How to Set Up a Living Trust in Oregon

A revocable living trust in Oregon allows you to use and control your assets during your lifetime, while they remain in trust and are distributed to your beneficiaries after your death. You might wonder if it’s worth it, but learning how to set up a trust in Oregon is a responsible step to protecting your assets and ensuring your beneficiaries are taken care of after you’re gone.

What is a living trust?

A living trust is a legal document that holds your assets while you're alive and distributes them after your death. The person who establishes the trust and puts their assets into it is called the grantor. The people who will receive the assets are called the beneficiaries. 

In Oregon, you can choose between a revocable or irrevocable trust. A revocable living trust (sometimes known as an inter vivos trust) is a popular estate planning strategy with a variety of benefits, including the flexibility to change or cancel it at any time. 

On the other hand, you can’t change an irrevocable living trust once it’s created. Many people choose a revocable living trust because it’s more flexible and allows them to maintain control of their assets.

Do I need a living trust in Oregon?

Most people with assets like homes, other real estate, businesses, investments, or savings can benefit from living trusts. One of the biggest benefits of a revocable living trust is the control it gives you during your life and after your death. During your lifetime, your assets are technically owned in the name of the trust, but you use them as you normally would. You live in your house, spend your money, and give gifts or sell assets as you want.

After the grantor’s death, the trust becomes irrevocable, meaning no one can change it. You still have control because your assets are controlled by the trust under the terms you set up. The assets can also be kept in trust until future dates you have chosen. For example, many people wait for beneficiaries to reach specific ages before disbursing to them.

How to set up a living trust in Oregon in 7 steps

Prepared correctly following these steps, revocable living trusts can give you the control, flexibility, and privacy that matter to you.

1. Choose between an individual or joint trust

If you’re single (or married but want to keep your assets separate), you’ll want to set up an individual trust, which means it only covers your assets and not shared assets. Joint trusts simplify the management of shared assets and are great for married couples. Plus, when one spouse passes away, the surviving spouse has full control over the trust.

2. Decide what property to include in the trust

As the grantor, you determine all the terms of the trust, and move your assets into control of the trust. Most people include significant assets like real property (real estate), bank accounts, investment accounts, and jewelry, vehicles, or other valuables. Some assets such as life insurance and retirement accounts cannot be added to a trust because they already have designated beneficiaries that determine who gets the money in the account.

3. Choose a trustee

When you create the trust, you need to select a trustee who will manage trust assets. You can choose anyone, but it usually makes the most sense to be your own trustee, so you can be in complete control.

If you do choose to be your own trustee, you’ll also need to select a successor to step in and manage the assets after you die. This trustee also is responsible for distributing trust assets to your beneficiaries according to your instructions. The trustee can be a family member, friend, or professional, like a lawyer. The most important thing is to choose someone you trust.

4. Decide who will be the trust’s beneficiaries

Beneficiaries are the people or organizations who will receive the assets in your trust after you pass away. In Oregon, you can name family members, friends, or charities. You can also name contingent beneficiaries, who will inherit trust assets if your primary beneficiaries die before you or are unable to inherit for any reason.

5. Create the living trust document

Creating a revocable living trust in Oregon requires you to prepare a trust agreement. This is a legal document that outlines your wishes and how your trust assets should be handled. You can create the trust agreement using an online service or by hiring an estate planning attorney.

It’s a good idea to get legal advice to make sure your trust document complies with Oregon state law, but it can be expensive. LegalZoom’s living trust service combines the best of both worlds, with an option to access attorney guidance and make free revisions for up to a year.

6. Sign the trust document in front of a notary public

The trust document is then signed by you in front of a notary. A notary is a certified professional who can verify your identity and confirm you’re signing the document voluntarily. You can find a notary at your bank, local courthouse, or even online. Oregon requires this step to make the trust legally binding.

7. Transfer property to the trust

The trust is not complete or functional until you transfer ownership of your assets into the trust. You’ll want to place as many assets as possible into the trust to maximize it. This process is called funding the trust.

If you’re including real estate, you’ll need to change the title of your property by recording a new deed with the trust as the owner. You’ll also need to retitle bank accounts and investment accounts, and complete paperwork for assets like vehicles.

Oregon has not adopted the Uniform Probate Code, which is a set of recommended rules developed by the Uniform Law Commission (ULC), so its trust procedures are considered complex. An estate planning attorney can help you make sure you transfer your assets according to Oregon living trust law.

Advantages of setting up a living trust in Oregon

Learning how to set up a trust in Oregon can help you take advantage of the benefits not only for you as the grantor, but for your beneficiaries as well.

Avoiding probate

Living trusts in Oregon allow you to avoid probate for the assets in your trust. Probate is a court procedure that approves a will and puts it into effect. The probate process can be time consuming; it takes months to resolve. Probate also involves the expenses of an attorney or law firm, an executor, and court costs.

There are other ways to avoid probate court, including transfer-on-death deeds for real property and joint tenancy or joint bank accounts with right of survivorship. There is also a small estate probate proceeding available if you have $75,000 or less in personal property and $200,000 or less in real estate. This procedure is faster and less expensive than a will and may be less costly than establishing a trust, but does not offer the other benefits a trust provides.

Privacy

A revocable trust allows you to keep your family matters private. While a will becomes public record during the probate process, a trust can avoid probate and is never made public. No one will know who your beneficiaries are, what assets are in the trust, or what the conditions of the trust are. Your trust is also more difficult to contest than a will, providing security that your arrangements will remain in place.

Avoiding guardianship and conservatorship

Living trusts protect you should you become mentally incapacitated. If this happens without a trust, the court may need to appoint a guardian, who makes decisions about your personal well-being, or conservator, who handles your finances. The court might not assign someone who will manage your assets according to your wishes.

However, if all of your assets are already controlled, owned, and managed by the trust, a guardianship or conservatorship proceeding is likely unnecessary. A trust gives you even better protection than a durable power of attorney (durable POA); a durable POA can be rejected, but a trust cannot be. By appointing a successor trustee through your living trust, you prevent the need for court oversight and control—your financial life is protected by the trust.

Avoiding delays in distribution

In Oregon, probate court can cause long delays in the distribution of your assets, especially if there are disputes. Assets passed by a will cannot be distributed until the probate process concludes, so your beneficiaries could wait months or even years for their inheritance. Assets in living trusts can be distributed immediately upon your death if you wish, or according to the timeline you set.

Flexibility

You can make any changes you like to your revocable living trust during your life, including adding or removing assets and updating beneficiaries. You can even eliminate it. An irrevocable living trust cannot be altered once it is final. Many people prefer the flexibility of a revocable trust for their estate plan.

Disadvantages of setting up a living trust in Oregon

Living trusts are an important estate planning strategy for many people, but there are a few disadvantages you should know about.

Medicaid rules and creditor protection

In addition to the estate tax, keep in mind that assets in a revocable living trust are not shielded from creditors, although it may be more difficult for creditors to locate them. Medicaid spend down rules also apply to living trust assets, which means the trust assets count towards your income when determining whether or not you qualify for benefits.

Time and effort to manage a living trust

Creating a living trust can take several weeks if you use an estate planning attorney because you’ll need to wait for them to draft the document. After it’s set up, you’ll need to transfer assets into it, which can take another few weeks, plus keep it updated over time. However, once the initial work is done, managing a revocable living trust isn’t difficult.

Cost of creating a living trust

The cost to set up a living trust in Oregon can range from $1,000 to $3,000 if you hire an estate planning attorney, depending on the complexity. Creating a do-it-yourself trust can significantly reduce the cost, with prices starting around $400. Services like LegalZoom offer a streamlined way to create a revocable living trust while still getting professional guidance.

Living trusts and estate taxes in Oregon

Estate tax is often an important factor in your estate plan. Revocable living trusts do not protect your assets from the estate tax. The Oregon estate tax applies to amounts over $1 million and the federal estate tax applies to estates exceeding $13.61 million. 

There are other strategies to reduce taxes, like using a special type of trust called a QTIP trust (or marital trust), which avoids the Oregon estate tax by leaving assets from a deceased spouse to a surviving spouse. You can also set up charitable remainder trusts and irrevocable trusts to avoid estate taxes. For example, an irrevocable life insurance trust removes the policy from your taxable estate. 

In addition to trusts, you can also gift assets to family members or charities during your lifetime to reduce the taxable value of your estate. However, there are limits on how much you can gift each year without triggering the federal gift tax.

Other estate planning considerations

Now you know the basics of how to set up a trust in Oregon—but there are a few other things to think about as you create your estate plan.

Living trusts vs. wills in Oregon

It’s often smart to have both a living trust and a will. A will allows you to name a guardian for your minor children, appoint an executor, leave instructions for paying debts and taxes, and cover any assets that weren’t transferred into your living trust before your death.

If you don’t transfer property to your trust and also don’t have a will, the court determines how to distribute your assets according to Oregon law. Typically, your spouse and children inherit your assets, but if you have no close relatives, they could go to distant family members or even to the state. Creating a will can help you keep this from happening.

Living trust maintenance and updates

It’s important to keep your revocable living trust up to date. Regularly reviewing your trust every few years or after major life events—such as getting married, having children, or acquiring new property—ensures that it still reflects your wishes. Keeping your trust current also helps prevent legal issues for your beneficiaries later on.

Protect your estate by creating a living trust online with LegalZoom. Start by answering a few simple questions. LegalZoom will review your answers and mail your complete living trust package to you.

FAQs

How much does it cost to create a living trust in Oregon?

The cost of creating a revocable living trust in Oregon can range from $1,000 to $3,000 if you hire an attorney. If you use an online service like LegalZoom, the cost starts around $400. The price depends on the complexity of your estate and how much legal guidance you need.

Can I create my own living trust in Oregon?

Yes, you can create your own revocable living trust. However, if your estate is large or complex, it may be a good idea to consult with an attorney. Professional advice ensures that your trust is set up correctly and follows Oregon law.

Does a will override a trust in Oregon?

No, a will does not override a trust. In fact, assets in your living trust are not controlled by your will at all. However, a will is still useful for managing assets that aren’t in the trust and for naming guardians for minor children or an executor for your estate.

Does a trust avoid Oregon estate tax?

A living trust does not protect your assets from Oregon estate tax, which applies to estates over $1 million. However, other strategies, such as irrevocable trusts or QTIP trusts, can help reduce the tax burden. Consult with a tax professional to explore your options.

How do I transfer my property to a trust in Oregon?

To transfer trust property, you need to retitle the assets so the trust becomes the legal owner. This involves filing new deeds for real estate, updating bank accounts, and moving investments into the trust’s name.

Brette Sember, J.D. contributed to this article.