Trusts are fiduciary agreements where a trustee manages the assets of a trustor for the benefit of a beneficiary. In most cases, a trust can be a tax haven while standing in court as irrevocable on your behalf. Knowing what to put into a trust, however, is a complicated issue due to value. This is true in Oregon when you’re not familiar with the term “trust property.” Though property just means “assets,” here’s what it entails.
Cash
Cash is often the ideal asset when building a trust or when opening one with just a few thousand dollars. The type of trust, be it revocable or irrevocable, dictates how or if the money you enter is withdraw-able. This trust is managed based on your will.
Investments
Assets that, themselves, generate profits qualify for the protection of a trust. These investments include stocks, bonds or businesses. In most cases, the capital gains earned from successful investing is only taxable if the beneficiary controls the trust.
Real estate
A trustor who enters their home into a trust does so in hopes of avoiding probate for their house. Probates happen when assets aren’t accounted for within a trust, so a public court decides on how such assets are disbursed. Any house you enter into a trust will even be sellable should you file the right arrangements for it.
Life insurance
An attorney works to ensure that any annuities from your insurance are used how you intend. The policy money, however, gets used to cover any number of expenses if you don’t specifically protect it within a trust. The annuities from insurance might even, without beneficiaries being named, go through undesired probate.
Allocating your assets into one sum
Being strategic about what you place into a trust starts with confirming what your options are. It’s not recommended that you create a trust without legal or financial help. What you specifically place into yours changes the liabilities and tax qualifications you get. Just keep in mind that “trust property” covers stocks and cash also—not just real estate.
