What to do-Will or Trust?

Most younger couples or couples with few assets decide to do wills. This is the simplest form of estate planning because it does not require any kind of lifetime management or transfers. They are less expensive to create. Additionally, if there are minor children, testimentary trusts may be created to set up trusts for those children if the parents pass before they are responsible enough to manage money. The will can designate beneficiaries also. Wills do require probate, which can be expensive but does have some benefits of court supervision of the disposition of assets.


The Revocable Living Trust

In Oregon, Trusts are a very common estate planning tool. They are used to designate where assets go upon death, who can manage assets when the "trustors" become incompetent, and are easy to amend when and if circumstances change. These are best when and if there are more assets and the family is more settled in their financial decision making. All assets, except in certain circumstances, must be transferred to the trust in order for them to have the most benefit. Assets that are not in the trust are transferred via a "pourover will" which is created with the trust-to insure the wishes of the trust are carried out. Lawyers and CPA's should always be consulted when drafting these documents.


Other Methods

Additional estate planning steps include irrevocable trusts, creating life estates in real property, and designating family members as survivors on accounts and real property. That is very commonly done without the advice of an accountant or lawyer and frequently has unintended legal and tax consequences. These steps should not be done without consulting a lawyer and CPA first.


Tax Planning and Your Oregon Estate

Whether you choose a Will or a Trust, married couples with larger estates (Over 1,000,000 in assets) must see an attorney to take advantage of methods to save significant Oregon and/.or Federal estate taxes. Oregon's estate tax threshold is under the Federal threshold. Larger estates, with planning, can avoid or significantly reduce significant tax exposure with the review and drafting by an attorney experienced in tax estate planning. A trust is the easiest method of doing this, but it can also be done via wills with marriage and disclaimer trust provisions.


The worst step is DOING NOTHING

In the event that there is no will or trust, Oregon Law will determine where your estate will go and who will administer your estate. You will have no say. Additionally, in the event that your estate is large enough to be taxed, no planning that you COULD have done will save you the taxes you COULD have saved. I have seen major unintended consequences because of failures to act. The time to act is now!