A "living" trust (also called an "inter vivos" trust) is simply a trust you create while you're alive. The beneficiaries you name in your living trust receive the trust property when you die. You could instead use a will, but wills must go through probate—the court process that oversees the transfer of your property to your beneficiaries.
Many people create a revocable living trust as part of their estate plan. You can modify or revoke (cancel) this type of trust at any time. Typically, you'll name yourself as the "trustee" of your trust. This means that while you're alive, you retain control of the trust and its property. In your trust document, you'll also name a "successor trustee" to take over and manage the trust after you die; this person will distribute the property in the trust to your beneficiaries. (If you create a shared living trust, as is often done by married couples, then your successor trustee would assume control after both spouses have died.)
In contrast, irrevocable trusts cannot be revoked or modified after they are signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.
When you set up a living trust to transfer your property to your loved ones after your death, you can potentially save them a lot of time, hassle, and money. Property left through a will (rather than a living trust) might be tied up for months or even years in probate court, and could involve court costs and lawyers' fees. By contrast, property left through a trust can be distributed to your beneficiaries almost immediately, and often without the need for an attorney.
Some states have fully adopted a model law called the Uniform Probate Code, which streamlines the probate process, but unfortunately Oregon is not one of these states. However, Oregon does offer a simplified probate process for "small" estates. Your estate can use this probate shortcut, called a "small estate affidavit," instead of going through the regular probate process if:
(Or. Rev. Stat.
The affidavit procedure is much quicker, more straightforward, and more inexpensive than regular probate. If your estate is likely to qualify, you might not need to worry about making a living trust just to avoid probate.
Additionally, in Oregon, you can transfer real property using a transfer-on-death deed; this can keep your home out of probate without using a living trust. But if you have other significant assets you'd like to keep out of probate, a living trust can be a good solution.
Yes, you'll still need a will. This might seem confusing—isn't the point of a living trust to avoid needing a will? Yes, it is, and your will might never be used. But you should still write one, for one or both of the following reasons:
Probably not. Most people don't actually need to worry about federal estate taxes because the federal estate tax is levied only on estates worth close to $12 million. However, Oregon does impose its own state estate tax, and the amount that triggers this tax is among the lowest in the country. So you could very easily incur the Oregon estate tax at your death but not the federal estate tax. One note of comfort, though: the tax rate for the Oregon estate tax is much lower than the federal estate tax.
If you're worried about estate taxes, you might be able to use a more complicated trust to reduce the taxes owed at your death, but you'll need to find an experienced estate planning attorney.
To make a living trust in Oregon, you:
You can use WillMaker & Trust to make a living trust using your computer. It has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With WillMaker & Trust, you can also make a will, powers of attorney, health care directives, transfer on death deeds, and many other useful documents. Use it just for yourself or for your entire family.
For more on Oregon estate planning issues, see Oregon Estate Planning.