Oregon residents who are developing their estate plans should know that the inclusion of a trust could be beneficial to their plans. A trust is a legal agreement between a settlor and a trustee; the agreement is for the trustee to receive, protect and manage the assets that the settlor delivers. The trustee also agrees to administer the assets in adherence to the trust’s provisions and to distribute the principal and income of the trust as directed by the trust’s instructions and only in benefit of the parties indicated in the trust.
The trustee serves as a fiduciary and is required to use reasonable care when managing the trust and choosing investments for the trust. The trustee is also obligated to not pursue any conflicts of interest while buying, selling or holding trust assets and to fulfill the responsibilities related to the settlor and the beneficiaries of the trust.
A trustee has a number of duties to uphold. These include obeying the trust terms, being reasonable and prudent when making administrative and investment decisions, and being transparent when giving trust information as stipulated in the trust agreement. The trustee also has a duty to be nonbiased when dealing with beneficiaries.
There are many reasons individuals may create a trust. A trust can be used to keep certain assets out of the probate process and to privatize how an estate’s assets are distributed. Individuals can also use a trust to protect assets from the creditors of beneficiaries and from being subject to division in a divorce.
An attorney who provides estate planning services may assist clients with creating the right type of trust for their tailored estate plan. The attorney may draft the provisions of a trust to ensure that a client’s wishes regarding certain assets are honored. Assistance may also be provided for choosing a trustee.