Oregon State Living Trust Rules

By Christine Funk, J.D.

Oregon State Living Trust Rules

By Christine Funk, J.D.

A trust is simply a way to manage assets and involves a few key people. The grantor, also called the settlor, is the person creating it, and the trustee is the person the grantor appoints to manage it. The grantor also lists one or more beneficiaries in the document who will receive the assets when they are distributed.

Man showing two people how to sign documents

In Oregon, as with all states, there are specific rules governing how to create and establish one. This process requires several steps and offers certain benefits to the creator and beneficiaries. To create yours in the state of Oregon, you must have the following: intent, property to transfer into it, parties (inclusive of the grantor, trustee, and beneficiaries), and a legal purpose for creating it. You must put your trust in writing, clearly outlining the above requirements, and sign it before a notary to legally create it.

Establishing a Trust

After writing and signing the document, you must fund the trust by transferring assets into it. This includes changing the legal documents that govern the assets. For example, if you want to transfer your house into it, you must change the deed to your house from "Grant Orr" to "Grant Orr, trustee for the Orr Living Trust." Similarly, you must change the title on your bank accounts if you transfer them.

Some assets are not transferable under Oregon law. These include some types of retirement accounts and life insurance policies. It is a good idea to check the beneficiaries of any retirement accounts or life insurance policies to make certain they are consistent with the grantor's intent when they create it.

Benefits of a Trust for the Grantor

As mentioned, when someone creates this type of legal document, they choose someone to manage the money. In most cases, the grantor names themselves since this allows them to continue managing their assets as they see fit. They can sell, gift, or add assets to their estate.

Another benefit is that the grantor appoints a successor trustee when creating the document. So, if the grantor becomes incapacitated or passes away, the successor has full authority to manage it and distribute the assets in accordance with the trust document. This can avoid a costly and extended legal battle in the courts as family members fight to gain control of the grantor's assets.

Benefits of a Trust for the Beneficiaries

There are several benefits for the beneficiary, but one of the most significant is avoiding the probate process. Unlike the beneficiary named in a will, those identified in the trust need not go through probate after the grantor's death. This can help all beneficiaries avoid the complex process and lengthy period of time it could take to complete the probate process. On the other hand, the trustee can distribute the assets to the beneficiaries almost immediately, unless the grantor defined other restrictions on the distribution of such property.

If you are considering setting up a living trust, make certain you follow all of Oregon's trust laws. There are several benefits for both you as the grantor as well as your beneficiaries. Visit Oregon's Secretary of State website to begin setting up yours today.

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