Oregon State Living Trust Rules

By Andrine Redsteer

Oregon, like many other states, has adopted the Uniform Trust Code, which sets forth the rules and requirements for living trusts. All trusts, in any state, must meet certain basic requirements: have a trustee, trust funds and designated beneficiaries. In Oregon, the state also imposes specific requirements regarding the primary place of business if an institution is appointed as trustee.

Oregon, like many other states, has adopted the Uniform Trust Code, which sets forth the rules and requirements for living trusts. All trusts, in any state, must meet certain basic requirements: have a trustee, trust funds and designated beneficiaries. In Oregon, the state also imposes specific requirements regarding the primary place of business if an institution is appointed as trustee.

Living Trust Basics

Oregon's requirements for a living trust aren't unlike other jurisdictions. First, living trusts in Oregon are revocable, meaning the creator, or "settlor," may amend or revoke the trust at any time during his lifetime. Moreover, a living trust in Oregon must have a settlor, trust funds and beneficiaries. If a living trust fails to include funds and beneficiaries, it serves no purpose and is invalid. According to Oregon law, a living trust is presumed revocable unless the creating document unequivocally states otherwise.

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Trustees

Under Oregon law, a settlor may be the trustee or the trustee may be a bank or financial institution based in Oregon. Oregon law allows for the appointment of multiple trustees; any of these trustees may be removed or replaced by the person who created the trust. If the creator of the living trust appoints himself as trustee, Oregon's Uniform Trust Code mandates that a successor trustee be appointed. In the event the settlor dies, the successor trustee takes on the role of primary trustee.

Creation of a Living Trust in Oregon

Oregon law requires that a living trust be created via a trust document; this document must include the name of the trustee and successor trustee and the names of beneficiaries. Property must also be transferred to the trust and can include such items as cash, real property and personal property. Oregon law requires notarization of a living trust document.

Taxes

In Oregon, a living trust is not exempt from estate, income or gift taxes. If a living trust has assets in excess of $1 million, an Oregon state tax return is required to be filed upon the settlor-trustee's death. Likewise, if living trust assets exceed $2 million, the filing of a federal estate tax return is required upon the death of the settlor-trustee.

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What Happens When a Trust No Longer Has Assets?

References

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California Law Regarding Revocable Trusts

California residents who want to protect their assets from probate court can draw up a revocable trust -- also known as a living trust. The trust allows you to pass homes, investments and other property to your heirs. The term "revocable" means you can change the terms of the trust or revoke it altogether during your lifetime. Although the trust enables you to avoid probate, the assets are still subject to federal and California income taxes, as well as to estate tax.

How to Dissolve My Revocable Living Trust in California

The settlor of a California revocable living trust may dissolve all or part of the trust at any time. A revocable living trust is an estate planning tool used to keep assets out of probate. A settlor creates the revocable living trust, transfers ownership of selected assets to it, and usually designates himself as trustee and primary beneficiary. He names alternate beneficiaries to receive assets upon his death. Until that event, he retains use and control of the assets, and retains the right to dissolve the trust at will.

What if You Violated an Irrevocable Trust?

The person appointed to oversee an irrevocable trust must act according to the terms of the trust and in the best interest of those who benefit under the trust. While all states recognize this duty, the type of recourse available in cases of breach can vary. Knowing when you may petition the court for removal of a trustee and when he may be personally liable for financial losses will help ensure that your trust operates according to the wishes of its creator.

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