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"Living Will" - Form for Appointing your Health Care Representative

5/13/2019

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Oregon doesn't call this a "living will" although that might be a term you are familiar with.  In Oregon, you can document your wishes and appoint someone to speak for you if you cannot speak for yourself -- that person is called your "Health Care Representative."  Use the form from your health care provider or you can download it at the link below (make sure you use the current form, which took effect on 1 January 2019.

Click here to get to page to download the Oregon Advanced Directive form

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Drowning in Debt? Wondering About Bankruptcy? Read this first.

9/24/2018

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I am not a bankruptcy attorney, but I have helped many clients understand when they should look into bankruptcy and when there is no need for a bankruptcy filing because the clients have no assets that creditors can reach. If you are concerned that you are drowning in debt and don't know a good bankruptcy attorney to consult, you can make an appointment with my assistant and discuss your situation; I will be happy to refer you to good consumer bankruptcy attorneys if we decide that bankruptcy is appropriate for your situation.

Below is another article in the terrific series by the National Consumer Law Center on this important subject.

Deciding Whether to File for Bankruptcy: Consumer Debt Advice from NCLC
by John Rao, National Consumer Law Center


Thirteenth in a series from NCLC to help families in financial difficulty. Click here for a list linking to all the articles in this series.


Federal law provides the right to file bankruptcy for people with debt problems.
[Note: Bankruptcy is as old as our Government -- Bankruptcy is in the Constitution.]

This article explains

-- how bankruptcy can help you and when it may be the wrong solution for you.

-- the difference between chapter 7 and 13 bankruptcies,

-- how you know the best time to file for bankruptcy, and

-- what a bankruptcy will cost.

Importantly, the article corrects common misconceptions about bankruptcy.


While you should consider other options first, do not wait until the last minute to think about bankruptcy.
Important rights may be lost by delay.


What Bankruptcy Can and Cannot Do

Bankruptcy may make it possible for you to:

  • • Eliminate your responsibility for many of your debts and get a fresh start. When a debt is discharged at the close of a successful bankruptcy, you have no further legal obligation to pay that debt.

  • • Stop foreclosure on your house or manufactured home and allow you an opportunity to catch up on missed payments.

  • • Prevent repossession of your car or other property, or force the creditor to return property even after it has been repossessed.

  • • Stop wage garnishment, debt collection harassment, and other similar collection activities to give you some breathing room.

  • • Prevent termination of utility service or restore service if it has already been terminated.

  • • Lower the monthly payments on some debts, including car loans.

  • • Allow you an opportunity to challenge the claims of creditors who seek to collect more than they are legally entitled.

Bankruptcy, however, cannot cure every financial problem, nor is it an appropriate step for every individual.

In bankruptcy, it is usually not possible to:

  • • Eliminate certain rights of “secured” creditors. A “secured” creditor has taken some form of lien on your property as collateral for a debt. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process, but you generally cannot keep the collateral unless you continue to pay the debt.

  • • Discharge certain types of special debts, such as child support, alimony, most student loans, court restitution orders, criminal fines, and some taxes.

  • • Protect all cosigners on their debts. When a relative or friend has cosigned a loan and you discharge the loan in bankruptcy, the cosigner may still have an obligation to repay all or part of the loan.

  • • Discharge debts that are incurred after bankruptcy has been filed.
Understanding the Difference Between a Chapter 7 and a Chapter 13 Bankruptcy

Your rights are very different depending on whether you file a chapter 7 or a chapter 13 bankruptcy.

In a chapter 7 bankruptcy (called a “liquidation”), you eliminate most of your debts, but may lose your property other than “exempt” property—that is property the law says creditors cannot reach unless they take that property as collateral. For many families most of their property is exempt. In a chapter 13 case (called a “reorganization”), you keep all your property, and pay a portion or all of your debts in installments over a period of three to five years.


How a Bankruptcy Can Help You

An Immediate Stop of Foreclosures, Evictions, Repossessions, Utility Shut-Offs, Garnishments, and Other Creditor Actions.

Your bankruptcy filing will automatically and immediately, without any further legal proceedings, stop most creditor actions against you and your property, at least temporarily.


Your request for bankruptcy protection creates an “automatic stay,” which stops the continuation of or the start of repossessions, garnishments, attachments, utility shut-offs, foreclosures, evictions, and debt collection harassment. The automatic stay provides you time to sort things out and address your financial problems. A creditor cannot take action against you or your property without bankruptcy court permission. Some creditors seek such permission immediately; others never seek permission.


Permission to continue collection activity is rarely granted to unsecured creditors. Secured creditors can get “relief from the stay” in a chapter 7 case to continue foreclosure or repossession of their collateral. But an automatic stay will almost always continue to be in effect to protect you in a chapter 13 bankruptcy case as long as you are making payments on the secured debt.


If the creditor takes action against you despite the automatic stay, the creditor may have to pay you damages and attorney fees and the creditor’s actions against you can be reversed. For example, a foreclosure sale which is held in violation of the automatic stay can be set aside.


Discharge of Most Debts.

When you successfully complete a bankruptcy, there is a “discharge” (that is, a cancellation) of many of your unsecured debts, such as medical bills and credit card obligations, which eliminates all debt collection and other actions concerning those debts. Certain debts may not be discharged, such as most taxes, liens associated with many secured debts, alimony, child support, and debts you incurred after the bankruptcy case was started. After bankruptcy, you will continue to owe those debts. Student loans can be discharged only if you can prove that repayment will be an undue hardship on you and your family.


Bankruptcy cannot prevent creditors from taking your home or car unless you make sufficient payments on your mortgage or car loan. The bankruptcy though prevents these creditors from seeking additional cash from you after they take the collateral. For example, if you do not pay a car loan, the creditor can seize and sell your car, but the bankruptcy prevents the creditor from seeking additional payment from you if the car’s sale price does not cover the full amount of the debt.


Protection Against Wage Garnishment, Bank Seizures, and Enforcement of Judgment Liens.

After you file bankruptcy, creditors are prohibited from garnishing your wages or other income or your bank account. Bankruptcy even stops government agencies from recovering Social Security or other public benefit overpayments, so long as your receipt of the overpayment was not based on fraud.


Bankruptcy also is an effective tool to deal with some types of court judgments against you. If a court judgment for money does not create a lien against your property, that judgment debt can be discharged in bankruptcy. If the judgment does create a lien on your property, you may ask the bankruptcy court to remove the lien if it affects “exempt property,” and then the creditor can never touch that property.


Protection of Your Household Goods from Seizure.

Most families’ household goods are exempt from seizure—you keep them even in bankruptcy. This is the case even when a creditor has taken household goods as security for a loan, as long as that loan was not used to purchase those goods. If those household goods were taken as security to purchase those goods (such as when you purchase furniture on credit and the store takes the furniture as collateral for the loan), then see the next paragraphs on “secured creditors” where your rights are explained.


Added Flexibility in Dealing with Auto Loans, Mortgages, and Other Secured Creditors.

Bankruptcy can help deal with creditors who take your property as collateral for their loans, such as car loans and mortgage loans. You still have to make payments on these loans if you want to keep the collateral. However, bankruptcy does provide added flexibility in dealing with these debts.


A chapter 7 bankruptcy lets you keep your car by paying the creditor the lesser of what you owe on the loan or the car’s value. If your car is worth $1,000, and the remaining amount on your car loan is $3,000, you can keep the car by paying the creditor only the $1,000. The $1,000 payment usually must be made in a lump sum before the chapter 7 bankruptcy ends (usually after three to five months). Some creditors instead let you pay that amount in installments over a number of months even after the bankruptcy ends, but that is up to the creditor.


A chapter 13 bankruptcy gives you greater flexibility to keep your property. For example, if you are six months delinquent on a mortgage, filing a chapter 13 bankruptcy stops a threatened foreclosure and allows you to gradually catch up on the back-payments, over as many as three to five years. In some cases a chapter 13 filing also allows you to make lower monthly payments by extending the repayment period or lowering the loan’s interest rate. But you have to keep making payments until the loan is paid off.


Utility Terminations.

A bankruptcy filing stops a threatened utility termination and restores terminated service, at least for twenty days. To keep utility service beyond twenty days after the bankruptcy filing, you provide a security deposit (usually equal to approximately twice the average monthly bill) and keep current on new utility charges, but you need not pay the past-due charges incurred before the bankruptcy was filed. Often you can take sixty days to pay the deposit and some utilities may not require a deposit.


Driver Licenses.

If your driver’s license was or will be taken away because you have not paid a court judgment, such as one arising from an automobile accident, bankruptcy normally can discharge the obligation to pay the court judgment, and you then have a right to regain or retain the driver’s license.


The Best Time to File for Bankruptcy

It is often stated that bankruptcy is a “last resort” for financially troubled consumers. This is not really true.

In some cases, legal rights can be lost by delaying a bankruptcy. Be especially careful to get early advice about bankruptcy if you are concerned about saving your home or your car or protecting your bank account or wages from seizure.


For example, bankruptcy may not help you after your home is sold at a foreclosure sale or money in your bank account is seized. Bankruptcy can stop an eviction proceeding, but you have fewer rights in bankruptcy after a court has ordered you to be evicted. Act quickly to consider your bankruptcy rights.


While not ideal, all is not lost if you wait to the last minute before a foreclosure, repossession, or garnishment. Bankruptcies in an emergency can be filed with little preparation by filing only a brief petition, a statement of your Social Security number, and a list containing the names and addresses of your creditors. Additional forms must be completed and filed shortly thereafter.


But you must still complete an approved budget and credit counseling briefing before filing your bankruptcy. The counseling usually takes less than an hour, and can be done over the phone or over the internet.


On the other hand, if you are not facing immediate loss of property, but in the future you will incur new debts that you will not be able to pay, a bankruptcy filing should be delayed until you incur those new debts. New debts incurred after the bankruptcy filing are not discharged in that bankruptcy case—you will still be obligated to repay those new debts. If you file too soon and incur a lot of debt after the filing, you may be back to where you started from or even worse.


If you file a first bankruptcy too soon, you will find it more difficult to file a second bankruptcy to discharge the new debts incurred after you file the first bankruptcy. After you first file a chapter 7 bankruptcy, you have to wait eight years to file another chapter 7 case. There is more flexibility to file a chapter 13 case after first filing a chapter 7 bankruptcy. Thus it is a good idea to wait to file for bankruptcy until your debts have peaked.


If you decide to wait to file bankruptcy, avoid the temptation to go on expensive vacations or credit card shopping sprees that you do not intend to repay. In a chapter 7 bankruptcy, debts incurred in this way can be declared non-dischargeable. On the other hand, pre-bankruptcy expenses for medical care and other essentials are rarely challenged. Similarly, it may make sense before filing bankruptcy to purchase in installments needed medical or automobile insurance.


The Cost of Filing Bankruptcy

Unfortunately, it is expensive to file bankruptcy. Bankruptcy is a legal proceeding with complicated rules and paperwork. You may want to get professional legal help, especially if you hope to use bankruptcy to prevent foreclosure or repossession. Most bankruptcy attorneys provide a free consultation to help you decide whether bankruptcy is the right choice. If the attorney takes the case, the attorney will expect to be paid, unless he or she works for a nonprofit legal services office or is doing the bankruptcy pro-bono.


You also have to pay the court a bankruptcy filing fee—$310 for chapter 13 or $335 for chapter 7. The fee can be paid in four installments over 120 days (or 180 days with court permission). You can also ask the court to waive the filing fee in a chapter 7 case if your household income is less than 150% of the official poverty guidelines (for 2018, $24,690 for a family of two or $37,650 for a family of four). No waiver is allowed in a chapter 13 case.


In a chapter 13 case, you pay your debts over time, and you usually have to pay the trustee handling your payments a 10% commission on each payment. While this can add up, you will be paying far lower interest on your debts in a chapter 13 plan than if you had not filed bankruptcy. Even more significantly in a chapter 13 plan, you may only have to repay a small percentage of what you owe on most of your unsecured debts.


Common Misconceptions About Bankruptcy

When You File Bankruptcy Typically You Will Lose Little or None of Your Property.

People are wrong who believe that a bankruptcy filing results in the loss of most of their property. Everyone who files bankruptcy gets to keep some of their possessions, and most people get to keep all of them.


No matter the type of bankruptcy you file, unless property is collateral for a loan, you get to keep all your property that is protected by “exemption” laws. Exemption laws typically protect clothes, appliances, furniture, jewelry, and often even your car and home.


An exemption law may state that you get to keep property that is worth less than a certain amount. What that property is worth is based not on how much the property cost, but rather on your “equity” in the property: the amount that the property is worth in its present condition minus how much you owe on a loan for that property.


For example, if an exemption law protects a $2,000 motor vehicle, this dollar amount applies to $2,000 of your equity in the car, not to the total value of the car. If your car has a total value of $7,000 today with a $5,000 car loan balance, you have $2,000 in equity in the car. In this scenario, you can fully protect a $7,000 car with the $2,000 exemption. You will still have to repay the $5,000 car loan in the bankruptcy or the auto lender will take the car, but you won’t lose the car to pay your other creditors.


What property and the amount of that property that is exempt varies widely from state to state and the application of exemptions in bankruptcy can be complex, particularly if you have moved within the last two years to a different state or bought a home within the last 40 months. You should discuss what property is exempt with a bankruptcy attorney, but the general rule of thumb is that, for most consumers filing bankruptcy, much of their property is exempt.


What property you keep also depends on the type of bankruptcy you choose—a chapter 7 or a chapter 13. In a chapter 7 case, you keep your exempt possessions, but other property may be sold, with the money distributed to pay your creditors. In a chapter 13 case, you keep all your property by paying their nonexempt value over time from future income under a plan approved by the bankruptcy court. If you have very valuable property, it might be sold in a chapter 7 bankruptcy, but you keep it if you pay its value to your creditors over a number of years in a chapter 13 plan.


The Effect of Bankruptcy on Your Credit Report.

The effect of a bankruptcy on your credit report is of understandable concern. Most often, you should not worry about bankruptcy making it harder for you to obtain credit. If you are delinquent on a number of debts, this already appears on your credit record. A bankruptcy is unlikely to make your credit rating any worse, but instead may make it easier for you to obtain future credit.


New creditors will see that old obligations have been discharged in the bankruptcy and that you have fewer other creditors competing with them for payment. Creditors also recognize that you cannot receive a second chapter 7 bankruptcy discharge for another eight years.


After bankruptcy, your credit file will also list the outstanding balance as zero dollars for each of your debts. The credit file will list the fact that you filed bankruptcy and that certain debts at one time were delinquent, but creditors are most interested in what you owe now on each debt. That your credit report shows that you owe nothing on a debt improves your credit standing.


After your bankruptcy is complete, check your credit report to make sure all the debts you discharged in bankruptcy are listed as now owing zero dollars. File a dispute with the credit bureaus if your discharged debts continue to be listed as having a balance owed.


Bankruptcy also often will enhance the stability of your employment and income. Wage garnishments, continuous collection calls, car repossessions, telephone disconnections, and other consequences of an unaffordable debt burden are eliminated, and this should help you find and hold steady employment. Steady income is key to creditworthiness.


Bankruptcy will make it more difficult for you to obtain a new conventional mortgage to purchase a home. Even then, most lenders will not hold the bankruptcy against you if you re-establish a good credit reputation for two to four years after your bankruptcy.


After bankruptcy, some new lenders may demand collateral as security, ask for a cosigner, or want to know why bankruptcy was filed. Other creditors, such as some local retailers, may not even check your credit report.


Bankruptcies stay on your credit record for ten years from the bankruptcy filing, while your debts are usually only reported for seven years from their delinquency. If delinquencies on your debts are five or six years old, bankruptcy will not help your credit record. The debts will be deleted from your credit report within a year or two, while the bankruptcy will stay on your record for ten years.


If you file bankruptcy, you usually do not need to go to court, unless something out of the ordinary occurs.

You will have to attend one meeting with the bankruptcy trustee (not with a judge). Creditors are invited to that meeting but rarely attend. In the rare case that you do receive a notice to go to court, it is important that you go and also check with your attorney if you have one. Before your case is closed, you must also take a course in personal finances, which will last for approximately two hours.


The Effect of Bankruptcy on Your Reputation in the Community.

Most people find their reputations do not suffer from filing bankruptcy. Bankruptcies are not generally announced publicly, although they are a matter of public record. It is unlikely that your friends and neighbors will know that you filed bankruptcy unless you tell them.


However, especially in a small town, where debts are owed to local people, reputational issues connected with filing bankruptcy may arise. In such a situation, weigh possible embarrassment and damage to reputation against bankruptcy’s potential advantages. If you believe that your reputation in a small town is a concern, you may choose to voluntarily pay selected debts after bankruptcy, but you cannot leave selected creditors out of the bankruptcy process entirely.


Feelings of Moral Obligation.

Most people want to pay their debts and make every effort to do so if payment is possible. If bankruptcy is the right solution to your financial problems, you should balance these feelings of obligation with the importance of protecting your family.


Bankruptcy is a legal right. A provision concerning bankruptcy is even contained in the United States Constitution. Big corporations like Kmart, American Airlines, Chrysler, and Macy’s, and famous people like Toni Braxton, Tammy Wynette, Larry King, Mickey Rooney, Henry Ford, and Walt Disney have all chosen to file bankruptcy.

The book of Deuteronomy states:
At the end of every seven years thou shalt make a release. And this is the manner of the release: every creditor shall release that which he has lent unto his neighbor and his brother; because the Lord’s release hath been proclaimed. (Deut. 15:1–2.)
Most importantly, during hard times, bankruptcy may be the only way to provide your family with food, clothing, and shelter. This book explores alternatives to bankruptcy, and these should be considered carefully. But it may be that bankruptcy is your best or only realistic alternative.


Potential Discrimination After Bankruptcy. The federal bankruptcy law offers you protection against being discriminated against because you have filed for bankruptcy. Government agencies, such as housing authorities and licensing departments, cannot deny you benefits because of a previous bankruptcy, including debts discharged in bankruptcy that were owed to those agencies. Government agencies and private entities involved in student loan programs also cannot discriminate against you based upon a bankruptcy filing.


Employers are not permitted to discriminate against you for filing bankruptcy. However, for some sensitive jobs which involve money or security, your bankruptcy may be considered evidence of financial problems which could be detrimental to your work. Bankruptcy law does not prevent discrimination by others, including private creditors, deciding whether to grant you any new loans.


When Bankruptcy May Be the Wrong Solution


There are at least seven situations in which bankruptcy may not be the right option for you:


  1. 1) If all your assets and income are exempt, then you are “collection-proof.”
    (See a previous article in this series: Wage Garnishments and Bank Account Seizures for more information about what it means to be “collection-proof.”) In that case, most creditors can do virtually nothing to harm you even if you don’t filing bankruptcy. At which point, there may not be a compelling reason to file for bankruptcy. Waiting until you are no longer collection-proof is generally more prudent than filing right away, unless you are concerned with a home mortgage, car loan, or other secured loan.


  2. 2) The debts at issue are secured by your property—such as home mortgages or car loans—and you do not have sufficient income to keep up payments while also catching up on past-due amounts. Bankruptcy may not help you when the long-term expense of keeping your home or car exceeds your long-term income.

  3. 3) You have valuable assets that are not exempt in the bankruptcy process and you do not want to lose these assets. A chapter 13 filing may still help if you can afford the necessary payments.

  4. 4) Your main reason for filing bankruptcy is to discharge a student loan, alimony or child support obligations, court restitution orders, criminal fines, or some taxes. These obligations are difficult if not impossible to discharge in bankruptcy.

  5. 5) You have only a few debts and strong defenses for each. Instead of filing for bankruptcy, you can raise these defenses aggressively. Usually the disputes can be settled out of court in an acceptable way. If they are not settled, you can use bankruptcy later.

  6. 6) Because of a prior bankruptcy, you cannot receive a discharge in a chapter 7 bankruptcy. However, in most cases, a chapter 13 petition can still be filed.

  7. 7) You can afford to pay all of your current debts without hardship.
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New Resource for Elders or People with Disabilities - and anyone helping them

8/15/2014

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ADRC is a FREE service to help people learn about public and privately paid options to address aging or disability needs, or to help families and caregivers.  Anyone in Oregon can use the service for themselves or their families.

To access the service, just call 1-855-673-2372, enter the elder's residence zip code, and get connected with the nearest ADRC office.  

Website:  www.ADRCofOregon.org
 
“When you are looking for information about services to address aging or disability needs, the Aging and Disability Resource Connection of Oregon can help you learn about public and privately paid options in your local community.  The ADRC has trained professional staff who can help you and your family with immediate needs, or help you plan for the future.  The ADRC of Oregon is a statewide resource for everyone, regardless of income level, and can be reached by calling a toll-free number, visiting a website, or by contacting a local ADRC office.”

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Hard lesson for some "DIY" types

6/25/2014

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Saw a great comment today by a lawyer who is struggling hard to solve a very difficult (and, now, expensive) estate administration problem involving title to real property. 

The problem was created by the now-deceased parents of his clients; those parents probably saved all of a few hundred bucks on lawyer fees by doing their own estate planning.

The lawyer's comment:


"You don't always get what you pay for, but you seldom get what you don't pay for."

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New!  "Adult Life 101" -- for all 18 year olds, especially new graduates

6/10/2014

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One of the most common things old geezers like me say when they look back at high school is

"Why didn't someone tell me this!?!
It would have saved me so much hassle.  How come nobody warned me?"

If you've reached age 18, grad or not, there are some pretty important things you need to take care of in the legal department.

But nearly every
young adult has no idea what those key things are.

That's why I am offering "Adult Life 101" for all 18 year olds, especially new grads.

For just $50, I'll give you some key information and take care of a few "must do" legal things, so you can be better prepared to start the next chapter of your life, whatever direction you go.  You can do this on your own, or you can bring your parents or a friend if you want.  Call for an "Adult Life 101" appointment. 

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New One-Number Statewide Abuse Hotline for All Forms of Abuse

5/12/2014

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Oregon Adds Statewide Abuse Reporting Line:
                   
        (855) 503-SAFE
 
Today we are happy to announce that Oregon has added another option for reporting suspected abuse of children and vulnerable adults. All our regular local hotline and reporting numbers will continue to take reports as usual, but we have added a single statewide number that provides another way to make these important reports. Oregon's abuse reporting hotline for children and adults, (855) 503-SAFE [855-503-7233], is up and running, and it provides callers with the ability to report suspected child abuse, elder abuse, abuse of people with physical or developmental disabilities, and abuse of people with mental illness or those experiencing a mental health crisis.
 
Callers will be directed that if the report is an emergency requiring immediate attention, to hang up and dial 911. If it is not an emergency, then callers will work through a simple phone tree to ensure their report gets to the right place for response, based on zip code and characteristics of the person they are calling about. Calls can be answered in English or Spanish. Once the calls are routed through the phone tree, they will be directed to local DHS or county offices for Child Protective Services and Adult Protective Services, County Developmental Disability Programs (CDDP) or County Mental Health Programs (CMHP) for response. Not all areas of the state will have a live person to take reports after hours, and some locations will provide voicemail reporting options.
 
All local hotline and reporting numbers will continue to take reports as usual, and the new line adds a single call option for those who want to use it. Oregon's abuse reporting hotline for children and adults is the result of two legislative workgroups, one on child welfare and one on elder abuse, which recommended a single hotline option to simplify reporting for Oregonians who are not familiar with the abuse reporting process. Mandatory reporters are often well aware of local reporting and hotlines and are responsible for most of the reports we receive. Citizens who may only make one or two calls in their lifetimes can be overwhelmed by the seeming complexity of agencies and numbers from which to choose.
 
(855) 503-SAFE [855-503-7233] will solve that problem by providing a single phone number anyone can call from any community in Oregon!

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Great reminder: at least as important as your will-- your beneficiary assignments 

3/22/2014

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Good story to remind you of something crucial.  Perhaps even more important than your will are all the designations you make over time that pass intangible property (financial accounts most often) outside the will.  You should have a day every year where you review these -- the first business day after New Years or your birthday or wedding ( or divorce) anniversary ...  Just so that every year you actually eyeball the names of the people who are slated to get the assets in those accounts should you die.  There are many horror stories of what happens to survivors of people who fail to do this.
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Free: New Family Caregiver Handbook from DHS

9/6/2013

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DHS has a new, free handbook you can download HERE (pdf).  If you are an elder thinking about having a family member provide your care, or if you're a family member who is or may someday be asked to provide care for a family elder or other family member with a disability, this is a worthwhile resource.

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Thinking about a Reverse Mortgage? You may want to act before Oct. 1

8/29/2013

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Prof. Gerry Beyer of Texas Tech posted about the latest in his "Wills Trusts and Estates" blog.  He writes:

"[R]everse mortgages allow individuals 62 and over to receive money from a bank [now] in return for their home upon their death. . . .  Reverse mortgage rules are going to change, which could mean less available funds for borrowers. The changes can also lower the program's high default rate.

[New] rules are expected to go into effect as early as October 1.  The changes will reduce the number of homeowners that will qualify for reverse mortgages and the maximum amount will be reduced as well.

People who apply before October 1 will qualify for the amounts under the rules now. Folks that are considering a reverse mortgage should act quickly if they want the current laws to apply."

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FRONTLINE: Life & Death in Assisted Living

7/31/2013

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The always-excellent PBS program "Frontline" focuses its lens on the state of assisted living facilities in America.  Spoiler alert:  It ain't pretty.
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Preparing for Departure ®  2013 - coming this fall

7/14/2013

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The second Oregon edition of
Preparing for Departure ®
will be offered this coming fall 2013, in conjunction with the Unitarian Universalist Congregation of Salem.

We are busy updating our material and revising the Oregon-specific provisions we added to the course outline last year with our first Oregon edition. 

If you want to participate in this limited offering event and to be placed on the mailing list for updates and enrollment information about this powerful, one-of-a-kind course, complete the survey at this link and provide your contact information there: (Survey Link coming soon).

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Don't Reverse Any Mortgages Until You Read This Free Guide Front-to-Back

1/25/2013

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(hat tip to "The Housekeeping Report")

NCOA Issues Updated Guide for Seniors Considering a Reverse Mortgage


     The National Council on Aging (NCOA) today issued the 2013 version of Use Your Home to Stay at Home™, the official reverse mortgage consumer booklet approved by the U.S. Department of Housing & Urban Development (HUD). The guide is designed to help seniors understand the pros and cons of a reverse mortgage. Reverse mortgages allow homeowners who are 62 or older to convert home equity into cash while remaining in the home.

     Amy Ford, director of NCOA’s Reverse Mortgage Counseling Services Network, called the guide “an older homeowner’s best resource when it comes to examining whether a reverse mortgage is right for them.”

A free copy of the guide is available (download the pdf by clicking here).

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Reverse Mortgages -- tread cautiously and carefully

6/30/2012

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Lots of good discussion about reverse mortgages lately:

http://consumerist.com/2012/06/thinking-of-a-reverse-mortgage-here-are-things-to-watch-out-for-and-some-alternatives.html

And for a "straight from the horse's mouth" take on that, note the name of this publication - dsnews, a publication for the "default servicing" industry:

Reverse Mortgages Puts Confused Homeowners at Risk of Foreclosure 06/28/2012 By: Tory Barringer

    The Consumer Financial Protection Bureau (CFPB) released a report Thursday showing that although reverse mortgages are meant to help borrowers in retirement, they are in fact causing problems for many who don’t fully understand them.

    A reverse mortgage is a type of home loan that lets older homeowners access the equity they have built up on their homes and defer loan payment until they sell the home, move out, or pass away. The original purpose of reverse mortgages was to allow these homeowners to convert home equity into an income stream or line or credit to use in retirement. Borrowers were largely expected to age in place with their loans, living in their current homes until they passed or needed skilled care.

    Reverse mortgages require no monthly mortgage payments, but borrowers must still pay property taxes and homeowner’s insurance. The report showed that nearly 10 percent of reverse mortgage borrowers are at risk of foreclosure because they failed to pay those costs.

    “Reverse mortgages are complex and have the potential to become a much more pervasive product in the coming years as the baby boomer generation enters retirement,” said CFPB director Richard Cordray. “With one in ten reverse mortgages already in default, it is important that consumers understand what they are signing up for and that it is the right product for them.”
The report found that many reverse mortgage borrowers do not understand how their loan balance will rise and their home equity will fall over time. In addition, the influx of new choices brought on by innovations and policy changes have made the matter too complex for many homeowners. The bureau further found that the tools currently available to help consumers understand the risks and tradeoffs are not enough. The report called for improved methods for housing counselors to help consumers understand their choices.

    There are many other problems with reverse mortgages as they currently stand, the report pointed out.  Many consumers are getting reverse mortgages before the age of 70 (with the most common age for a new borrower being 62, the first age at which reverse mortgages are available), and some are even getting them before retiring.

    “These borrowers will have fewer resources to pay for everyday and major expenses later in life and may find themselves without the financial resources to finance a future move-whether due to health or other reasons,” said the report.

    Another problem is that 70 percent of borrowers are taking out the full amount of proceeds as a single lump sum instead of treating the payment as an income stream. As a result, these borrowers have fewer available financial resources later in life. They may not be able to continue paying taxes and insurance on their homes, leading to potential foreclosure. The report found that borrowers who save or invest their money may earn less on the savings than they spend paying interest on the loan.

    Finally, the bureau addressed the issue of deceptive or misleading marketing materials about reverse mortgages. The report cited examples of mailers that depict reverse mortgages as a government benefit or entitlement program in the vein of Medicare and use images resembling government seals to entice consumers. It can be difficult for consumers to tell that a reverse mortgage is a financial product, not a government benefit. . . .

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"I need a trust."

5/26/2012

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      It is remarkable how many people tell me "I need a trust," even though they can't tell me why they need a trust.  

     Here's a little bit of information on trusts that I prepared for the "Preparing for Departure"(TM) seminar that we're giving right now:





Trusts and Living Trusts

      Trusts (and living trusts) are often sold (hard) as an alternative to wills and probate, even for people with modest amounts of property.  Despite any hype via the media or that you may hear at an "estate planning seminar," living trusts are not for everyone.  It depends on what you own and how you own it, as well as what you intend to happen when you die.

     Trusts avoid probate (for the property held by the trust only) because the trust, not you, owns the property.  In living trusts, you (the grantor) usually set yourself up as both the beneficiary and administrator (the trustee) of the trust, with a successor trustee and successor beneficiaries.  While you're alive, you are the business agent of the trust, and you use the trust for your own benefit, such as to pay your bills.  If you can’t act as trustee, the successor trustee uses the trust assets for your benefit while you are alive.  Then, on your death, the trust assets are used for the benefit of, or turned over to, your successor beneficiaries.  Because you did not own the assets solely in your name at your death, they do not need to go through probate.

     One downside of trusts is that you need to spend money up front to have the trust created by an attorney and to prepare all the legal documents to change the ownership of your assets (your home, stocks, bank accounts, etc.) to the trust.  If you miss something, and you die with assets in your name, a probate may still be required on your death, which is why you still need a pour-over will to "pour" any remaining assets you forgot about into your trust. 

     The main problem with living trusts is that it's more complex for you to pay taxes, buy and sell things, and just generally to have this separate legal entity in place owning your stuff.  It can also just be more expensive. 


     In fact, in one sense, trusts really don’t avoid probate—they just let you do it yourself while you are still alive, with the extra burden of making sure that every time some circumstance changes in your property or wishes, you do a little bit more probating.

     I'm not saying nobody needs a trust.  And trusts aren't all bad.  I'm just saying that you shouldn't have a trust until you know what problem you are solving by having one, and what the alternatives were, and how much they cost, so that you could compare those alternatives to the care and feeding of the trust. 


      One reason that some people use them is that they learned about the big, big problems that can result from I call “home brew estate planning,” where people make their someone else a joint owner of their major property, just so that they can "avoid probate."  This is often a disastrously bad idea, so if a trust keeps you from doing that, it's a good thing.

     For example, if you make your daughter a joint owner with right of survivorship, she can move in with you, she can stop you from selling by refusing to sign off on the deed of sale, and you cannot change your mind and take her off the deed unless she agrees.  And if she gets into trouble with debt or legal judgments against her for accidentally injuring someone, you may find yourself co-owning property with someone you never intended.


     But you don't need a trust to avoid the home brew estate planning problem.  Between Oregon's recently adopted "Transfer on Death Deeds" and a will, you can pretty much do everything you need to do without the bother of a trust.



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Sitting is Killing Us

3/1/2012

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I'm a lawyer, not a doctor.  But, lawyers are supposed to pay attention to evidence, and not ignore it just because it's new or different.  And there's one matter on which the evidence is increasingly clear:  we sit way too much for our own good.  Nice graphic on this (that I got from here) is below:
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"How to Die in Oregon"

6/14/2011

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Great, thoughtful review of an important HBO special here.  I don't even have access to HBO, so I have to go out of my way to find this, but it's worth it.  Although most people put off planning and thinking about end-of-life decisions too long because they think it's depressing, the reality is that most people find that doing the work and thinking about their wishes for end-of-life care and final arrangements is actually uplifting; there's a lightening that you feel when you make your peace with the fact that we're all mortal, and that we will all leave people we care about and stuff we've acquired behind.  Life planning, including plans for what to do if we find ourselves faced with intractable pain, is actually a liberating thing to do.
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USAA Magazine: "5 Things Worth the Splurge" (Summer 2011)

6/14/2011

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  Interesting short article from USAA Magazine includes these points:

   "EVERYONE LOVES A BARGAIN.  But sometimes trying to save money ends up costing more in the long run.  Here are five areas where it's better to skip the discount and save up for high-quality fare."
  The second item listed:

  "ESTATE PLANNING:  For as little as $15, you can buy a do-it-yourself kit for drawing up a will.  However, the USA Educational Foundation points out that estate planning is a complex issue and recommends you update estate planning documents whenever there is a major change in your life or in the tax code.  It might be worth paying an estate planning attorney to make sure you've covered your bases.  Costs vary but generally begin in the $800 to $1,800 range, with more complex documents costing $2,000 and up."

  Now, obviously, I sell estate planning services -- or, as I prefer to think of it and do it, I sell life planning services.  And part of life planning, if only out of courtesy to those left behind, necessarily includes some thinking about what should happen to all your stuff you're going to leave in this world when you depart (known as your estate).  But whether I did life planning or not, I would definitely agree that the people who wind up spending the most on legal bills are invariably the ones who set out to spend the absolute least.  Bottom line, there is nothing more expensive than trying to undo some "home-brew" estate planning that is one part Wikipedia, one part TV shows, and one part a quick discussion with family members.  This really is a case where it's probably better to do nothing than it is to do something wrong while trying to save a little money on legal fees.
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John Gear Law Office LLC and Salem Consumer Law.  John Gear Law Office is in Suite 208B of the Security Building in downtown Salem at 161 High St. SE. That is right across High Street from the Elsinore Theater, a half-block south of Marion County Courthouse.

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