Revocable Living Trusts: Are They Really Necessary For A Successful Estate Plan?

A Revocable Living Trust (RLT) is a well-known estate planning tool that is used throughout the United States. For some, an RLT can provide meaningful advantages, including privacy, disability planning, and a smooth transition of asset management. However, an RLT is not the right fit for everyone, and in Washington State, it is often worth weighing its benefits against the relative simplicity of the probate process—the legal process of validating a will, appointing a personal representative, and administering an estate.

An RLT is a trust that is created while you are alive. Once the trust is created, you fund the trust by transferring all your assets into the trust instead of having them titled in your own name.

While the probate process may be cumbersome in many states, Washington State's process is quite efficient. This is largely because the personal representative is almost always granted nonintervention powers as long as the estate is solvent, and the decedent's will does not provide otherwise. These nonintervention powers allow the personal representative to accomplish the estate's goals without obtaining court approval for every step, making the overall probate process more streamlined.

Creating an RLT can be quite expensive and labor-intensive. An attorney has to draft the RLT, and if you are transferring homes or real property into your RLT, you will need to pay for a new deed and the recording fees. While an attorney can assist you with the initial steps, after an RLT is created, you are responsible for confirming that all assets—past and future—are titled in the RLT's name and transferred to the RLT. Many times, an asset is missed, so in addition to drafting the RLT, your attorney will also need to draft a pour-over will. A pour-over will is a type of will that transfers any remaining assets not already in the RLT into the RLT upon your death. If you forget to title an asset in the name of the RLT and must use the pour-over will, you will still need to utilize the probate process.

These upfront costs and labor often outweigh the benefits of utilizing an RLT as an estate planning tool, especially if the only goal is to avoid probate. Fortunately, there are many other estate planning tools that can achieve efficient results. For example, a community property agreement between spouses allows you to skip the initial probate and leave everything to the surviving spouse.

RLTs remain a valuable option in certain circumstances, but Washington residents should evaluate them carefully rather than assume they are necessary. If you are interested in finding out which estate planning tools are right for you and your estate plan, reach out to a trusted estate planning attorney.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.