What Happens to My Home After I Pass Away?

When you pass away, what happens to your Oregon house will depend on several factors, including whether or not you have a will or living trust, the specific terms of these documents, and how your property is titled. As an experienced Portland estate planning attorney, I have found that for many of my clients, their home is their primary asset that holds a lot of their net worth. As such, understanding what happens with the home is of crucial importance to most clients.  Here’s a general overview of what typically occurs:

1. With a Will:
   • Probate Process: If you have a will, your estate will go through the probate process in Oregon. The probate court will oversee the distribution of your assets, including your house, according to the instructions in your will.
   • Executor: The person named as the executor in your will (or personal representative, as it’s referred to in Oregon) will be responsible for managing your estate during the probate process. They will ensure that your debts are paid, and your assets, including your house, are distributed to your named beneficiaries or heirs as specified in your will.
2. With a Living Trust:
   • If you have a properly funded and executed living trust, your estate can avoid the probate process and the home can be distributed to the rightful beneficiaries. This is a primary advantage to the living trust and why a majority of clients use them in their estate plan.  
3. Without a Will or Living Trust (Intestate Succession):
   • If you do not have a will or living trust, Oregon’s laws of intestate succession will dictate how your property is distributed. Typically, your surviving spouse, children, or other close relatives will inherit your house and other assets according to a predetermined legal hierarchy. See here for specific information regarding this hierarchy. 
4. Joint Tenancy or Community Property:
   • If you own the house with someone else as joint tenants with the right of survivorship, the surviving joint tenant will usually automatically inherit your share of the property upon your death, bypassing the probate process.
   • Under Oregon law, when a house is titled to “husband and wife” there is a presumption of survivorship among the couple. As such, when one spouse passes away, the entire ownership of the house will pass to the surviving spouse.   
5. Mortgage Considerations:
   • If you have a mortgage on the house, the lender will have certain rights and requirements that need to be addressed upon your passing. The person inheriting the house will typically need to continue making mortgage payments or arrange to pay off the mortgage.
6. Estate Taxes:
   • Oregon has an estate tax with certain exemptions and rates. Namely, if your total estate is over $1,000,000, the beneficiaries will be subject to estate tax.  However, it is important to note that there is an unlimited exemption between husband and wife and there will be no estate taxation due upon the passing of the first spouse. However, tax will be due upon the passing of the surviving spouse. Be sure to consult with a tax professional, in conjunction with an estate planning attorney, for the most up-to-date information regarding Oregon estate taxes.

Conclusion

It’s important to keep your estate planning documents, including your will or living trust, up to date to ensure that your wishes for your house and other assets are followed. Consulting with an attorney who specializes in Portland estate planning can help you create an estate plan that meets your specific goals and minimizes potential complications for your loved ones. If you have any questions about estate planning or the distribution of your home, please contact Thapar Law at 503-295-9741 or send us a message.