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Thursday, April 17, 2014

Revocable Living Trusts

Revocable Living Trusts by Oregon State Bar

Revocable living trusts are often promoted as an effective alternative to probate. Even though Oregon’s probate system is relatively simple and inexpensive, many people seek an even quicker and easier mechanism for transferring the assets of a deceased person to the beneficiaries of that person. Revocable living trusts often serve this purpose, but they often create problems, too. To help you decide if a revocable living trust is right for you, here are answers to some of the most frequently asked questions about these trusts.

What is a revocable living trust?
A revocable living trust is a legal device that can be used to manage your property during your lifetime and to distribute your property after your death.
A revocable living trust is established by a written agreement or declaration, which appoints a “trustee” to administer the property transferred to the trust, and which gives detailed instructions on how the property is to be managed and eventually distributed. If you want your trust to substitute for a probate proceeding (court administration of property after death), you must give the trustee detailed instructions about how to handle these situations, and you should legally transfer substantially all of your property to the trustee. A revocable living trust agreement or declaration is usually longer and more complicated than a will, and transfer of assets to the trustee can be time-consuming and expensive. Any competent adult can establish a revocable living trust.

Who can be the trustee?
In Oregon any competent adult can be the trustee, including the person setting up the trust. An Oregon bank or trust company can also act as trustee. A professional fiduciary that is not an Oregon bank or trust company can act as trustee, if a court appoints it and it posts a bond. You can appoint more than one trustee, delegating different duties to each trustee if you wish, and you can retain the power to remove the trustee and appoint a new one. Appointing a successor trustee is essential if you are the first trustee and the trust will carry on after you die or become incapacitated.

How is a revocable living trust established?
If a revocable living trust is appropriate for you, you will need a written agreement or declaration of trust, which sets out your plan for management and distribution of your assets. Then you must legally transfer all trust assets to the trustee. Deeds, stock transfers, new bank accounts and other legal documents may be necessary. Assets not formally transferred to the trustee may not be considered part of the trust and might still be subject to probate.
You must also have a will to ensure that any property not properly placed in your trust before death can be transferred to it after death......
 Legal editor: Tim McNeil, August 2013

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