Do I Need a Revocable Living Trust?
Mar 2015 | Estate Planning & Probate
Many of our firm’s estate planning clients ask whether they need a Revocable Living Trust (“RLT”). For most people in Washington, an RLT is unnecessary. The primary benefit of RLTs is that they can help an estate avoid probate. RLTs were fashionable in Washington many years ago when the state’s probate process was more burdensome. Over the years, however, the Washington legislature has made it easier and less expensive to administer an estate, making RLTs less necessary.
In addition, it may be expensive and inconvenient to set up an RLT. Aside from the cost of preparing the trust document itself, each of a client’s assets needs to be retitled and placed into the name of the trust. This would include bank accounts, real estate, and vehicles. Some clients find it unpleasant and confusing to conduct their entire financial life in the name of a trust. And, if a client forgets to place a later-acquired asset into the trust, a probate may be necessary to clear the title to the asset, making the entire creation of the RLT for not.
Avoiding probate upon someone’s death doesn’t mean avoiding all expense and inconvenience. To wind up a trust after the death of its creator, the successor trustees would need to follow Washington rules and give proper notices, pay creditors, handle taxes and make proper distributions, much like a normal probate. Moreover, even with an RLT, family members may disagree over the proper administration of the trust, which may create great expense that would reduce the value of the trust.
In some circumstances, however, an RLT may be helpful—especially for clients who have property in other states. Still, we recommend having an experienced estate planning attorney review your circumstances before relying on an RLT as a centerpiece of your estate planning. If you have questions about your estate plan, contact Chad Horner at Curran Law Firm, P.S.—Experienced, dedicated, and responsive legal representation located in South King County.