A living trust, also known as an “inter vivos” trust, is a trust that you create while you are still living. Trusts can be understood as a type of contract between the funder of the trust (“trust grantor”), the trustee, and the beneficiaries. Some trusts, called testamentary trusts can be created in your will, and be funded through probate. Using a living trust ensures that your chosen beneficiaries receive your property upon your death without needing to go through the probate process to transfer your assets because you transfer your assets into your living trust during your lifetime. This necessary process is called trust funding.

There are two types of living trusts: revocable and irrevocable. A revocable living trust allows you to change your mind at any time because you retain control over the trust and the property in it. You can change or revoke a revocable trust at any time. With an irrevocable living trust, on the other hand, you cannot modify or revoke an irrevocable trust once you sign the documents except under limited circumstances. Essentially, you lose control over the property when you create and fund an irrevocable trust.

Let’s review some circumstances that may mean a living trust is the right choice for you.

You want to avoid probate

A key advantage of establishing a living trust in Washington is that you can bypass the often lengthy and costly probate process. Probate involves the court-supervised settlement and distribution of your estate, a process that can take months or even years. Sidestepping probate can also smooth the transition of assets to your heirs, reducing the likelihood of friction and family disputes.

Avoiding probate can be especially important if you own real estate in multiple states. If you pass owning real property outside Washington State, an ancillary probate may need to be filed in each jurisdiction where you own real property. Placing your real property in a living trust can help you avoid probate in each jurisdiction, streamlining the asset distribution process and saving time and expenses.

Children From Another Marriage

If you have children from outside your current marriage, registered domestic partner, or committed intimate relationship (“CIR”), their inheritance rights may be impaired by the surviving spouse or partner’s claims to community property and community-like property. In addition to community property agreements, separate property agreements, prenups, and other estate planning tools, a living trust may provide certainty as to the separate character of your property and who can benefit from that property after your death. For example, each spouse or partner could ensure that their share of the community property goes to each of their descendants separately.

Or, a deceased spouse could provide that the surviving spouse or partner is allowed to continue to live in their shared residence until they move out and then require the house be sold and the proceeds divided among the intended beneficiaries. Any lack of clarity in this regard is likely to result in costly litigation under the Trusts and Estates Dispute Resolution Act (RCW 11.96A) between the decedent’s intended heirs and the surviving spouse or partner with a lot of advantage going to the party in possession (usually the surviving spouse or partner) who may take control of the decedent’s assets, depleting any benefits intended for the decedent’s heirs.

You want to protect your privacy

Many individuals prefer to keep the contents of their estate private. Because probate is a public process, people can learn about the contents of your estate. A living trust may keep the details of your assets and beneficiaries confidential. This shields your financial affairs from public scrutiny.

You want to plan for potential incapacity

Planning for incapacity is a critical aspect of a comprehensive estate plan. A living trust allows you to appoint a successor trustee who can step in to manage your affairs if you become unable to do so. This streamlined process avoids the need for court intervention and the appointment of a conservator and ensures a seamless transition of trust management.

Note that certain assets, including life insurance and retirement accounts, cannot be placed into trust, so you will need to make other arrangements for them.

You want more flexibility and control over your assets

A living trust offers flexibility in designing your estate plan. You have the freedom to set specific conditions for the distribution of assets, allowing you to maintain control over how and when your beneficiaries receive their inheritances.

You want to protect your property from creditors

Assets held in a special needs trust may enjoy some level of protection from creditors. This can provide an added layer of security for your beneficiaries, safeguarding their inheritances from potential financial challenges they may face.

You want to protect your younger beneficiaries or permanent dependents

If you have minor beneficiaries, a living trust allows you to appoint a trustee to manage and distribute assets on their behalf. You can decide to distribute assets at certain points, such as birthdays, as your heirs mature. Or, if your minor beneficiaries are likely to be permanently dependent on you for support, then you can use a special needs trust to provide for their special needs, while avoiding disqualification from any asset-based public benefits they may have qualified for.

This feature eliminates the need for court supervision, providing a more efficient and customized approach to safeguarding the financial well-being of your children or grandchildren.

Non-Citizen Spouses

A Qualified Domestic Trust (“QDOT”) can significantly increase the portion of the overall estate that passes to their heirs for a couple with a noncitizen spouse who is likely to be the surviving spouse.

Optimizing Estate Tax Treatment for High-Net-Worth Individuals

High-Net-Worth Individuals (HNW) with estates over the 2024 federal estate tax exemption of $13,610,000 for an individual or ($27,220,000 for a married couple), and the Washington estate tax threshold of $2,193,000 per taxpayer (usually including life insurance) may benefit from using trusts, whether by using testamentary spousal credit shelter trusts and QTIPS, or by using other estate planning techniques such as a Special Power of Appointment Trust (SPAT) or a Spousal Lifetime Access Trusts (SLAT). These options are particularly important to consider before the 2026 estate tax exemption drops on January 1, 2026 (adjusted for inflation, it is estimated to be $6.08 million per person and $12.16 million per married couple), together with the gift tax exclusion that permits the shift of substantial wealth into such trusts without triggering a gift tax liability.

Learn more about the benefits of a living trust

A living trust can enhance your estate planning strategy. Discuss the benefits of a living trust with an experienced estate planning attorney in Washington and discover how it can help protect your assets.