Most Living Trusts provide for their creator(s) to be the initial Trustee(s). If there are joint Trustees (co-Trustees), often one will continue to serve as sole Trustee if the other is no longer able to serve. If the sole Trustee is no longer able to serve, a trusted relative, friend, or associate usually becomes the successor Trustee. This succession of Trustees, in the case of a Trustor’s onset of any disability, will likely avoid the necessity of the appointment of a Guardian of one’s Estate, which might be necessary in the absence of a Living Trust
This situation, however, is parallel to the situation in which a person, with or without a Living Trust, uses a Durable Power of Attorney for Assets (also known as a Financial Durable Power of Attorney) to provide asset management upon his/her disability. Granted, third parties such as banks, brokers, and title companies are often more willing to transact with a Trustee of a Living Trust than with an Agent under a Durable Power of Attorney; yet asset management upon disability is available in the absence of a Living Trust through a Durable Power so long as it has been provided for before the onset of disability. If no Durable Power has been created, or if created, no Agent is able and willing to serve, then the appointment of a Guardian of one’s Estate may be necessary in the absence of a Living Trust.
Remember, too, that a Living Trust can only provide for financial or asset management, and not personal management and care. If personal management and care are required, it may be available through a Durable Power of Attorney for Health Care so long as it has been provided for before the onset of disability; or, lacking that, through the appointment of a Guardian of one’s Person.
A Living Trust can consist of multiple independent trusts, each of which can be managed by a different Trustee for the benefit of different beneficiaries. So, for example, a husband and wife (eg, “John and Mary”) could create the John & Mary Trust, consisting of three independent Trusts during their joint lives:
This example used a married couple, but a similar arrangement could be used equally well for non-married partners.
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A Living Trust provides a flexible framework in which to create multiple independent Trusts, each of which can be tailored to solve the financial circumstances of the parties, allowing them to keep their joint financial dealings joint and their separate financial dealings separate — as well as providing financial management in the case of disability. |
So long as none of your property remains titled in your name at death, a Washington (“domiciliary”) probate should not be needed to change title of your assets into the names of your Beneficiaries. A Washington probate will be unavoidable, however, if you are a party to a lawsuit at death and if the lawsuit is to be maintained in your name, as either a Plaintiff or a Defendant.
So long as that property is titled in the name of your Living Trust at death, a non-resident state (“ancillary”) probate should not be needed to change title to any real estate (eg, vacation, business, rental, or commercial real property) you own outside of Washington into the names of your Beneficiaries. If you have no such property, this issue is moot. If you do have such property, you should consider creating a Living Trust and transferring your out-of-state real property into it for this reason alone, perhaps just to hold title to your out-of-state real property. Ancillary probates are expensive, time consuming, and easily avoidable.
This is certainly true if you are a California resident. But as a Washington resident, just what are your potential savings in money and time?
But remember that most of the work will need to done regardless of whether you use a Will or a Living Trust:
Practically speaking, many of the “costs” of a probate proceeding result from problems that need to be resolved independent of the probate process:
As long as:
his/her work following his/her Court appointment will be much the same as if he/she were the Trustee of your Living Trust — that is just what the Washington legislature intended by their enacting probate Nonintervention Powers … to turn the administration of a probate estate into that of a Living Trust. In these circumstances, once the Personal Representative is appointed, any advantages in using a Living Trust over a Will become insignificant as regards a “quicker and less expensive estate administration.” In fact, under Washington law, a Personal Representative acting under Nonintervention Powers has more flexibility and greater powers over a probate estate than a Trustee has over a Living Trust. RCW 11.100.140
How much are you contemplating paying now to create a Living Trust? $1,500? $2,500? More? How much time are you willing to devote to its administration for the rest of your life? Remember that for its use to actually result in “quicker and less expensive estate administration,” it is largely an “all or nothing” deal for an event that may not come to fruition for many, many years. In order to ensure the avoidance of a probate at death, all your assets must then be held by your Living Trust. Meanwhile, you must be scrupulous in titling and administering your assets in the Living Trust. And then, all it takes is one asset, and a probate may be necessary.
At first blush, a probate proceeding is public, and administering a Living Trust at death is private. Remember, however, that while a Decedent’s Will is required to be filed, an Inventory & Appraisement for the estate is no longer required to be filed in a Washington probate. Consequently, what will become available to the public about your assets is the degree to which you describe them in the dispositive provisions of your Will. For example, if your Will says only “I give my entire estate to my spouse if he/she survives me, and if he/she doesn’t survive me, then to my children by right of representation,” or “I give my entire estate to my Trustee,” you have revealed nothing about either your assets or their worth.
If you are concerned about the disclosure of your personal information, your assets, and their value, much of that is already readily available to anyone who is serious about obtaining it:
In summary, a probate proceeding may not be as revealing as you suspect, you are largely in control of any disclosure regarding assets in a probate proceeding, much personal and financial information about you is already available to anyone who is serious about finding it and willing to pay the price, and using a Living Trust may not provide the relative privacy that you may otherwise desire.
There is more law on Will contests than Trust contests, Will contests are more popular than Trust contests, and the Courts are more familiar with Will contests than Trust contests. Consequently, Will contests are more favored than Trust contests — meaning that Will contests favor the contestant-Objectors, while Trust contests favor the defendant-Trustees.
Furthermore:
Both of these circumstances are absent upon the use of a Living Trust.
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If you own property in another state, or if you are concerned about the possibility of a contest surrounding the disposition of your estate at death, you should consider creating a Living Trust and transferring your property into it. Doing so should avoid the necessity of a probate in the other state and decrease the likelihood of a contest at death. Ancillary probates as well as probate contests, whether involving a Will or a Trust, are unusually expensive and time consuming, and contests can, and occasionally do, result in unintended changes to one’s estate plans. |