TRUSTS & WILLS

The Value of a Trust

  • Great estate plan.

 

  • Probate is avoided.

 

  • More cost effective than a Will.

 

  • Precludes the need for a Conservator.

 

  • Determines who gets your assets.

 

  • Protects your children and grandchildren.

 

  • Preserves privacy (no public records).

 

  • Maintain control of your assets.

 

  • No complicated tax filings.

 

  • Plans for death/inheritance taxes.

 

  • Can be easily modified to meet new goals or requirements.

 

  • Property in other states can be included in the Oregon Trust, avoiding probate expenses.

 

  • Plans for the present and future needs of physically and mentally challenged children and grandchildren.

Do You Need a Trust?

The State of Oregon requires probate if you have personal property (money, collections, furnishings, automobiles, bank accounts, stock portfolios) valued in excess of $75,000, or you have real property valued in excess of $200,000. Insurance and retirement account proceeds with named beneficiaries are excluded from calculation of these limits.

Trust and Law Experience

  • 30 years of law experience in the state of Oregon.

  • 20 years of military law experience (U.S. Navy).

  • Preparation of over 500 Trusts and 2,000 Wills.

  • Practice limited to Trusts, Wills and Business Law.

Typical Trust Costs

Trusts are affordable when compared to Wills. A typical Trust generally costs $2,000 for an individual, $2,500 for a married couple (plus deed recording fees, mortgage consent, and DMV expenses). Additional services are available for death tax provisions and tax planning.

Trust Documents

The Trust estate plan includes the following documents:

  • The Revocable Family Trust;

  • A Pourover Will;

  • Durable Powers of Attorney

  • Advance Healthcare Directives; and
  • Certificate of Trust.

    The Ten Step Process to a Revocable Family Trust

1. Review the requirements, guidelines and qualifications for creating a Revocable Family Trust (online).
2. Complete the Trust Information Guides.
3. Call 503-226-3221 for the initial conference appointment.
4. Initial conference (generally 1-3 hours).
5. Prepare draft Trust documents (one week).
6. Client review of Trust documents.
7. Call 503-226-3221 for an appointment to execute the Trust documents and review requirements for acquisition of future assets (generally 1-3 hours).
8. Acquire consent of mortgage lien holder(s) for transfer of property to Trust (completed by attorney).
9. Real property deeds are recorded transferring ownership to the Trust (completed by attorney).
10. Annual review of Trust (we will contact you when approaching the anniversary of the Trust).


Frequently Asked Questions (FAQ)

Who determines the distribution of your assets at the time of your death?

If you prepared an estate plan involving a Trust or a Will, you do. Without a Trust or Will, your estate will be at the mercy of the Oregon Revised Statutes (Oregon laws). The Oregon state legislature, through the Oregon laws, will determine if your wife or your children from this marriage (or former marriages) receive a portion of your estate. Those decisions are subject to legislative change at the whim of the Oregon state legislature. It should be noted that changes in the Federal laws regarding estate taxes have prompted many states to initiate or increase state inheritance taxes (Oregon being one of them).

What comprises a complete Estate Plan?

A complete estate plan consists of a document that transfers ownership after death (a will or trust), a document that plans for incapacity (durable power of attorney), and a document that plans for end of life decisions (advance healthcare directive).

What is a Trust?

A Trust is a written declaration wherein a Trustor gives all of his or her property to a Trustee to manage as set forth in the Trust Declaration. In a revocable family trust, the Trustor and the initial Trustee is generally the same person. The primary directive of the Trust is that the Trustee uses the Trust properties for the benefit of the Trustor.

How does a Trust affect my everyday life expenses or purchases?

It doesn’t. You are free to spend your money on whatever you like, or purchase/sell any property or asset.

Can I change the terms of my Trust?

The originator of a Trust can always change the terms of his or her Trust, as long as they have mental capacity.

What Happens When the Trustor/Trustee Becomes Incapacitated or Dies?

As the Trustee is generally the Trustor, in the event of incapacitation or death a new Trustee (called a Successor Trustee) is designated according to the Trust Declaration. The new Trustee is usually a family member. When the Trustor becomes incapacitated the Successor Trustee takes over, taking care of the needs of the Trustor. Upon the death of the Trustor, the Successor Trustee disburses the property as set forth in the Trust Declaration.

Aren’t Trusts More Expensive than Wills?

Initially Trusts do cost a little more than a Will. However, when the price of probate of the Will is calculated in, the Will is significantly more expensive. The costs to file a Will in probate (Multnomah, Clackamas or Washington County) range from $498.00 to $726.00. There is another $110.00 for publication (Daily Journal of Commerce), and the typical attorney fees in a non-taxable estate will be anywhere from $5,000 to $10,000. If assets are in the name of the decedent alone, probate expenses will be required at the death of the surviving spouse as well.

What are the typical costs for a Will vs. a Trust?

 
Will
Trust
Initial Preparation Costs (average)
750.00
2,500.00
File Probate
612.00
0.00
Public Announcement
110.00
0.00
Probate Attorney Fees
7,500.00
0.00
Post-Death Attorney Fees
0.00
300.00
Final Costs
8,972.00
2,800.00

Depending on the timing and the wills, these costs can be doubled by the death of the remaining spouse.

What is probate?

Probate is the state sanctioned change of ownership. Through the probate system, the court will decide, using the Will, who should get your assets at the time of your death. At the end of probate (typically 6-16 months) the court will sign a Judgment directing the allocation of assets. As you are probably aware, Wills can be contested, which can mean years between your death and the actual receipt of assets by your heirs. A Trust Declaration designates 1) who receives your assets and 2) when your assets are disbursed, without the guidance of the courts.

How does a Trust avoid probate expenses in other states?

In a properly prepared Trust, all real estate is transferred to the Trust. A new Deed is filed for each parcel of real property, regardless of location. At the time of death, the successor Trustee simply transfers the property to the designated beneficiary. If you rely solely on a Will, you will end up with probate in each state that you own real property. In Oregon, it is not unusual to have probates not only in Oregon, but for vacation properties in Arizona, California or Washington. If you rely on a Will to change ownership, there will be a probate in each state in which you own real property.

What about final expenses?

A Trust can disburse assets immediately, although the current tax laws may make waiting six months advantageous. You can also direct that the Trust pay final expenses as they occur.

Can I continue the Trust past my death?

There is no legal requirement to end the Trust upon your death. In fact many trusts continue on for years providing for the care of children, grandchildren, pets or special needs individuals.

 

What is a Conservator?

A conservator is a person appointed by the courts to take care of your financial affairs while you are alive but unable to care for them yourself. A Conservatorship, like a probate, requires filing and attorney fees. Conservatorships require annual reporting and legal notices. It is essentially like dying every year until the year you actually succumb. At the time of your death, the Conservatorship ends and the probate process begins. This can become very expensive. A properly prepared Trust will preclude the need of a Conservatorship, in that the successor Trustee will manage your financial affairs as you set forth in your Trust Declaration until your death. Upon your death, assets will be distributed as set forth in the Trust Declaration, without the court’s involvement.

How can a Trust protect my children and grandchildren?

A Trust determines when a child or grandchild will receive the benefits of your hard work. If your children or grandchildren are under age 18, then you can set forth 1) when they get the proceeds, 2) how they get the Trust property and 3) for what purposes they can use trust assets. For example, most parents and grandparents want to encourage their children to continue their education. They would not want their child or grandchild to receive several hundred thousand dollars on their 18th birthday. How would you have handled a windfall at 18? Without an estate plan, that is exactly what will happen. There is no encouragement to go to school or to spend the funds wisely (wisely not being a brand new Porsche). A Trust enacts your wishes over your and your heirs’ lifetimes.

Is my Estate Plan public record?

If you rely on probate, the answer is yes. Probate is a public forum, where the records can be reviewed by anyone. The periodical Willamette Week has, in the past, published a column called Tales from the Crypt. They would send a reporter to the courthouse to review various probates, find one that they thought was entertaining, and then publish an article about it. Unfortunate, but legal. Many unscrupulous “investment companies” troll the probate records looking for little old ladies with a sizable estate as “potential clients”. A Trust is a private document that is not available for public review. Only those parties with a legal interest have access to the document.

How does a Trust file tax returns?

You continue to use your Social Security Number to file all tax returns until incapacitation or death. At the time of your death the successor Trustee will file for a Federal Tax Identification Number, and will use that number for future filings.

How can you plan for physically and mentally challenged children and grandchildren?

You plan for them by using what is known as a Special Needs Trust. Without appropriate designation of asset distribution, The State of Oregon can terminate care benefits of the child or grandchild. Properly drafted Trusts take this into consideration and provide for “extras” to your special needs child or grandchild. Upon the demise of the child or grandchild, the remaining proceeds will be distributed as you have directed.

Can a Trust reduce death taxes?

A complete Trust (with tax planning) can significantly reduce the tax burden of the estate. In Oregon, death taxes commence on estates valued at $1,000,000 (2015). The determination date is the date of death. Federal taxes commence at $5,000,000.00.

Can I use the Trust to fund designated charities?

Yes. You can direct the Trust to distribute assets to any individual, organization or institution that you desire. Many Trusts are used to fund university activities, civic organizations and other worthwhile causes.