C.I.R., 127 TC 139, 154–157 (2006), aff’d, 507 F3d 435
(6th Cir 2007); Estate of Timken v. United States, 601 F3d 431 (6th Cir 2010).
EXAMPLE: Before September 25, 1985, a parent (P) creates a trust
with income to the child (C) for 20 years, the remainder to such lineal
descendants as C designates pursuant to a general power of appointment.
After 20 years, C exercises the power so that the remainder is transferred to
P’s great-grandchildren (GGC). According to the regulation, C has made a
GST, notwithstanding the trust’s original creation date.
A transfer made pursuant to a limited power of appointment will not be a
GST, if it does not postpone or suspend the vesting, absolute ownership, or power
of alienation beyond the applicable rule against perpetuities. Treas Reg §26.2601-
1(b)(1)(v)(B).
NOTE: The Oregon rule against perpetuities is found in ORS
105.950(1): “A nonvested property interest is invalid unless: (a) When the
interest is created, it is certain to vest or terminate no later than 21 years
after the death of an individual then alive; or (b) The interest either vests or
terminates within 90 years after its creation.”
For GST purposes, the period begins on the date that the power was
irrevocably created (not when exercised). Treas Reg §26.2601-1(b)(1)(v)(B).
EXAMPLE: A parent (P) creates a trust in 1970, income to the child (C)
for 30 years, the remainder to such lineal descendants as C designates
pursuant to a limited power of appointment. If the power is exercised to
create another trust, the interests created thereby must vest within 21 years
after the death of any lineal descendant living on the trust-creation date, or
the year 2060, which is 90 years after the trust-creation date. If no lineal
descendant of P is alive on the trust-creation date, the interests created by
the exercise of the power must vest no later than 2060. If, by its terms, the
trust will last beyond 2060, the power holder would become a transferor for
GST purposes on the exercise date.
Other exceptions apply to GSTs that occurred under a will or a revocable
trust executed before October 23, 1986, if the decedent died before 1987, Treas
Reg §26.2601-1(a)(2)(ii), and for certain GSTs made if, on October 22, 1986, a
decedent-transferor was under a mental disability and did not regain competence
before death, Treas Reg §26.2601-1(b)(3)(i).
PRACTICE TIP: The lawyer should review all well-funded trusts that
were irrevocable on September 25, 1985, to determine whether they could
produce GSTs, as defined under the present law. Additions (including
constructive additions) should not be made to grandfathered irrevocable
trusts. If limited, rather than general, powers of appointment exist in
grandfathered trusts, the lawyer should consider their exercise in favor of the
youngest class of beneficiaries because no GST consequences will result.
§ 13.7-2 Modifications to Grandfathered Trusts
A modification to a grandfathered generation-skipping transfer (GST) trust
may cause that trust to lose its exempt status. This loss will not occur if the
modification comes within four safe harbors developed by the Internal Revenue
Service.
First, the distribution of principal from a grandfathered trust or retention of
principal in a continuing grandfathered trust will not cause the trust to lose its
exempt status, if:
(1) Either:
(a) The terms of the grandfathered GST trust “authorize distributions to
the new trust or the retention of trust principal in a continuing trust, without the
consent or approval of any beneficiary or court”; or
(b) At the time that the grandfathered GST trust became irrevocable,
“state law authorized distributions to the new trust or retention of principal in the
continuing trust, without the consent or approval of any beneficiary or court”; and
(2) The terms of the new or continuing trust “do not extend the time for
vesting of any beneficial interest in the trust in a manner that may postpone or
suspend the vesting, absolute ownership, or power of alienation of an interest”
beyond the applicable rule against perpetuities.
Treas Reg §26.2601-1(b)(4)(i)(A).
Second, a court-approved settlement of a bona fide issue regarding the
administration of the grandfathered trust or the construction of terms of the
governing instrument of the grandfathered trust will not cause the trust to lose its
exempt status if the settlement is (1) the product of arm’s-length negotiations, and
(2) “within the range of reasonable outcomes under the governing instrument and
applicable state law addressing the issues resolved by the settlement.” Treas Reg
§26.2601-1(b)(4)(i)(B).
Third, a judicial construction to resolve an ambiguity in the terms of a
grandfathered trust or to correct a scrivener’s error will not cause a trust to lose its
exempt status if (1) the “judicial action involves a bona fide issue,” and (2) the
“construction is consistent with applicable state law that would be applied by the
highest court of the state.” Treas Reg §26.2601-1(b)(4)(i)(C).
The fourth safe harbor covers modifications to a trust’s governing terms or
its administration that do not fall within the first three safe harbors. Under Treasury
Regulation §26.2601-1(b)(4)(i)(D)(1), a modification in the terms of the governing
instrument by judicial reformation or a modification of the governing instrument in
the manner in which it is administered that does not fall within one of the first
three safe harbors will not cause a trust to lose its exempt status if the modification
does not:
(1) Shift a beneficial interest in the trust to any beneficiary who occupies
a lower generation (as defined in IRC §2651) than the person or class of persons
who held the interest before the modification; and
(2) Extend the time for vesting of any beneficial interest in the trust
beyond the period provided for in the original trust agreement.
PRACTICE TIP: The lawyer should review the terms of any
grandfathered irrevocable trust for which a modification is being considered
to make certain that the modification will not cause the trust to lose its GST
tax-exempt status. If the modification does not clearly fall within one of the
four safe harbors, the lawyer should request an IRS letter ruling.
§ 13.8 OTHER RELATED ISSUES

§ 13.8-1 Basis Adjustments
Property transferred under a taxable termination as a result of the death of a
person receives a stepped-up basis or stepped-down basis in accordance with IRC
§1014(a), except that, if the inclusion ratio of the property is less than one, the
increase or decrease in the basis is multiplied by the inclusion ratio. IRC
§2654(a)(2). For all other generation-skipping transfers, the basis of the property is
increased, but not above its fair-market value, by the amount of tax attributable to
the appreciation in the property existing immediately before the transfer. IRC
§2654(a)(1).
IRC section 1014 has been amended.
PRACTICE TIP: Attorneys who provide advice to executors and
beneficiaries may want to examine recently added IRC section 1014(f).
Section 1014(f) and its proposed regulations require the beneficiary’s basis
for inherited property to be consistent with the property’s estate tax value
(the “basis consistency” rules). Generally, any executor of an estate that must
file an estate tax return under IRC section 6018 must also comply with the
basis-consistency reporting requirements. An executor is generally only
required to file an estate tax return (IRS Form 706 (United States Estate (and
Generation-Skipping Transfer) Tax Return) under section 6018 if the gross
value of the estate exceeds the federal estate exemption for the decedent. See
Prop Treas Reg § 1.6035-1(a)(1), 81 Fed Reg 11,486-01, 11,489 (Mar 4,
2016). See also Eliminating Unnecessary Tax Regulations, 83 Fed Reg
6806-01 (Feb 15, 2018). Therefore, if a gross estate does not exceed the
federal estate tax exemption for the decedent, the executor does not
generally need to follow the basis-consistency reporting requirements. If a
federal estate tax return is filed only to make a GST election or a portability
election under IRC section 2010(c)(5), then the executor does not need to
comply with the basis-consistency reporting requirements. See Proposed
Treasury Regulation §1.6035-1(a)(2) for more information.
§ 13.8-2 Income Tax Deductions
The generation-skipping transfer (GST) tax imposed on income distributions
from a trust are deductible by the beneficiary for income tax purposes. IRC
§164(a)(4). If a GST tax is imposed on a taxable termination or a direct skip as a
result of the transferor’s death, the trust or beneficiary is allowed a deduction for
that portion of the GST tax attributable to items of gross income of the trust not
properly included in gross income for periods before the date of the GST. IRC
§691(c)(3).
§ 13.8-3 Extension of Time for Payment of Tax; Stock Redemptions to Pay
Tax
If an interest in a closely held business is the subject of a direct skip at death,
and the estate otherwise qualifies for an extension of payment of the estate tax
under IRC §6166 (see §12.2-7(b)(3)), any generation-skipping transfer (GST) tax
resulting from the direct skip is treated as additional estate tax for purposes of the
IRC §6166 election. IRC §6166(i).
If a GST of stock occurs at the same time as, and as a result of, the death of a
person, redemption of that stock may qualify for sale or exchange treatment under
IRC §303(d).
§ 13.8-4 Nonresident Aliens
Regulations providing for the application of the generation-skipping transfer
tax to transferors who are nonresident aliens are found in Treasury Regulation
§26.2663-2.
§ 13.9 FILING
§ 13.9-1 Forms
The person liable for the tax imposed on a generation-skipping transfer
(GST) (see §13.6-2) must file the applicable forms and report any allocation of the
exemption.
Form 709 is used to report lifetime direct skips subject to the gift tax.
Form 706 is used to report direct skips subject to the estate tax that occur on
the transferor’s death. If the direct skip is from a trust, then Form 706, Schedule R,
part 1, must also be filed. For taxable distributions, a trustee must file Form 706-
GS(D-1) and provide a copy to each transferee who, in turn, must file Form 706-
GS(D). For taxable terminations, a trustee must file Form 706-GS(T).
Direct skips must be reported on or before the due date for the gift or estate
tax return. All other GSTs must be reported on or before the 15th day of the fourth
month after the close of the calendar year in which the transfer occurs. Treas Reg
§26.2662-1(d).
PRACTICE TIP: All IRS forms discussed in this section are available
online at www.irs.gov/forms-instructions.
§ 13.9-2 Section 9100 Relief
A number of elections regarding a generation-skipping transfer (GST) to be
made on the federal forms are regulatory elections, which the Internal Revenue
Service (IRS) can grant reasonable extensions of time to make under Treasury
Regulation §301.9100. They include allocating the GST exemption and electing
out of automatic allocations of the exemption (see §§13.5-3 to 13.5-3(b)), making a
reverse qualified terminable interest property (QTIP) election at death (see §13.2-
1), splitting certain trusts for GST purposes (see §13.6-1(b)(4)), and treating a
single QTIP trust as two separate QTIP trusts under a transitional rule in Treasury
Regulation §26.2652-2(c). To be granted Section 9100 relief, the taxpayer must
satisfy the IRS that: (1) the taxpayer acted reasonably and in good faith and (2) the
grant will not prejudice the interest of the government. Treas Reg §301.9100-3(a).
The request for a grant of relief is made by a request for a private letter ruling.
Treas Reg §301.9100-3(e)(5).
The IRS issued proposed regulations in 2008 intended, when finalized, to
replace Treasury Regulation §§301.9100-1 to 301.9100-3 as the avenue for seeking
grants of extensions for GST elections. Prop Treas Reg §26.2642-7.
The status of Proposed Treasury Regulation section 26.2642-7 remains
unchanged.
If a GST election is made late, relief may be available under Treasury
Regulation section 301.9100-3(b)(1). See, e.g., Priv Ltr Rul 2018-26-001 (June 29,
2018) (the IRS granted an extension of time of 120 days to make an election under
IRC section 2632(c)(5) based on the taxpayer’s reasonable reliance on a qualified
tax professional).
Chapter 14: OREGON ESTATE TAX
PHILIP N. JONES, B.A., Lewis & Clark College (1973); J.D., Lewis & Clark Law School (1976);
admitted to the Oregon State Bar in 1976, and the Washington State Bar Association in
1993; partner, Duffy Kekel LLP, Portland.
JEFFREY M. CHEYNE, B.A., University of Oregon (1968); J.D., LL.M. (Tax) University of San
Diego School of Law (1975, 1984); member of the Oregon State Bar since 1990, the
Washington State Bar Association since 2003, and The State Bar of California since
1975; partner, Samuels Yoelin Kantor LLP, Portland.
Portions of this chapter are based on materials prepared by Holly N. Mitchell, of Duffy Kekel
LLP, Portland.
The 2011 Legislature made significant changes to ORS chapter 118, which
became effective for decedents dying on or after January 1, 2012. The tax imposed
by ORS chapter 118 (formerly known as the Oregon inheritance tax) is now known
as the Oregon estate tax.
This chapter is divided into four sections:
(1) An introduction, including a discussion of the terminology applicable
to both the old inheritance tax and the new estate tax, see §§14.1-1 to 14.1-3;
(2) A discussion of the new law adopted by the 2011 Legislature,
effective for estates of decedents who died on or after January 1, 2012, see §§14.2-
1 to 14.2-6(d)(3);
(3) A discussion of the old law applicable to estates of decedents who
died before 2012, see §§14.3-1 to 14.3-5; and
(4) A discussion of the procedural law applicable to both the old statutes
and the new statutes, see §§14.4-1 to 14.4-13.
Many references in this chapter to pre-2012 law are made to the 2009
Oregon Revised Statutes; for purposes of clarification, a parenthetical —
“(2009)”—will follow such references.
NOTE: This chapter is based on the Internal Revenue Code, federal
regulations, the Oregon Revised Statutes, Oregon Administrative Rules, and
reported state and federal cases as of August 31, 2012. Before relying on any
statements in this chapter, the reader should review current statutes,
regulations, rules, and case law to determine whether any changes have
occurred to them after December 31, 2011.
§ 14.1-1 A Brief History
The first inheritance tax was adopted in Oregon in 1903, with an initial rate
that varied from 1% to 6%, depending on the degree of kinship and the amount
inherited. HB 41 (1903). In 1971, a “pickup tax” equal to the federal credit for
state death taxes was enacted in Oregon as a floor to the Oregon tax, and the rates
then varied from 2% to 20%. Former ORS 118.100; 1971 Or Laws ch 732. After
1971, the legislature regularly “reconnected” to changes in the federal law. By
1975, the rates varied from 3% to 25%. Former ORS 118.100 (1975). These rates
ended in 1977, when the Oregon legislature adopted an inheritance tax equal to the
greater of (1) a flat 12% rate after applying an exemption, or (2) the federal state
death tax credit. Former ORS 118.100; 1977 Or Laws ch 666, §9. The 1977
legislation also scheduled the end of the 12% rate by January 1, 1987, when the
Oregon inheritance tax became a pure pickup tax equal to the federal state death
tax credit. Former ORS 118.100(1)(b) (1977).
In 1997, the legislature reenacted the pickup tax and repealed the Oregon
gift tax, which had been enacted in 1933. Former ORS 118.010; 1997 Oregon
Laws ch 99, §7; 1933 Or Laws ch 427. As a result, Oregon reconnected its
inheritance tax to the Internal Revenue Code as amended by the federal Taxpayer
Relief Act of 1997, Pub L No 105-34, 111 Stat 788, which had scheduled an
increase in the federal unified credit from $600,000 in 1997 to $1,000,000 in 2006
and years thereafter. (As explained in greater detail below, those unified credit
amounts remained in place through 2011 for purposes of calculating the federal
Table A cap on the Oregon inheritance tax.)
In 2001, Congress enacted the Economic Growth and Tax Relief
Reconciliation Act (EGTRRA), Pub L No 107-16, 115 Stat 38, which (1) began
the scheduled increases of the federal unified credit that would eventually reach
$3,500,000 in 2009, (2) phased out the federal state death tax credit by 2005, and
(3) caused the phase out of the Oregon inheritance tax, which was based on the
amount of the federal state death tax credit. The Oregon legislature balked at
following the federal exemption increases and declined to reconnect to the newly
amended Internal Revenue Code. Instead, in 2003, the Oregon legislature enacted
HB 3072 (2003 Or Laws ch 806), which “froze” Oregon’s connection to the
Internal Revenue Code as of December 31, 2000. ORS 118.007 (2003–2009). As a
result, Oregon “decoupled” itself from later changes in the federal estate tax. In
effect, Oregon adopted an exemption beginning at $700,000 in 2003 and climbing
to $1,000,000 in 2006 and years thereafter. That 2003 Oregon legislation also
adopted a $1,000,000 filing threshold for 2002, followed by a $700,000 filing
threshold in 2003 that eventually grew to $1,000,000 in 2006, in accordance with
pre-EGTRRA scheduled increases in the federal unified credit. An Oregon-only
qualified terminable interest property (QTIP) election was also authorized. See
former ORS 118.010(7) (2009).
The nature of this “freeze” or “decoupling” is described in Force v. Dep’t of
Revenue, 350 Or 179, 252, 252 P3d 306 (2011).
During the interim period between 2001 and 2003, some strange results took
place in the Oregon inheritance tax because of the interplay between the Oregon
filing threshold and the federal unified credit. For example, under HB 3072 if a
decedent died in 2002 with a taxable estate of $999,999, no Oregon tax would be
due because of the Oregon filing threshold, but if the decedent had had a taxable
estate of $1,000,000 (only one dollar higher), an Oregon tax of $33,200 would be
due. This odd (and unintended) result came about because HB 3072 provided that
an Oregon inheritance tax return was not required for taxable estates of less than
$1,000,000, but the unified credit equivalent for 2002 was fixed by HB 3072 at
only $600,000. See 2003 Or Laws ch 806, §10. Estates of slightly more than
$1,000,000 similarly paid an Oregon tax of slightly more than $33,200, but not less
than that amount. This “cliff effect” is no longer present.
As a result of the 2003 legislation, Oregon’s inheritance tax required four
calculations, which are discussed in §14.3-3 (describing the law for estates of
decedents who died before 2012).
This bizarre tax (or the bizarre four-part calculation of this tax) was
simplified by 2011 legislation, 2011 Or Laws ch 526. The new law is effective for
estates of decedents who die on or after January 1, 2012. It imposes a wholly new
stand-alone state estate tax that does not follow the federal exemptions. See §14.2-
1.
The 2011 Legislature changed the name of the tax to the Oregon estate tax,
rather than the Oregon inheritance tax. The legislature made other changes as well,
such as (1) the dual nature of the calculation was eliminated, see Table A and
Table B in the Instructions for Form IT-1 (Oregon Inheritance Tax Return); (2) the
four steps described in §14.3-3 were eliminated; (3) a $1,000,000 exemption was
adopted; and (4) a new rate table was enacted, ranging from 10% to 16%. In
addition, the new law changed the date of the “tie-in” to the federal estate tax to
December 31, 2010, rather than December 31, 2000, under the old law. ORS
118.007.
NOTE: As a result of the 2011 legislative changes, the Oregon
Department of Revenue (DOR) is revising and updating many of the Oregon
Administrative Rules applicable to ORS chapter 118, and will issue revised
forms and instructions from time to time. The new forms and instructions
will be available on the DOR’s Web site, at www.oregon.gov/DOR. See
OAR ch 150, div 118.
§ 14.1-2 The Constitutional and Case Law Background
References to specific sections of the Internal Revenue Code (IRC) appear
throughout ORS chapter 118, such as IRC §2011, IRC §2031, IRC §2032A, IRC
§2056, IRC §2056A, and IRC §2058. The current limitation ties the Oregon estate
tax to the IRC “as amended and in effect on December 31, 2010.” ORS 118.007.
Since 1997, ORS chapter 118 has adopted April 28, 1997, December 31, 2000, and
now December 31, 2010, as the “tie-dates” for determining which version of the
IRC is to be followed in connection with the Oregon estate tax. Some may ask why
the legislature does not adopt a provision in ORS chapter 118 declaring that all
references to and interpretations of the IRC will use the most current version of the
IRC as amended from time to time. The reason is that the legislature does not have
the constitutional authority to do so. Any statutory reference to a statute of a
jurisdiction outside of Oregon must be limited to a specific past or current date.
This restriction is derived from §1 of article IV and §21 of article I of the Oregon
Constitution.
Section 1 of article IV provides: “The legislative power of the state, except
for the initiative and referendum powers reserved to the people, is vested in a
Legislative Assembly, consisting of a Senate and a House of Representatives.” OR
CONST ART IV, §1(1).
Section 21 of article I provides: “No ex-post facto law, or law impairing the
obligation of contracts shall ever be passed, nor shall any law be passed, the taking
effect of which shall be made to depend upon any authority, except as provided in
this Constitution.” OR CONST ART I, §21.
In a letter on behalf of the Legislative Counsel Committee, Dexter Johnson,
Deputy Legislative Counsel, stated:
Section 1, Article IV vests legislative power in the Legislative Assembly, subject
only to the initiative and referendum powers reserved to the people of this state.
Section 21, Article I, prohibits any law from being passed, the taking effect of
which is made to depend on any authority, except as provided in the Constitution.
Read in conjunction, the two provisions prohibit the Legislature from passing a
law that delegates legislative decision-making to any authority over which the
Legislature has no control. Hillman v. North Wasco Co. PUD, 213 Or 264, 279,
284–286 (1958). A law that attempts to reference future laws of the United States
is a delegation of legislative authority to Congress, and as such is
unconstitutional.
Excerpt from letter from Dexter A. Johnson, Deputy Legislative Counsel, to Paul
Warner, Legislative Revenue Officer (June 6, 2001) (citation not verified by
publisher). Permission to print the excerpt was obtained from both Dexter A.
Johnson and Paul Warner.
A controlling case in this matter is Seale v. McKennon, 215 Or 562, 572, 336
P2d 340 (1959), which holds: “When a statute adopts by specific reference the
provisions of another statute, regulation, or ordinance, such provisions are
incorporated in the form in which they exist at the time of the reference, and not as
subsequently modified.”
Although Seale is not a tax case, it is generally relied on for the principle
that when a state law refers to a specific statute of another jurisdiction, the law that
is adopted in Oregon is the law of the other jurisdiction as it existed on the date
that it was adopted in Oregon. This holding from the Seale case establishes how
IRC sections and terms, such as IRC §2031 and “federal taxable estate,” should be
interpreted in connection with the Oregon estate tax.
However, in Seale, 215 Or at 572, the court also added some confusion to
this issue with the following clause:
[W]hereas, where the reference is general, such as a reference to a system or body
of laws or to the general law relating to the subject in hand, the referring statute
takes the law or laws not only in their contemporary form but also as they may be
changed from time to time.
The “general reference” argument could apply to sections like ORS 118.100,
which states that the “tax provided for in ORS 118.010 . . . shall be paid to the
Department of Revenue on the date the federal estate tax is payable.” ORS
118.100(1). In Force v. Dep’t of Revenue, 350 Or 179, 252 P3d 306 (2011), the
personal representative argued that because no federal estate tax was due (for a
decedent who died in 2003), the estate owed no Oregon inheritance tax. The
Oregon Supreme Court upheld the Oregon Tax Court, concluding that the Oregon
inheritance tax was due. The court applied rules of statutory construction to find, in
part, that the reference in former ORS 118.010(2) (2009) to the state death tax
credit “allowable under section 2011 of the Internal Revenue Code” meant the IRC
that was in effect on December 31, 2000. Force, 350 Or at 188. The court looked
to the context of the statute, and found that former ORS 118.007 (2009), which
provided that any reference to the federal tax law in the Oregon inheritance tax
statutes “means the federal Internal Revenue Code as amended and in effect on
December 31, 2000,” controlled the interpretation of former ORS 118.010(2)
(2009). Force, 350 Or at 188. Thus, the court avoided and did not discuss the
general-reference argument.
The 2011 Legislature amended ORS 118.100 to provide that “if no federal
estate tax return is required,” a return must be filed and the tax must be paid “no
later than nine months following the date of death of the decedent.” ORS
118.100(1).
IRC section 2011 was repealed in 2014.
§ 14.1-3 Terminology
The following terminology applies to both the old inheritance tax and the
new estate tax, except where noted. In reviewing these definitions, the reader
should keep in mind that the old Oregon inheritance tax was tied to the federal
estate tax as the federal statutes existed on December 31, 2000, former ORS
118.007 (2009), while the new Oregon estate tax is tied in as of December 31,
2010, ORS 118.007. Thus, when relevant, the Oregon estate tax ties to provisions
of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act
of 2010 (Pub L No 111-312, 124 Stat 3296), which became effective on December
17, 2010.
(1) Gross estate—the total value of all assets (worldwide), without any
reduction for debts, expenses, or other deductions. The gross estate is the same for
both federal and Oregon purposes. ORS 118.005(6); former ORS 118.005(5)
(2009); IRC §2031. The filing thresholds for both federal and Oregon purposes are
measured against the gross estate to determine whether a return is required to be
filed. ORS 118.160(1); former ORS 118.160(1) (2009).
(2) Filing threshold—the value of the gross estate (above) for which a
return is required to be filed. The Oregon filing threshold has been $1,000,000
since 2006. ORS 118.160(1)(c); former ORS 118.160(1)(b)(D) (2009). Because of
the revenue implications, the Oregon filing threshold is not scheduled to change.
The federal filing threshold for 2008 was a gross estate of $2,000,000. In 2009, the
federal filing threshold was a gross estate of $3,500,000. The federal tax was
bifurcated in 2010, with estate representatives having a choice between a
$5,000,000 exemption or no federal estate tax. In 2011, the federal filing threshold
is $5,000,000 and in 2012, the federal filing threshold is $5,120,000, with the
exemption indexed in 2012. See IRC §6018, IRC §2010.
(3) Deductions—include debts, administration expenses, marital bequests,
charitable bequests, funeral expenses, and other items. Deductions are usually
slightly different for Oregon and federal purposes. For example, the Oregon estate
tax is allowed as a deduction for federal purposes (IRC §2058), but not for Oregon
purposes. See ORS 118.010.
(4) Federal taxable estate—the gross estate minus deductions. IRC
§2051. The federal taxable estate is usually different than the Oregon taxable
estate. In general terms, the federal taxable estate is the amount that is multiplied
by the federal rate tables to calculate the federal estate tax (the exception to that
statement is when adjusted taxable gifts have been made).
(5) Oregon taxable estate—the 2011 Legislature, for the first time,
specifically adopted the phrase Oregon taxable estate and defined it as “the federal
taxable estate with the adjustments provided by ORS 118.010(3).” ORS
118.005(7). These adjustments include adding back any state death tax deduction
under IRC §2058, adding back in Oregon special marital property (OSMP) from a
prior estate (unless already included in the federal estate), and adding back in the
value of marital deduction property and qualified domestic trust (QDOT) property
from a prior estate, but subtracting the OSMP claimed in this estate, and other
exclusions and deductions. ORS 118.010.
(6) Adjusted taxable gifts—cumulative gifts made in excess of the annual
exclusion. IRC §2001(b), IRC §2503.
(7) Tentative tax—the federal estate tax before the application of the
unified credit.
(8) Adjusted taxable estate—the Oregon taxable estate reduced by $60,
000. IRC §2011(b)(3). This is the amount on which the Table B Oregon
inheritance tax is calculated under pre-2012 Oregon law. This amount does not
include adjusted taxable gifts. The term adjusted taxable estate is no longer used in
connection with the calculation of the federal estate tax, and it is not used in
connection with the new Oregon estate tax law.
(9) State death tax credit—this federal credit has been fully phased out
for deaths occurring after 2004. IRC §2011(b)(2)(B). For federal purposes, it has
been replaced by a deduction. IRC §2058. However, the old state death tax credit
rate table is still used to calculate the old Oregon inheritance tax. Former ORS
118.010(2) (2009). For deaths before 2012, see Table B in the Instructions for
Form IT-1, Oregon Inheritance Tax Return.
IRC section 2010 (unified credit against estate tax) has been amended.
(2) Filing threshold. For “estates of decedents dying or gifts made after
December 31, 2017, and before January 1, 2026,” the basic exclusion amount is
$10 million. IRC § 2010(c)(3)(C). That amount has been adjusted for inflation. For
deaths occurring in 2018, the adjusted amount is $11,180,000. Further inflation
adjustments will be made in subsequent years.
(6) Adjusted taxable gifts. IRC section 2001 and IRC section 2503 have
been amended.
(8) Adjusted taxable estate. IRC section 2011 was repealed in 2014.
§ 14.2 OREGON ESTATE TAX—FOR DEATHS OCCURRING ON OR
AFTER JANUARY 1, 2012
§ 14.2-1 Calculating the Oregon Estate Tax
As discussed in §14.1-1, the 2011 Legislature made many changes to estate
tax law for deaths occurring on or after January 1, 2012. With the repeal of the
two-table tax calculations, Table A and Table B, the computation of the Oregon
estate tax will be simpler since only one tax table is used. This section describes,
step by step, the process to determine the new Oregon estate tax.
(1) Step 1—Determine the decedent’s gross estate. The first step is to
identify and value the decedent’s assets at the time of the decedent’s death,
including “all property, real or personal, tangible or intangible, wherever situated.”
IRC §2031(a). The total value of these assets constitutes the decedent’s “gross
estate” under IRC §2031 and ORS 118.005(6).
(2) Step 2—Determine whether an Oregon estate tax return is required. If
the value of the decedent’s gross estate is less than $1,000,000, then no Oregon
estate tax return is required to be filed. ORS 118.160(1)(c).
However, because the decedent’s gross estate includes the value of all of the
decedent’s assets, wherever located in this world, a resident or nonresident
decedent whose estate includes assets located in Oregon worth substantially less
than $1,000,000 will still be subject to the filing requirement if the total value of
the gross estate is over $1,000,000. Thus, if a nonresident decedent has a deeded
time-share interest in a beach property at the Oregon coast worth $300,000 as well
as other assets in California worth $800,000, the decedent would have to file an
Oregon estate tax return because the decedent’s worldwide gross estate would be
valued at over $1,000,000.
If the value of the decedent’s gross estate is $1,000,000 or more, an Oregon
estate tax return is required, and it is due on the date the federal estate tax is
payable, but if no federal estate tax return is required, the Oregon estate tax return
is due nine months after the date of the decedent’s death. ORS 118.100(1),
118.160(1)(c). Six-month and other extensions to file the return are discussed in
§14.4-2.
(3) Step 3—Determine the federal taxable estate. If an Oregon estate tax
return is required, the next step is to determine the federal taxable estate, which is
defined in §14.1-3 and is specifically referenced by the Oregon estate tax law. ORS
118.005(5). The federal taxable estate is, generally, the gross estate minus the
applicable deductions that are claimed on a federal estate tax return. See IRC
§§2051–2058. If no federal estate tax return is required, the representative of the
estate must still complete a federal estate tax return because the schedules from the
federal estate tax return must be attached to the Oregon estate tax return.
(4) Step 4—Determine the Oregon taxable estate. After the amount of the
federal taxable estate is determined, the next step is to determine the Oregon
taxable estate. See §14.1-3, item (5). The Oregon taxable estate is determined by
making “adjustments” (i.e., additions and deletions) to the federal taxable estate.
ORS 118.010(3), 118.005(7). Note that the Oregon taxable estate includes the
value of the decedent’s worldwide assets and worldwide deductions.
(5) Step 5—Calculate the preliminary Oregon estate tax. Once the
Oregon taxable estate is determined, the preliminary Oregon estate tax can be
calculated. ORS 118.010(4). If the Oregon taxable estate is less than $1,000,000,
the Oregon estate tax is zero. If the Oregon taxable estate is $1,000,000 or more,
the tax rate begins at 10% for the first dollar over $1,000,000, and the tax rate
incrementally increases from 10% to a maximum of 16% for Oregon taxable-estate
values over $9,500,000. Assuming that a decedent died in 2012 with an Oregon
taxable estate of $4,500,000, the preliminary Oregon estate tax would be $367,500.
(6) Step 6—Determine the actual Oregon estate tax. If the decedent
described in Step 5 was domiciled in Oregon at the time of his or her death and did
not own any real property or tangible personal property located outside of Oregon,
the Oregon estate tax would be $367,500. If the decedent was domiciled in
Oregon, but owned real property or tangible personal property located outside of
Oregon or had intangible personal property subject to a death tax in another state
or country, then the preliminary Oregon estate tax would be subject to the
fractional adjustment discussed in §14.2-3. ORS 118.010(5). If the decedent was
not domiciled in Oregon at the time of his or her death, but owned real property or
tangible personal property located in Oregon, then the preliminary Oregon estate
tax would be subject to a fractional adjustment discussed in §14.2-3.
The Oregon estate tax is due when the federal estate tax is payable, or if no
federal estate tax return is required, the Oregon estate tax is due nine months after
the date of the decedent’s death. ORS 118.100(1). Requests for extensions to pay
the tax are discussed in §14.4-2.
NOTE: For deaths occurring on or after January 1, 2012, Oregon estate
tax returns must be filed on Form OR-706, “Oregon Estate Transfer Tax
Return,” available at www.oregon.gov/DOR/forms/Pages/default.aspx. For
deaths occurring before that date, the return must be filed on Form IT-1,
“Oregon Inheritance Tax Return,” available at
www.oregon.gov/DOR/forms/FormsPubs/form-it-1_150-103-001_2011.pdf.
§ 14.2-2 Lifetime Gift Transfers
With the pre-2012 Oregon inheritance tax, the decedent’s lifetime gifts in
excess of the annual exclusion amounts (described as “adjusted taxable gifts”)
were taken into account in a complicated way. See former ORS 118.010(2) (2009),
discussed in §14.3-3. In contrast, the new Oregon estate tax law ignores adjusted
taxable gifts, because the definitions for gross estate and federal taxable estate do
not include adjusted taxable gifts. See ORS 118.005(5)–(6); see also IRC
§2001(b), IRC §2031.
This law presents a significant lifetime planning opportunity. An elderly
person with an estate of $4,900,000 (just below the 2012 federal unified credit of
$5,120,000, see IRC §2010) could make a 2012 gift (deathbed or otherwise) of
$4,000,000 to his or her children. The gift would not be taxable for federal gift tax
purposes because the gift would be within the $5,120,000 federal lifetime gift
exclusion. Although the gift would be brought back into the federal estate as an
adjusted taxable gift, the total estate of the decedent would be below the federal
estate tax unified credit of $5,120,000. More importantly, the decedent would die
with a gross estate of $900,000, which is below the Oregon filing threshold. ORS
118.160(1)(c). As a result, no federal estate tax or gift tax would be due, and no
Oregon estate tax would be due. The Oregon tax savings would be $380,400 under
the pre-2012 law, and $413,500 under the new law.
In the above illustration, significant tax savings would be experienced even
if the gift were not successful in reducing the Oregon estate below the filing
threshold. If the decedent in the above illustration had given away only $3,000,000
in 2012, rather than $4,000,000, his or her 2012 Oregon taxable estate would be
$1,900,000, rather than $900,000. In this situation, the resulting Oregon estate tax
would be $91,000. Had the gift not been made, the resulting estate tax under the
new law would have been $413,500, for a tax savings of $322,500.
Taxpayers and their advisors must be careful, however, because the Oregon
estate tax savings from this sort of death-bed gift may be offset by the loss of a
stepped-up basis for income tax purposes. Lifetime gifts generally do not receive a
stepped-up income tax basis at death. In contrast, most assets transferred at death
that have appreciated during a decedent’s lifetime do receive a stepped-up basis
equal to the fair-market value as of the date of death. IRC §1014. Consider, for
example, a $1,000,000 gift in 2012 by the elderly person described above. The
Oregon estate tax savings would be $112,000. If the assets given away had an
income tax adjusted basis of $100,000, the donee would receive the assets with that
same low basis of $100,000. Later, when the donee sells the gifted assets for
$1,000,000, there would be a taxable income gain of $900,000. Using a combined
Oregon and federal income tax rate of 24.5%, the combined income taxes would be
$220,500, almost double the Oregon estate tax savings.
The federal unified credit is $11,180,000 as of 2018, and it is expected to
continue to increase in future years based on the rate of inflation.
§ 14.2-3 Oregon Residents Versus Nonresidents
Oregon taxes resident decedents on all types of property (tangible and
intangible), wherever situated. The tax is calculated on the entire Oregon taxable
estate (wherever located), and then the tax is multiplied by a fraction, the
numerator of which is the sum of the value of the decedent’s (1) real property
located in Oregon, (2) tangible personal property located in Oregon, and (3)
intangible personal property wherever located (but excluding intangible personal
property subject to a death tax in another state or country). The denominator is the
total value of the decedent’s entire gross estate. ORS 118.010(2)(a), (5).
Nonresident decedents are taxed based on the proportional value of real
property and tangible personal property located in Oregon as it relates to the value
of the entire estate. Thus, the tax is calculated on the Oregon taxable estate (which
includes Oregon assets and non-Oregon assets, both tangible and intangible), and
then the tax is multiplied by a fraction, the numerator of which is the sum of the
value of the Oregon tangible personal property and the Oregon real property (but
no intangible property), and the denominator is the entire gross estate. ORS
118.010(2)(b), (6).
Unlike the pre-2012 Oregon inheritance tax, nonresidents are no longer
taxed on intangible property located in Oregon. ORS 118.010(6); see former ORS
118.010(4)(a) (2009). This change greatly simplifies the calculation of the tax. It
also avoids two murky issues: (1) whether an asset constitutes intangible personal
property located in Oregon and (2) whether a nonresident’s home state taxes
intangible personal property of Oregon decedents.
In short, under the new Oregon statutory scheme, tangible property (both
real and personal) will be taxed only by the state in which it is located. This is true
for estates of both residents and nonresidents. Intangible personal property held by
resident estates will be taxed regardless of location. However, intangible personal
property that is subject to a death tax in another state or country is excluded from
the numerator of the fraction. ORS 118.010(5). Intangible personal property held
by nonresident estates will not be taxed if there is no other real or personal
property located in Oregon; however, if a nonresident estate holds real property or
tangible personal property in Oregon, any intangible personal property will be
excluded from the numerator of the fraction. ORS 118.010(2), (5)–(6).
These statutes can produce some unexpected results. As noted in §14.2-1,
the filing threshold of $1,000,000 is based on the value of the decedent’s gross
estate, regardless of where the assets included in the gross estate are located. ORS
118.160(1)(c), 118.005(6). As a result, a nonresident with a gross estate of
$1,000,000 or more, but with a small amount of Oregon tangible assets, will be
required to file an Oregon estate tax return, and will be required to pay Oregon
estate taxes if the taxable estate exceeds $1,000,000, even if the state of residence
imposes no estate or inheritance tax.
For example, if an Oregon resident moves to California (which has no estate
or inheritance tax), but leaves behind in Oregon either real property or tangible
personal property, the person’s estate will be subject to the Oregon estate tax if the
taxable estate (wherever located) exceeds $1,000,000. The same result will take
place if the person never lived in Oregon, but happens to own real property or
tangible personal property in Oregon. Because of the fractional method of
calculating the tax, even a small amount of tangible property located in Oregon
will trigger a tax.
If all of a nonresident’s property located in Oregon passes to a surviving
spouse or to a charity, the Oregon estate tax on nonresidents is not necessarily
eliminated. Marital deductions and charitable deductions, like all other deductions,
reduce the taxable estate, not the gross estate, and the fractional formula uses the
value of the decedent’s gross estate as its denominator and the value of the
decedent’s gross estate located in Oregon as its numerator. ORS 118.010(3)(b), (6).
The fact that some or all of the numerator passes to a spouse or a charity does not
affect the fraction or the resulting percentage. Marital deductions and charitable
deductions will reduce the overall Oregon tax, but they will not reduce the
percentage of the tax payable to Oregon, nor will they reduce the assets (the gross
estate) to be measured against the filing threshold. As a result, the amount of tax
payable to Oregon will remain the same regardless of whether Oregon assets or
foreign assets pass to the spouse or to charity (assuming that the value passing to
the spouse or to charity remains the same).
As a further example, if the surviving spouse was an Oregon resident when
the first spouse died, but then moved to California (which has no estate or
inheritance tax), but is the beneficiary of a state-qualified terminable interest
property (QTIP) trust or an Oregon special marital property (OSMP) trust that
holds either real property or tangible personal property located in Oregon, the
surviving spouse’s estate will be subject to the Oregon estate tax if the taxable
estate (wherever located) exceeds $1,000, 000. ORS 118.010(3)(b), (6).
The same result occurs if the Oregon property is subject to an encumbrance.
The encumbrance reduces the taxable estate, but it does not reduce the amount of
the gross estate in Oregon, nor does it reduce the gross estate located elsewhere.
Thus, it is possible for a nonresident decedent to owe an Oregon estate tax even
when the net value of the assets located in Oregon is negative due to an
encumbrance on them.
Equally puzzling is the fact that the legislature drafted the statute in a
manner that reflects a determination by the legislature that personal property of a
nonresident decedent can have a situs in Oregon. Yet the Oregon Court of Appeals
has held in a probate case that the personal property of a nonresident decedent has
the same situs as the decedent’s domicile. West v. White, 92 Or App 401, 403–404,
758 P2d 424, aff’d, 307 Or 296 (1988). Although the West case dealt with an
intangible (a promissory note), the holding is not limited to intangible personal
property.
The lawyer should keep in mind, however, that no Oregon estate tax return
will be due (and no tax will be due) if the worldwide gross estate of the decedent is
less than the filing threshold of $1,000,000. ORS 118.160(1)(c).
The bottom line is that nonresident clients with even a small amount of
tangible assets located in Oregon should review their situation to determine
whether steps should be taken to minimize or eliminate the Oregon estate tax.
These steps might include disposing of Oregon assets or moving the Oregon assets
to another state, such as the state of the client’s residence, depending on the estate
tax laws or inheritance tax laws of the state of residence. A nonresident might also
consider placing tangible property located in Oregon into an entity created in
another state, such as a limited liability company. Even Oregon residents can
reduce their Oregon estate tax by holding tangible assets in other states, but the
amount of the overall tax savings will depend on the estate tax laws of those other
states.
Nonresident surviving spouses who are beneficiaries of a state QTIP trust or
an OSMP trust present an interesting challenge. If the surviving spouse moves to
another state (such as California), and the state QTIP trust or OSMP trust then
liquidates all of the Oregon property held in trust, what part, if any, of the
surviving spouse’s estate is reportable in Oregon? Even though the trust holds no
Oregon property at the time of the surviving spouse’s death, ORS 118.010(3)(a)(B)
requires that the value of property for which a deduction for OSMP was previously
allowed or for which a state QTIP election was previously allowed be included in
the Oregon taxable estate. When the surviving spouse dies, it was unclear whether
the entire value of property held in a state QTIP or OSMP trust is treated as
Oregon property because it was claimed as a deduction in the first deceased
spouse’s estate. But a number of lawyers believe that the estate of a nonresident
decedent is taxable in Oregon only to the extent that the estate holds real property
or tangible personal property located in Oregon; thus, no tax would be due. ORS
118.010(2)(b).
Recently, the Oregon Department of Revenue adopted an administrative rule
in response to this issue. OAR 150-118.010(8)(4) (effective for estates of
decedents who die on or after January 1, 2012) specifies as follows:
The amount to be included in the estate on the death of a surviving spouse
is limited to trust property that is subject to Oregon estate tax. If a QTIP or OSMP
election was taken when the first spouse dies, the property that is required to be
included in the estate of the surviving spouse is dependent upon the residency
status of the surviving spouse. If a resident decedent, the gross estate of a
surviving spouse must include the value of any property included in the QTIP or
OSMP election. If a nonresident decedent, the gross estate of a surviving spouse
must include the value of any property included in the QTIP or OSMP election to
the extent that the property consists of real property located in Oregon or tangible
personal property located in Oregon.
Example 2 of this rule clarifies that if the surviving spouse is not a resident
at the time of his or her death, “[t]he Oregon estate must include the value of any
real property located in Oregon and any tangible personal property located in
Oregon remaining in the trust; intangible property is excluded from the estate.”
OAR 150.118.010(8), Example 2.
Thus, if the surviving spouse is no longer a resident of Oregon at the time of
his or her death and has liquidated all of the Oregon property, no Oregon estate tax
would be due. If the surviving spouse liquidated some but not all of the Oregon
property prior to death, then only the Oregon real property and Oregon tangible
personal property held by the trust would be subject to Oregon estate tax.
OAR 150-118.010(8) was renumbered OAR 150-118-0080 (elections).
§ 14.2-4 Effective Date of the New Estate Tax Law
Technically, the effective date for HB 2541 (2011 Or Laws ch 526) is
September 29, 2011. See 2011 Or Laws ch 526, §31. However, except for the
amendments to ORS 105.645 (regarding tax-qualified disclaimers) all provisions
of HB 2541 apply to estates of decedents who die on or after January 1, 2012. See
2011 Or Laws ch 526, §30. The 2011 amendments to ORS 105.645 apply to estates
of decedents who die on or after January 1, 2010. See 2011 Or Laws ch 526,
§30(2). When HB 2541 was introduced in the House Revenue Committee, the
Oregon Law Commission (OLC) prepared a comprehensive Work Group Report,
which can be found at https://law-
olc.uoregon.edu/sites/default/files/pictures/Inheritance Tax Work Group HB
2541_0.pdf. Note that the OLC report does not discuss the amendments that were
made by the senate.
§ 14.2-5 Portability Election
QUERY: Can the estate of the first spouse to die during 2011 or 2012
make a portability election under Oregon law to pass the unused portion of
the deceased spouse’s $1,000,000 Oregon exclusion amount to the surviving
spouse? No. However, if both spouses die during 2012,an argument can be
made that the estate of the first spouse can make a portability election to
include the “deceased spousal unused exclusion amount” under IRC
§2010(c) to reduce the Oregon taxable estate of the surviving spouse. The
resolution of such an election will likely have to be litigated in the Oregon
courts.
The Oregon Department of Revenue (DOR) has not issued any published
determination regarding the applicability of the federal portability election as it
applies to Oregon law. However, in a recent e-mail a DOR representative issued
the following response:
The department understands that “any other applicable exclusions or deductions”
as used in ORS 118.010(3)((b)(B) could possibly be challenged by an estate to
include the federal portability provision of IRC 2010(c)(2), (3), (4) and (5) based
on the plain language of the statute. However program believes the legislature
clearly did not intend to tie to the federal portability provision because without a
statutory provision that identifies a basis exclusion amount for Oregon purposes,
Oregon would tie to the federal basic exclusion amount identified in IRC
2010(c)(3) which is $5 million. A tie to the federal provision would obviously not
be revenue neutral which was a goal of the legislature as evidenced by LRO’s
Revenue Impact Statement dated June 9, 2011 that shows the expected revenue
impact for the legislation to be near zero.
Program believes there would need to be a legislative change in order for
Oregon to adopt a portability provision. Thanks for bringing the question to the
department’s attention and thanks in advance for communicating the department’s
position on this issue to practitioners.
If the federal estate tax law is amended to extend the federal portability
provisions beyond 2012, then it may make sense for the Oregon legislature to
consider whether the Oregon estate tax law should be amended to include express
portability provisions, so that a surviving spouse can use the deceased spouse’s
unused Oregon exemption. Until then, the DOR will likely not recognize any
election for a surviving spouse to use the deceased spouse’s unused Oregon
exemption.
Federal portability is now permanent.
§ 14.2-6 Natural Resource Credit Under the New Law
§ 14.2-6(a) Background
In 2007, the Oregon legislature enacted ORS 118.140 to provide state tax
relief to owners of “natural resource property.” The statute granted a $7,500,000
Oregon inheritance tax exemption for natural resource property that is transferred
to a family member. See former ORS 118.140(2). This legislation was drafted late
in the session, and a number of questions arose. Some of these questions were
resolved in the 2008 special legislative session when the $7,500,000 exemption
was changed to a credit. Also, the 2008 Legislature added the concept of “working
capital” as part of the natural resource property that is eligible for the natural
resource credit, but did not define working capital. See former ORS
118.140(2)(a)(D) (2009).
In 2008, the Oregon Department of Revenue adopted an administrative rule
defining working capital as “current assets less current liabilities.” See OAR 150-
118.140(4)(i). This definition did not easily mesh with the working-capital
practices used by owners of natural resource property because, in many cases,
working-capital balances had to be sufficient to carry a natural resource business
for several years through good times and bad times before the business operation
started producing sufficient revenue to cover expenses.
Legislators tried unsuccessfully to resolve this issue during the 2009
legislative session by introducing HB 3305. The bill died in the House Revenue
Committee. Then Representative Vicki Berger, the Legislative Revenue Office,
and several other legislators, including the chairs and other members of the House
and Senate Revenue Committees, requested that the Oregon Law Commission
conduct a law-reform project regarding Oregon’s inheritance tax laws. The request
included a review of the natural resource credit. A workgroup was formed in 2009.
After several months of deliberations, HB 2541 was presented to the House
Revenue Committee during the 2011 legislative session. After being amended by
both houses, it became law on June 28, 2011. 2011 Or Laws ch 526. The term
working capital was replaced with the term operating allowance, as defined in
ORS 118.140(1)(j). See §14.2-6(b)(2).
OAR 150-118.140 was renumbered OAR 150-118-0110 (estate tax credit for
natural resource property).
§ 14.2-6(b) Natural Resource Property: Requirements and Definitions
§ 14.2-6(b)(1) Natural Resource Property
Under the pre-2012 law, one had to review approximately six different
statutes to determine whether the nature and use of the property would qualify as
“natural resource property.” See former ORS 118.140(1) (2009). Instead, the
definitions under the new law are more self-contained within the statute. First there
is the property criteria and then there is the use criteria. The natural resource
property definition includes a broad spectrum of real property and personal
property, including intangible personal property. Generally, any property
reasonably and customarily used in the natural resource businesses described in the
statute will qualify as natural resource property. ORS 118.140(1)(i).
The second part of the definitional criteria concerns how the property is
actually being used. The natural resource property must be used in a “farm
business” (ORS 118.140(1)(c)), a “fishing business” (ORS 118.140(1)(e)), or a
“forestry business” (ORS 118.140(1)(g)), together referred to as a “natural
resource business.” The definition of farm use includes the production of biofuel.
ORS 118.140(1)(d); see ORS 308A.056(3)(f), (l).
The 2015 Legislature amended ORS 118.140(1)(i) to clarify that the natural
resource property must be located in this state.
§ 14.2-6(b)(2) Operating Allowance
Because of the practical difficulties with its definition, the term working
capital in former ORS 118.140 (2009) was replaced with the term operating
allowance. See §14.2-6(a). Operating allowance means “cash or a cash equivalent
that is spent, maintained, used or available for the operation of a farm business,
forestry business or fishing business and not spent or used for any other purpose.”
ORS 118.140(1)(j).
The operating allowance may be claimed as natural resource property, but
the claimed amount may not exceed the lesser of $1,000,000 or 15% of the claimed
natural resource property (excluding the operating allowance itself). ORS
118.140(1)(i)(I), 118.140(2)(a). The term operating allowance more closely
matches the operating life cycle of natural resource businesses than the term
working capital under prior law (see §14.2-6(a)); cash may accumulate after crop,
forest, or livestock sales, or as savings to buy equipment or other property, only to
be disbursed during the crop-production process.
§ 14.2-6(b)(3) Use and Transfer Requirements
To qualify for the credit under ORS 118.140, the natural resource property
must be transferred to a family member (as defined in IRC §2032A) of the
decedent. ORS 118.140(1)(b). There are two time-period requirements with respect
to family use that must be satisfied in order to fully utilize the natural resource
credit.
First, for five out of eight years ending on the date of the decedent’s death,
the decedent or a family member must have operated the natural resource business
and used the natural resource property in that business. ORS 118.140(3)(c)–(d),
(5)–(6).
Second, for five out of eight years following the decedent’s death, a family
member or an entity operated by a family member must operate the family
business and use the natural resource property in the family business. ORS
118.140(9)(a). See §14.2-6(d)(1) for the tax consequences of disposing of natural
resource property prematurely.
Natural resource property that is leased to or from a family member, or
property that is held in trust for a family member who is a qualified beneficiary (as
defined by ORS 130.010, ORS 118.140(1)(k)), continues to qualify as natural
resource property. ORS 118.140(4)(a)–(b). Natural resource property owned in a
limited liability company, corporation, partnership, or trust in which at least one
family member materially participates also continues to qualify. ORS 118.140(8).
§ 14.2-6(b)(4) Adjusted Gross Estate
The term adjusted gross estate was added to ORS 118.140 as a defined term,
since there are three natural-resource computational requirements that are based on
the value of the adjusted gross estate. Adjusted gross estate means the value of the
gross estate reduced by the deductions under IRC §2053 (expenses, indebtedness,
and taxes) and IRC §2054 (uninsured losses during the settlement of the estate).
ORS 118.140(1)(a).
The adjusted gross estate is used to determine (1) the natural resource credit,
which is computed as described in ORS 118.140(2)(b); (2) the maximum value of
the adjusted gross estate that is eligible to claim the credit, ORS 118.140(3)(a); and
(3) the satisfaction of the requirement that the natural resource property in the
estate must meet the 50% requirement, ORS 118.140(3)(b). The amount of natural
resource property claimed cannot exceed $7,500,000. ORS 118.140(2)(b). In order
to claim the credit, the total adjusted gross estate cannot exceed $15,000,000, and
the total value of natural resource property in the estate must equal at least 50% of
the total adjusted gross estate. ORS 118.140(3).
The 2015 Legislature clarified that the total value of natural resource
property in the estate must be at least 50 percent of the total adjusted gross estate
“that is in this state.” ORS 118.140(3)(b).
§ 14.2-6(c) Calculating the Natural Resource Credit
Under prior law, the natural resource credit was computed according to a
table set forth in former ORS 118.140(2)(c) (2009). See §14.3-5. Under current
law, the credit is calculated as a fraction of the Oregon estate tax. ORS
118.140(2)(b). The amount allowed as a natural resource credit is determined as
follows:
(1) First, determine the Oregon estate tax.
(2) Second, determine the value of the natural resource property that is
claimed under ORS 118.140(2)(b). The value of natural resource property can
exceed $7,500,000, but the value claimed on Schedule NRC of the estate tax return
cannot exceed $7,500,000. Also, the executor may claim less than the full amount
of the credit, and may apply the credit value to specific assets. ORS 118.140(2)(b)–
(c).
(3) Third, determine the adjusted gross estate and then determine the ratio
of the claimed natural resource property; the numerator of the ratio is the amount
of natural resource property claimed (not to exceed $7,500,000), and the
denominator is the total adjusted gross estate. ORS 118.140(2)(b).
(4) Finally, determine the natural resource credit by multiplying the ratio
by the Oregon estate tax. ORS 118.140(2)(b).
§ 14.2-6(d) Transferring or Replacing Natural Resource Property
Generally, personal property (tangible or intangible) that constitutes natural
resource property can be replaced with other tangible or intangible personal
property and still qualify for the natural resource credit if it continues to be used in
the natural resource business. ORS 118.140(4)(c), (9)(d); see ORS
118.140(1)(i)(I).
If real property that is claimed to be natural resource property is transferred
after the decedent’s death but before the estate tax return is filed, it must be
replaced with real property that qualifies as natural resource property, and it will
continue to be eligible for the credit. ORS 118.140(4)(c). The replacement must
occur within one year in order to continue to qualify for the credit, unless the
replacement property is acquired within two years as a result of an involuntary
conversion pursuant to IRC §1033. The replacement property must continue to be
used in a natural resource business. ORS 118.140(9)(d).
If, before the decedent’s death, real property that constitutes natural resource
property is replaced with qualifying real property pursuant to an IRC §1031
exchange or an IRC §1033 conversion, the holding period for the previously
owned property may be included for purposes of satisfying the requirement that the
property be operated as natural resource property for five out of the eight years
ending on the date of the decedent’s death. ORS 118.140(7).
§ 14.2-6(d)(1) Disposition Tax and Other Taxable Transfers
If natural resource property is sold or is no longer used in a natural resource
business before the property is used for five out of the eight calendar years after the
decedent’s death, a “disposition” occurs and an additional tax is due. ORS
118.140(9)(a). The additional tax is prorated to reflect a reduced tax applicable to
the portion of the five-year period remaining unused, and the additional tax is due
within six months after the date of disposition or cessation of use. ORS
118.140(9)(e). Also, the use of cash or other natural resource assets to pay federal
estate taxes or state inheritance or estate taxes constitutes a disposition. ORS
118.140(9)(b).
§ 14.2-6(d)(2) Annual Reporting Requirement
The transferees of natural resource property for which a credit has been
claimed under ORS 118.140 must file annual reports with the Oregon Department
of Revenue (DOR) to maintain eligibility for the credit. The report must track each
asset for which the credit is claimed and must indicate the status of each asset, that
is, whether the asset (1) is still used in the natural resource business, (2) has been
replaced with other natural resource property that is being used in the natural
resource business, or (3) has been subject to a taxable disposition. ORS
118.140(10). The annual reporting requirement ceases when the transferee has
used the property to operate a natural resource business for the requisite five-year
period. ORS 118.140(9)(a), (10).
The annual report form (titled “Annual Certification for Natural Resource
Credit Property or Commercial Fishing Business Credit Property”) is available at
the DOR’s Web site, www.oregon.gov/DOR/forms/Pages/default.aspx.
§ 14.2-6(d)(3) Natural Resource Tax Forms
The natural resource credit under ORS 118.140 is claimed by filing
Schedule NRC with the Oregon estate tax return, Form OR-706. Any dispositions
before the expiration of five out of eight years of qualified use following the death
of the decedent are subject to tax, which is reported on Form OR706A.
PRACTICE TIP: Form OR-706 and Schedule NRC are online at
www.oregon.gov/DOR/forms/Pages/default.aspx.
§ 14.3 THE PRE-2012 OREGON INHERITANCE TAX

Sections 14.3-2 to 14.3-5 discuss the Oregon inheritance tax for estates of
decedents who died before January 1, 2012. The four steps summarized below—
and discussed in more detail in §14.3-3— do not appear in the Oregon inheritance
tax statutes, but these steps must be followed in order to calculate the Oregon tax:
(1) Determine the decedent’s gross estate. If the value of the decedent’s
gross estate is less than $1,000,000, no return is due. See ORS 118.160(1)(b)(D).
(2) If a return is due, calculate the Oregon inheritance tax on the adjusted
taxable estate using Table B in the Instructions for Oregon Form IT-1. This rate
table reflects the rate of tax for the state death tax credit under federal law. Do not
apply a unified credit. This step produces a tax even if the adjusted taxable estate is
as small as $40,000.
PRACTICE TIP: Form IT-1 is online at
www.oregon.gov/DOR/forms/FormsPubs/form-it-1_150-103-
001_2011.pdf.
(3) Calculate the federal estate tax (using federal law in effect in 2000) on
the federal taxable estate (defined by federal law in effect in 2000) using Table A
in the Instructions for Form IT-1. For purposes of this calculation, include adjusted
taxable gifts in the amount on which the tax is calculated. After the tax has been
calculated using Table A, reduce the tax by a unified credit of $345,800 (unified
credit equivalent of $1,000,000).The result of this step can be called the federal
cap.
(4) Pay the lesser of the two amounts shown in steps 2 and 3.
The number $1,093,784 is a magic number in the calculation of the Oregon
inheritance tax. As noted above, estates pay Oregon inheritance tax in an amount
equal to the lesser of the Oregon inheritance tax or the federal cap. Taxable estates
below $1,093,784 pay an amount equal to the federal cap, while taxable estates
above this amount pay a tax equal to the Oregon inheritance tax (the state death tax
credit). As a result, taxable estates between $1,000,000 and $1,093,784 pay an
Oregon inheritance tax at a marginal rate of 41%, because the federal cap (and its
federal estate tax rate table) is the limiting factor on the Oregon inheritance tax.
Above $1,093,784, the marginal rate drops to 6.4% because the state death tax
credit rate table is the limiting factor. That rate eventually climbs to 16% for very
large estates. The significance of the number $1,093,784 is also discussed in §14.3-
3, in the discussion of the impact of adjusted taxable gifts.
Although former ORS 118.220 (2009) and OAR 150-118.100(1) provide
that the Oregon inheritance tax is due and payable on the date that the federal
estate tax is due, these provisions should not be interpreted as excusing the filing of
an Oregon return (or the paying of the Oregon tax) for estates that owe no federal
estate tax under federal law applicable on the date of death. Because former ORS
118.007 (2009) provides that Oregon is “frozen” to the federal estate tax as of
December 31, 2000, former ORS 118.220 (2009) and OAR 150-118.100(1) should
be interpreted based on whether a federal estate tax would have been due under
federal law on December 31, 2000. Force v. Dep’t of Revenue, 350 Or 179, 252
P3d 306 (2011). OAR 150-118.260(1)-(A) and OAR 150-118.100(1) confirm that
the Oregon return is due nine months after the date of the decedent’s death. (In
early 2011, the Oregon Department of Revenue announced that the automatic
extension of time to file for 2010 deaths provided for in the federal Tax Relief,
Unemployment Insurance, and Job Creation Act of 2010, Pub L No 111-312, 124
Stat 3296, does not apply to Oregon returns.)
§ 14.3-2 Lifetime Gift Transfers
For estates of decedents who died before January 1, 2012, adjusted taxable
gifts are not taxed in the calculation of the Oregon inheritance tax, but they are
taxed in the calculation of the federal cap.
Adjusted taxable gifts are the cumulative amounts of gifts of the decedent
that did not qualify for the annual exclusion, combined with the cumulative
amounts by which qualifying gifts exceeded the annual exclusion. IRC §2001(b),
IRC §2503. To determine the impact of adjusted taxable gifts on the Oregon
inheritance tax, the lawyer must carefully analyze how the adjusted taxable gifts fit
into the four-step process of calculating the Oregon inheritance tax (discussed in
§14.3-3).
NOTE: IRC §2035(a), which purports to bring back into the federal
gross estate certain gifts made within three years of death, is usually not
applicable to most pre-death transfers, except for the transfer of an existing
life insurance policy to an irrevocable life insurance trust or a transfer of
such property (or an interest therein) that would have been included in the
decedent’s gross estate under IRC §2036 (transfers with retained life
estates), IRC §2037 (transfers with reversionary interest), IRC §2038
(revocable transfers), or IRC §2042 (proceeds of life insurance) if such
transferred interest or relinquished power had been retained by the decedent
on the date of his death. IRC §2035(a). The 1976 federal change that
abandoned the contemplation-of-death rule and enacted a three-year rule was
largely abandoned in 1981, and IRC §2035(a) now has very limited
application. Section 2035(b) brings back into the gross estate any gift taxes
paid within three years of the decedent’s death, but relatively few decedents
have paid gift taxes.
§ 14.3-3 Calculating the Oregon Inheritance Tax
For decedents who died before January 1, 2012, the lawyer must follow the
four steps discussed in this section to calculate the Oregon inheritance tax.
NOTE: Before working through the four steps, the lawyer should
become familiar with the terms gross estate and adjusted taxable estate.
Oregon adopted the federal definition of gross estate, so the gross estate will
be the same for both federal and Oregon purposes. Former ORS 118.005(5)
(2009); IRC §2031. The gross estate does not include adjusted taxable gifts.
The “adjusted taxable estate” is equal to the taxable estate minus $60,000.
IRC §2011(b)(3). None of the gross estate, the taxable estate, or the adjusted
taxable estate includes adjusted taxable gifts. IRC §2001(b).
For simplicity of illustration, the steps discussed below assume a 2009 death
of an unmarried woman with no deductions of any kind (no marital bequests,
charitable bequests, claims, or administration expenses). Annual exclusions are
ignored for purposes of this scenario.
(1) Step 1—Determine the filing threshold. The first step in calculating
the Oregon inheritance tax is to determine whether the estate exceeds the Oregon
filing threshold. The filing threshold is determined by the value of the gross estate.
If the gross estate equals or exceeds $1,000,000, then an Oregon return is due, and
the second, third, and fourth steps must then be analyzed. If the gross estate is less
than $1,000,000, the filing threshold is not met, no return is due, and the other
steps need not be examined. If no return is due, then no tax is due. Former ORS
118.160(1)(b)(D) (2009).
If a client dies with a gross estate of $1,100,000, an Oregon return is due,
and the other steps (described below) will result in a tax. But if the client makes a
gift of $150,000 immediately before her death, her gross estate will be $950,000,
because the gross estate does not include adjusted taxable gifts. As a result, no
return will be due, and no tax will be due. In both cases, her children will receive
the entire estate. In the first example, the estate will pay an Oregon inheritance tax
of $38,800, but in the second example the estate will pass 100% tax free. See
Instructions for Oregon Form IT-1. Yet in both examples, the client started out
with the same assets. By making a $150,000 gift, the client saved her family
$38,800. (A decision whether to make such gifts should also take into account that
lifetime gifts generally do not receive a stepped-up basis at death, while assets
transferred at death do receive a stepped-up basis. IRC §1014.)
PRACTICE TIP: Oregon Form IT-1 is online at
www.oregon.gov/DOR/forms/FormsPubs/form-it-1_150-103-
001_2011.pdf .
(2) Step 2—Calculate the Oregon inheritance tax. If a return is due, the
second step is to calculate the Oregon inheritance tax. The Oregon inheritance tax
is based on the amount of the adjusted taxable estate. The adjusted taxable estate is
equal to the taxable estate minus $60,000. IRC §2011(b)(3). The adjusted taxable
estate does not include taxable gifts. The amount of the Oregon tax is based on a
rate table that is identical to the old federal table for the state death tax credit.
Former ORS 118.010(2) (2009). The table appears as Table B in the instructions
for Oregon Form IT-1. The table does not use a unified credit. Instead, it generates
a tax as soon as the adjusted taxable estate exceeds $40,000. In our example, if the
gift had not been made, the estate of $1,100,000 would generate an Oregon
inheritance tax of $38,800. But this amount is not necessarily the amount that the
estate must pay. Instead, the lawyer must continue on to Step 3.
(3) Step 3—Calculate the federal cap. The third step is to calculate what
is called the federal cap. This is the federal estate tax that the estate would have
paid (in our example) for a 2009 death based on the federal law applicable to a
2009 death as that law existed in 2000. At that time, the federal unified credit
equivalent was scheduled to be $1,000,000 for a 2009 death. Unlike the calculation
of the Oregon inheritance tax, the calculation of the federal estate tax (and thus the
federal cap) requires that any adjusted taxable gifts be added back in before the
estate tax is calculated. IRC §2001(b). For a $1,100,000 estate, the federal cap
would be calculated on $1,100,000, regardless of whether or not the decedent had
made the deathbed gift of $150,000.
The federal cap is calculated using the federal estate tax rate table that
appears as Table A in the instructions for Oregon Form IT-1. After the tax is
calculated, the unified credit of $345,800 (which is the tax equivalent of assets
worth $1,000,000) is applied. The result is the federal cap. In the scenario
described in this section, the resulting federal cap would be $41,000.
(4) Step 4—Determine the amount of tax to pay. The amount of the
Oregon inheritance tax is the lesser of the results of Step 2 and Step 3, because
former ORS 118.010(2) (2009) imposes a tax equal to the maximum allowable
state death tax credit available for the year of death based on 2000 federal law.
However, an estate can receive a credit only against the tax it actually owes. The
credit cannot exceed the tax. As a result, if the 2000 federal tax was less than the
amount calculated by the state death tax credit table, then this lower amount of the
tax limits the availability of the credit. The federal tax “caps” the credit. For a
$1,100,000 estate with no gift, the lesser of the two steps is $38,800. If the
$150,000 gift had been made, the tax would have been zero, because no return
would have been due.
After completing the four-step analysis, the lawyer can determine whether
the Oregon inheritance tax applies to adjusted taxable gifts. This determination
takes three forms:
(1) If the decedent used adjusted taxable gifts to reduce her gross estate
below the Oregon filing threshold, then the adjusted taxable gifts (and the rest of
her estate) completely avoid the Oregon inheritance tax. Former ORS
118.160(1)(b)(D) (2009).
(2) If her gross estate (after the gifts) is above the Oregon filing threshold,
then a return will be due. Her adjusted taxable gifts will not be taken into account
in calculating the Oregon inheritance tax (Step 2), but the gifts will be taken into
account in the calculation of the federal cap (Step 3). In most cases, making
adjusted taxable gifts will (with one minor exception) reduce the Oregon
inheritance tax by the amount of the marginal rate of the state death tax credit
applied to the adjusted taxable estate. For example, the tax savings resulting from a
$10,000 taxable gift from a $1,100,000 estate would be $560, or 5.6% of the gift. If
the estate were $3,000,000, the tax savings would be $880, or 8.8% of the gift.
(3) There is one minor exception. If the Oregon inheritance tax is greater
than the federal cap (Table A), then the federal cap will be the determining factor
because it is the lesser of the two. In this situation, making adjusted taxable gifts
will not reduce the tax due because the federal cap includes a tax on the gifts. This
exception occurs only if the taxable estate (before the gifts) is less than $1,093,784.
Below this amount, the Oregon inheritance tax is greater than the federal cap, and
the gifts will be taxed. But even this minor exception has an exception. If the
taxable estate (before the gifts) is only slightly below $1,093,784, and the gifts are
large enough to bring the Oregon inheritance tax below the federal cap, then tax
savings can still be obtained.
Although the Oregon inheritance tax does not generally apply to adjusted
taxable gifts, adjusted taxable gifts may still be important in determining the
Oregon inheritance tax. For example, the presence of adjusted taxable gifts can
significantly reduce the amount that can be placed in a credit shelter trust, even
though no federal tax is due. Consider the following example: The decedent makes
adjusted taxable gifts in the amount of $800,000, then dies in 2011 leaving a gross
estate of $3,000,000, a surviving spouse, and a typical tax-planning will that calls
for the creation of two trusts—a credit shelter trust and a marital trust—to be
funded with the entire $3,000,000 gross estate. Both trusts are drafted so that they
are eligible for an election for qualified terminable interest property (QTIP), either
federal or Oregon. See IRC §2056(b)(7)); former ORS 118.010(7) (2009). The
gross estate is well below the federal $5,000,000 unified credit, even if adjusted
taxable gifts are included, so no federal return or federal tax is due. Moreover, no
Oregon inheritance tax will be due, as a result of the marital deduction. But how
much of a marital deduction is needed to reduce the Oregon inheritance tax to
zero? And how large may the Oregon-exempt credit shelter trust be, assuming that
the goal is to maximize the size of the Oregon-exempt trust in order to minimize
the tax due on the second death? The answers to these questions are surprising:
The estate will need to claim a $2,800,000 marital deduction by making an Oregon
QTIP election on $2,800,000 of the trusts, and the Oregon-exempt trust will be
limited to only $200,000. This result is caused by several factors. First, the
calculation of the Oregon inheritance tax (Step 2) does not employ a unified credit
or an exemption; it triggers Oregon tax at only $40,000. Second, the calculation of
the federal cap (Step 3) takes into account the adjusted taxable gifts, which
effectively means that the adjusted taxable gifts end up consuming some of the
federal unified credit that was available under 2000 law. In the scenario described
in this paragraph, in order to reduce the Oregon inheritance tax to zero, either Step
2 or Step 3 needs to be reduced to zero, because the amount to be paid is the lesser
of those two steps. To reduce Step 2 to zero, the marital deduction would have to
be $2,900,000 (the other $100,000 would be protected by the $40,000 Oregon
“exemption” and by the $60,000 difference between the taxable estate and the
adjusted taxable estate). To reduce Step 3 to zero, the marital deduction would
have to be $2,800,000 in order to “shelter” $2,000,000 of the trusts and the
$800,000 of adjusted taxable gifts, leaving $1,000,000 to be protected by the
$1,000,000 unified credit available in 2011 under federal law in effect in 2000,
since Step 3 is based on 2000 law. As a result, a marital deduction of $2,800,000
will need to be claimed (by making an Oregon QTIP election), and the size of the
Oregon-exempt trust will be limited to only $200,000. (Of course, a different result
might be desirable if the lawyer decides to pay some tax in the first estate in order
to reduce the tax payable in the second estate.)
If the lawyer plans to use the alternate valuation date election to eliminate an
Oregon inheritance tax that would otherwise be due, and the client has made
adjusted taxable gifts, the reduction in value attributable to the alternate valuation
election must be large enough to reduce the federal cap to zero. In other words, the
taxable estate plus the adjusted taxable gifts (the federal tax computation base)
must be reduced to a point below $1,000,000 in order to reduce the federal cap to
zero. Simply reducing the Oregon gross estate to a point below $1,000,000 is not
sufficient. This is because the estate will pay the lesser of the federal cap (Step 3)
or the Oregon inheritance tax, which is based on the state death tax credit table
(Step 2). The state death tax credit table does not employ a unified credit. Instead,
the tax is imposed on all amounts over $40,000. Unless the federal cap is zero, the
estate will pay some Oregon tax. Because an Oregon return must be filed to make
an Oregon alternate valuation date election, using the alternate valuation date to
reduce the gross estate below $1,000,000 does not avoid the filing requirement.
IRC §2032(d); OAR 150-118.010(7)(1).
The lawyer should calculate some illustrations to determine the amount of
tax savings that might be obtained by making various taxable gifts. It all depends
on the size of the estate and the size of the gifts. As a general rule, the client will
save the most money if the gifts reduce the gross estate to a point below the
$1,000,000 Oregon filing threshold, but lesser tax savings are available even if the
resulting gross estate is still above the filing threshold. Also, the lawyer should
keep in mind that the tax savings described above are understated, because they do
not take into account the annual exclusion.
§ 14.3-4 Oregon Residents Versus Nonresidents Under Prior Law
For estates of decedents who died before January 1, 2012, Oregon taxes
resident decedents on (1) tangible personal property located in Oregon, (2) real
property located in Oregon, and (3) all intangible property regardless of situs.
Former ORS 118.010(3) (2009). But the tax is calculated on the entire taxable
estate (wherever located), and then the tax is multiplied by a fraction, the
numerator of which is the sum of the three classifications described above, and the
denominator is the entire gross estate. Former ORS 118.010(3) (2009).
Nonresident decedents are taxed on property located in Oregon, including
tangible personal property and real property. Nonresidents are also taxed on
intangibles located in Oregon, unless the state of domicile grants reciprocity (an
exemption for intangibles owned by nonresident decedents). But the tax is
calculated on the entire taxable estate (wherever located), and then the tax is
multiplied by a fraction, the numerator of which is the value of the assets subject to
tax in Oregon, and the denominator is the entire gross estate. Former ORS
118.010(4) (2009). The definition of intangibles located in Oregon appears to be
very broad, at least according to the regulations. OAR 150-118.010(1).
In short, under the Oregon statutory scheme for estates of decedents who
died before 2012, tangible property (both real and personal) will be taxed only by
the state in which it is located, for both resident estates and nonresident estates.
Intangible personal property held by resident estates will be taxed regardless of
location, and intangible personal property held by nonresident estates will be taxed
only if it is located in Oregon and the resident state does not grant a reciprocal
exemption. Former ORS 118.010; OAR 150-118.010(3), OAR 150-118.010(4).
These statutes can produce some unexpected results. As noted in §14.3-3,
the filing threshold of $1,000,000 is based on the gross estate, regardless of where
the assets of the gross estate are located. Former ORS 118.160(1)(b)(D) (2009). As
a result, a nonresident with a gross estate of $1,000,000 or more, but with a small
amount of Oregon assets, will be required to file an Oregon inheritance tax return,
and will be required to pay an Oregon inheritance tax if the taxable estate exceeds
$1,000,000, even if the state of residence imposes no estate or inheritance tax.
For example, if an Oregon resident moves to California (which has no estate
or inheritance tax), but leaves behind in Oregon either real property, tangible
personal property, or (more likely) intangible personal property (such as an Oregon
bank account), the person’s estate will be subject to an Oregon inheritance tax if
the taxable estate (wherever located) exceeds $1,000,000. The same result will take
place if the person never lived in Oregon, but happens to own real property or
personal property (tangible or intangible) in Oregon. Because of the fractional
method of calculating the tax, even a small amount of Oregon property will trigger
a tax. And the definition of intangible personal property is extremely broad, at least
according to the regulations. OAR 150-118.010(1).
The same result will take place if the person lived in Washington, except
Washington has its own estate tax, and Oregon exempts the intangible personal
property of Washington residents because Washington grants a reciprocal
exemption for intangible personal property of Oregon residents. RCW 83.100.040;
WAC §458-57-125. As a result, an Oregon tax will be due from the estate of a
Washington resident if the estate holds Oregon real property or tangible personal
property located in Oregon, even if the value of the Oregon property is small. On
the other hand, if the Washington resident holds Oregon intangible personal
property, no Oregon tax will be due.
A reciprocal exemption for intangible property does not exist between
Oregon and California. California has no estate or inheritance tax, and the Oregon
regulations provide that the exemption exists in Oregon only if the foreign state
imposes an estate or inheritance tax and exempts the intangible personal property
of Oregon residents. OAR 150-118.010(4)(b); CAL REV & AND TAX’N CODE
§13302.
As discussed in §14.2-3, if all of a nonresident’s property located in Oregon
passes to a surviving spouse or to a charity, the Oregon inheritance tax on
nonresidents is not necessarily eliminated. Marital deductions and charitable
deductions, like all other deductions, reduce the taxable estate, not the gross estate,
and the fractional formula uses the gross estate as its denominator and the value of
the decedent’s gross estate located in Oregon as its numerator.
The lawyer should keep in mind, however, that no Oregon inheritance tax
return will be due (and no tax will be due) if the world-wide gross estate of the
decedent is less than the filing threshold of $1,000,000. Former ORS
118.160(1)(b)(D) (2009).
The bottom line is that nonresident clients with even a small amount of
Oregon assets should review their situation to determine whether steps should be
taken to minimize or eliminate the Oregon inheritance tax. These steps might
include disposing of Oregon assets or moving the Oregon assets to another state,
such as the state of residence, depending on the inheritance tax laws of the state of
residence. Even Oregon residents can reduce their Oregon inheritance tax by
holding tangible assets in other states, but the amount of overall tax savings will
depend on the inheritance tax laws of those other states.
§ 14.3-5 Natural Resource Credit Under Pre-2012 Law
In 2007, the Oregon legislature enacted ORS 118.140, which provided a
$7,500,000 inheritance tax exemption for “natural resource property” transferred to
a qualifying family member. Former ORS 118.140(1), (3). In the 2008 special
legislative session, the natural resource exemption was converted to a credit. See
2008 Or Laws ch 28. See §14.2-6(a) for additional history about the statute.
For estates of decedents who died before 2012, the natural resource credit is
available in estates in which natural resource property constitutes at least 50% of
the “total adjusted gross estate,” but the credit is not available if the adjusted gross
estate exceeds $15,000,000. Former ORS 118.140(3) (2009). The rate of the credit
begins at 0.8% for natural resource property valued over $100,000, and then
increases to 13.6% for natural resource property valued over $7,100,000. The
amount of the credit peaks for qualifying property valued at $7,499,999, and the
credit is then phased out for qualifying property exceeding that value. The credit is
optional, and an estate may elect to claim less than the full amount of the available
credit.
COMMENT: It appears that little reason exists to claim a credit for
natural resource property that exceeds $7,499,999 in value, and in fact,
doing so could be detrimental. Accordingly, an estate holding natural
resource property in excess of $7,499,999 should consider claiming a partial
credit.
The following definitions apply to the natural resource credit under former
ORS 118.140 (2009):
(1) Adjusted gross estate is defined as the value of the gross estate
reduced by the amounts allowable as deductions under IRC §2053 (expenses,
indebtedness, and taxes) and IRC §2054 (losses). Former ORS 118.140(3)(b)
(2009); OAR 150-118.140(1)(b). (The term adjusted gross estate is used in the
IRC in only two places, IRC §2057(c) and IRC §6166(b)(6)).
(2) The credit generally applies to qualifying natural resource property,
which is defined as property involved in three industries: farming, forestry, and
commercial fishing. Former ORS 118.140(2)(a) (2009). The specific types of
eligible property within each of the industries are listed in the statute and can be
summarized as follows:
(a) Farming property includes real property and tangible and intangible
personal property used in farming, such as crops, equipment, and working capital.
The definition of farm use includes the production of biofuel. Former ORS
118.140(1)(a), (2)(a)(C) (2009); see former ORS 308A.056(3)(f), (l) (2009).
(b) Forestry property includes real property and personal property used in
forestry such as trees, timber, improvements, equipment, and working capital.
Former ORS 118.140(2)(a)(C) (2009).
(c) Commercial fishing includes personal property used in the conduct of
commercial fishing, such as boats, gear, equipment, licenses, and permits as well
as equipment, working capital, and property used to process and sell fish directly to
consumers (including a restaurant with seating capacity of less than 15 seats at
which the catch from the fishing business is prepared and sold). Former ORS
118.140(2)(a)(B) (2009).
(3) The natural resource property must be transferred to a “member of the
family” as defined in IRC §2032A. Qualified family members include (a) the
decedent’s living ancestors; (b) the decedent’s spouse, registered domestic partner,
or parent; (c) the descendants of the decedent; (d) the descendants of the
decedent’s spouse, registered domestic partner, or parent; and (e) the spouse or
registered domestic partner of any such descendant. Former ORS 118.140(3)(c),
(5), (7)(a) (2009); OAR 150-118.140(4)(h); IRC §2032A(e)(2).
(4) Before the decedent’s death, the decedent or a qualifying family
member of the decedent must have used the property for farm or forest purposes
during five out of the last eight years preceding the decedent’s death. Former ORS
118.140(3)(d) (2009). This prior-use rule is not required to seek a credit relating to
commercial fishing or fishing property. After the decedent’s death, a qualifying
family member must continue to use the property for farm-related purposes, forest-
related purposes, or commercial fishing operations for at least five out the eight
calendar years following the decedent’s death. Former ORS 118.140(7) (2009).
Property held in trust for the benefit of a qualifying family member will
qualify for the credit. Former ORS 118.140(4)(b) (2009). Also, property owned by
a qualified family member through a limited liability company, corporation, or
partnership will qualify for the credit, as long as at least one qualifying family
member materially participates in the business after the transfer. Former ORS
118.140(5) (2009).
Transferees of the natural resource property must pay an additional
inheritance tax if they fail to use the property for a qualified use for at least five out
of the eight years following the decedent’s death. Former ORS 118.140(7) (2009).
Although the statute refers to this as an “additional tax,” it is actually a recapture of
the tax that would have been due if the natural resource credit had not been taken.
The amount of the additional tax will be prorated based on the amount of the credit
allowed and the number of years that the property was not used as a qualified use
after the decedent’s death. In particular, the statute provides that the additional tax
liability will be the amount of the credit allowed on the disqualified property,
multiplied by five minus the number of years the property was used as natural
resource property, divided by five. Former ORS 118.140(7)(b) (2009).
The natural resource credit is claimed by filing Schedule NRC with the
Oregon inheritance tax return (Form IT-1).
PRACTICE TIP: Form IT-1 is online at
§ 14.4 PROCEDURES APPLICABLE TO BOTH OLD AND NEW LAW

§ 14.4-1 Fiduciary’s Request for Release from Personal Liability for
Oregon Estate Tax
Effective September 28, 2009, ORS 118.265 permits a personal
representative or trustee to make a written request to the Oregon Department of
Revenue (DOR) for a prompt determination of the Oregon estate tax and a release
from the fiduciary’s personal liability for the tax. This ability to request a release
from personal liability from estate tax is somewhat similar to that under the federal
statute, IRC §2204(a).
A form for requesting a discharge from personal liability is available online.
For deaths occurring on or after January 1, 2012, see Form 150-104-005 at
www.oregon.gov/DOR/forms/Pages/default.aspx. For deaths before that date, see
Form 150-103-005 at www.oregon.gov/DOR/forms/Pages/default.aspx.
Upon receipt of such an application, the DOR is required to notify the
fiduciary of the amount of tax due. That notice of tax due must be given “[a]s soon
as possible, and in any event within 18 months of the application,” or, if the
fiduciary requests the determination before filing the return, “by the earliest of the
following”: (1) “Eighteen months after the return is filed,” (2) the “expiration of
the period prescribed for the assessment of the tax under ORS 305.265,” or (3) the
“expiration of the period prescribed for the issuance of a notice of deficiency under
ORS 314.410” (three years after the return was filed). ORS 118.265(1).
After paying any tax specified in the notice, the fiduciary “shall be
discharged from personal liability for any deficiency in tax,” and the department
will send the fiduciary a receipt or release to that effect. ORS 118.265(2).
Administrative rules will be adopted to describe this procedure in more detail; a
request form was published on January 1, 2010. See Form 150-103-005 on the
DOR’s Web site. A special version of the 18-month rule is provided in the
legislation in the unusual circumstance that an estate makes a request for a release
before the return is filed.
COMMENT: Although ORS 118.265 became effective on September
28, 2009, the procedure is not limited to returns filed after that date. As a
result, any estate may file a request for release on or after September 28,
2009, including estates that have filed returns previously.
The ability to request a release for a previously filed return presents an
issue brought about by the Oregon tax amnesty program (which ran from
October 1, 2009, to November 19, 2009). See 2009 Or Laws ch 710. Under
that program, an estate can apply for “amnesty” and then file a past-due
return or an amended return and pay past-due taxes for an inheritance tax
return originally due before January 1, 2008. If certain other conditions are
met, the DOR will waive all penalties and half of the interest that would
otherwise apply. However, as an “incentive” for taxpayers to participate in
the amnesty program, if a taxpayer who decides to not participate in the
program (or who was simply unaware of the program), but later is found to
owe tax on a return that would have been eligible for the amnesty program,
then that taxpayer will be subject to an additional penalty of 25% of the tax
due, in addition to all of the previously due penalties and interest, with no
reduction under the amnesty program. For example, if in 2010, an estate
requested a release for an inheritance tax return originally timely filed in
2007, and that request for release caused the DOR to review the return, and
the DOR determined that an additional tax was due, the DOR could have
asserted an additional 25% penalty for the failure to have participated in the
amnesty program. Accordingly, estates may wish to review their situation
carefully before requesting a release for returns due before January 1, 2008.
Those estates may prefer to simply allow the statute of limitations to expire.
See §14.4-4(a) regarding the Oregon statute of limitations on the collection
of the inheritance tax.
ORS 118.265 does not alter the requirement in ORS 118.250 that the DOR
issue a receipt for any estate/inheritance tax paid. As a result, the DOR will
continue to issue the same receipts that it has been issuing for the last several
years.
Although a personal representative may be discharged from personal
liability for estate taxes under ORS 118.265, the statute does not release the
beneficiaries. See ORS 118.210. If a person acting as a fiduciary is also a
beneficiary, that person’s potential liability as a beneficiary will continue.
Although the statute does not so state, the form for requesting a discharge
published by the DOR indicates that the discharge is not effective to the extent that
the fiduciary remains in possession or control of estate assets. Beneficiaries remain
liable for the estate tax to the extent of assets received by them, ORS 118.270, and
the statute of limitations on collecting such tax from them is not limited by ORS
118.265 (see ORS 314.410). As a practical matter, however, a release of the
fiduciary will likely serve as an indication that the DOR has examined the return
and does not intend to seek any additional taxes. But it might possibly (although
unlikely) mean that the DOR believes that it will be able to collect any additional
tax from the beneficiaries.
Fiduciaries also remain responsible for notifying the DOR of a change in the
estate’s liability for federal estate taxes, either through an audit or an amended
return. See ORS 118.100(2); IRC §2032A. “Any executor filing an amended
federal estate tax return shall also file an amended return with the [DOR] within 90
days thereafter.” ORS 118.100(2).
Form OR-706-DISC (Request for Discharge from Personal Liability for
Oregon Inheritance Tax) is available at
See OAR 150-118-0190 (application for determination of estate tax and
discharge from personal liability).
§ 14.4-2 Extensions of Time to File or Pay
The Oregon Department of Revenue (DOR) may grant extensions of both
the time to file the estate tax return and the time to pay the tax due. Regarding an
extension of the time for filing, see OAR 150-118.100(1) (for estates of decedents
who die on or after January 1, 2012); OAR 150-118.160-(B) (for estates of
decedents who died on or after January 1, 2003, and before January 1, 2012).
Regarding an extension of the time for payment, see ORS 118.225 and OAR 150-
118.225.
If an estate has requested an extension of time to file a federal estate tax
return or to pay the estate tax (see IRS Form 4768), a copy of that request must be
filed with the Oregon return when it is filed, and the appropriate boxes should be
checked on page 1 of the Oregon return. OAR 150-118.100(1) (for estates of
decedent’s who die on or after January 1, 2012); OAR 150-118.160-(B) (for estates
of decedents who died on or after January 1, 2003, and before January 1, 2012).
PRACTICE TIP: Oregon returns are online at
If no federal return is being filed, or if a federal extension is not being
requested, the same IRS Form 4768 is used to file a request for an extension of
time to file, but the words “For Oregon Only” should be typed in the top margin of
the form, and the form should be filed with the DOR before the due date. OAR
150-118.225(1)(a). A copy of the federal form should also be attached to the
Oregon return when it is filed.
A six-month extension of time to file an estate tax return is automatic. OAR
150-118.100(1) (for estates of decedents who die on or after January 1, 2012); see
OAR 150-118.160-(B) (for estates of decedents who died before 2012). However,
the DOR will grant a request for an extension of time for more than six months to
pay the estate tax if (1) the executor explains why the extension is needed, (2)
“reasonable cause exists” for the extension, and (3) the estate “secure[s] acceptable
collateral for payment of the Oregon estate tax.” OAR 150-118.225(1); ORS
118.225. The DOR will respond with either an approval or a rejection. Oregon
follows federal law in reviewing such requests.
An extension of time to file does not extend the time to pay, nor does an
extension of time to pay extend the time to file. OAR 150-118.100(1); see OAR
150-118.160-(B) (for pre-2012 deaths). Interest continues to accrue during the
extension period. ORS 118.260(5); see OAR 150-118.225; see also OAR 150-
118.260. See §14.4-3(discussing interest and penalties).
In the absence of an extension, the Oregon estate tax must be paid within
nine months after the date of the decedent’s death. ORS 118.100. If the executor
applied for an extension of the time to pay all or part of the tax and secured
payment of the tax with a “bond, deposit or other good collateral acceptable to the
Department of Revenue,” the DOR may extend the time for paying the tax for up
to 14 years. ORS 118.225.
OAR 150-118.100(1) was renumbered OAR 150-118-0090 (due dates and
extensions of time to file for estates of decedents who died on or after January 1,
2012).
OAR 150-118.225 was renumbered OAR 150-118-0150 (extension of time
to pay tax).
OAR 150-118.260 was renumbered OAR 150-118-0170 (penalties and
interest).
Oregon tax forms are online at
IRS Form 4768 (Application for Extension of Time To File a Return and/or
Pay U.S. Estate (and Generation-Skipping Transfer) Taxes) is available at
§ 14.4-3 Interest and Penalties
Interest on Oregon taxes accrues from the original due date of the estate tax
return, which is nine months after the date of the decedent’s death. ORS
118.260(5)(a); see ORS 314.400(7), 305.220; see also OAR 150-118.260(4).
Although ORS 305.220 specifies an interest rate, the rate is adjusted occasionally,
and the latest rate can be found at OAR 150-305.220(1). The statute refers to
simple interest, not compound interest. Although ORS 305.220(1)–(2) calls for a
rate of interest per month or fraction thereof, a daily rate is used for fractional
months. ORS 305.220(6); OAR 150-305.220(1); see former OAR 150-118.260(4)
(for estates of decedents who died before January 1, 2012). For interest covering
periods of time during which the interest rate changed, the interest must be
computed at the rates in effect during those time periods.
If the time for paying the tax has been extended under ORS 118.225, the
interest nevertheless accrues from the original due date of the return. ORS
118.260(5)(b); see former OAR 150-118.225(1)(b) and OAR 150-118.260(1)-(B)
(for estates of decedents who died before January 1, 2012). If the tax has not yet
been calculated, a deposit may be made to stop the running of interest and penalties
on the portion of the tax deposited. ORS 118.260(7), (9); see former OAR 150-
118.260(1)-(A) (for estates of decedents who died before January 1, 2012).
Payments are credited first to penalties and interest, and then to the tax itself. ORS
118.260(8).
If an estate tax or inheritance tax is not paid within 60 days after notice of a
tax delinquency, the interest rate imposed by ORS 305.220 is increased by one-
third of one percent per month (4% annually). ORS 305.222; OAR 150-
305.222(1). Such a notice includes a notice of assessment following a deficiency,
or a final order issued by the Oregon Tax Court or the Oregon Supreme Court that
affirms the deficiency. Reportedly, the Oregon Department of Revenue (DOR) has
taken the position that that enhanced interest rate applies to IRC §6166 installment
payments, even if all of the installment payments are made by their respective due
dates. See ORS 118.260(4).
ORS 118.260(1) imposes a 5% “delinquency penalty” for a late return. In
addition, ORS 118.260(2) imposes an additional 20% “failure to file penalty” if the
return is more than three months late. Thus, if a return is more than three months
late, the estate would be required to pay a total penalty of 25%. If any of the
delinquency is due to fraud with intent to avoid tax, then a penalty of 100% is
applied pursuant to ORS 118.260(3), although this particular subsection is
ambiguous as to whether it is referring to a penalty or simply the tax itself. (Similar
penalties appear in ORS 314.400, but that statute is apparently limited to income
taxes, while ORS 118.260 applies to estate taxes.) See OAR 150-118.260(1)-(A)
and OAR 150-118.260(1)-(B) (for estates of decedents who died before January 1,
2012).
COMMENT: ORS 305.992 purports to impose a 100% penalty if tax
returns are not filed for three consecutive years. An administrative rule,
OAR 150-305.992, confirms that the statute is intended to apply to annual
returns. However, the statute itself refers to ORS chapter 118, which is the
estate tax statute, even though the estate tax return is not an annual return.
As a result, the DOR might contend that an estate tax return more than three
years late will be subject to a 125% penalty, even if no fraud is involved.
ORS 305.992 also states that the 100% penalty is in addition to any other
penalties. Although that statute also states that the total penalties may not
exceed 100%, the “total penalties” described in that statute do not include
the penalties imposed by ORS chapter 118.
NOTE: Under prior law, even though the executor obtained permission
from the DOR to extend the time for payment and paid the tax in the agreed
installments, the tier-two penalty interest (currently 4%) under ORS 305.222
was added to the delinquency rate of 5% for a total of 9% starting 60 days
after the tax was assessed. Former ORS 118.260(5)(b). The Oregon interest
rate of 9% currently is significantly higher that the interest rate payable
under an installment plan under IRC §6166. For estates of decedents who die
on or after January 1, 2012, the law drops the tier-two interest rate under
ORS 305.222 but retains the delinquency rate under ORS 305.220. Thus,
under the current rates, an installment plan approved by the DOR will
impose a 5% interest rate. ORS 118.260.
For estates of decedents who die on or after January 1, 2012, interest on
refunds owing to an estate will begin to accrue “45 days after the due date of the
return or on the date the amended return or refund claim is filed, whichever is later,
and ending at the time the refund is made.” ORS 118.100(1); see ORS 314.415; see
also ORS 118.260(7). For estates of decedents who died before that date, interest
on refunds owing to an estate will begin to accrue “on the date the amended return
or refund claim is filed to the time the refund is made.” Former ORS 118.100(1)
(2009).
OAR 150-118.260 was renumbered OAR 150-118-0170 (penalties and
interest).
OAR 150-305.220(1) was renumbered OAR 150-305-0140 (interest on
deficiencies and delinquencies).
The 2017 Legislature deleted subsection (6) from ORS 305.220 (which used
a daily rate for fractional months). The legislature also amended the statute to
provide that “[u]nless specifically provided otherwise by statute or by rule . . . ,
every deficiency or delinquency arising under any law administered by the
Department of Revenue shall bear simple interest at the rate of 10 percent per
annum, to be computed on a daily basis.” ORS 305.220(1). However, OAR 150-
305-0140 provides for a 5 percent annual rate, or 0.0137 percent daily.
The 2017 Legislature also amended ORS 305.222. If an estate tax is not paid
within 60 days after notice of a tax delinquency, the interest rate imposed by ORS
305.220 is increased by 4 percent, beginning on day 61. ORS 305.222(2).
Pursuant to ORS 118.260(4), if estate taxes are not paid when due, “there
shall be added to the amount of tax required to be shown on the return a
delinquency penalty of five percent of the amount of such tax.” As amended in
2017, the statute now provides that “[t]his penalty is in lieu of any delinquency
penalty applicable under [ORS 118.260(1)].” ORS 118.260(4).
OAR 150-118.225 was renumbered OAR 150-118-0150 (extension of time
to pay tax).
OAR 150-305.992 was renumbered OAR 150-305-0480 (100 percent
penalty for returns not filed for three consecutive years).
§ 14.4-4 Statutes of Limitation
§ 14.4-4(a) Statute of Limitations for Notice of Deficiency
The 2009 Legislature enacted ORS 118.265 to correct a flaw in prior Oregon
law, which inadvertently did not impose any statute of limitations on the collection
of an inheritance tax by the Oregon Department of Revenue (DOR). ORS
118.265(4) provides that “[t]he expiration of the period prescribed for the issuance
of a notice of deficiency concerning any tax due under this chapter shall be as
provided under ORS 314.410.” In turn, ORS 314.410(1) imposes a three-year
statute of limitations on the issuance of a notice of deficiency, which notice must
be given “as prescribed in ORS 305.265.”
Note, however, that the 2011 Legislature enacted ORS 118.165, which
combines ORS 118.265(4) and portions of ORS 314.410 into one statute. As under
prior law, ORS 118.165 provides that the DOR may give a notice of deficiency “as
prescribed in ORS 305.265” within three years after an estate tax return is filed.
Although ORS 118.165 applies to estates of decedent’s who die on or after January
1, 2012, a notice of deficiency must be given within the same the period as under
prior law. See 2011 Or Laws ch 526, §§28, 30.
ORS 314.410—the statute regarding an income tax deficiency—extends the
period for giving a notice of deficiency to five years if 25% or more of gross
income was omitted from the return. However, the estate tax statute—ORS
118.265(4), which applies to decedents who died before January 1, 2012—makes
no mention of a 25% omission from the gross estate; therefore, presumably, the
extended five-year period does not apply to the inheritance tax for estates of
decedents who died before 2012.
However, for estates of decedent’s who die on or after January 1, 2012, ORS
118.165(2) specifies that if the DOR finds that the gross estate has been
undervalued by greater than 25%, the notice of deficiency may be given within
five years after the estate tax return is filed. If no return is filed, or if the return is
false or fraudulent, the notice may be issued at any time. ORS 118.165(3).
Under both old law and new law, the statute of limitations on deficiencies
does not begin running until a return is filed.
§ 14.4-4(b) Statute of Limitations to File a Claim for Refund
The 2009 Legislature enacted ORS 118.227 to set forth a time period for
refunds of taxes paid. The statute provides that the Oregon Department of Revenue
may allow or make a refund of any tax (or portion of any tax) paid under ORS
chapter 118 within the period prescribed in ORS 314.415, which is the income tax
statute on refunds.
Under ORS 314.415(2)(a), a taxpayer must file a claim for a refund within
three years from the date the return was filed, or two years from the date the tax
was paid, whichever period expires later.
§ 14.4-5 Availability of Federal Elections
Sections 14.4-5(a) to 14.4-5(c) discuss the availability of federal elections
for Oregon estate tax purposes:
(1) Section 14.4-5(a) discusses federal elections available under ORS
118.010 for decedents who die on or after January 1, 2012;
(2) Section 14.4-5(b) discusses federal elections available under ORS
118.010 for decedents who died before January 1, 2012; and
(3) Section 14.4-5(c) discusses other federal elections available under
Oregon estate tax law.
§ 14.4-5(a) Federal Elections Available Under ORS 118.010 for Estates
of Decedents Who Die on or After January 1, 2012
Pursuant to ORS 118.010(8)(a), any election available under federal law is
available as a separate election for Oregon estate tax purposes. ORS 118.010(8)(a)
If the federal taxable estate is determined by making an election under section
2031(c), 2032, 2032A, 2056 or 2056A of the Internal Revenue Code or another
provision of the Internal Revenue Code, or if a federal estate tax return is not
required under the Internal Revenue Code, an executor may make separate
elections for state estate tax purposes under that same provision.
An estate may claim deductions allowable under IRC §2053 or IRC §2054
“for either estate tax purposes or fiduciary income tax purposes, but not both.”
OAR 150-118.010. “The executor of an estate may make different elections for
federal and Oregon purposes.” OAR 150-118.010.
Also, ORS 118.010(8)(b) provides that an executor may make elections
under ORS 118.013 (adjustment for Oregon special marital property), ORS
118.140 (credit based on the value of “natural resource property”), and IRC §2056
(bequests to surviving spouse) for Oregon estate tax purposes. ORS 118.010(8)(c)
provides that these elections are irrevocable.
The elections permitted for Oregon estate tax purposes (see ORS
118.010(8)) include the following:
(1) An election with respect to land subject to a “qualified conservation
easement” under IRC §2031(c);
(2) An election for an alternate valuation date under IRC §2032 (see
§12.1-2(a); see also §14.4-6);
(3) The special-use election under IRC §2032A for valuing certain
property used for farming purposes (see §12.2-12(b)(3));
(4) A qualified terminable interest property (QTIP) election under IRC
§2056 (see §12.1-5(c)(3); see also §12.2-12(g), 12.2-12(n)); and
(5) A qualified domestic trust (QDOT) election under IRC §2056A (see
§12.1-5(c)(4)).
NOTE: Similar provisions previously appeared in OAR 150-
118.010(7)(1) for estates of decedents who died before 2012. See former
ORS 118.010(7) (2009). See §14.4-5(b).
All of the elections are irrevocable and must be made in the manner required
by federal law, and that manner must be followed on the Oregon return even if a
federal return is not required. ORS 118.010(8).
OAR 150-118.010 was renumbered OAR 150-118-0020 (deductions
allowed in determining estate tax or fiduciary income tax).
OAR 150-118-0080 specifically provides that an Oregon QTIP election can
be larger or smaller than the federal QTIP election. If the Oregon QTIP election is
different from the federal QTIP election, then the beneficiaries of the estate will
have a different federal income tax basis than their Oregon income tax basis, and
an adjustment will need to be made on the beneficiary’s Oregon income tax return,
either on Form OR-40 (Oregon Individual Income Tax Return for Full-year
Residents) or on Form OR-41 (Oregon Fiduciary Income Tax Return), and a
Schedule OR-ASC (Oregon Adjustments for Form OR-40 Filers) will need to be
attached to the Oregon income tax return. ORS 316.716. See also ORS 316.287
and ORS 316.697 (fiduciary adjustment). For more information on this subject, see
Philip N. Jones, Inconsistent Elections and Basis in Oregon, OSB Est Plan &
Admin Sec Newsltr 2–3 (July 2017), available at
https://estateplanning.osbar.org/files/2017/07/Est_2017Jul.pdf. That article notes that
many federal elections, in addition to the QTIP election, may be made in an
inconsistent manner on an Oregon estate tax return.
If inconsistent QTIP elections are made for federal and Oregon purposes,
then the surviving spouse’s federal taxable estate will be different from the
surviving spouse’s Oregon taxable estate. OAR 150-118-0080. That rule
erroneously states that the Oregon QTIP property will be included in the second
taxable estate “in addition to” the value of the federal QTIP property, when in fact
the inclusion of the federal QTIP property in the Oregon taxable estate will depend
on whether that same property was subject to an Oregon QTIP election. For
example, if the entire federal taxable estate of the first spouse to die was subject to
a federal QTIP election, but a smaller amount of property was subject to an Oregon
QTIP election, then the federal QTIP property will be excluded from the Oregon
taxable estate, and the Oregon QTIP property will be included. The same result
would take place if the Oregon election had been an OSMP election rather than an
Oregon QTIP election. OAR 150-118-0080. ORS 118.010(3) is very confusing on
this point.
If the surviving spouse is a nonresident of Oregon at the time of the second
death, the only Oregon QTIP property or OSMP property to be included in the
second estate will be the Oregon real property and the Oregon tangible personal
property that is subject to the Oregon QTIP election or the OSMP election. OAR
150-118-0080(4). If the assets of the QTIP trust or the OSMP trust have been
converted to intangible personal property and the surviving spouse was no longer
an Oregon resident, that intangible property will not be included in the second
taxable estate.
§ 14.4-5(b) Federal Elections Available Under ORS 118.010 for Estates
of Decedents Who Died Before January 1, 2012
For estates of decedents who died before January 1, 2012, former ORS
118.010(7) (2009) permitted an executor to make separate elections under IRC
§2032 or IRC §2056, but only as provided in administrative rules adopted by the
Oregon Department of Revenue (DOR). However, OAR 150-118.010(7) made
clear that any election that was available under federal law was available as a
separate election for Oregon inheritance tax purposes. See §14.4-5(a) regarding
elections. See also §14.4-12 regarding a deduction for a qualified family-owned
business interest, which was available for estates of decedents who died before
2012.
Although separate elections could be made for Oregon inheritance tax
purposes, if a federal election was made, it was binding for Oregon purposes,
unless a specific Oregon statute or administrative rule permitted different elections
to be made on the two returns. OAR 150-118-140(5) (formerly OAR 150-
118.140(2)). The only Oregon rule or statute that specifically provided otherwise
was OAR 150-118.010(2), which permitted inconsistent elections under IRC
§642(g), which is the election to take administration-expense deductions on either
the fiduciary income tax return or the estate tax return.
Although OAR 150-118.010(7) permits separate Oregon elections for all
available federal elections regardless of whether a federal return is filed, this rule
does not appear to address contrary (inconsistent) federal and Oregon elections.
Thus, OAR 150-118-140(5) (formerly OAR 150-118.140(2)) and OAR 150-
118.010(7), read together, appear to require that if a federal election is made, the
same Oregon election must also be made but, if a particular election is not made on
the federal return, or if no federal return is filed, the election can nevertheless be
made on the Oregon return. That interpretation seems to be the one held by most
lawyers who have studied this issue. However, it is also possible to read OAR 150-
118.140(5) (formerly OAR 150-118.140(2)) and OAR 150-118.010(7) as being
entirely inconsistent, such that one permits different (inconsistent) elections for
federal and Oregon purposes, while the other requires that the elections be exactly
the same. As a result, it is possible that the DOR will require that if federal and
state returns are both filed, the same elections must be made on both returns.
OAR 150-118.010(7)(3) provides that when an Oregon election is made,
“the obligations of electing parties, agreements required of persons benefiting from
elections, and the inclusion of property in the gross estate of a surviving
beneficiary are the same as under the [Internal Revenue Code]” in effect on
December 31, 2000. In other words, Oregon adopted all of the federal procedural
requirements existing under 2000 federal law pertaining to federal elections.
If a separate election is being made, the executor has to check the box to that
effect in Part 1 on page 1 of Oregon Form IT-1.
All of the elections are irrevocable, and must be made in the manner
required by federal law, and that manner must be followed on the Oregon return
even if a federal return is not required. OAR 150-118.010(7)(1).
§ 14.4-5(c) Other Federal Elections Available Under Oregon Law
Other elections (not mentioned in ORS 118.010) that are available for
purposes of the Oregon estate/inheritance tax include the following:
(1) An election under IRC §642(g) to deduct administration expenses on
the fiduciary income tax return or on the Oregon inheritance tax return, see ORS
118.010(8); see also former ORS 118.010(7) (2009), OAR 150-118.010(1), and
OAR 150-118.010(2) (for deaths before 2012);
(2) An election under IRC §6166 to extend the time to pay the estate tax
due when the estate consists largely of an interest in a closely held business (see
ORS 118.225);
(3) An election under IRC §6163 to extend the time to pay the tax on the
value of a reversionary or remainder interest; and
(4) An election under IRC §6081 and IRC §6161 to extend the time to
pay and/or file a return.
See the discussion on extensions in §14.4-2.
PRACTICE TIP: Most of these elections are discussed on Oregon Form
OR-706 (for estates of decedents who die on or after January 1, 2012) and
Oregon Form IT-1(for estates of decedents who died before that date) as
well as in the instructions for those forms. Form OR-706 (Oregon Estate
Transfer Tax Return) is available at
www.oregon.gov/DOR/forms/Pages/default.aspx; Form IT-1 is available at
The federal election to pay the federal estate tax in installments under IRC
section 6166 is not available with respect to the Oregon estate tax as a matter of
right. Instead, installment payments might be allowed by the Oregon Department
of Revenue, in its discretion. See § 14.4-2 (extensions of time to file or pay).
§ 14.4-6 The Oregon Alternate Valuation Date Election
Like other federal elections (see §§14.4-5 to 14.4-5(c)), the election for an
alternate valuation date is available for Oregon estate tax purposes. See ORS
118.010(8); see also former ORS 118.010(7) (2009) and OAR 150-118.010(7) (for
estates of decedents who died before 2012). Under federal law, the election may be
made on a timely filed federal return, or it may be made on a federal return filed up
to one year after its due date, including extensions. IRC §2032(d).
Oregon has adopted these federal procedural requirements. As a result, if an
Oregon alternate valuation election is desired, an Oregon return must be filed and
the election must be made on that return, even if the election causes the gross
estate to fall below the filing threshold, and the return must be filed no later than
one year after the due date, even if it is a no-tax-due return.
For estates of decedents who die on or after January 1, 2012, see Part 3 in
the Instructions for Oregon Form OR706, which directs the reader to refer to the
Instructions for federal Form 706 for information regarding the alternate valuation
election. For estates of decedents who died before 2012, see OAR 150-
118.010(7)(1); see also Part 3 in the Instructions for Oregon Form IT-1,
If the alternate valuation date election is made for Oregon estate tax
purposes, but is not made for federal purposes, then the basis of estate assets will
differ under state law and federal law. ORS 316.716. The lawyer should keep in
mind that a federal alternate valuation date election cannot be made if the election
would not reduce federal taxes. IRC §2032(c). Thus, an estate that owes Oregon
taxes, but that owes no federal taxes, cannot make an alternate valuation date
election on the federal return, but may make the election on an Oregon return. In
addition, if a federal alternate valuation date election is made, the same election
must be made for Oregon purposes.
If the election for an alternate valuation date for Oregon estate taxes is made
in a manner that is inconsistent with the election for an alternate valuation date for
federal estate taxes, then the assets of the estate will have a different basis for
Oregon income tax purposes compared to the federal income tax basis. See § 14.4-
5(a) (discussing the elections).
§ 14.4-7 Appraisals
For estates of decedents who die on or after January 1, 2012, ORS
118.100(6) requires an executor to “explain, on the [estate tax] return, how the
reported values were determined.” The executor must also “attach copies of any
appraisals.” ORS 118.100(6). Apparently, this latter provision does not require the
executor to obtain an appraisal, but if one is obtained, a copy must be attached.
OAR 150-118.100(6)(1) adds, “If there was no appraisal, the executor must
attach a statement to the return explaining how the value was determined. If the
determination of value is based on a county property tax statement, the
determination of value must be supported by other evidence of value.”
Furthermore, OAR 150-118.100(6)(2) provides:
A fee appraisal represents both common and best practice for determination of the
value for most real and personal property but may not always be necessary. For
example, where an Oregon Special Marital Property election has been made, the
value of the asset(s) included within the election may not have an impact upon the
estate tax.
Thus, the Oregon Department of Revenue would prefer to have the estate
values determined by appraisal, but recognizes that appraisals may not always be
necessary.
OAR 150-118.100(6) was renumbered OAR 150-118-0100 (property values
and appraisals).
§ 14.4-8 Apportionment of the Oregon Estate Tax
Apportionment of the Oregon estate tax (and the federal estate tax) is
governed by ORS 116.303–116.383. The tax is apportioned among the “persons
interested in the estate,” not among the bequests generated by the estate. ORS
116.313. The apportionment process includes nonprobate dispositions, because
ORS 116.303(3) defines a “person interested in the estate” as any person who
either receives property from the decedent or receives property by reason of the
death of the decedent, if the property is included in the decedent’s estate. The
statute defines estate as “the gross estate of a decedent as determined for the
purpose of federal estate tax and the estate tax payable to this state.” ORS
116.303(1).
NOTE: The apportionment rules are the same under current law and
former law.
Marital and charitable bequests do not generally bear any apportionment of
the tax. ORS 116.343(1)–(2). These two types of bequests are discussed in the
statute as deductions “allowed by reason of the relationship of any person to the
decedent” or “allowed by reason of the purpose of the gift.” ORS 116.343(2).
In the event of a dispute over the apportionment of the tax, the probate court
has jurisdiction to resolve the dispute, usually in connection with a petition for the
approval of a final accounting, but a separate petition on the subject of
apportionment is permitted. ORS 116.323.
The tax apportionment provided in ORS 116.313 may now be overridden by
either a will or a revocable trust.
Oregon does not have a state equivalent of IRC section 2207A, which
requires QTIP trusts to pay a portion of the federal estate tax on the second death at
the highest marginal rates. Section 2207A applies only to the federal estate tax, not
to the Oregon estate tax. Instead, the amount of the Oregon estate tax to be paid by
the QTIP trust is determined under ORS 116.313, which requires a pro rata
apportionment of the Oregon estate tax, unless the will or trust provides otherwise.
Thus, unless the will or trust provides otherwise, a QTIP trust will be required to
pay the increase in federal estate tax caused by the inclusion of the QTIP trust in
the gross estate, but that same QTIP trust will be required to pay only a pro rata
portion of the Oregon estate tax.
§ 14.4-9 Federal Estate Tax Audits
ORS 118.100(2) requires fiduciaries to report to the Oregon Department of
Revenue if a federal estate tax audit results in a change to the estate tax, or if an
amended federal estate tax return is filed with the Internal Revenue Service.
§ 14.4-10 Deduction for Oregon Special Marital Property: Schedule OSMP
In the classic estate plan for a married couple, the estate of the first spouse to
die is divided into a credit shelter trust equal to the federal estate tax exemption,
and the remainder of the estate is given to the surviving spouse, either outright or
in a qualified terminable interest property (QTIP) trust or other trust that qualifies
for the marital deduction. The assets distributed to the credit shelter trust are
shielded from tax by the federal estate tax exemption and the state estate tax
exemption, and the assets given to the surviving spouse are shielded from tax by
the marital deduction, at least at the first death.
The advantage of this plan is that when the first spouse dies, it uses the
deceased spouse’s exemption amount plus the marital deduction for property
passing to or available to the surviving spouse, resulting in no tax at the first death.
IRC §2010, IRC §2056. This plan worked well for Oregon residents until 2002,
when Oregon broke from the federal estate tax system. Following the break, the
federal exemption amount climbed from $1,000,000 in 2002 to $3,500,000 in
2009, was unlimited in 2010, was $5,000,000 in 2011, and was $5,120,000 in
2012. (The federal exemption after 2012 was not known as of this writing). The
Oregon exemption amount, however, stayed at $1,000,000 for deaths after 2005. If
the classic estate plan for a married couple were followed today, and the credit
shelter trust were funded to the full amount of the federal exemption, the estate of
the first to die would owe Oregon tax on the value of the credit shelter trust in
excess of the $1,000,000 Oregon exemption.
After 2005, Oregon estate plans needed to be changed to avoid the Oregon
inheritance tax at the first death. Two planning choices were available. The first
solution was to limit the credit shelter trust funding formula to $1,000,000, but this
system had obvious problems. Most of the existing marital funding and credit
shelter funding formulas were tied to the federal exemption and, therefore, by their
terms, would not allow funding only up to the Oregon exemption amount. As a
result with a federal exemption formula, the credit shelter would be funded in
excess of the $1,000,000 Oregon exemption amount and an Oregon inheritance tax
would be due. Also, if the funding formula were revised to use the $1,000,000
Oregon exemption amount, then the reduced funding would fail to use the full
federal exemption amount for the deceased spouse. The second solution was to
make an Oregon QTIP election for the assets in the credit shelter trust in excess of
$1,000,000, and thereby defer the Oregon tax on the excess value over $1,000,000
until the later death of the surviving spouse. This solution would work well if the
credit shelter trust distribution provisions would satisfy the marital QTIP
requirements. IRC §2056(b)(7). Although the terms of many credit shelter trusts
qualify for a QTIP election, some do not. For example, in some credit shelter
trusts, the surviving spouse is not entitled to all of the income (accumulation trusts)
and, in some trusts, the surviving spouse is not the only trust beneficiary during the
surviving spouse’s lifetime (trust with other beneficiaries). Either of those facts
would disqualify a trust from QTIP treatment.
To help solve the problems caused by the difference between the federal
exemption amount and the Oregon exemption amount, and to deal with the fact
that some credit shelter trusts do not qualify for a QTIP election, the 2005 Oregon
Legislature enacted statutes allowing an election for Oregon special marital
property (OSMP), ORS 118.013–118.019. The OSMP election is an irrevocable
election that allows a QTIP-like deferral for trusts (or other property interests, or a
portion of a trust or other property) that would not otherwise qualify for an Oregon
QTIP election. For example, trusts that permit income to be accumulated, and
trusts that permit distributions to beneficiaries other than the surviving spouse, do
not quality as QTIP trusts. Credit shelter trusts frequently contain such provisions.
Under the OSMP election, both an accumulation trust and a trust with other
beneficiaries are allowed to defer estate taxes until the death of the surviving
spouse, provided that while the surviving spouse is living, distributions can only be
made to the surviving spouse. ORS 118.013(2)–(3); see former ORS 118.019
(2009) (for deaths before 2012). By using an OSMP election (or an Oregon QTIP
election) for the portion of the credit shelter trust that exceeds $1,000,000, an
estate can fund the credit shelter trust to the full federal exemption amount and still
pay no Oregon tax at the first death. On the second death, the OSMP assets will be
included in the gross estate of the surviving spouse, valued as of the date of the
surviving spouse’s death for Oregon purposes, but the OSMP assets would not be
included in the surviving spouse’s federal estate. ORS 118.010(3); see former ORS
118.019 (2009) (for deaths before 2012).
To make the OSMP election for an accumulation trust, the executor must
attach a statement to the estate tax return that (1) identifies the trust (or other
property interest) that constitutes the OSMP, (2) affirms that the identified property
meets the requirements of OSMP, and (3) affirms that the trust will be
administered as required by the statute. ORS 118.016(1).
The OSMP election for a trust that has other (nonspouse) beneficiaries
allows the executor to “set aside a share of the trust or other property interest as a
separate share of the trust or property interest or as a separate trust.” ORS
118.013(3). In addition to the election described above for an accumulation trust,
the surviving spouse and each potential beneficiary who is living at the time of the
election must sign a notarized statement in which they (1) consent to a portion of
the trust (usually the amount in excess of $1,000,000) being set aside as OSMP, (2)
agree to release all rights to distributions from the OSMP during the surviving
spouse’s lifetime (except distributions to the spouse are permitted), and (3) agree
that all other provisions of the trust will remain in effect. ORS 118.016(2). The
statute sets forth language to be used for these consents. The statutory language is
contained in Schedule OSMP for the Oregon return.
The OSMP election is made on Schedule OSMP for Oregon Form OR706
for estates of decedents dying on or after January 1, 2012, and on Schedule OSMP
for estates of decedents who died before January 1, 2012. The OSMP schedules
require the OSMP assets to be identified (and to contain statements to be signed by
the spouse and nonspouse beneficiaries when an OSMP election is made for a trust
that has nonspouse beneficiaries).
If a federal return is filed, the differences between the Oregon and the
federal marital deduction amounts must be explained to the Oregon Department of
Revenue (DOR). The executor can do this by filing an additional Schedule M
marked “For Oregon Purposes Only” that identifies the OSMP assets.
COMMENT: Although it may seem obvious that an executor is making
an OSMP election if the estate files a Schedule OSMP, the schedule does not
contain the statutorily required statements that affirm that the identified
property meets the requirements of the OSMP, and that the trust will be
administered as required by ORS 118.016(1). Out of an abundance of
caution, an executor might consider attaching an exhibit to the Schedule
OSMP that contains these two statements.
Schedule OSMP and the related instructions state that each asset subject to
the OSMP election must be described in detail and identified by showing the
schedule number and the item number of the asset shown on the Oregon estate tax
return. The Instructions for Schedule OSMP also state that “[u]nless the executor
indentifies a fractional portion or percentage of the trust or other property for this
election, the executor is deemed to have made an OSMP election on the entire trust
or other property.”
The requirement that the OSMP assets be specifically indentified on the
Oregon estate tax return has been changed by OAR 150-118.010(8)(3), which
The executor must identify the assets by schedule, item number, and the fixed
amount, percentage or fractional interest that are included as part of the Oregon
QTIP or OSMP election, either on the return or, if those assets have not been
determined when the estate tax return is filed, on a statement to that effect,
prepared when the assets are definitively identified.
COMMENT: Under OAR 150-118.010(8)(3), the DOR should permit
estates to specify a fractional formula on the Schedule OSMP (the form even
refers to a “fractional portion”), and then wait until receipt of the federal
estate tax closing letter before actually funding the federal credit shelter trust
and also funding the segregated OSMP trust. In this situation, no specific
assets would be specified on the Oregon-only Schedule M or on the
Schedule OSMP. Under these circumstances, the Schedule OSMP would
specify a fractional formula and further state that an amended return will be
filed when the segregated OSMP trust is funded.
However, the DOR has been reviewing that policy due to the
enactment of ORS 118.265 in 2009. See §14.4-1. This statute authorizes the
executor or trustee of an estate to request a prompt determination of the
estate tax due and “discharge from personal liability therefor.” ORS
118.265(1). The DOR must respond to such a request within the 18-month
period described in ORS 118.265(1). The DOR now believes that a request
for release under ORS 118.265 (and its 18-month response period) may
interfere with the filing of an amended return, or might interfere with the
DOR’s review of such an amended return.
CAVEAT: In light of OAR 150-118.010(8)(3), which allows the
executor to identify OSMP assets and QTIP assets after the original return is
filed, an executor should proceed with caution in requesting a discharge
from personal liability. OAR 150-118.265(3) provides that “[t]he discharge
does not apply to tax liability resulting from assets of the decedent’s estate
that are still in the possession or control of the executor.” Thus, if the
executor is still in control of the assets because they have not been identified
and transferred for OSMP or QTIP purposes when the request for discharge
is filed, it may not be effective.
NOTE: The 2011 Legislature deleted references to a “beneficiary” in
the OSMP statutes and substituted that word with the term permissible
distributee, as that term is defined in ORS 130.010 of the Oregon version of
the Uniform Trust Code. See ORS 118.013(1). Since the OSMP statutes did
not specifically define beneficiary, the term was changed to permissible
distributee to more precisely define and identify the beneficiaries who must
consent to the OSMP election.
For estates of decedents dying or gifts made after December 31, 2017, and
before January 1, 2026, the basic exclusion amount under federal law is $10 million,
as adjusted according to the statute. IRC § 2010(c)(3)(A), (C). After the inflation
adjustments were made, the federal exclusion was $11.18 million in 2018, and will
continue to be adjusted for inflation in future years.
The statutes regarding “Oregon special marital property” (OSMP) are found
in ORS 118.013 to 118.016. Unlike a QTIP election, an OSMP election does not
require that the surviving spouse be a citizen of the United States.
Form OR-706 (Oregon Estate Transfer Tax Return) is available at
OAR 150-118.010(8)(3) was renumbered OAR 150-118-0080(3) (the
executor may identify OSMP assets and QTIP assets after the original return is
filed).
If an OSMP election is inconsistent with the federal QTIP election, then the
assets of the OSMP will have a different basis for Oregon income tax purposes
compared to the federal income tax basis. See Supp § 14.4-5(a) (discussing the
elections).
OAR 150-118.265(3) was renumbered OAR 150-118-0190(3) (the discharge
does not apply to tax liability resulting from assets of the decedent’s estate that are
still in the executor’s possession or control).
§ 14.4-11 Oregon QTIP Election
ORS 118.010(8) allows the executor of an estate to make for Oregon estate
tax purposes any election permitted under federal law, including an election under
IRC §2056(b)(7) for qualified terminable interest property (QTIP).
An Oregon QTIP election is made by filing an “Oregon-only” Schedule M
that specifically identifies the property subject to the Oregon-only QTIP election.
See Instructions for Oregon Form OR-706 (online at
See §12.1-5(c)(3) regarding QTIP elections under federal law.
NOTE: Although the current statute applies to estates of decedents who
die on or after January 1, 2012, the QTIP election was also available for
estates of decedents who died before that date. See former ORS 118.010(7)
(2009) and OAR 150-118.101(7). OAR 150-118.010(7)(3) provides that
when an Oregon election is made, the obligations of the electing parties,
agreements required of persons benefitting from the elections, and the
inclusions of property in the estate of a surviving spouse are the same under
Oregon law as under the Internal Revenue Code. As a result, all of the other
federal requirements for QTIP elections apply for Oregon purposes.
QUERY: When would an executor prefer to make an Oregon QTIP
election rather than an election under Oregon law for Oregon special marital
property (OSMP)? (See §14.4-10 regarding the OSMP deduction.)
Obviously, if the trust interest would not qualify as a QTIP interest, but
would qualify as an OSMP interest, then the OSMP election should be
made. But if the trust interest qualifies as both a QTIP interest and an OSMP
interest, either election could be made, and there seems to be little reason to
prefer one over the other. The QTIP election is governed by federal law, but
is subject to the identification requirement of OAR 150-118.010(8)(3). Also,
the instructions to the Oregon estate tax return require the identification of
specific assets that will be subject to the QTIP election. Making a QTIP
election would, however, eliminate the requirement of filing a Schedule
OSMP.
COMMENT: Some lawyers believe that a trust that qualifies as a QTIP
trust is eligible only for a QTIP election, and that such a trust may not be
subject to an OMSP election. In other words, the OSMP election is limited
to trusts that do not qualify for a QTIP election.
OAR 150-118.010(7)(3) was renumbered OAR 150-118-0070(3) (when an
Oregon election is made, the obligations of the electing parties, agreements
required of persons benefitting from the elections, and the inclusions of property in
the estate of a surviving spouse are the same under Oregon law as under the
Internal Revenue Code). See the discussion in Supplement § 14.4-5(a) regarding an
Oregon QTIP election (or an OSMP election) in an amount different than the
federal QTIP election.
§ 14.4-12 Deduction for Qualified Family-Owned Business Interest
Under prior law—which tied ORS chapter 118 to the Internal Revenue Code
as of December 31, 2000—an estate could claim a deduction for a “qualified
family-owned business interest” (QFOBI) pursuant to the provisions of former IRC
§2057. See former ORS 118.007 (2009) and former ORS 118.010(7) (2009). By
using this deduction plus the $1,000,000 exemption, an estate could increase its
effective exemption amount to $1,300,000. This deduction was repealed at the
federal level in 2004 as part of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), Pub L No 107-16, 115 Stat 38; however it
remains in effect for Oregon estates through 2011.
Effective January 1, 2012, the 2011 Legislature changed the IRC tie-in date
to December 31, 2010, and the QFOBI deduction is effectively repealed beginning
in 2012. However, if the provisions of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (Pub L No 111-312, 124 Stat 3296)
sunset in 2013, the QFOBI deduction will return.
§ 14.4-13 Qualified Tax Disclaimers
ORS 105.645, the statute regarding tax-qualified disclaimers, was amended
to change the Internal Revenue Code reference date to December 31, 2010, and
this change is effective retroactive to January 1, 2010, to accommodate the
extension of the time for making a tax-qualified disclaimer in connection with a
2010 estate which was provided in the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010, Pub L No 111-312, 124 Stat 3296.
Chapter 15: LITIGATION
JAN K. KITCHEL, B.S., Oregon State University (1973); J.D., Willamette University College of
Law (1978); member of the Oregon State Bar since 1978 and the Washington State Bar
Association since 1983; shareholder, Schwabe, Williamson & Wyatt, P.C., Portland.
KATHERINE O. VANZANTEN, B.A., Boston University (1994); J.D., LL.M., Golden Gate
University (1997); member of the Oregon State Bar since 1997; shareholder, Schwabe,
Williamson & Wyatt, P.C., Portland.

SIBYLLE BAER, B.S., University of Florida (1987); J.D., Lewis & Clark Law School (1992);
admitted to the Oregon State Bar in 1992 and the Washington State Bar Association in
1993 (currently inactive); shareholder, Cartwright Baer Johansson P.C., Portland.

This chapter discusses:
(1) Will contests (see §§15.2-1(a) to 15.2-2(g));
(2) Wrongful death claims and survivorship of causes of action (see
§§15.3-1 to 15.3-8); and
(3) Civil actions against persons who physically or financially abuse a
vulnerable person (see §15.4).
Litigation of creditors’ claims is discussed in chapter 8.
The procedural requirements of will contests are explained in §§15.2-1(a)
to 15.2-1(g). The grounds for will contests are separately discussed in §§15.2-2 to
15.2-2(g).
Litigation of wrongful death cases is discussed from both the plaintiff’s and
the defendant’s points of view. The procedures are discussed involving both
deceased plaintiffs and deceased defendants. (Often, litigators do not understand
the probate procedures necessary in a wrongful death case until settlement or
trial.)
§ 15.2 WILL CONTESTS
§ 15.2-1 Procedural Requirements
§ 15.2-1(a) The Primary Statute
Any interested person (as defined in ORS 111.005(19)) may contest the
probate of a decedent’s will by filing a petition in the probate proceedings within
four months of the later of two events:
(1) Four months after the date of delivering or mailing the information
described in ORS 113.145 (information to devisees and heirs), if that information
was required to be delivered or mailed to the person on whose behalf the petition
is filed, ORS 113.075(3)(a); or
(2) Four months after the first publication of the notice to interested
persons, if the person on whose behalf the petition is filed was not required to be
named in the petition as an interested person, ORS 113.075(3)(b).
For a contestant to be an interested person, the contestant must either (1) be
an intestate heir, a devisee, or a creditor with a claim against the decedent’s
estate; or (2) have an interest in a previous will that was not revoked other than
by the will that is being contested. See ORS 111.005(19). A nonheir party who
was a beneficiary under a prior will that was revoked other than by the will being
contested does not have standing. In re Carlson’s Estate, 153 Or 327, 334–335,
56 P2d 347 (1936). In In re Carlson’s Estate, 153 Or at 332, an earlier will,
which was last seen in the decedent’s possession, could not be found and was
presumed to have been revoked by the decedent’s physical act, independently of
the execution of the decedent’s later will.
In Harris v. Jourdan, 218 Or App 470, 490, 180 P3d 119 (2008), the court
concluded that the “evidentiary presumption in In re Carlson’s Estate simply is
not applicable in this case” because the proponent of the later will “never
contended that the [earlier] will was destroyed entirely independently of his
influence on [the decedent’s] decision to draft the [later] will.” The court said that
In re Carlson’s Estate “was decided under a different statutory scheme, and one
that did not contain the current definition of an ‘interested person.’” Harris, 218
Or App at 490. The court in the Harris case concluded that a person is entitled to
contest the probate of a will, if he or she “can demonstrate the existence of a
property right or claim that ‘may’ be affected by the proceeding.” Harris, 218 Or
App at 488 (citing ORS 111.005(19)).
A will contest is commenced “by the filing of a petition in the probate
proceedings.” ORS 113.075(2). A petition that is filed beyond the four-month
limitation period described in ORS 113.075(3) is untimely. Betz v. Ganos, 196 Or
App 5, 10, 100 P3d 756 (2004). See ORS 113.145.
It is not clear whether it is necessary to file the petition and serve the
personal representative within the four-month period, or whether it is sufficient to
file the petition within the time period, and then serve the personal representative
later. Under the former statute, which allowed contests within six months from
the filing of probate, the Oregon Supreme Court held that the general statutes of
limitations apply only to common-law rights of action. In re Desborough’s
Estate, 220 Or 528, 531, 349 P2d 849 (1960), “They do not affect a special
statutory proceeding which sets up its own limitation as has the probate code
pertaining to will contests.” In re Desborough’s Estate, 220 Or at 531. Therefore,
under In re Desborough’s Estate, the general statutes of limitations (see, e.g.,
ORS 12.020), which provide that an action is commenced when the complaint is
filed and the summons is served or delivered to the serving officer, do not govern
a will-contest proceeding.
COMMENT: Serving the petition on the personal representative within
the four-month period is arguably sufficient, even if the actual filing takes
place after the four-month period has expired.
Note, however, that if the will is contested on the ground that the decedent
promised or represented that the decedent would either (1) make, revoke, or not
revoke a will; or (2) die intestate, the action may be commenced by the filing of a
separate action in a court of competent jurisdiction. ORS 113.075(2). Such a
cause of action may not be presented as a claim under ORS chapter 115. ORS
113.075(4).
The time to file a will contest does not begin to run against a contestant
who is an interested person (and thus is entitled to individual notice under ORS
113.145) until individual notice has been mailed. In the case of a childless
decedent, lost or unknown collateral relatives may occasionally “crawl out of the
woodwork” to contest a will or assert intestate rights.
The petition for admitting a will to probate must list the name and post-
office address of any person asserting an interest in the estate, or on whose behalf
an interest has been asserted, based on a contention that (1) the will alleged in the
petition to be the decedent’s will is ineffective in whole or in part; (2) there exists
a will that has not been alleged in the petition to be the decedent’s will; or (3) the
decedent agreed, promised, or represented that he or she would make or revoke a
will or devise, or not revoke a will or devise, or die intestate. ORS 113.035(8).
See ORS 113.075(1).
The notice required to be given to interested persons under ORS 113.145
must be delivered or mailed to any person asserting an interest in the estate, as
described in the previous paragraph. ORS 113.145(1)(g).
ORS 113.075(4) was renumbered ORS 113.075(5) (“A cause of action
described in [ORS 113.075(1)(c)] may not be presented as a claim under ORS
chapter 115.”)
The 2017 Legislature amended ORS 113.075 to add that a person who
commences an action under ORS 113.075(1) must give notice of the action to
(1) the “heirs and devisees identified in the petition for probate or
amended petition for probate”;
(2) the Department of State Lands (DSL), if the personal representative
delivered or mailed information to the DSL under ORS 113.045; and
(3) the Attorney General, if any devisee under the contested will is a
charitable trust (see ORS 130.170), a public benefit corporation (see ORS 65.001),
or a religious organization.
ORS 113.075(4).
not comply with the formalities of ORS 112.235 (regarding the execution of
a will). The statute allows the proponent of the writing to establish “by clear
and convincing evidence” that the decedent intended the writing to
constitute (1) “[t]he decedent’s will”; (2) “[a] partial or complete revocation
of the decedent’s will”; or (3) “[a]n addition to or an alteration of the
decedent’s will.” ORS 112.238(1).
A writing described in ORS 112.238(1) may be filed with the court
for administration as the decedent’s will pursuant to ORS 113.035 (petition
for appointment of personal representative and probate of will). The
proponent of the writing must give notice of the filing of the petition to those
persons described in ORS 113.035(5), (7), (8), and (9). ORS 112.238(2). The
statute applies to decedents who died after January 1, 2016, but includes
writings that occurred before January 1, 2016.
The statute also allows an heir or a devisee to claim an interest in the
decedent’s intent that the writing was to be a partial or complete revocation
of the decedent’s will, or an addition to or an alteration of the decedent’s
will.” ORS 112.238(3). The proponent of the writing must give notice of the
filing to “any personal representative appointed by the court, the devisees
named in any will admitted to probate and those persons identified in ORS
113.035(5).” ORS 112.238(3).
A person who files a petition under ORS 112.238 must pay a filing fee
in accordance with ORS 21.135. ORS 112.238(5).
After the filing of a petition under ORS 112.238(2) or (3), the court
“may make a determination regarding the decedent’s intent after a hearing or
on the basis of affidavits.” ORS 112.238(2)–(3).
“If the court determines that clear and convincing evidence exists
showing that a writing described in [ORS 112.238(1)] was intended by the
decedent to accomplish one of the purposes set forth in [ORS 112.238(1)],”
the court will (1) “[p]repare written findings of fact in support of the
determination”; and (2) “[e]nter a limited judgment that admits the writing
for probate as the decedent’s will or otherwise acknowledges the validity
and intent of the writing.” ORS 112.238(4)(a).
The court’s determination “does not preclude the filing of a will
contest under ORS 113.075, except that the will may not be contested on the
grounds that the will was not executed in compliance with ORS 112.235.”
ORS 112.238(4)(b).
The court may enter a limited judgment regarding its decision on a
petition filed under ORS 112.238. ORS 111.275(1)(f).
§ 15.2-1(b) Contents of Petition; Filing Fees
A will contest is commenced “by the filing of a petition in the probate
proceedings.” ORS 113.075(2). See ORS 111.205 (pleadings and mode of
procedure generally).
The contents of a petition contesting a will are not set forth in ORS
113.075. The general practice is that the petition is filed in the probate proceeding
itself (see ORS 113.075(2)), with the caption identifying the estate proceeding
and, below that heading, listing the contestants and the respondents.
The body of the petition should identify the parties to establish that the
contestant has an interest in the proceeding, and should set forth the grounds for
the will contest, for example, lack of testamentary capacity, undue influence,
insane delusions, fraud, or mistake. See §§15.2-2 to 15.2-2(g), regarding the
grounds for a will contest.
PRACTICE TIP: The form of the petition must comply with the
requirements of UTCR 2.010 and UTCR 9.030. See
www.courts.oregon.gov/rules/Pages/default.aspx. Also, all “petitions . . .
before a probate court must include a declaration under penalty of perjury in
the form required by ORCP 1 E.” ORS 111.205.
Filing fees are found in ORS 21.135–21.170. The lawyer should also check
with the local probate court clerk to be sure about the latest fee schedule. See
www.courts.oregon.gov/pages/fees.aspx.
ORS 21.105 requires that the caption of a pleading that commences an
action include a reference to the statute that establishes the filing fee for that
proceeding.
ORS 111.205 was amended in 2013. All petitions before a probate court
must include “a declaration under penalty of perjury in the form required by ORCP
1 E, or an unsworn declaration under ORS 194.800 to 194.835, if the declarant is
physically outside the boundaries of the United States.”
§ 15.2-1(c) Parties to a Will Contest
Any interested person may file a will contest against the personal
representative of the estate. ORS 113.075. The term interested person “includes
heirs, devisees, children, spouses, creditors and any others having a property right
or claim against the estate of a decedent that may be affected by the proceeding” as
well as “fiduciaries representing interested persons.” ORS 111.005(19). See Harris
v. Jourdan, 218 Or App 470, 490, 180 P3d 119 (2008).
The personal representative is the only necessary opposing party and is
called the respondent or the proponent. The beneficiaries of the challenged will
are proper parties, but not necessary parties.
PRACTICE TIP: Strategic consideration should govern the decision of
whether to join additional parties other than the personal representative. For
example, if the ground for the will contest is undue influence, the particular
beneficiary who exercised the undue influence is usually joined to identify
him or her as an adverse party. Often, the beneficiary who exercised undue
influence is also the personal representative. Otherwise, the contestant may
wish to avoid naming additional parties, who may merely line up additional
opposing counsel against the contestant.
Because the personal representative is already before the court and is
usually represented by counsel, and if the petition contesting the will is filed in
the probate proceeding (see §15.2-1(b)), serving the petition by mail on the
lawyer for the personal representative is adequate. Other parties can be served
with a copy of the petition and a summons, just as in other litigation. In the
alternative, the other parties can be mailed a notice of time within which to object
to the will-contest petition; if they fail to object, they will be bound by the result.
A citation issued by the court ordering these parties to appear is also satisfactory,
but requires unnecessary time and effort. The foregoing are matters of general
practice in Oregon without appellate court confirmation.
A homeowner’s insurer has no duty to defend an action brought against the
homeowner for undue influence and interference with economic relations. Drake
v. Mut. of Enumclaw Ins. Co., 167 Or App 475, 481–482, 1 P3d 1065 (2000).
A person who commences an action under ORS 113.075(1) must give notice
of the action to the persons described in Supplement § 15.2-1(a) (discussing 2017
amendments to ORS 113.075).
See Price v. Lotlikar, 285 Or App 692, 397 P3d 54 (2017) (discussing the
term interested person under ORS 111.005(19)).
§ 15.2-1(d) Will Contest Distinguished from Other Claims
A will contest is a special type of claim “to” rather than “against” the
estate. Claims “against” the estate are usually creditors’ claims, which must be
presented within the statute of limitations applicable to the claim and within a
specified time or they are barred. ORS 115.005; see chapter 9. An anomalous
third type of claim is a claim that the decedent violated a promise or an
agreement to make a will, or not to revoke an existing will, or to die intestate.
This is a claim “to” the estate, but it was not recognized by the legislature until
1991 as a basis for a will contest. See ORS 113.075(1)(c). See §15.2-2. Because
the breach theoretically is not final until the date of death, the statute of
limitations begins to run at the date of death. See chapter 8.
A claim includes “liabilities of a decedent, whether arising in contract, in
tort or otherwise.” ORS 111.005(7). This language seems not to limit a claim to a
claim “against” the estate, and seems to include a claim involving a contract to
make a will. But see Harris v. Craven, 162 Or 1, 18, 91 P2d 302 (1939) (a
contract to make a will is not within the claims statutes, which refer to claims that
are pecuniary in nature; note, however, that this case predates the probate code).
NOTE: ORS 113.075 makes clear that such a claim cannot be
presented as a claim against the estate under ORS chapter 115, making the
statute consistent with case law.
In First Nat. Bank of Oregon v. Dep’t of Revenue, State of Or., 294 Or 60,
67, 653 P2d 985 (1982), the court discussed the nature of a contract to make a
will. The court held that this was a claim “to” rather than “against” the estate, and
confirmed the rule that an inheritance tax is determined by the amount of the
estate at the time of death, but it did not settle the statute-of-limitations question.
The court of appeals resolved the question whether the claims statute of
limitations governs an action to enforce a contract not to change a will in
Willbanks v. Goodwin, 70 Or App 425, 430–431, 689 P2d 1004 (1984), rev’d on
other grounds, 300 Or 181 (1985), holding that the claims statute of limitations
does not apply to an action to enforce a contract not to change a will. See Betz v.
Ganos, 196 Or App 5, 10, 100 P3d 756 (2004) (because the petitioner’s will
contest was not filed within the four-month limitation period described in ORS
113.075(3), it was untimely filed).
See Supplement § 15.2-1(a) regarding ORS 112.238 (petition to admit a
will).
§ 15.2-1(e) No-Contest Clause in Will
An in terrorem clause is “a provision in a will that reduces or eliminates a
devise to a devisee if the devisee contests the will.” ORS 112.272(4).
With certain exceptions, an in terrorem clause in a will is valid and
enforceable. ORS 112.272(1). Except as provided in ORS 112.272, if a devisee
contests a will that contains an in terrorem clause that applies to the devisee, the
court must enforce the clause against the devisee, even though the devisee
establishes probable cause for the contest. ORS 112.272(1). ORS 112.272
prohibits the court from enforcing an in terrorem clause if:
(1) The devisee contesting the will establishes that he or she “has
probable cause to believe that the will is a forgery or that the will has been
revoked,” ORS 112.272(2); or
(2) The contest is brought by a fiduciary acting on behalf of a protected
person under ORS chapter 125, a guardian ad litem appointed for a minor, or a
guardian ad litem appointed for an incapacitated or financially incapable person,
ORS 112.272(3).
The in terrorem statute, enacted in 1997, probably puts to rest any
controversy in prior case law. In Wadsworth v. Brigham, 125 Or 428, 454–455,
259 P 299 (1927), adhered to on reh’g, 125 Or 428 (1928), the testator’s
illegitimate daughter, who was not named in the will, contested the will. The will
provided that any person who contested the will or claimed to be an heir of the
testator would receive $5; any other devise or bequest under the will was
revoked. The court held that when a will contest is brought in good faith, a no-
contest provision is void as against public policy. In U.S. Nat. Bank of Portland v.
Snodgrass, 202 Or 530, 555–556, 275 P2d 860 (1954), the court enforced a
forfeiture clause in a trust provision that disinherited the testator’s daughter if she
married a Catholic. Then, in Larson v. Naslund, 73 Or App 699, 705, 700 P2d
276 (1985), the court of appeals held that the Snodgrass decision overruled sub
silentio the Wadsworth good-faith exception to the enforcement of a no-contest
provision. In Larson, the court upheld a clause providing that any person who
contested the will would receive $1 in lieu of any provision previously made for
that person in the will. The court in Larson upheld the public policy of
testamentary freedom, as opposed to the public policy argument articulated in
Wadsworth. The court concluded that “a will contestant must show that a no-
contest provision is either unlawful or in contravention of some specific public
policy or it will be enforced.” Larson, 73 Or App at 706.
COMMENT: No-contest clauses are common in wills that are the
product of undue influence because of the chilling effect that the clause has
on any person contemplating contesting the will.
QUERY: Does the presence of an in terrorem clause evidence
overreaching on the part of a beneficiary who influenced the testator?
Also, if a beneficiary receives nothing or only a small distribution under a
will, an in terrorem clause will not be much of a deterrent.
The 2015 Legislature amended ORS 112.272. First, the legislature clarified
that an in terrorem clause is “a provision in a will that reduces or eliminates a
devise to a devisee if the devisee contests the will in whole or in part.” ORS
112.272(4) (emphasis added).
Second, the legislature amended ORS 112.272(2) to add two additional
exceptions to the general validation of in terrorem clauses; the court will not
enforce an in terrorem clause if
(1) the contestant establishes that “[t]he will is invalid in whole or in
part”; or
(2) the contestant “is only making objections to the acts of the personal
representative in the administration of the decedent’s estate.”
ORS 112.272(2)(a)(C), (b).
Third, the legislature added that the statute “is not intended as a complete
codification of the law governing enforcement of an in terrorem clause. The
common law governs enforcement of an in terrorem clause to the extent the
common law is not inconsistent with the provisions of this section.” ORS
112.272(5).
See Fenner v. Fenner, 288 Or App 540, 546, 405 P3d 159 (2017) (“if there
exists an ambiguity about the scope of a no-contest clause, [the court] will not
presume to expand the sweep of the clause beyond what the text provides”);
Frakes v. Nay, 254 Or App 236, 295 P3d 94 (2012), rev den, 353 Or 747 (2013).
(No-contest provisions are strictly construed and are not extended beyond their
express terms. Therefore, an action by a beneficiary against an estate-planning
attorney individually does not trigger a no-contest clause.).
NOTE: Oregon’s Uniform Trust Code contains a similar in terrorem
clause in ORS 130.235. Both Fenner and Frakes involve no-contest
provisions contained within a trust, not a will, and are, therefore, governed
by ORS 130.235.
§ 15.2-1(f) Will Contest: Action Tried Without a Jury
In a will contest, proof of any facts must be made in the same manner as in
an action tried without a jury, rather than as in a suit in equity. ORS 113.055(4).
In Matter of Summers’ Estate, 49 Or App 5, 8 n 3, 618 P2d 1287 (1980), the court
stated that this language means that appellate review of a will contest is not de
novo. However, this dictum has been rejected. In Sanders v. U.S. Nat. Bank, 71
Or App 674, 680–682, 694 P2d 548 (1985), the court held that the statute does
not change the preexisting right to de novo review in will contests. This ruling
was adhered to in Williams v. Overton, 76 Or App 424, 426, 709 P2d 1115
(1985), in which the court also exercised de novo review. The appellate courts
continue to review will contests de novo. See, e.g., Harris v. Jourdan, 218 Or
App 470, 473, 180 P3d 119 (2008).
The language in ORS 113.055(4) does not convert a will contest from a suit
in equity to an action at law, invoking the right to a jury trial. See Sanders v. U.S.
Nat. Bank, 71 Or App at 680–681; Rantru v. Unger, 73 Or App 680, 682, 700
P2d 272 (1985).
A plaintiff may be able to obtain a jury trial by contesting a will in an
action alleging the tort of intentional interference with economic relations. See
Allen v. Hall, 328 Or 276, 974 P2d 199 (1999) (discussed in §15.2-2(g)). The
elements of proof in such an action, however, may be more rigorous.
§ 15.2-1(g) Judgment
The 2003 Legislative Assembly enacted a comprehensive revision of the
laws governing judgments, and made numerous other legislative changes to the
laws governing procedure in civil actions. See 2003 Or Laws ch 576. Oregon law
now provides for three types of judgments: a general judgment, a limited
judgment, and a supplemental judgment, See ORS 18.038; see also ORS 18.005
(definitions). The title of the judgment document must specify the type of
judgment. See ORS 18.038. Any document captioned as a judgment is
appealable. See ORS 19.205. The court must make a determination that there is
no just reason for delay before entering a limited judgment. See ORS 18.052,
111.275(2). Although these words need not appear in the judgment, the best
practice is to include them. See ORS 18.052, 111.275(2). An order approving a
final accounting is a general judgment of final distribution. ORS 116.113; see
ORS 116.093. An order closing the estate and discharging the personal
representative is a supplemental judgment of discharge. ORS 116.213.
On a determination that there is no just reason for delay, the court in a
probate proceeding may enter a limited judgment for a decision in a will contest
filed in the probate proceeding. ORS 111.275(1)(b), (2). “The judgment
document need not reflect the court’s determination that there is no just reason
for delay.” ORS 111.275(2).
See Appendix 2C for a helpful table listing various judgments and orders
and the corresponding ORS sections.
See Supplement § 15.2-1(a) regarding ORS 112.238.
§ 15.2-2 Bases for Will Contest
The two most common substantive grounds for will contests are lack of
testamentary capacity and undue influence. See §§15.2-2(a) to 15.2-2(b). Rarely
does a contestant allege insane delusion. See §15.2-2(c). Although a will may
also be contested for want of proper execution, this chapter does not discuss that
issue. See §§4.2-3(a) to 4.2-3(c).
NOTE: A foreign will that is offered for probate in this state “may be
contested for a cause which would be grounds for rejection of a will of a
testator who died domiciled in this state.” ORS 113.065(2). See §8.4-2.
Oregon law articulates three substantive grounds on which a will may be
contested. Pursuant to ORS 113.075(1), “[a]ny interested person may contest the
probate of the will or the validity of the will or assert an interest in the estate” for
any of the following reasons:
(1) The will alleged in the probate petition is ineffective in whole or in
part;
(2) A will exists that has not been alleged in the probate petition to be
the decedent’s will; or
(3) The decedent “agreed, promised or represented that the decedent
would make or revoke a will or devise, or not revoke a will or devise, or die
intestate.”
The usual grounds for a will contest, that is, lack of testamentary capacity,
undue influence, and insane delusion, apply to wills contested under item (1)
above.
See Supplement § 15.2-1(a) regarding ORS 112.238 (petition to admit a
will).
§ 15.2-2(a) Lack of Testamentary Capacity
One of the requirements of a valid will is that it must be made by a person
“who is of sound mind.” ORS 112.225. See §4.2-1. The requirements for
testamentary capacity are as follows:
(1) The person must be able to understand the nature of the act in which
he or she is engaged (execution of his or her will);
(2) The person must know the nature and extent of his or her property;
(3) The person must know, without prompting, the claims, if any, of
those who are, should be, or might be the natural objects of the person’s bounty;
and
(4) The person must be cognizant of the scope and reach of the
provisions of the document.
Golden v. Stephan, 5 Or App 547, 550, 485 P2d 1108 (1971).
Although the proponent of the will has the burden of proving testamentary
capacity, “the proponent is aided by a presumption of competence [that] attends a
properly executed will.” Golden, 5 Or App at 550; see also Matter of Unger’s
Estate, 47 Or App 951, 955, 615 P2d 1115 (1980).
A will contest may be commenced after the proponent of the challenged
will offers it for probate in solemn form (i.e., by testimony of the attesting
witnesses as to its execution). See §§5.2-4(a) to 5.2-4(h). The real burden of proof
then shifts to the contestant and remains there.
“Mental competency to make a will is determined at the precise moment
the will is executed.” Matter of Gentry’s Estate, 32 Or App 45, 49, 573 P2d 322
(1978); Matter of Johnson’s Estate, 24 Or App 897, 905, 547 P2d 658 (1976).
For this reason, great weight is given to the testimony of the attesting witnesses
and any other disinterested persons that are present at the time of the will’s
execution. Matter of Unger’s Estate, 47 Or App at 955. The will contestant will
have difficulty overcoming the strong testimony of the attesting witnesses
confirming the elements of testamentary capacity. See Whitteberry v.
Whitteberry, 9 Or App 154, 157, 496 P2d 240 (1972). The testimony of the
attesting witnesses nonetheless has been overcome by stronger testimony to the
contrary. See Matter of Unger’s Estate, 47 Or App at 958 (testimony from the
examining physician and nursing home personnel outweighed that of the attesting
witnesses, who either had little opportunity to observe the testator or were not
disinterested).
The significance of the rule that testamentary capacity is determined at the
time that the will is executed is illustrated by holdings that a person determined to
be mentally ill or insane can make a will during a lucid interval, In re Cook’s
Estate, 231 Or 133, 136, 372 P2d 520 (1962), or that a person held to be
incompetent and functioning under a guardianship may likewise execute a valid
will, Matter of Gentry’s Estate, 32 Or App at 50.
A relatively minimal level of mental competency has been held to be
sufficient to execute a will. Wills have been upheld despite evidence that:
(1) The testator had filthy living habits; his farm was in disrepair;
animals had died because they had not been fed and had rotted on his farm; his
house was filthy; he slept in his clothes; and he wore rain gear and rubber boots
continuously, Vsetecka v. Novak, 4 Or App 463, 466, 478 P2d 655 (1971);
(2) The testator was 94 years old, blind, failing physically, living in a
nursing home, and afflicted with a chronic brain syndrome, Nease v. Clark, 6 Or
App 589, 595, 488 P2d 1396 (1971); and
(3) The testator had been judicially declared incompetent and required a
guardian, Whitteberry, 9 Or App at 156.
A testator is “not required to have had a high degree of mentality” at the
time that the will is executed, and “one may have testamentary capacity even if
mentally incompetent to execute contracts, deeds or other bilateral engagements.”
In re Walther’s Estate, 177 Or 382, 388, 163 P2d 285 (1945); see Meister v.
Finley, 208 Or 223, 232–233, 300 P2d 778 (1956) (a person “may have quite
limited intelligence and still be competent to select the persons whom he wishes to
receive his worldly goods at his death and to know that an instrument he signs will
effectuate his purpose in that regard”).
For a discussion of representing clients with diminished capacity, see THE
ETHICAL OREGON LAWYER ch 18 (Oregon CLE 2006). See also ELDER LAW ch 2
(Oregon CLE 2000 & Supp 2005).
For a discussion of representing clients with diminished capacity and
disability, see The Ethical Oregon Lawyer ch 18 (OSB Legal Pubs 2015). See also
Elder Law ch 2 (OSB Legal Pubs 2017) (responding to declining capacity).
§ 15.2-2(b) Undue Influence
A leading case in Oregon on the subject of undue influence is In re
Reddaway’s Estate, 214 Or 410, 418, 329 P2d 886 (1958), in which the court
stated the general principle that “the law will not permit improper influences to
control the disposition of a person’s property.”
Although the term undue influence cannot be specifically defined, the
theory is that “‘the testator is induced by various means to execute an instrument
which, although his, in outward form, is in reality not his will, but the will of
another person which is substituted for that of testator.’” In re Reddaway’s
Estate, 214 Or at 418 (quoting In re Porter’s Estate, 192 Or 483, 492, 235 P2d
894 (1951)). In other words, but for the wrongful influence exercised on the
testator, he or she would not have executed the will.
Every person is influenced by the attitudes, communications, and ideas of
others; the court’s task is to analyze all the facts “to determine whether the
influence in the particular case is ‘undue.’” In re Reddaway’s Estate 214 Or at
418; see also Slusarenko v. Slusarenko, 209 Or App 307, 325, 147 P3d 920
(2006); Harris v. Jourdan, 218 Or App 470, 491, 180 P3d 119 (2008).
In In re Reddaway’s Estate, 214 Or at 419, the court did not approach its
determination from the standpoint of the testator’s freedom of will, but from the
nature of the influencer’s conduct in persuading the testator to act and the
unfairness of the advantage that was reaped as the result of wrongful conduct. See
also Slusarenko, 209 Or App at 325. “Equity acts because there is want of
conscience on the part of the donee, not want of consent on the part of the donor.”
In re Reddaway’s Estate, 214 Or at 420.
Undue influence is said to have “a closer kinship to fraud than to duress.”
In re Reddaway’s Estate, 214 Or at 420. See §15.2-2(d). Although undue
influence may be “a species of fraud,” in the strict sense, fraud is not necessary.
In re Reddaway’s Estate, 214 Or at 420.
In a will contest, “‘the burden of proof as to undue influence is upon the
contestant. However, where a confidential relationship exists between the testator
and a beneficiary, along with other suspicious circumstances, the burden of
production is placed upon the proponent.’” McNeely v. Hiatt, 138 Or App 434,
441, 909 P2d 191 (1996) (quoting Nease v. Clark, 6 Or App 589, 596, 488 P2d
1396 (1971)). The proponent must then go forward with proof sufficient to
overcome the adverse inference.
When “a confidential relationship exists between a testator and the
beneficiary, slight evidence is sufficient to establish undue influence.” In re
Reddaway’s Estate, 214 Or at 420 (if the testamentary gift results in taking
property away from those who had a reasonable expectation of being the
recipients of the testator’s bounty, the burden is on the donee to produce evidence
that improper influence was not used); see also Slusarenko, 209 Or App at 326.
The influence must exist at the time that the will is created. The courts recognize
that cases of this type must ordinarily rest on circumstantial evidence. In re
Reddaway’s Estate, 214 Or at 427.
In In re Reddaway’s Estate, 214 Or at 421–427, the court stated the
guidelines for suspicious circumstances in the form of seven factors, which have
been followed in many subsequent decisions. The court also stated that
“[i]nfluence gained by kindness and affection will not be regarded as ‘undue,’ if
no imposition or fraud be practiced”; the court looks to the donee’s purpose and
motive in inducing the testamentary gift. In re Reddaway’s Estate, 214 Or at 425
(emphasis original).
The seven factors set forth in In re Reddaway’s Estate have been used in
many subsequent decisions to resolve the difficult question of when a will has
been the product of undue influence. See, e.g., Matter of Swenson’s Estate, 48 Or
App 497, 500–502, 617 P2d 305 (1980). The seven factors are summarized as
follows:
(1) Procurement: the beneficiary participates in obtaining or preparing
the will, In re Reddaway’s Estate, 214 Or at 421–422;
(2) Lack of independent advice: “a beneficiary who participates in the
preparation of a will and who occupies a confidential or fiduciary relationship to
the testator” has a duty “to see that the testator receives independent and
disinterested advice,” In re Reddaway’s Estate, 214 Or at 422;
(3) Secrecy and haste: the fact of the will being kept from family
members who might otherwise have been the natural objects of the testator’s
bounty, In re Reddaway’s Estate, 214 Or at 423;
(4) Change in the testator’s attitude following close association with the
beneficiary, In re Reddaway’s Estate, 214 Or at 423–424;
(5) Change in the testator’s plan of disposing of property: unexplained
changes from previous wills or from intestate disposition, In re Reddaway’s
Estate, 214 Or at 423–424;
(6) An unnatural or unjust gift to the beneficiary as compared to those
who otherwise would naturally be expected to take, In re Reddaway’s Estate, 214
Or at 424–426; and
(7) The donor’s susceptibility to influence: a testator who is physically
sick, emotionally or mentally confused, or becomes dependent on the beneficiary
is susceptible to influence, In re Reddaway’s Estate, 214 Or at 426–427; see also
In re Weir’s Estate, 21 Or App 476, 485, 535 P2d 119 (1975) (the court
concluded that the will was the product of undue influence when the testator, a
person of strong will, had become physically sick and infirm and, by reason of
physical infirmities, depended on the beneficiary).
The same seven factors have been used in actions to set aside deeds and to
set aside transfers that establish joint tenancies because of undue influence. See,
e.g., Ryan v. Colombo, 77 Or App 71, 77, 712 P2d 139 (1985); McKee v.
Stoddard, 98 Or App 514, 520, 780 P2d 736 (1989).
“[A]n inference of undue influence arises where the evidence establishes
the existence of a confidential relationship, the beneficiary’s dominance over the
testator and the presence of suspicious circumstances [the seven factors]
surrounding execution of the will.” Sangster v. Dillard, 144 Or App 210, 216,
925 P2d 929 (1996), modified on recon. sub nom, Matter of Estate of Cochrane,
146 Or App 105 (1997). See also Harris, 218 Or App at 491–492. “The will’s
proponent then bears the burden of producing evidence negating that inference.”
Sangster, 144 Or App at 216.
“Dominance does not necessarily require proof of an authoritative,
controlling person bullying or directing the actions of a subservient one. It may
exist more subtly ‘such as by suggestion or persuasion or by fostering a sense of
need and dependence.’” Sangster, 144 Or App at 216 (quoting Knutsen v.
Krippendorf, 124 Or App 299, 309, 862 P2d 509 (1993)). Dominance may be
found when the testator “is isolated from the outside world and relies almost
exclusively on the beneficiary to meet [the testator’s] daily needs.” Sangster, 144
Or App at 216 (citing In re Weir’s Estate, 21 Or App at 477).
The facts that “a beneficiary made the appointment and escorted a testator
to an attorney’s office do not, in themselves, support an inference of undue
influence.” Ramsey v. Taylor, 166 Or App 241, 264, 999 P2d 1178 (2000). Also
relevant is the fact that the testator had met with his own lawyer without the
beneficiary’s presence.
A bequest to the lawyer who drafts the will, or to the lawyer’s secretary,
creates a presumption of invalidity on the basis of undue influence, which must
be overcome by clear and convincing evidence. Cline v. Larson, 234 Or 384, 411,
383 P2d 74 (1963).
In the Harris case, the beneficiary of a previous will of the decedent
contested the probate of a subsequent will on the ground of undue influence.
Citing In re Carlson’s Estate, 153 Or 327, 56 P2d 347 (1936), the proponent of
the subsequent will claimed that the court was required to first determine the
validity of the earlier will before entertaining the contest of the later will. Harris,
218 Or App at 489–490. The court disagreed: “Nothing in the statutory definition
of an ‘interested person’ or Oregon case law suggests that a will contestant who
seeks to inherit under an earlier, facially valid will must also demonstrate that the
earlier will could survive a will contest.” Harris, 218 Or App at 490.
§ 15.2-2(c) Insane Delusion
An insane delusion affecting a natural object of a testator’s bounty may be
sufficient to invalidate the will, even though the testator is otherwise found to
have testamentary capacity. In re Quaid’s Estate, 215 Or 603, 605–607, 335 P2d
86 (1959) (substantial evidence existed of expressions of the testator’s
unreasonable hatred toward her daughter, including pictures of the daughter taken
when she was a child, which the testator had defaced).
“To be an insane delusion[,] a belief must have absolutely no foundation in
fact.” Matter of Yett’s Estate, 44 Or App 709, 714, 606 P2d 1174 (1980). Any
evidence, however slight, that provides a basis for the testator’s belief negates the
conclusion that the will was a product of the delusion, rather than being the will
of the testator. Matter of Yett’s Estate, 44 Or App at 714. See also Potter v. Jones,
20 Or 239, 249–250, 25 P 769 (1891) (“[d]elusions are conceptions that originate
spontaneously in the mind without evidence of any kind to support them, and can
be accounted for on no reasonable hypothesis”).
An insane delusion that does not touch the subject matter of the will does
not negate testamentary capacity. In re Walther’s Estate, 177 Or 382, 398–399,
163 P2d 285 (1945).
“Whether [a] decedent’s thoughts . . . were insane delusions depends on
whether there is any foundation in fact for them.” Sanders v. U.S. Nat. Bank, 71
Or App 674, 682, 694 P2d 548 (1985) (relying on the definition of insane
delusion articulated in the Potter case). In the Sanders case, the decedent’s
children challenged the will of their father, which left only one dollar to each of
them. The court concluded that the father’s will was not the product of an insane
delusion, because there was “evidence to support decedent’s belief that his two
children did not like him and that they were primarily interested in his money on
his death.” Sanders, 71 Or App at 683.
The reasoning in the Sanders case was followed in Dillon v. Phillips, 92 Or
App 65, 68–69, 756 P2d 1278 (1988), in which the court upheld a father’s
disinheritance of his children. The will stated that the children made
misrepresentations to the decedent, were unwilling to help the decedent in his old
age, and disliked the decedent. The court stated that the decedent’s statements,
even if wrong, were not insane delusions, if the decedent had even a slight basis for
them. After noting a long history of family discord, the court concluded that the
will was consistent with the testator’s treatment of his children during his lifetime.
PRACTICE TIP: The definition of paranoia (insane delusion) articulated
in Potter, 20 Or at 249–250, may be attacked by substantial forensic
psychiatric evidence showing how psychiatric criteria have changed from
the 1891 concepts.
§ 15.2-2(d) Fraud
In In re Reddaway’s Estate, 214 Or 410, 420, 329 P2d 886 (1958), the
court stated that undue influence “has been characterized as ‘a species of fraud.’”
However, other decisions have stated that fraud is a species of undue influence.
See, e.g., In re Rosenberg’s Estate, 196 Or 219, 231, 246 P2d 858 (1952); In re
Smith’s Estate, 212 Or 481, 483, 320 P2d 273 (1958).
A will may be voided when it was the product of fraud in the inducement
(facts led the testator to make the will) or fraud in the execution (the testator did
not know that he or she was signing a will). In re Rosenberg’s Estate, 196 Or at
231.
“Where a beneficiary under a will conceals or suppresses facts where it was
[the beneficiary’s] duty to disclose such facts where there is a confidential
relationship existing between [the beneficiary and the testator], such may
constitute fraud sufficient to void a will.” In re Rosenberg’s Estate, 196 Or at 231.
Also, when “a will was executed [based] on false data brought about by [a]
fraudulent representation by or on behalf of a party or parties benefiting from the
will,” the will may be set aside on the ground of fraud, even though “the will may
express the [the testator’s] wishes and be [the testator’s] free and voluntary act at
the time.” In re Rosenberg’s Estate, 196 Or at 231. This type of fraud is “a species
of undue influence” and is governed by the same criteria generally recognized to
prove fraud. In re Rosenberg’s Estate, 196 Or at 231, 247. The entire will is void,
even though the fraud is perpetrated by only one of the beneficiaries. In re
Rosenberg’s Estate, 196 Or at 230–231. Very few appellate decisions involving
will contests in Oregon are based on fraud in the standard sense, as compared to
undue influence.
§ 15.2-2(e) Mistake
Mistake is generally not a basis for contesting a will or any part of a will. A
court may invalidate a portion of a will when a mistake of facts influenced the
disposition of property, and the disposition would not have been made if the facts
had been known. See Estate of LaGrand, 47 Or App 81, 86, 613 P2d 1091 (1980)
(dictum).
§ 15.2-2(f) Revocation of Will
A will may be contested if it has been revoked or altered as provided in
ORS 112.285–112.315.
If a will has been revoked by a subsequent will that cannot be found, the
existence of that subsequent will must be proved with the type and quantum of
proof necessary to prove a lost will. Melhase v. Melhase, 87 Or 590, 593, 171 P
216 (1918). The contestant should be prepared to prove that the more recent, lost
will either contained an express revocation clause or was so inconsistent with the
earlier will as to revoke it. Johnstone v. Zimmer, 191 Or App 26, 33 n 3, 81 P3d
92 (2003). The existence of the later will can be proved orally, and it can have the
effect of revoking an earlier will, even though it is not presented for probate.
Melhase, 87 Or at 593. See ORS 113.075(1)(b).
The 2015 Legislature codified prior law holding that a partial revocation of a
provision in a will by one or more physical acts is not a valid revocation. ORS
112.285(3). However, the statute allows a contestant to establish, by clear and
convincing evidence, “that the testator intended by the physical act or acts to
revoke the entirety of the will.” ORS 112.285(3).
intended the writing to constitute (1) “[t]he decedent’s will”; (2) “[a] partial or
complete revocation of the decedent’s will”; or (3) “[a]n addition to or an alteration
of the decedent’s will.” ORS 112.238(1). For further discussion of ORS 112.238,
see Supplement § 15.2-1(a).
§ 15.2-2(g) Intentional Interference with Prospective Inheritance
In Allen v. Hall, 328 Or 276, 974 P2d 199 (1999), the decedent’s relatives
brought an action against the beneficiaries under the decedent’s will, alleging
intentional interference with prospective inheritance. According to the relatives,
the decedent had drafted a new will that named them as the beneficiaries of the
estate, but the new will was never executed because of the defendants’ actions.
The relatives claimed that the defendants intentionally and falsely represented to
the decedent’s lawyer that the decedent was not lucid enough to execute a new will
that the lawyer had prepared at the decedent’s request, and that the decedent
thereafter did not have an opportunity to execute the new will. The relatives also
alleged that the defendants intentionally and falsely represented to the hospital that
one of the defendants had a power of attorney that authorized her to remove the
decedent from life support.
The court determined that it need not “decide in the abstract whether to
recognize a separate and distinct claim for intentional interference with prospective
inheritance in this state.” Allen, 328 Or at 288. However, the court held that the
relatives’ complaint “state[d] a claim under a reasonable extension of the scope of
the tort of intentional interference with economic relations.” Allen, 328 Or at 288.
The elements of the tort of intentional interference with economic relations
are as follows:
(1) “[T]he existence of a professional or business relationship (which
could include, e.g., a contract or a prospective economic advantage)”;
(2) “[I]ntentional interference with that relationship or advantage”;
(3) “[B]y a third party”;
(4) “[A]ccomplished through improper means or for an improper
purpose”;
(5) “[A] causal effect between the interference and the harm to the
relationship or prospective advantage”; and
(6) “[D]amages.”
Allen, 328 Or at 281.
To be actionable, the interference must come about through improper
motives or improper means. Improper means include “violence, threats or other
intimidation, deceit or misrepresentation, bribery, unfounded litigation,
defamation, or disparaging falsehood.” Allen, 328 Or at 285–286. Any of these
improper means might be present in a will contest.
In Church v. Woods, 190 Or App 112, 118, 77 P3d 1150 (2003), an elder
abuse case, the court reasoned that undue influence can also constitute improper
means, allowing an argument in Allen-type cases that undue influence alone
might supply the element of improper means.
In Butcher v. McClain, 244 Or App 316, 260 P3d 611 (2011), the plaintiffs
alleged interference with economic relations. The plaintiffs were disinherited by a
subsequent will, and they did not discover the new will until the decedent’s death.
The appellate court reversed the lower court’s ruling by finding that the damages
accrued upon the decedent’s death and, therefore, the statute of limitations started
to accrue then rather than when the will was executed. Butcher, 244 Or App at 324.
COMMENT: A prospective litigant should consider carefully whether a
jury trial would help or hurt the cause of action, and whether the elements of
the tort can be proved.
For further discussion of the tort of intentional interference with economic
relations, see 2 TORTS ch 26 (OSB Legal Pubs 2012).
§ 15.3 WRONGFUL DEATH CLAIMS AND PROCEDURES;

SURVIVORSHIP OF CAUSES OF ACTION
Actions for wrongful death are authorized by ORS 30.010–30.100. The
action must be brought by the personal representative of the decedent, who brings
the action for the benefit of the decedent’s surviving spouse, children,
stepchildren, parents, and stepparents, or other intestate heirs under ORS
30.020(1); or for the devisees under the will pursuant to ORS 30.075.
Typically, but not necessarily, ORS 30.075 is the applicable statute when a
person is injured and subsequently dies of a cause that is unrelated to the injury.
See Roe v. Pierce, 102 Or App 152, 157, 794 P2d 4 (1990), vacated on other
grounds, 313 Or 228 (1992) (the court rejected the argument that “ORS 30.075
applies only in cases where the injured person died of causes unrelated to those for
which a claim can be made under ORS 30.020”). Under ORS 30.075, causes of
action arising out of injuries to a person do not abate upon the injured person’s
death.
An action for wrongful death must be commenced within three years after
the injury causing the decedent’s death is discovered or reasonably should have
been discovered. ORS 30.020(1). The statute also sets forth other time limitations
on the commencement of an action. See §15.3-4. See generally 2 TORTSv ch 30
(OSB Legal Pubs 2012).
Oregon law does not recognize other claims that are, essentially, wrongful
death claims, unless they are brought pursuant to ORS 30.010–30.100. For
example, a child cannot bring a separate action for emotional distress and loss of
parental consortium. Horwell by Penater v. Oregon Episcopal Sch., 100 Or App
571, 574–575, 787 P2d 502 (1990) (a minor child’s action for negligent infliction
of emotional distress and loss of parental consortium, alleging that her parent
died due to the defendant’s negligence, was in substance a wrongful death action
and thus had to meet the requirements of the wrongful death statute); Simons v.
Beard, 188 Or App 370, 373–374, 72 P3d 96 (2003) (a mother cannot recover for
emotional distress for the death of a viable fetus, but she can recover for
emotional distress associated with her own injuries and impact in the birthing
process).
See Bell v. Tri-Cnty. Metro. Transp. Dist. of Oregon, 353 Or 535, 548, 301
P3d 901 (2013) (“Because the three-year time limit in ORS 30.075(1) is a
limitation on the commencement of a survival action for personal injuries by a
personal representative, it is superseded by the two-year limitation period for the
commencement of a tort action against a public body under ORS 30.275(9).”).
An action can be maintained for the wrongful death of a stillborn child.
Libbee v. Permanente Clinic, 268 Or 258, 265–66, 518 P2d 636 (1974).
§ 15.3-2 Victim’s Personal Representative
§ 15.3-2(a) Appointment
When a person’s death is caused by the wrongful act or omission of
another, or when a person dies while a tort action is pending (whether or not the
tort caused the death), the decedent’s personal representative may maintain an
action against the wrongdoer if the decedent, had he or she survived, could have
maintained an action against the wrongdoer for injuries. ORS 30.020(1), 30.075.
The personal representative is an officer of the court representing the interests of
several groups of survivors:
(1) The decedent’s surviving spouse, surviving children and stepchildren
(minors or adults), and surviving parents and stepparents, ORS 30.020(1);
(2) Persons who, under the laws of intestate succession, would be entitled
to inherit the decedent’s personal property, ORS 30.020(1); and
NOTE: Parents have a right to recover damages, whether or not they
would inherit personal property under the laws of intestate succession, and
even if the decedent has a spouse and children. Rake v. Boise Cascade
Corp., 43 Or App 767, 770, 604 P2d 421 (1979).
(3) If the action is brought under ORS 30.075, the beneficiaries of the
action are those who take under the decedent’s will, see Roe v. Pierce, 102 Or
App 152, 156, 794 P2d 4 (1990), vacated on other grounds, 313 Or 228 (1992).
Actions under ORS 30.075 are not limited to those in which the tort did not
cause the decedent’s death; this statute also contemplates actions in which the
defendant’s wrongful act eventually results in the decedent’s death. See Roe, 102
Or App at 156; see also ORS 30.075(3).
Only a personal representative may bring an action for wrongful death.
ORS 30.020(1); Brown v. Hackney, 228 Or App 441, 449, 208 P3d 988 (2009);
Ross v. Robinson, 169 Or 293, 304–305, 124 P2d 918 (1942). A personal
representative in a wrongful death claim is appointed pursuant to ORS chapter
113. “Any interested person or executor named in the will may petition for the
appointment of a personal representative.” ORS 113.035. See §§5.2-2(a) to 5.2-
2(b).
After the petition for the appointment of a personal representative is filed,
the court is authorized to “appoint a qualified person it finds suitable as personal
representative, giving preference” in the order set forth in ORS 113.085. See In re
Roedler’s Estate, 110 Or 147, 151, 222 P 301 (1924).
Although the person who is appointed as the personal representative may
be the person nominated under the decedent’s will to serve, the proceeds from the
wrongful death action may or may not pass pursuant to the terms of the will. See
Roe, 102 Or App at 156. The primary reason to petition for admission of the will
and to appoint the person nominated in the will as the personal representative is
to avoid the requirement of a bond when the language of the will waives the
bond. See chapter 5.
The personal representative is authorized to “[p]rosecute claims of the
decedent including those for personal injury or wrongful death.” ORS 114.305(20).
See also ORS 30.070.
PRACTICE TIP: In the absence of a will, the court may follow the
preference statute, ORS 113.085, and appoint any one of a number of
persons. The result may be a race to the courthouse for the appointment
when some family members believe that the loss is theirs alone and try to
exclude other family members from any recovery, particularly in view of the
different potential beneficiaries under ORS 30.020 and 30.075. The lawyer
should give careful thought to selecting the best plaintiff to serve as the
personal representative, and in deciding which statute to use, ORS 30.020 or
ORS 30.075. See Roe, 102 Or App at 156.
§ 15.3-2(b) Petition for Appointment
“Any interested person or executor named in the will may petition for the
appointment of a personal representative.” ORS 113.035. The petition for the
appointment of a personal representative in a wrongful death claim must be
carefully drafted. If the wrongful death action is the only asset in the estate, the
petition should so state and indicate “value unknown.” In such a case, an estate is
not administered per se. Publication of notice to creditors (see §§2.5-1, 5.2-8, 7.3-
2(a), 9.3-3), inventory (see §§7.4-1 to 7.4-5), tax releases (see chapter 7), and
annual accountings (see chapter 11) are not required in most counties. See ORS
30.030(5). The personal representative must comply with the requirements for
accounting and closing the estate under ORS chapter 166. Including any other
assets in the estate, however, triggers the full administrative process.
The 2017 Legislature changed the wording of ORS 113.035 (substituting the
words the person nominated as personal representative for the word executor) so
that the first sentence in the 2012 text should now read as follows: “Any interested
person or the person nominated as personal representative named in the will may
petition for the appointment of a personal representative and for the probate of a
will.”
§ 15.3-2(c) Award and Settlement
The personal representative in a wrongful death action may seek and be
awarded five different types of damages:
(1) Expenses incurred for services rendered to the decedent, including
charges for doctor, hospital, nursing or medical services, and burial and memorial
services, ORS 30.020(2)(a);
(2) Damages that would compensate the decedent for disability, pain,
suffering, and loss of income between the time of injury and the date of death,
ORS 30.020(2)(b);
(3) Compensatory damages for pecuniary loss to the decedent’s estate,
ORS 30.020(2)(c);
(4) Just, fair, and reasonable compensation for the decedent’s spouse,
children, stepchildren, parents, and stepparents “for pecuniary loss and for loss
society, companionship and services of the decedent,” ORS 30.020(2)(d) (note
that parents are included in the group of people entitled to share in a damages
award for wrongful death); and
(5) Punitive damages (separately stated in a finding or verdict) that “the
decedent would have been entitled to recover from the wrongdoer if the decedent
had lived,” ORS 30.020(2)(e).
Damages for emotional distress suffered by the persons who survive the
decedent are not recoverable in a wrongful death case. Simons v. Beard, 188 Or
App 370, 373–374, 72 P3d 96 (2003) (a mother could not recover for emotional
distress for the death of her viable fetus, but she could recover for emotional
distress associated with her own injuries and impact in the birthing process);
Demars v. Erde, 55 Or App 863, 866–867, 640 P2d 635 (1982).
The personal representative probably may pursue only the damages that the
decedent would have been able to pursue had he or she lived, along with a normal
loss-of-consortium claim and attorney fees. ORS 30.075. The personal
representative cannot pursue attorney fees if the injuries sued for caused the
decedent’s death. ORS 30.075(3). After the decision in Roe v. Pierce, 102 Or
App 152, 794 P2d 4 (1990), vacated on other grounds, 313 Or 228 (1992), it is
not clear whether the plaintiff can pursue a claim for loss of consortium only for
the time period between the tort and the decedent’s death under ORS 30.075.
If an action for wrongful death is brought under ORS 30.020, damages for
disability, pain, suffering, and loss of income between the time of the decedent’s
injury and the time of his or her death can be recovered only in the wrongful death
action. ORS 30.075(3). See generally 1 DAMAGES §§13.1–13.30 (Oregon CLE
1998 & Supp 2007).
With the approval of the court, the personal representative has the authority
to settle a claim with no notice requirement to other interested persons. ORS
30.070; Matter of White’s Estate, 289 Or 13, 19, 609 P2d 365 (1980); see ORS
114.305(20). See Forms 15-1 and 15-2. Although the statute “does not require
notice to the beneficiaries or grant them a right to intervene in the proceeding to
approve the settlement, . . . [t]hey may be heard as a matter of right regarding
allocation of the proceeds.” Matter of White’s Estate, 41 Or App 439, 444, 599 P2d
1147 (1979), aff’d, 289 Or 13 (1980).
On the settlement or recovery of the judgment, the personal representative
must distribute the damages as prescribed in ORS 30.030, if the personal
representative brought the action under ORS 30.020. ORS 30.030(1). The
personal representative must pay or reimburse costs, expenses, and fees incurred
in prosecuting or enforcing the claim, action, or judgment. ORS 30.030(2).
Payment or reimbursement also must be made for the reasonable charges incurred
for doctor, hospital, nursing, or other medical services, and burial and memorial
services rendered for the decedent. ORS 30.020(3).
For further discussion of damages in wrongful death cases, see 1 Damages
ch 11 (OSB Legal Pubs 2016).
§ 15.3-3 Distribution of Wrongful Death Proceeds
The careful probate lawyer in a wrongful death claim appears before (or
files appropriate documents with) the court, has the settlement approved,
represents in detail to the court the charges prescribed in ORS 30.030(2)–(3) (see
§15.3-2(c)), and asks the court to order that those charges be paid. See Form 15-3.
At this point, the personal representative is in possession of a given amount of
money for distribution. According to the practice in each jurisdiction, the
personal representative may be required to post a corporate surety bond in the
amount of the proceeds, or may have the court order that the proceeds be
deposited in an interest-bearing account, not to be withdrawn except on further
order of the court.
If the proceeds are placed in an interest-bearing account, the interest must
be apportioned on distribution. The interest earned is taxable income to the estate,
and the personal representative must file a tax return and apportion the tax
appropriately among the beneficiaries’ shares.
When the beneficiaries agree completely on the apportionment of the
proceeds, the personal representative may have all the beneficiaries consent to or
join in the petition for distribution, which is then presented to the court. See Forms
15-4, 15-5, and 15-6. If the beneficiaries do not agree, the personal representative
should file a petition proposing a scheme of distribution, and notify the
beneficiaries of it.
§ 15.3-3(b) Compensating Decedent’s Family
The portion of the wrongful death damages intended to justly, fairly, and
reasonably compensate the decedent’s surviving spouse, children, stepchildren,
parents, and stepparents for pecuniary loss and loss of society, companionship,
and services must be distributed as follows:
(1) In accordance with each person’s loss as determined by agreement,
ORS 30.020(2)(d), 30.030(4); or
(2) By the probate court in the case of a settlement and absent agreement
among the beneficiaries, ORS 30.040; or
(3) As determined by the trial judge if the judgment for the plaintiff is
given, and absent agreement by the beneficiaries, ORS 30.050.
Any remaining damages pass pursuant to the laws of intestate succession,
but no damages are subject to taxes or claims against the decedent’s estate. ORS
30.030(5).
If the matter proceeds to trial, the probate court takes evidence from each
of the persons asserting an interest in the proceeds on the issues of pecuniary loss
and loss of society, companionship, and services. See Matter of White’s Estate,
41 Or App 439, 444, 599 P2d 1147 (1979), aff’d, 289 Or 13 (1980).
PRACTICE TIP: Special problems arise when the beneficiaries disagree
about the apportionment of the wrongful death proceeds. One problem is the
personal representative’s potential conflict of interest. The personal
representative’s lawyer must exercise great caution to ensure that he or she
does not provide representation for any other members of the group.
§ 15.3-3(c) Minors as Recipients of Proceeds
Problems may arise when members of the class receiving the proceeds
from a wrongful death action are minors, in which case most courts will require
the appointment of a lawyer to represent the minors’ interests. In some counties,
the court makes the appointment on its own motion when a large amount of
money is involved. If the amount of money that accrues to a minor’s benefit
exceeds $10,000, a conservator must be appointed. See ORS 126.700. Although
ORS 126.700 allows for payment of less than $10,000 to a natural parent or
guardian, many insurance companies require that a release be executed by a
conservator to protect the company against liability once the minor reaches the age
of majority.
If payment to a minor from a settlement agreement or pursuant to a
judgment exceeds $25,000, a conservator must be appointed. See ORS
126.725(1)(b). Without a conservator, problems arise if the minor alleges that he or
she never received the money or the benefit of it from the guardian. The court can
either continue the conservatorship until the minor reaches the age of 18 or allow
the conservator to distribute the funds to a parent as trustee pursuant to ORS
126.700, after which the conservatorship is closed. See GUARDIANSHIPS,
CONSERVATORSHIPS, AND TRANSFERS TO MINORS (OSB Legal Pubs 2009).
An early New York case, In re Kaiser’s Estate, 198 Misc 582, 100 NYS2d
218, 220 (Sur 1950), applied a formula to determine the allocation of the
wrongful death proceeds with regard to pecuniary loss. The decedent was
survived by a spouse and a one-year-old child. Given the decedent’s life
expectancy of 25.27 years at the time of death, the court used, as the numerator,
the years of dependency of the beneficiary and, as the denominator, the years of
dependency plus the life expectancy of the decedent. This fraction multiplied by
the net proceeds determined the child’s share.
For further discussion of ORS 126.700 (payment or delivery of money or
property to a minor in amounts not exceeding $10,000 per year) and ORS 126.725
(settlement agreements with persons against whom a minor has a claim), see
Guardianships, Conservatorships, and Transfers to Minors § 5.2-1 to § 5.2-2
(OSB Legal Pubs 2018).
See also ORS 126.730 (judgments paid to minors) and ORS 126.735
(allowing a minor to contract with a bank to establish a bank account for the
purpose of depositing payments or deliveries of moneys under ORS 126.700, ORS
126.725, or ORS 126.730), which are discussed in Guardianships,
Conservatorships, and Transfers to Minors § 5.2-3 to § 5.2-4.
§ 15.3-4 Statutes of Limitations
An action for wrongful death must “be commenced within three years after
the injury causing the death of the decedent is discovered or reasonably should
have been discovered.” ORS 30.020(1). In any case, an action may not be
commenced later than the earlier of the following:
(1) Three years after the decedent’s death, ORS 30.020(1)(a); or
(2) “The longest of any other period for commencing an action under a
statute of ultimate repose that applies to the act or omission causing the injury,
including but not limited to the statutes of ultimate repose provided for in ORS
12.110(4), 12.115, 12.135, 12.137 and 30.905,” ORS 30.020(1)(b).
An action under ORS 30.075, if commenced before the decedent’s death,
must comply with the time limits of ORS 12.110; if not commenced before the
decedent’s death, the action must be commenced by the personal representative
within three years of the injury. ORS 30.075(1).
The wrongful death statute of limitations controls over the medical
malpractice statute of limitations in ORS 12.110(4). Baxter v. Zeller, 42 Or App
873, 877, 601 P2d 902 (1979). But see Kambury v. DaimlerChrysler Corp., 334
Or 367, 374, 50 P3d 1163 (2002) (“the product liability statute of limitations is the
more specific statute and must control over the more general wrongful death
statute of limitations”). Furthermore, ORS 30.020 contains no tolling procedure
for any delay in the appointment of a personal representative. Eldridge v.
Eastmoreland Gen. Hosp., 307 Or 500, 505, 769 P2d 775 (1989); Korbut v.
Eastman Kodak Co., 100 Or App 649, 650, 787 P2d 896 (1990) (the action was
dismissed when the personal representative was appointed more than two years
after the decedent’s death, and brought a medical malpractice action against
several defendants more than three years after the injury that caused the death,
but within two years of discovery of the cause of injury).
The statute of limitations for wrongful death actions against public bodies
is governed by ORS 30.275. See Housen v. Morse Bros., Inc., 32 Or App 491,
493, 574 P2d 361 (1978) (an action against a public body must be “commenced
within two years after the occurrence giving rise to the right”).
The statute of limitations in products liability cases is governed by
Oregon’s Products Liability Act, ORS 30.900–30.928. Thompson v.
Communications Tech., Inc. (CTI), 877 F2d 27, 28 (9th Cir 1989).
The statute of limitations for products liability actions arising out of injury
from breast implants is governed by ORS 30.908.
All statutes of limitations imposed under ORS chapter 115 “apply to
actions brought in the name of the state, or brought in the name of any county or
public corporation, and to actions brought for the benefit of the state or for the
benefit of any county or public corporation.” ORS 115.008.
See Bell v. Tri-Cnty. Metro. Transp. Dist. of Oregon, 353 Or 535, 548, 301 P3d
901 (2013) (“Because the three-year time limit in ORS 30.075(1) is a limitation on
the commencement of a survival action for personal injuries by a personal
representative, it is superseded by the two-year limitation period for the
commencement of a tort action against a public body under ORS 30.275(9).”).
§ 15.3-5 Attorney Fees and Personal Representative Fees
A cause of action arising out of injuries to a person does not abate on the
person’s death. ORS 30.075(1). Attorney fees are allowed to the prevailing
plaintiff in ORS 30.075 claims. ORS 30.075(2). Attorney fees are not allowed,
however, if the injury actually results in the death of the person. ORS 30.075(3).
Fees to personal representatives should take into account a wrongful death
recovery. In Brown v. Hackney, 228 Or App 441, 448–449, 208 P3d 988 (2009),
the court of appeals concluded that the phrase “whole estate” under ORS 116.173
included a wrongful death settlement for purposes of calculating the personal
representative’s fee.
§ 15.3-6 Jury Instructions
UCJI Nos. 21.01, 21.03, 21.04, and 21.05 (relating to comparative
negligence) may help the lawyer in structuring the proof required to realize the
damages claimed and promote a proper allocation of the award received.
UCJI 21.03 (applicable only to claims arising before September 9, 1995) has
been withdrawn.
§ 15.3-7 Tortfeasor’s Personal Representative
§ 15.3-7(a) Effect of Tortfeasor’s Death
The death of a wrongdoer does not abate the plaintiff’s wrongful death
claim for relief. The claim of the plaintiff’s personal representative continues
against the personal representative of the wrongdoer’s estate, with the exception
that punitive damages will not lie. ORS 30.080.
§ 15.3-7(b) Parties
When a wrongdoer dies after the commencement of an action for injuries
or wrongful death, the court, upon motion of the plaintiff or the plaintiff’s
personal representative, “shall cause to be substituted as defendant the personal
representative of the wrongdoer, and the action shall continue against such
personal representative.” ORS 30.100.
When a wrongdoer is deceased when the action is filed, the action must be
brought against the personal representative of the wrongdoer’s estate.
Worthington v. Estate of Davis, 250 Or App 755, 764, 282 P3d 895 (2012);
Ramirez v. Lembcke, 191 Or App 70, 76, 80 P3d 510 (2003) (the court has no
jurisdiction over a deceased wrongdoer). See ORS 30.080. If the plaintiff filed an
action against a deceased wrongdoer, the plaintiff must then file an amended or
supplemental complaint to name the personal representative of the wrongdoer’s
estate as the defendant. Ramirez, 191 Or App at 76; Worthington, 250 Or App at
764. It is not proper or sufficient for the plaintiff to simply have a personal
representative appointed for the wrongdoer, and then continue the case against
the decedent personally. Ramirez, 191 Or App at 76–77 (the case was dismissed
for want of personal jurisdiction because the plaintiff named only the decedent as
the defendant).
§ 15.3-7(c) Petition for Appointment
If no estate is initiated for the deceased wrongdoer within 60 days of the
wrongdoer’s death, the plaintiff may petition the court to appoint an
administrator. ORS 30.090.
PRACTICE TIP: If the plaintiff must secure the appointment of a
personal representative to have a party defendant, the plaintiff may allege in
the petition that the plaintiff is seeking the appointment under ORS 30.090;
this procedure restricts the scope of the proceeding to the wrongful death
action alone. By securing this appointment, the tortfeasor’s personal
representative has not volunteered to probate any assets requiring
administration that belong to the decedent wrongdoer.
PRACTICE TIP: Obtaining the appointment of a personal representative
for a tortfeasor occasionally occurs when the decedent wrongdoer owned
nothing that required probate administration, and the family members simply
do not wish to be involved in the lawsuit. A lawyer often finds another
lawyer who is willing to be appointed for the purpose of tendering the
defense to the insurance company. Most lawyers give notice, either formally
or informally, to the relatives of the deceased wrongdoer of their intent to
proceed in this fashion. Occasionally, a family member will then come
forward and serve. On tendering the defense to the insurance carrier, the
personal representative in this situation often chooses to resign and allow the
insurance company, as the real party in interest, to request appointment of a
successor personal representative. A lawyer should avoid appointing one of
his or her own staff members to serve as personal representative.
§ 15.3-8 Closing the Estate
When a plaintiff’s estate consists of assets requiring probate administration
as well as a claim for wrongful death, all of the steps of administration can be
completed and the distribution of assets can be made before the wrongful death
action is resolved. See ORS 116.013. The estate must not be closed, however,
because the personal representative continues to be a party in the pending
proceeding (whether the personal representative is the plaintiff or the defendant).
Once the wrongful death action is concluded, the estate may be closed when the
receipts evidencing the distribution of the proceeds are filed. ORS 116.213.
In Haugh v. Kilmer, 71 Or App 345, 692 P2d 631 (1984), the decedent was
survived only by his parents. Before the appointment of a personal representative
for the decedent, the parents obtained a settlement from the defendants and
released them from further liability. A subsequently appointed personal
representative filed an action for wrongful death against the defendants. The trial
court granted the defendants’ motion for summary judgment on the ground that
the parents’ release barred the action. The court of appeals affirmed because all
the interested parties of a single class had joined in the settlement.
§ 15.4 PHYSICAL OR FIDUCIARY ABUSE OF VULNERABLE

PERSONS
“A vulnerable person who suffers injury, damage or death by reason of
physical abuse or financial abuse” has a cause of action “against any person who
has caused the physical or financial abuse or who has permitted another person to
engage in physical or financial abuse.” ORS 124.100(2).
Under the statute, the term vulnerable person means:
(1) “An elderly person,” that is, a person who is age 65 or older, ORS
124.100(1)(a), (e)(A);
(2) “A financially incapable person” (as defined in ORS 125.005), ORS
124.100(1)(b), (e)(B);
(3) “An incapacitated person” (as defined in ORS 125.005), ORS
124.100(1)(c), (e)(C); or
(4) “A person with a disability who is susceptible to force, threat, duress,
coercion, persuasion or physical or emotional injury because of the person’s
physical or mental impairment,” ORS 124.100(1)(e)(D) (see ORS 124.100(1)(d)
for the definition of person with a disability).
The action may be brought by (1) the vulnerable person; (2) a guardian,
conservator, or attorney-in-fact for the vulnerable person; (3) the “personal
representative for the estate of a decedent who was a vulnerable person at the time
the cause of action arose”; (4) a “trustee for a trust on behalf of the trustor or the
spouse of the trustor who is a vulnerable person”; (5) the attorney general; (6) the
Department of Human Services; or (7) any district attorney. ORS 124.100(3),
124.125.
NOTE: An action may also be brought against any person who has
permitted another person to engage in physical or financial abuse. ORS
124.100(2), (5).
The term financial abuse includes a wrongful taking of the money or
property of a vulnerable person, ORS 124.110(1)(a). See Church v. Woods, 190
Or App 112, 117, 77 P3d 1150 (2003). Financial abuse also includes a
transferee’s retention, “without good cause,” of a vulnerable person’s money or
property after the vulnerable person has requested that the money or property be
returned. ORS 124.110(1)(b); see Hoffart v. Wiggins, 226 Or App 545, 549–550,
204 P3d 173 (2009) (the plaintiff need not prove that the broker wrongfully took
the plaintiff’s property).
Physical abuse subject to the statute is described in ORS 124.105. Physical
abuse includes the defendant’s use of “any unreasonable physical constraint on the
vulnerable person.” ORS 124.105(2). Also, an action may be brought under the
statute if the defendant “subjected the vulnerable person to prolonged or continued
deprivation of food or water.” ORS 124.105(2).
A prevailing plaintiff in an action under ORS 124.100 may recover (1) an
amount equal to three times the economic damages resulting from the physical or
financial abuse, or $500, whichever is greater; (2) an amount equal to three times
all noneconomic damages; (3) reasonable attorney fees; and (4) reasonable fees
for a conservator or guardian ad litem incurred because of the litigation. ORS
124.100(2).
A valid claim for the wrongful appropriation of money or property of a
vulnerable person does not require a traditional fiduciary relationship between the
plaintiff and the defendant. ORS 124.110(1) (overruling White v. McCabe, 159
Or App 189, 979 P2d 289 (1999)).
A “taking” can include creating in the defendant a right of survivorship in
the abused person’s real property. Church v. Woods, 190 Or App 112, 117, 77
P3d 1150 (2003). In Church, 190 Or App at 118, the court of appeals also defined
the word wrongful, stating that “[c]onduct generally is ‘wrongful’ if it is carried
out in pursuit of an improper motive or by improper means.” “‘Improper means’
must be independently wrongful by reason of statutory or common law, beyond
the mere fact of the injury complained of.” Church, 190 Or App at 118. Improper
means may “‘include violence, threats, intimidation, deceit, misrepresentation,
bribery, unfounded litigation, defamation and disparaging falsehood.’” Church,
190 Or App at 118 (quoting Conklin v. Karban Rock, Inc., 94 Or App 593, 601,
767 P2d 444 (1989)). The court stated that undue influence also can constitute
improper means. The court explained that the emphasis in cases involving undue
influence should be on the unfairness of the advantage reaped. Church, 190 Or
App at 118.
The appellate court has ruled on a few elder-abuse cases in the past few
years. Of note are the following decisions:
(1) In order to be liable “for permitting another person to engage in
physical or financial abuse” under ORS 124.100(5), the defendant must have
known, or reasonably should have known, that the abuser would abuse the
plaintiff, Miller ex rel. Miller v. Tabor W. Inv. Co., LLC, 223 Or App 700, 717,
196 P3d 1049 (2008) (an apartment manager had no idea that one tenant might
follow another to a mini mart and assault the other tenant);
(2) A participant in an allegedly fraudulent investment scheme can be
liable under ORS 124.100, along with securities violations under ORS chapter 59,
and racketeering violations under ORS chapter 166, Cruze v. Hudler, 246 Or App
649, 267 P3d 176 (2011), adh’d to as modified on recons., 248 Or App 180 (2012);
(3) Taking property includes diminishing the owner’s share in the
property, Church, 190 Or App at 117–118 (“[b]ecause the conveyance transferred
an undivided interest in Elden’s property to defendant, and it diminished Elden’s
interest commensurately, defendant took Elden’s property within the meaning of
ORS 124.110(1)(a)”);
(4) The initial taking of property need not be wrongful for an action to
exist under ORS 124.110(1)(b) for the “wrongful retention” of property, Hoffart,
226 Or App at 548–549 (after the plaintiffs asked their investment broker to return
their money to them, the broker acted in bad faith in failing to return the entire
amount of their investment); and
(5) An action for financial abuse under the current version of ORS
124.110(1)(a) does not require the existence of a fiduciary relationship between the
abuser and the vulnerable person, Cruze, 246 Or App at 666; see White, 159 Or
App at 195 (the court construed an earlier version of the statute to require a
fiduciary relationship).
PRACTICE TIP: A copy of the complaint must be served on the attorney
general within 30 days after the action is commenced. ORS 124.100(6).
For further information on civil actions for the abuse of a vulnerable
person, see ELDER LAW ch 10 (Oregon CLE 2000 & Supp 2005).
PHYSICAL OR FINANCIAL ABUSE OF VULNERABLE PERSONS (new
title)
The 2015 Legislature renumbered the subsections of ORS 124.100(1), but on
July 1, 2018, the numbering of those subsections will appear as stated in the 2012
text.
In Gibson v. Bankofier, 275 Or App 257, 365 P3d 568 (2015), the court
reiterated the four elements to a claim for financial abuse of a vulnerable person.
“There must be ‘(1) a taking or appropriation (2) of money or property (3) that
belongs to [a vulnerable] person, and (4) the taking must be wrongful.’” Gibson,
275 Or App at 268 (quoting Church v. Woods, cited in the 2012 text). The court
found that the mere existence of a confidential relationship was not inherently
wrongful.
In Gattuccio v. Averill, 273 Or App 126, 362 P3d 691 (2015), the court ruled
that a company was a “person” under the statue but could not be held responsible
for the criminal conduct of its employee.
In Herring v. Am. Med. Response Nw., Inc., 255 Or App 315, 297 P3d 9, rev
den, 353 Or 867 (2013), a young adult was sexually abused by a paramedic during
an ambulance ride to the hospital. The court determined that she was a “vulnerable
person” under the terms of ORS 124.100, in spite of the temporary nature of her
condition and the fact that she was not elderly. Herring, 255 Or App at 320–22.
The court stated:
ORS 124.100 plainly establishes that a person is incapacitated if, while being
abused, her self-protecting ability is significantly impaired. Nothing in the text
requires the duration of that impairment to exceed the period during which the
abuse occurs. We conclude that, in protecting “incapacitated” persons, ORS
124.100 protects, among others, persons who are only temporarily and fleetingly
unable to protect their own health and safety, from abuse inflicted, at least in part,
during that temporary and fleeting period.
Herring, 255 Or App at 321–22.
A court is required to triple the amount of noneconomic damages awarded to
a prevailing plaintiff in an action under the vulnerable-person statute. Herring, 255
Or App at 322–23. The trial court’s tripling of the jury’s award of $500,000 for
noneconomic damages in the action did not violate the $500,000 cap on
noneconomic damages under ORS 31.710. Herring, 255 Or App at 322–26.
Violations of ORS 124.100 are “per se sufficiently egregious to justify the
enhanced award” and the statute “does not contain a mens rea requirement.”
Herring, 255 Or App at 325.
“[A] plaintiff may bring an action against a defendant for ‘permitting’
another person to engage in physical abuse if the defendant knowingly acted or
failed to act when the defendant was aware of the substantial risk that the abuser
would commit the abuse that the plaintiff suffered.” Wyers v. Am. Med. Response
Nw., Inc., 268 Or App 232, 253, 342 P3d 129 (2014), aff’d, 360 Or 211 (2016). In
the Wyers case, six women brought separate actions against an ambulance
provider, seeking damages under ORS 124.100 based on allegations that the
provider “permitted” a paramedic in its employ to sexually abuse them while they
were being transported to the hospital. Wyers, 268 Or App at 235. The trial court
had granted the defendant’s summary-judgment motion and dismissed the actions.
The cases were consolidated for appeal. The appellate court reversed and remanded
the trial court’s decisions, concluding that the plaintiffs had “produced evidence
that, viewed in the light most favorable to them, shows that, before any of the
abuse of any of plaintiffs, defendant knew that [the paramedic] had a history of
being accused of the same kind of abuse, by precisely the same category of
victim.” Wyers, 268 Or App at 254. Thus, “a reasonable juror could conclude that
defendant knowingly failed to act regarding its knowledge of the risk that [the
paramedic] was a serial predator who would sexually abuse additional women,
such as plaintiffs, if permitted to do so.” Wyers, 268 Or App at 254.
Attorney negligence does not create bystander liability for purposes of elder
financial abuse. Hunsinger v. Graham, 288 Or App 169, 404 P3d 1004 (2017).
Third-party liability requires proof of two mental states under ORS 124.100(5):
actual knowledge that the abuse occurred (the defendant’s act or failure to act) and
constructive knowledge of abuse (the circumstances in which the act or failure to
act occurs). The court focused on the latter, constructive knowledge, ultimately
concluding that legal negligence does not create third-party liability for elder
abuse.
See Schmidt v. Noonkester, 287 Or App 48, 55, 401 P3d 266 (2017)
(“assuming . . . that ‘unfounded litigation’ may be the predicate for an elder abuse
claim, it can satisfy, at most, only the ‘wrongful conduct’ element of such a claim,”
so the claim fails); Bates v. Bankers Life & Cas. Co., 993 F Supp 2d 1318, 1345 (D
Or 2014), aff’d, 716 Fed Appx 729 (9th Cir 2018) (“To the extent the claim is
premised on wrongful delay and/or denial of meritorious claims filed under
plaintiffs’ long-term health-care policies, it is not cognizable as elder abuse under
Oregon’s statutory scheme.”).
The failure to serve the attorney general within 30 days of filing a complaint
pursuant to ORS 124.100 is jurisdictional, resulting in dismissal of the complaint.
Bishop v. Waters, 280 Or App 537, 543–549, 380 P2d 1114 (2016).
For further information on civil actions for the abuse of a vulnerable person,
see Elder Law ch 9 (OSB Legal Pubs 2017).
NOTE: An attorney is a “public or private official” under the elder-
abuse reporting statutes and, as such, has the obligation to report a
reasonable belief that the attorney has come into contact with a person who
is subject to elder abuse or child abuse. ORS 124.050(9)(r); ORS 124.060.
The failure to report abuse under these statutes is a violation of the
law and can also result in personal liability. ORS 124.990.
However, attorneys are not required to report information obtained in
the course of representing a client if the disclosure “would be detrimental to
the client.” ORS 124.060(1).
FORMS
Form 15-1 Petition of Personal Representative for Approval and

Authority to Settle Wrongful Death Claim
Download MS Word


)
____________________, ) PETITION OF
) PERSONAL
Deceased. ) REPRESENTATIVE FOR
) APPROVAL AND
) AUTHORITY TO SETTLE
) WRONGFUL DEATH
) CLAIM
The personal representative represents:

1.
An agreement to settle the wrongful death claim of ____________,
deceased, filed in the ____________ Court, Case No. _____, has been reached
for the amount of $_______, subject to the approval of this Court.
2.
The affidavit of [lawyer for petitioner] in support of this settlement and in
support of attorney fees and costs in the total amount of $__________ is attached
to this petition and marked Exhibit 1.
3.
Notice of the proposed settlement and this petition have been given to
decedent’s surviving spouse, children, and parents.
[or]
3.
The surviving spouse, children, and parents have agreed to this settlement
subject to the approval of the Court as indicated by their signatures on this
petition.
WHEREFORE,
4.
The personal representative prays for an order:
(a) Approving the agreement of the personal representative to settle the
above-described wrongful death claim for the sum of $_______;
(b) Authorizing the personal representative to execute appropriate
settlement instruments;
(c) Authorizing the personal representative to pay attorney fees in the
wrongful death action in the sum of $______ and costs of $________, as
supported by the attached affidavit of _______________; and
(d) Authorizing the deposit of the settlement funds after payment of
attorney fees and costs in _____________ Bank, not to be withdrawn until further
order of the Court.
DATED:____________________, 20___.

/s/__________________________
[name]
/s/__________________________
[name]
Surviving Spouse
/s/__________________________
[name]
Decedent’s Father
/s/__________________________
[name]
Decedent’s [Daughter / Son]
/s/__________________________
[name]
Decedent’s [Daughter / Son]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
NOTE: Although notice to spouse, parents, and children is not required by
statute, the failure to represent all their interests adequately could result in a
malpractice claim against the lawyer for the personal representative; the notice of
settlement and an opportunity for them to object should diminish this risk.
COMMENT: See §15.3-2(c). See also ORS 30.070, 111.205. See UTCR
2.010 and UCTR 9.030 for the form of documents.
NOTE: In the probate court, the last page of every petition must include the
number (if any).
this form.
Form 15-2 Affidavit of Lawyer
Download MS Word
EXHIBIT 1


)
____________________, ) AFFIDAVIT OF
) [LAWYER FOR
Deceased. ) PETITIONER]
I, ___________________, being first sworn, say:

[Describe claim, the amount of the settlement, and reason for
recommending settlement; negligence; decedent’s earnings, age, and health;
ages of spouse, children, and parents; and other damages items, such as medical
and funeral expenses, pain and suffering, loss of wages, support given to spouse,
children, and parents, nature of family relationships, and add the following:]
Considering the nature of the claim, the likelihood of recovery, the
pecuniary loss, and the loss of society and companionship and services of the
decedent as well as all other damages authorized by ORS 30.020(2)(d), I
recommend acceptance of the settlement.
[Describe fee arrangement.]
/s/__________________________
[name]
Lawyer for Petitioner
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
SUBSCRIBED AND SWORN TO before me on ________, 20___.
/s/__________________________
COMMENT: See §15.3-2(c). See also ORS 116.183; UTCR 9.060(2).

case.” UTCR 2.010(7).
this form.
Form 15-3 Order Approving Settlement of Wrongful Death Claim
Download MS Word


)
____________________, ) ORDER APPROVING
) SETTLEMENT OF
Deceased. ) WRONGFUL DEATH
) CLAIM
Based on the petition of the personal representative for approval and

authority to settle the wrongful death claim for the amount of $__________, and
it appearing that notice of the proposed settlement has been given to the proper
parties; and the Court being fully advised;
IT IS ORDERED that the settlement of the personal representative of the
wrongful death claim filed in the _____________ Court, Case No. _______, in
the amount of $__________ is hereby approved; and attorney fees and costs in
the amount of $__________ hereby approved;
IT IS FURTHER ORDERED that the proceeds of the settlement be
deposited in an interest-bearing account in _________________ Bank not to be
withdrawn until further order of this Court.
DATED: __________________, 20___.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax number]
[e-mail address]
NOTE: The final paragraph is unnecessary if an apportionment agreement

has been reached, and funds are to be distributed immediately. No increase in the
bond should be necessary under these circumstances.
COMMENT: See §15.3-3(a). See also ORS 30.070. See UTCR 2.010 and
UCTR 9.030 for the form of documents.
NOTE: In the probate court, the last page of every order must include the
this form.
NOTE: “Before the court awards attorney fees in an amount less than the
amount requested by the personal representative, the court must allow the attorney
an opportunity to submit additional materials supporting the requested amount.”
ORS 116.183(2)(b).
Form 15-4 Petition for Apportionment of Proceeds of Wrongful Death
Settlement or Judgment
Download MS Word


)
____________________, ) PETITION FOR
) APPORTIONMENT OF
Deceased. ) PROCEEDS OF
) WRONGFUL DEATH
[Settlement] ) [SETTLEMENT /
) JUDGMENT]
)
[or] )
)
_____________________, )
Personal Representative )
of the Estate of )
)
_____________________, )
)
Deceased )
)
v. )
)
_____________________, )
)
[Judgment] )
The personal representative represents:
1.
[The settlement of the claim for the wrongful death of this decedent has
now been approved by the court / The judgment has been obtained for this
wrongful death action]. The amount of the [settlement / judgment] is
$__________. After payment of attorney fees ($________), costs ($________),
medical expenses ($________), and funeral expenses ($_________), the sum of
$_________ plus accumulated interest will be available for distribution.
Surviving the decedent are the spouse, _______________; the decedent’s parents,
_______________ and _______________; and the decedent’s children,
_______________, ________________, and _________________.
2.
The decedent’s spouse, parents, and children are each entitled to receive the
amount that would justly, fairly, and reasonably compensate them for their
pecuniary loss and for the loss of the society, companionship, and services of the
decedent.
3.
The personal representative is giving notice to all of the following:
NAME ADDRESS RELATIONSHIP AGE
[spouse]
[children]
[decedent’s father]
[decedent’s mother]
4.
A hearing on the apportionment will be held on ______________, 20___,
before [judge], Room _____, ___________ County Courthouse, to determine the
apportionment of the settlement among the parents, spouse, and children of the
decedent, and each party should appear with his or her lawyer at that time.
WHEREFORE,
5.
Petitioner prays that the [settlement / judgment] funds and interest
remaining after payment of attorney fees, costs, medical expenses, and funeral
expenses be apportioned as provided by law.
DATED:____________________, 20___.
/s/__________________________
[name]
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §15.3-3(a). See also ORS 30.020–30.070, 111.205. See

UTCR 2.010 and UCTR 9.030 for the form of documents.
NOTE: In the probate court, the last page of every petition must include the
number (if any).
this form.
Form 15-5 Agreement of Spouse, Children, and Parents for
Apportionment of Wrongful Death Settlement or Judgment
Download MS Word


)
____________________, ) AGREEMENT OF
) SPOUSE, CHILDREN,
Deceased. ) AND PARENTS FOR
) APPORTIONMENT OF
) WRONGFUL DEATH
) [SETTLEMENT /
) JUDGMENT]
The undersigned spouse, children, and parents of the decedent fully

understand that they are each entitled to receive as part of the [settlement /
judgment] in the wrongful death action filed in __________________ Court,
Case No. _________, against [defendant’s name], an amount that would justly,
fairly, and reasonably compensate them for their pecuniary loss and for the loss
of the society, companionship, and services of the decedent. The undersigned
fully understand that any additional amounts received in the settlement should be
distributed in accordance with the laws of intestate succession in the decedent’s
state of domicile. The undersigned have been advised by the lawyer for the
personal representative that the lawyer cannot represent any of the undersigned
with respect to a dispute among them as to the apportionment of the proceeds of
the [settlement / judgment]. The undersigned have been advised that it is in their
best interests for each of them to obtain a lawyer to represent their interests,
advise them of their rights, and recommend to them the amount they should
receive. The undersigned parties to this agreement have determined that they
wish to settle the apportionment among themselves. Now, therefore, the parties
agree to the apportionment of the [settlement / judgment] as follows:
(1) Attorney fees $_________
(2) Costs $_________
(3) Doctor, hospital, nursing, and burial and memorial services for the
decedent $_________
(4) Spouse [name] $_________
(5) Father [name] $_________
(6) Mother [name] $_________
(7) Children [name] $_________
[name] $_________
[name] $_________
(8) Beneficiaries under the laws of intestacy in state of the decedent’s
domicile $________.
AGREED to on _________________, 20___.
SPOUSE CHILDREN:
/s/__________________________ /s/__________________________
FATHER:
/s/__________________________ /s/__________________________
MOTHER:
/s/__________________________ /s/__________________________
NOTE: Minor children cannot agree to the settlement; a guardian ad litem

and/or a lawyer should be appointed for them.
this form.
Form 15-6 Order of Apportionment of Wrongful Death Settlement or
Judgment
Download MS Word


)
____________________, ) ORDER OF
) APPORTIONMENT OF
Deceased. ) WRONGFUL DEATH
) [SETTLEMENT /
) JUDGMENT]
This matter has come on the petition for apportionment of the [settlement /
judgment] of the wrongful death proceeds and interest, and the parties to the
apportionment have appeared individually and by their respective lawyers, and
the Court has heard their testimony. The Court finds that the spouse is entitled to
$________, the parents are entitled to $_________, the children are entitled to
$__________, divided as follows: _____________, _______________, and
________________, and the beneficiaries under the laws of intestacy of the
decedent’s domicile are entitled to $__________; now, therefore, it is
ORDERED that the proceeds recovered for the wrongful death claim of
_________, deceased, and interest on the [settlement / judgment] be apportioned
as follows:
(1) Spouse $_________
(2) Father $_________
(3) Mother $_________
(4) Child [name] $_________
(5) Child [name] $_________
(6) Child [name] $_________
(4) Beneficiaries under the laws of intestacy of the decedent’s domicile
$________.
IT IS FURTHER ORDERED that the funds received in settlement be
deposited in _________________ Bank and not released until further order of
this court.
DATED: __________________, 20___.
/s/__________________________
[name]
Judge
[name]
[address]
[telephone no.]
[fax no.]

[name]
[OSB no.]
[address]
[telephone no.]
[fax no.]
[e-mail address]
COMMENT: See §15.3-3(a). See UTCR 2.010 and UCTR 9.030 for the form
of documents.
NOTE: In the probate court, the last page of every order must include the
this form.

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Administering Oregon Estates 2018

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ADMINISTERING

NOTE: This package contains the 2012 revision of Administering Oregon

This handbook may be cited as:

OREGON STATE BAR

Chapter 1—Alternatives to Probate

Chapter 2—Probate Jurisdiction and Procedures

Chapter 3—Preadministration Procedures

Chapter 5—Initiating Probate and Small-Estate Proceedings

Chapter 6—Special Considerations

Chapter 7—Initial Responsibilities and Liabilities of Personal Representative

Chapter 8—Rights of Interested Persons

Chapter 9—Claims against the Estate

Chapter 10—Managing Estate Assets

Chapter 11—Accounting, Distribution, and Closing

§ 1.3 PROBATE PROPERTY AND NONPROBATE PROPERTY

§ 1.4 ASSESSING THE NEED OR DESIRABILITY FOR PROBATE

§ 1.6 TYPES OF NONPROBATE PROPERTY

§ 1.7 PROBATE OF NONPROBATE PROPERTY

Form 1-1 Affidavit of Heirship

8. The names, relationships, and addresses of the decedent’s heirs at law

Personally appeared the above-named _______________, who

COMMENT: See §1.5-3.

[name of bank] Account No. ___________

The undersigned, being first duly sworn, states as follows:

COMMENT: See §1.5-13.

§ 2.1 RIGHT OF THE STATE TO CONTROL PROBATE MATTERS

§ 2.2 PROBATE JURISDICTION

§ 2.8 PROBATE COSTS; EXPENSES

§ 2.9 FINALITY OF ORDERS AND JUDGMENTS; APPEALS

Form 2-1 Order Transferring Venue

IN THE __________ COURT OF THE STATE OF OREGON

In the Matter of the )

On the petition of _______________ for determination of venue, the Court

LAWYER FOR PERSONAL REPRESENTATIVE:

IN THE ____________ COURT OF THE STATE OF OREGON

In the Matter of the )

On the petition of _______________ for determination of venue, the Court

LAWYER FOR PERSONAL REPRESENTATIVE:

IN THE _____________ COURT OF THE STATE OF OREGON

In the Matter of the )

NOTICE IS HEREBY GIVEN that _______________ has filed herein a

LAWYER FOR PETITIONER:

IN THE _____________ COURT OF THE STATE OF OREGON

In the Matter of the )

Service of notice of hearing on [describe petition, report, etc.] is hereby

SUBSCRIBED AND SWORN TO before me on _____________, 20___.

COMMENT: See §2.5.5.

IN THE ____________ COURT OF THE STATE OF OREGON

In the Matter of the )

PERSON ENTITLED TO NOTICE:

NOTE: Only persons entitled to notice can waive notice.

IN THE ____________ COURT OF THE STATE OF OREGON

In the Matter of the )

PERSON ENTITLED TO NOTICE:

COMMENT: See §2.5-6.

Appendix 2A Table of Situations Requiring Petitions

Situation ORS Citation

COMMENT: See §2.4-4.

By and to How When ORS

COMMENT: See §§2.5-1 to 2.5-4.

Court Action Probate Estates

Decision on a petition for Limited judgment.

Admitting will to probate. Limited judgment,

SUBSCRIBED AND SWORN TO before me on ___________, 20_.

/s/______________________ Date: _, 20