Should You Put Your Home in a Trust? The Must-Know Guide for OR & WA Owners

Absolutely, and for many Portland metro homeowners, especially those with significant real estate holdings, putting property in a trust is smart estate planning.

What a Trust Does

A trust is a legal entity that holds property. When you transfer your home into a trust, the trust owns the property, not you personally. You can be the trustee (manager) of the trust, but legally, the trust holds the title.

Why Put Real Estate in a Trust

Probate avoidance is the big one. When you die, property in your name must go through probate, a court process that takes time, costs money (Oregon and Washington both charge probate fees), and becomes public record. Property in a trust bypasses probate. It transfers directly to beneficiaries you name in the trust. Faster. Private. Less expensive. This matters tremendously in the Portland metro where real estate values are significant. A $600,000 home goes through probate, your heirs wait months, probate costs eat into estate value.

Oregon-Specific Considerations

Oregon has relatively friendly probate laws compared to some states, but trusts still offer advantages. Oregon probate fees are based on estate value. A trust avoids these fees.

Also important: Oregon recognizes “Lady Bird Deeds”—a special deed structure that transfers property to beneficiaries while avoiding probate and gift tax. I recommend discussing this with an attorney.

Washington-Specific Considerations

Washington similarly allows trusts. Washington doesn’t have state income tax (advantage for heirs), but property still must be handled for tax purposes. A trust provides structure.

Washington also recognizes enhanced life estates (similar to Lady Bird Deeds). An attorney can structure these to benefit your estate plan.

Real Estate in Trusts: Tax Implications

Important: putting real estate in a trust doesn’t trigger capital gains tax immediately. When you transfer property into a trust you control, it’s not a “sale,” so no tax event. However, when property passes to beneficiaries at your death, there’s “step-up in basis”—the property’s tax basis increases to fair market value at death. This can eliminate capital gains tax for heirs. Significant benefit.

Revocable vs. Irrevocable Trusts

Revocable trust: you control it while alive, it becomes irrevocable at death. This is most common for probate avoidance.

Irrevocable trust: typically used for asset protection or tax planning. Once you put property in it, you’ve given up control. More complex.

Most Portland metro homeowners use revocable trusts for real estate.

Should You Trust Your Property?

If you own real estate in Oregon or Washington and want to avoid probate, minimize costs, and streamline inheritance—yes, discuss trusts with an estate attorney. The cost of creating a trust ($1,000-$2,000) is minimal compared to probate costs. If you have significant real estate holdings, especially investment property, trusts are almost always advisable.

Bottom Line

Real estate can absolutely be in a trust. For Portland and Washington owners, especially those with multiple properties or significant values, trusts are standard estate planning tools. Get professional guidance on structure.