Preparing for the passing of a loved one can be emotionally overwhelming, but taking steps to plan ahead for the distribution of your estate can ease the burden during an already difficult time.
Without proper planning, the added stress of managing details like taxes, probate, and property distribution can create unnecessary strain for those left behind. For individuals with significant wealth, concerns about high estate and gift tax rates are often top of mind. By preplanning, you not only offer your loved ones peace of mind while they grieve, but you also secure a clearer, more organized future for your estate and property. Failing to plan ahead may very well cause a great deal of stress for your heirs, as well as cause an unnecessary loss of value of the estate as the government gets involved.
The best method to avoid probate is to put your property and other assets into a trust. This effectively removes your name from the title, and puts the trust as the owner of the assets. By putting your property or properties into a trust, as well as your other assets, this effectively removes your property from the probate process and places it under the management of a trustee. The benefit here is it avoids probate and ensures that your assets are distributed according to your wishes. Unfortunately we have seen many times that when a property goes through probate, there can be infighting among the heirs as to who gets what, and many times people will come out of the woodwork in an attempt to get their hands on part of your estate.
Without proper preparations, your loved ones may face a complicated and costly process involving probate court, potential family disputes, estate taxes, and creditors. Not to mention, the probate process takes a minimum of six months to complete, and tends to heavy, unneeded burden for the person who is chose to be the personal representative.
Now that you’ve decided that trust are the way to go, here’s what you should know about using trusts to protect your property in Portland.
What Does a Trust Do?
In Portland, transferring real estate into a trust allows beneficiaries to bypass much of the paperwork and red tape that often accompany the probate process. Probate in Portland can be a lengthy and costly ordeal, sometimes taking months or even years to resolve. There will need to be a personal representative appointed who takes a personal representative class. Their will have to spend six months at a minimum working on the probate process. When it comes to selling the assets, a judge will have to sign off and authorize a sale, and finally at the end, authorize creditors to be paid off and remaining funds to be distributed to the heirs of the estate. In most cases it is best to avoid this process.
What about Gift Taxes
There is a lifetime exclusion on the transfer of gifts or estates which is adjusted annually for cost of living increases, in 2021 the amount was set at 11.7 million per individual and 23.4 million for couples. After your lifetime exclusion is met, if you’re married and your spouse is deceased, their exclusion rolls over to the survivor. If your home is under a trust, your heirs will realize gift tax savings, ranging from 8 to 40 percent and generally paid by the gifter. The estate portion of this tax is applied upon death, and the trust may also protect the home from creditors. Another benefit of real estate trusts is that they are private transfers of wealth, not a matter of public record as with probate. With probate, everything is a matter of public record. If privacy is a concern to you, then you can discretely and privately transfer your assets according to your choosing by using a trust.
Setting Up a Trust
There are many structures to consider when setting up real estate trusts in Portland, so you’ll want to speak with a good attorney to see which one is going to be the best option for your situation.
When meeting with a trust attorney, it’s important to bring all relevant documents and take a clear, honest inventory of your assets. If you have a family member who needs ongoing financial support, you may want to consider setting up a special needs trust to ensure they’re cared for. Alternatively, if you have a family member who struggles with managing money, a spendthrift trust can protect their inheritance from creditors and limit their access to the principal funds. If you choose to establish an irrevocable trust, be aware that this means your decisions are final—once your property or assets are transferred into the trust, they cannot be undone. While irrevocable trusts can offer estate tax benefits for your beneficiaries in most cases, it’s essential to carefully weigh the pros and cons before making a final decision.
The attorney will also ask you to choose a successor trustee—someone who will manage the estate after you’re gone. Be sure to discuss this responsibility with the person you have in mind to ensure they are willing and able to take on the role. Once you’ve made your decision, the attorney will draft the trust documents, and the next step is to transfer the property deed into the trust. As the trustee, you will hold the title to the property in the trust, with your name and the date of transfer clearly noted on the deed.
How to Choose a Trust Attorney
The best way to choose a trust attorney in Portland is by asking other people you know who have their financial act together for referrals. Reach out to people who seem to be doing well and ask if they have done any estate planning, and if so, if they were happy with the attorney they used. These referrals should be given the most weight.
Beyond that, Google and the internet is a great place to look, but be sure to read the reviews. If you choose an attorney without any online reviews, and who wasn’t referred to you, it is going to be a complete gamble as to whether or not they are a good attorney. Lastly, we at Better Off Home Buyers know several good estate planning attorneys we have worked with in the past that we would be happy to refer you to.
Better Off Home Buyers can help if you have recently inherited a property that is in a trust. Better Off Home Buyers specializes in making the process as easy and seamless as possible, closing in as few as just a few weeks. Better Off Home Buyers has a lot of experience working with grieving families so we will be sure to treat the situation with sensitivy and respect. We would love to help out, so send us a message or call Better Off Home Buyers at 1-888-827-0889.