A Washington living trust holds your assets in trust while you continue to use and control them. After your death, the trust passes assets to your beneficiaries according to your instructions. A revocable living trust can provide flexibility and control.
Living Trusts in Washington
When you as the grantor establish a living trust in Washington, you place your assets into the trust’s ownership, but they continue to be managed and available for your use during your life. The more assets you place in the trust, the more beneficial it will be. Assets such as life insurance and retirement accounts cannot be transferred to a trust, so there are limitations. A trust needs a trustee, the person managing its assets, and you can select whomever you wish to be your trustee. It is most common to simply choose yourself so you can be in charge. You then need a successor trustee who can step in after your death and continue to manage the trust and distribute it to your beneficiaries. A revocable living trust can be altered, changed, or eliminated completely whenever you choose during your life. An irrevocable living trust is permanent and no change is possible.
A living trust Washington keeps all assets in your trust out of probate, the court procedure that verifies a will and puts it into effect. Probate can take months and involves the expenses of an attorney, executor, and court fees. Washington does not use the Uniform Probate Code, which complicates its processes. A trust allows you to sidestep all of this and distribute trust assets immediately upon your death, if that is what you choose, with no fees. Assets passed through a will cannot be distributed until probate concludes. Your trust allows you to avoid probate in Washington, but also in any other state where you hold property, as long as you include that property in your trust.
If you have a small estate worth under $100,000 it qualifies for a simplified estate administration, which avoids the time and expense of probate, and also is less expensive than a trust (but does not offer the other benefits a trust provides).
Do I Need a Living Trust in Washington?
Living trusts can be an important part of your estate planning because they offer control that cannot be obtained through other avenues. Your living trust puts you in complete control of your assets during your life. They are technically owned in the name of the trust, but you control the trust and you can use your assets as you normally would. After your death, you maintain control over the assets because they are protected and maintained by the trust until the distribution dates that you select. You can choose to distribute assets at future dates, such as birthdays when your heirs are more mature. A will does not provide this option and passes assets once probate concludes.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Creating a living trust in Washington provides you with privacy since the terms of the trust, your beneficiaries, and the assets in the trust are never made public. If you use a will, it must be probated and become public record. A trust is also harder to contest than a will, offering security that your plan will remain in place.
Living Trusts and Estate Taxes in Washington
Washington applies an estate tax to estates worth over $2 million and federal estate tax applies to estates of more than $5 million. Your living trust will not shield your assets from this tax. There is however, a specialized trust called a QTIP trust (or an AB or marital trust) that will do just that. Assets passed from the deceased to a surviving spouse through this type of trust are exempt from estate tax. Medicaid spend down rules apply to assets in your trust and creditors can access the assets as well.
How to Create a Living Trust in Washington
To create a living trust in Washington, prepare a written trust document and sign it before a notary public. To finalize the trust and make it effective, you must transfer ownership of your assets into it. A living trust is an effective tool that can provide you with the flexibility and privacy you seek.
LegalZoom can help you create a Washington living trust online. LegalZoom living trusts include a pour-over will, transfer deeds, and a document organizer.