Many people believe that trusts are only for millionaires. This is not the case. Most of our clients do not have a million dollars, but they do have specific wishes for how their estate will be managed when they die.
In Oregon, the three most common reasons to establish a trust are 1. Probate avoidance; 2. Privacy; and 3. Reduce estate taxes. The following is a quick overview of these reasons:
A Will Does NOT Avoid Probate
Probate is the court-supervised and public process of transferring assets from a deceased person to their living beneficiaries. When a someone dies the person nominated as executor in the Decedent’s Will files a petition for probate and requests to be appointed as Personal Representative (executor) of the estate. On average probate is a 9–12-month process and will cost between $5,000.00-$8,000.00 in court costs and attorney fees. There are a lot of rules and procedures involved that can make the process seem like it will never end, and this can be frustrating. If done properly, a Trust will avoid probate saving your family thousands of dollars in legal fees and speeding up the process!
A Trust is a Private Transaction
When a petition is filed with the court to appoint an executor, the petition is a matter of public record. This means anyone can see the sensitive information in a probate petition. Information in a petition includes names of beneficiaries, their addresses, and information about assets. This information can and sometimes does get used for nefarious purposes. A Trust does not need to be filed with a court and therefore, your estate and beneficiary information will remain private. When it comes to transferring assets to the next generation, it is best to keep the assets and the parties’ involved private.
The State of Oregon Wants Its Share
Estate taxes are assessed at both the State and Federal levels. The Federal estate tax kicks in when the value of the estate is well over $11 million dollars per spouse. The Oregon estate tax kicks in for estates valued over $1 million. While most of us will not have a federally taxable estate, quite a few of us will have an Oregon estate tax. To find the value of your estate combine the value of your assets, including life insurance policies, less any debts. An estate valued at $1.4 million, could have an estate tax of $40,000.00! However, with the right type of planning the Oregon estate tax can be reduced and even eliminated.
The Tip of the Iceberg
The above is a short list of the reasons you may want a revocable living trust. Additional reasons include planning for a child with a disability or social problem, and the preservation of assets for generations. Taking the time to learn about trusts could save your family thousands of dollars.
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Estate planning involves various legal instruments, such as wills, trusts, powers of attorney, and healthcare directives. We specialize in estate planning, ensuring that your documents comply with the ever-changing state and federal laws. We can help you navigate intricate legal requirements, minimizing the risk of costly errors and potential disputes.
Every person's financial situation and family dynamics are unique. We will take the time to understand your goals and circumstances, allowing for the creation an estate plan that suits your individual situation.
We can assist you in structuring your estate plan to protect your assets from potential creditors, lawsuits, and taxation. Our experience can also help you employ strategies to minimize tax liabilities.
Probate is the legal process through which a deceased person's assets are distributed. It can be time-consuming and costly. We can help you explore options to minimize or avoid the probate process, allowing your beneficiaries to receive their inheritances more quickly and efficiently.
When estate plans are unclear or disputed, it can lead to conflicts and legal battles. We can help you draft clear and legally sound documents that minimize the chances of disputes among heirs and beneficiaries. In the event that a dispute arises, we can also represent your interests and work toward an amicable resolution.
Estate plans need to be reviewed and updated periodically to reflect changes in your financial situation, family dynamics, and applicable laws. We can provide ongoing support and guidance, ensuring that your estate plan remains current and effective.
Engaging a law firm for estate planning provides peace of mind, knowing that your affairs are in capable hands. It allows you to focus on enjoying your life without the constant worry of what may happen to your assets and loved ones in the future.
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