Living Trusts in the State of Washington

By David Carnes

Under a living trust arrangement, you place your assets under the care of a trustee, and the trustee distributes them to your beneficiaries, according to your wishes, after your death. The creation of a trust offers certain legal benefits, such as tax exemptions and probate avoidance. In the state of Washington, trusts are created and governed by Chapter 11.98 of the Revised Code of Washington.

Under a living trust arrangement, you place your assets under the care of a trustee, and the trustee distributes them to your beneficiaries, according to your wishes, after your death. The creation of a trust offers certain legal benefits, such as tax exemptions and probate avoidance. In the state of Washington, trusts are created and governed by Chapter 11.98 of the Revised Code of Washington.

Probate Avoidance

The main benefit of a revocable living trust is that its assets are not subject to the probate process -- the trustee can distribute assets at any time before or after death, as long as distribution is authorized by the trust document. This benefit often saves your heirs time and money after you die because probate administration can be expensive and take months or years to complete. Washington offers an inexpensive, expedited probate process for estates worth less than $100,000, which may be an alternative to creating a trust.

Protect your loved ones. Start My Estate Plan

Revocability

A trust can be either revocable or irrevocable. You can dissolve or amend a revocable trust at any time before you die, but irrevocable trusts cannot be dissolved or amended. Unlike some states, Washington considers a trust to be irrevocable unless the trust document specifically states otherwise. The main advantage of an irrevocable trust is that the trust assets are normally protected from creditors and are not counted as part of your probate estate for estate tax purposes. This is important if the value of your estate would otherwise exceed the estate tax exemption -- $5,120,000 in 2012 and set to fall to one million dollars in 2013.

Creation

In the state of Washington, you must be at least 18 to establish a trust. Create the trust by drafting a document that specifically states its purpose is to create a trust; names the beneficiaries; names a trustee who lives in Washington; and instructs the trustee in how to distribute the assets. Under Washington law, the same person cannot be the sole trustee and the sole beneficiary. Although not required by law, carefully listing trust assets in the trust document helps to prevent disputes concerning the identities of the assets that belong to the trust. Signing and dating the trust document in front of a notary public prevents questions about its authenticity.

Transferring Assets

Transferring title of your assets to the name of your trustee prevents the court from considering these assets as part of your probate estate. If the trust assets include cash, the trustee should establish a bank account in the name of the trust using the trust instrument as proof of his authority to open the account. Title to real estate and automobiles should also be transferred into the trust. When you add property to the trust, always amend the trust document to include the new property and, if it is titled property such as real estate, change the title to the name of your trustee.

Protect your loved ones. Start My Estate Plan
Family Trust Planning Guide

References

Resources

Related articles

How to Transfer a Vanguard Account to a Living Trust

Transferring property to a living trust is an important step in setting up the trust. Investment accounts, such as those offered by Vanguard, allow an investor to list a beneficiary who will receive the proceeds of the account upon the account holder’s death. Problems arise, however, if the beneficiary dies before the account holder. It is for this reason that transferring these types of accounts to your trust is prudent financial planning.

How to Execute a Living Trust

A living trust allows a person known as a trust grantor to place his assets under the administration of a trustee, who then distributes these assets to trust beneficiaries as instructed by the grantor in the trust deed. The main advantage of a living trust is that since it is prepared while the grantor is still alive, it allows the grantor's property to pass to his beneficiaries, both before and after his death, without the expense and delays of probate. The administration of a living trust involves challenges, responsibilities and potential legal liability.

The Advantages of a House in a Living Trust

A living trust is created by a trust deed and becomes effective while the trust grantor is still alive. During the lifetime of the trust, it is administered by a trustee selected by the grantor. A trust is revocable if the grantor retains the power to revoke it; otherwise, it is irrevocable, and its assets belong to the trust, not the grantor, for tax purposes. There can be certain advantages to putting real estate, like your home, into a living trust.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Living Trust Guidelines

A living trust is a way of managing assets, a tool used primarily in estate planning. It offers a number of advantages ...

Consumer's Guide to Living Trusts & Wills in Arizona

A will is a set of instructions that tell a probate court how to distribute your assets between the time you die and ...

How to Obtain a Copy of a Living Trust in California

A living trust is a means of transferring property to an individual or group of people. It is created by a person ...

How to Create a Legal Trust

A trust is a legal instrument that is useful for tax and estate planning. Under a trust arrangement, a trustee manages ...

Browse by category
Ready to Begin? GET STARTED