What is a trust? What happens to your assets after your death? It depends on what, if any, legal documents you have in place to direct the distribution of those assets. Generally speaking, assets can pass to beneficiaries through a few methods including intestate succession, beneficiary designations, a will, and/or a trust. Each method has its own benefits, costs, and quirks to consider when creating your estate plan.
A revocable living trust agreement is a powerful document that can accomplish many of the goals people commonly have in estate planning—a trust can allow your beneficiaries to avoid probate, protect assets for young children, or aid in minimizing estate taxes when set up correctly. A trust is created by a “settlor” and is managed by a “trustee.” A revocable trust may be modified or revoked by the settlor during the settlor’s lifetime, unlike an irrevocable trust which cannot be modified except under limited circumstances.
A revocable living trust can hold real property, bank accounts, personal property, and many other types of assets. It functions similarly to owning those assets directly during your lifetime, while providing specific instructions for the management and distribution of those assets after your death. Much can be accomplished, but how to structure a trust and whether a trust is the right tool for you and your family depends on your unique circumstances.
We’re reviewing other methods of passing assets in past and future news posts, and the Oregon State Bar provides additional resources on estate planning. But if you’re wondering how all of this affects your personal situation and would like custom-tailored professional advice, please contact us now to begin exploring your estate planning options.