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When you create a Revocable Living Trust, you must transfer ownership of all your property, including all real estate, personal property, bank accounts, and pension accounts to the name of the Trust while you are alive. This is very different from a Testamentary Trust, which is created by your Will in the event of your death. Both of these types of Trust, however, direct how your estate should be distributed after your death.
There are several reasons to create a Revocable Living Trust. The most common reason, as a way to avoid probate, is not usually needed in Washington. In many states, a Revocable Living Trust is very useful in avoiding the high cost of probating an estate. Washington State, however, has low probate costs, so it is usually less expensive to write a Will and probate it than to create and manage a Revocable Living Trust through your entire life. In addition to the expense of managing a Revocable Living Trust, it is all too easy to forget to transfer some of your assets into the trust’s name. If any of your assets are in your own name at the time of your death, your estate may need to go through the probate process even if you have created a Revocable Living Trust.
Another motivation is privacy. Since Revocable Living Trusts are not usually filed with the Court, having such a Trust gives you a greater degree of privacy than a Will, which becomes part of the public record once it has been filed after your death. If you are concerned about family disputes surrounding financial matters, for example, you may wish to keep the distribution of your assets from becoming public record.
A properly created Revocable Living Trust can also avoid the necessity of having a Guardianship established if you become disabled in the future. Once again, however, there is a less expensive way to accomplish this goal. Durable Powers of Attorney can cover both health care issues and financial issues and can be written by an attorney for much less than the cost of a Revocable Living Trust.