What is the difference between a Will versus a Trust in Oregon?

A will and a trust are both estate planning documents that can be used to distribute your assets after you pass away. However, there are significant differences between the two, and it's important to understand these differences to make an informed decision about which option is best for your specific situation.

Probate.

One of the main differences between a will and a trust is the role of probate. Probate is the legal process that occurs after a person dies, during which the court determines the validity of the will and oversees the distribution of the assets to the beneficiaries.  If you have no will when you die, the rules of distribution to beneficiaries are controlled by Oregon law.

A will must go through probate in order for the assets to be distributed. This can be a time-consuming and expensive process, and the outcome of the probate proceedings can be unpredictable.  In Oregon, probate takes a minimum of six months to complete, and usually longer.  The process can cost upwards of $5,000.00 or more in legal expenses and court fees.  And if conflict is going to occur, it usually occurs in probate. 

A trust, on the other hand, can bypass probate. When you create a trust, you transfer ownership of certain assets to the trust, and the trust becomes the legal owner of those assets. Since the trust owns the assets, they do not have to go through probate when you die. This can save time, money, and hassle for your beneficiaries.

Bank Accounts.

Another important difference between a will and a trust is the way they handle bank accounts. If you have a bank account in your name alone, a will can be used to transfer ownership of that account to your beneficiaries after you die. However, if the account is jointly owned with someone else, the ownership of the account will pass to the surviving owner, regardless of what your will says.

A trust, on the other hand, can be used to control bank accounts during your lifetime, as well as after you die. You can transfer ownership of the account to the trust, and the trust can continue to control the account even after you die. This can be particularly useful if you have a large amount of money in a bank account that you want to pass on to your beneficiaries without going through probate.  It can also be useful if you have younger beneficiaries and you want to delay certain distributions until the beneficiary is of a certain age (usually beginning around age 25 or 30).

Oregon Law.

Finally, it's important to understand how Oregon law affects wills and trusts. Oregon has its own laws regarding estate planning, which can affect the validity and interpretation of your will or trust.

For example, Oregon law requires that wills be signed by the person making the will (the "testator"), and that the signature be witnessed by at least two people. If these requirements are not met, the will may not be considered valid.

Oregon law also has specific requirements for trusts, including the requirement that the trust be funded with assets during the creator's lifetime in order to be valid. If you are considering creating a will or a trust in Oregon, it's important to consult with an attorney who is familiar with Oregon law in order to ensure that your estate plan is valid and legally enforceable.  Please contact our office if you would like to schedule a free consultation.

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