TESTAMENTARY TRUSTS VS. LIVING TRUSTS IN OREGON

Both Testamentary Trusts and Living Trusts are useful estate planning tools, but they differin when they are established, how they are funded, and their associated benefits and drawbacks. 

It is important to understand these important distinctions, in order to make the right choice for you and your loved ones.

TESTAMENTARY TRUSTS IN OREGON

• Are created within a Will and take effect upon the grantor’s death.

• Are subject to the Probate process in Oregon, a legal procedure that validates the Will and oversees the estate’s administration, which can be lengthy, expensive, and makes your estate a matter of public record.

Pros of Testamentary Trusts in Oregon

• Cost-effective to establish: Are generally a bit less expensive to create than Living Trusts, as they are part of a Will.

• Court oversight: The court supervises the Trust’s administration during Probate, which some individuals may prefer for added protection of their heirs.

• Protection for minors or individuals with special needs: Allows for controlled distribution of assets to beneficiaries who may not be ready to manage their inheritance independently, specifying conditions and ages for distributions.

• Asset protection: Can offer some protection from creditors and can be drafted to potentially reduce estate tax liability.

Cons of Testamentary Trusts in Oregon

• No Probate avoidance: The assets must go through Probate, which can be time-consuming, costly, and public.

• Lack of privacy: Details of the estate become a matter of public record during the Probate process.

• Delayed asset distribution: Beneficiaries may face delays in receiving their inheritance due to the Probate process.

• Less flexibility: Once the grantor passes away and the Trust is established, the terms are generally irrevocable and cannot be easily changed.

LIVING TRUSTS IN OREGON

• Are established during the grantor’s lifetime.

• Are funded during the grantor’s lifetime by transferring assets into the Trust’s name.

• Can be revocable or irrevocable. Living Trusts can be changed or revoked during the grantor’s lifetime, while irrevocable Trusts generally cannot be changed once established.

Pros of Living Trusts in Oregon

• Probate avoidance: Assets held in a properly funded Living Trust bypass the Probate process, saving time and money, and providing quicker access to assets for beneficiaries.

• Privacy: Details of the estate remain confidential as they do not go through Probate.

• Flexibility and control during lifetime: Revocable Living Trusts allow the grantor to manage and control assets, as well as amend or revoke the Trust, during their lifetime.

• Incapacity planning: Can provide for the management of assets in the event of the grantor’s incapacity without court intervention.

• Continuity: Can provide for continuous management of property after death or incapacity.

• Protection for minors or individuals with special needs: Also allows for controlled distribution of assets to beneficiaries who may not be ready to manage their inheritance independently, specifying conditions and ages for distributions

Cons of Living Trusts in Oregon

• Higher upfront costs: Can be a little more expensive to establish than a Will and Testamentary Trust, due to the complexity of setting up the Trust and transferring assets.

• Ongoing maintenance: Requires ongoing management, including ensuring assets are properly transferred into the Trust and maintaining accurate and up-to-date Trust records.

• Limited asset protection: Revocable Living Trusts generally do not protect assets from creditors. Irrevocable Trusts generally offer more protection.

CHOOSING THE RIGHT TRUST

The best choice for you and your family depends on your specific goals, the size and complexity of your estate, your beneficiaries’ needs, and your desire for privacy and flexibility.  Consulting with a Seasoned Estate Planning Attorney, like Natalie Wetenhall of Evergreen Law Group, LLC, to discuss your unique situation and make an informed decision, is essential.

Call our office today to set up your complimentary consultation call – at 541-471-2222, or via our contact form at www.evergreenlawgroup.net