There are a number of ways to plan your estate, but one popular option is to form a living trust. This guide has all of the information you need to know about living trusts, including step-by-step instructions to setting one up in the state of Oregon. For those of you thinking about estate planning, getting the help of a financial advisor may be a good choice. SmartAsset offers a free financial advisor matching service to help you find an advisor in your area who suits your needs.
How to Create a Living Trust in Oregon
Here is a step-by-step guide to creating a living trust in the Beaver State:
- Figure out which type of trust you need to make. There are single trusts, which will be what you want to use if you’re single. Married couples have the choice between a single trust or a joint trust. A joint trust is a good option if you want to place jointly owned property, like cars and homes, in your trust.
- Do a property inventory. You need to know exactly what you own and what you want to store in the living trust. You can put a wide range of assets and property into a living trust, including real estate, bank accounts, family heirlooms, jewelry, mutual funds and bonds. This is also a good time to gather any relevant paperwork, such as certificates of stock ownership or car titles.
- Choose your trustee. In the state of Oregon, any adult, including yourself, can be a trustee, as can an Oregon bank or trust company. If you pick yourself, you also need to name a successor trustee to take over after you’ve died or if you become incapacitated. Now is also a good time to figure out who you want to pass your property onto once you’ve died. In addition to managing your trust, your trustee (or successor trustee) will be responsible for ensuring your estate is doled out according to your trust’s instructions.
- Draw up the trust document. You can do this by yourself or hire an attorney to help you.
- Sign the trust document in front of a notary public.
- Fund the trust by transferring your property into it. It’s possible to do this on your own, but it can be complicated. Getting a lawyer can make it easier.
What Is a Living Trust?
A living trust is a legal framework in which property can be placed. Every trust has a trustee who is in charge managing the trust and distributing the trust’s property as directed. You can name yourself as the trustee or give that job to someone else.
There are two types of living trusts:
- An irrevocable trust is permanent. Property cannot be removed from an irrevocable living trust without permission from everyone named in the trust. Because property is completely turned over to the trust, taxes are paid from the trust.
- A revocable trust is more forgiving. With this type of trust, the grantor can modify the trust at his or her discretion. The grantor maintains ownership of the property within the trust and pays taxes on it directly.
How Much Does It Cost to Create a Living Trust in Oregon?
The cost of forming a living trust in Oregon will depend largely on the method you choose to create it. One option is to use an online service to do it yourself. This could end up costing less than $100. You could also use a lawyer to help you set it up. While this option is more expensive, it will also save you from the dangers of DIY estate planning.
The cost of hiring a lawyer to create your trust will depend on your attorney’s fees and could end up costing more than $1,000. The overall cost will also depend on the complexity of your estate, your specific estate planning goals and whether tax planning services are necessary. If you do end up using an attorney, just make sure they specialize in trusts.
Why Get a Living Trust in Oregon?
Getting a trust can make life easier for your family once you have died. This is because property stored inside a living trust is not subject to probate, a time-consuming legal process that property not placed in a trust must undergo. Although the process is intended to ensure the deceased’s property is properly disposed of, the process can be lengthy and costly.
A living trust is especially helpful in a state like Oregon, which does not use the Uniform Probate Code, a system that simplifies the probate system in other states. However, Oregon does offer the simplified process of summary probate to estates worth $275,000 or less, as long as no more than $200,000 of that amount is real estate.
Aside from avoiding the probate process, there are a few other reasons a living trust may be useful. It can also make it easier to give property to a minor, as the property can be held in the trust until the child reaches a certain age. A trust can also help you avoid conservatorship in the event you become incapacitated. That’s because you’ll already have named a trustee to manage your affairs.
Who Should Get a Living Trust in Oregon?
Contrary to common misconceptions, trusts are not just for the wealthy. Particularly large or complicated estates may be especially well served by living trust. In Oregon, though, even smaller and simpler estate may be benefit from a living trust as the state does not use the Uniform Probate Code. However, note that estates worth $275,000 or less will already undergo the simpler process of summary probate. Other things to take into an account when weighing whether to get a living trust is whether or not you have dependents.
It’s important to ensure that the upsides of getting a living trust outweigh the downsides, as there are some cons to getting a living trust. They are generally more expensive and more difficult to form than just writing a will. They can also make things more difficult after you die because the time period to contest a living trust is longer than it is for other estates.
Living Trusts vs. Wills
Even if you have a living trust, you’ll still need a will. A will can direct any property that’s not placed inside the trust and that must still go through the probate process. Moreover, wills can do some things living trusts cannot. For instance, a will is capable of naming an executor and providing instructions on how to pay certain taxes and debts. If you have children who are still minors, a will allows you to establish guardianship for your children and name managers for your children’s property.
The table below provides a more comprehensive comparison of what the two documents can do:
|Living Trusts vs. Wills|
|Names a property beneficiary||Yes||Yes|
|Allows revisions to be made||Depends on type||Yes|
|Avoids probate court||Yes||No|
|Requires a notary||Yes||No|
|Names guardians for children||No||Yes|
|Names an executor||No||Yes|
Living Trusts and Taxes in Oregon
It is unlikely that a living trust will impact your taxes. It can’t hurt, though, to look into the Oregon estate tax and the Oregon inheritance tax when you’re planning your estate. Remember that estate tax is levied on the estate before it’s distributed, whereas inheritance tax is paid by heirs after the estate has been distributed.
The Oregon estate tax applies to estates worth more than $1 million. The rate runs from 10% to 16%. The federal estate tax may also apply. It is levied on estates worth more than $11.7 million per individual in 2021, or $23.4 million for couples.
There is no inheritance tax in Oregon.
A living trust can be especially helpful in a state like Oregon that doesn’t use the Uniform Probate Code. Because of this, the probate process may be especially time-consuming in the Beaver State.
If you want to create a living trust in Oregon, you’ll have to devote some time to planning and paperwork. You can do it alone, but it may be helpful to find a lawyer to help you set one up. This will be much more expensive though. Remember that whether or not you opt to create a living trust, you’ll likely still need a will.
Estate Planning Tips
- Whether you have questions about creating a trust or investing your wealth, it might make sense to work with a financial advisor. You’ll want to make sure you find the right advisor for your situation though. SmartAsset can help with our free financial advisor matching service. First you’ll answer a few questions about your situation. Then, the program will pair you with up to three financial advisors in your area, all of whom have been fully vetted and are free of disclosures. From there, each advisor will reach out to answer any questions you may have and discuss setting up an appointment. Our platform has advisors all over, so whether you’re in Oregon, New York or Florida, someone can be found to help you.
- Think carefully when naming the executor of your estate. This person will have a big job and be responsible for getting everything you own to the right people. Make sure you pick someone who is up for the job.
- You’ll want to know exactly how much money you’ll have when planning your estate. That includes knowing how much money you’ll be getting from the government in retirement. Get an estimate using our Social Security calculator.
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