Why a Revocable Living Trust Might Be the Smartest Estate Move You Make

Attorney James Jones: [00:00:00] Imagine this, your loved ones are grieving, and instead of focusing on healing, they’re tangled in red tape, waiting on court approvals, tracking down account access, and maybe even fighting over who gets what. Now, picture this a different scene. Everything runs smoothly. No court delays, no public drama.

Just calm, quiet, administration of your wishes. What made the difference? A revocable living trust. In this episode of Legacy Talk, I’ll walk you through why this one legal tool can be the key to protecting your family, your privacy, and your peace of mind, not just after you’re gone, but while you’re still alive.

You are listening to the legacy talk podcast hosted by James A. Jones, attorney at law and founder of sound legacy law, PLLC in Tacoma. Attorney Jones is here to talk about how to best protect your family assets and well, pulling stories from his more than 20 years of helping families and business owners [00:01:00] protect their assets, create their estate plans, preserve their wealth and plan for the future.

Nobody wants to think about estate planning, but life has a way of sneaking up on you and. And at any moment, something unexpected could happen that will leave you regretting not having acted sooner. So join attorney James A. Jones in the Legacy Talk podcast and together learn how to plan for your future today and have peace of mind tomorrow.

Attorney James Jones: Welcome to Legacy Talk. I am your host, James Jones. On today’s show, again, we are talking about why a revocable living trust might be the smartest estate move you make. And if you’ve listened to this podcast at all over the years, you’ll know that I am a revocable trust guy. I’m a fan of the revocable living trust.

I find that it’s the most versatile estate planning tool in my toolbox. It fits people of all ages. It fits young people. [00:02:00] It fits middle aged people. It fits seniors. Young people can have it to manage their assets and have it deal with their assets when their kids are young, middle-aged people can use it for estate tax planning.

Seniors can use it for estate management if they’re not able to. A lot of different things that it can be done with this trust. And so today I thought we would talk about some of the main points of a revocable living trust, why it is the best tool that you can use for your estate plan, or could be. And uh, go through several points in that regard.

So the first thing I wanna talk about is the number one thing that people worry about with their estate plan after what you know, goes to the kids and who’s in charge and stuff like that. It’s how is it administered it? Washington state probate is a relatively streamlined process unlike other states like California or New York, but it’s still a public court [00:03:00] process.

It takes six to 12 months or longer. And it requires formal notices dealing with the court, dealing with creditors, sometimes dealing with creditors claims. A revocable trust when properly funded, can avoid probate entirely. Assets transferred to your beneficiaries quickly and privately without any court involvement.

For example, I have clients all the time that pass away. That’s just the business I’m in, but. If I have a client passing away with a home in their trust and bank accounts, in their trust, the successor trustee who is named to administer the trust, who is in charge when they’re gone, can take over the next day after they pass away, and within weeks have distributed everything without any delays, without any probate, without any court fees, without it being public knowledge to their nosy neighbors.

So the number one reason to avoid probate or to use a [00:04:00] trust to avoid probate is you don’t have to go through that public process. Okay. Another benefit of using a revocable trust is privacy, like I just mentioned. When a will is probated in Washington, it becomes part of the public record. Anyone can access it, anybody. That includes the full list of the beneficiaries and potentially asset values, including like phone numbers and addresses and stuff like that with a revocable trust. Those details are private administration happens outside of the court system shielding your personal and financial details from public view.

I’ve had clients with the nosy neighbor going into the court case and trying to see what, what’s going on, right? Or a nosy family member.

I had a client who’s a business owner who didn’t want to have competitors see what was going on. He didn’t wanna know what his, have creditors know what his estate was worth or who got the company when he was gone. So he used a trust to help transition that [00:05:00] without having to make it public. Okay.

Another benefit of a revocable living trust is that it helps plan for incapacity. When you do a will, the will only takes effect when you’re gone. Okay? It has no impact when you’re alive, but what happens if you become incapacitated due to a stroke or dementia or something like that? A revocable living trust allows your A successor trustee to step in and manage your assets without any court intervention, so no guardianship required.

In Washington, if you don’t have a revocable trust and you don’t have a durable power of attorney, a guardianship would be required. And these petitions in Washington are increasingly scrutinized. They take several months to finalize. So you could be sitting somewhere for months waiting for a guardian to be appointed to can deal with your care, pay your bills, things like that.

With the trust, there’s no court hearing, no judge, no delay, just continuity, right? You name a friend [00:06:00] or a family member to manage your estate and that friend or family member starts as soon as you’re not able to do it. Okay? I have multiple clients who name their children as a successor trustee, who help their parent when they’re unable to pay their bills, manage their assets.

And they use the trust to do so. They didn’t have to go to court. They didn’t have to do a durable power of attorney to have that done. They have the authority to manage the trust according to the terms of the trust. So it’s much easier dealing with banks and all those things. With a trust, you have greater control of asset distribution as well.

Wills generally distribute assets in a lump sum. Trusts often allow for more sophisticated planning, like staggered distributions, protection from creditors and long-term oversight by trustees. Washington is one of the states where it has strong protections for surviving spouses and community property, but having a [00:07:00] trust detail what goes on, and this is particularly important in blended families, having a trust detail, what goes on makes things a lot smoother.

Okay. Trust can, in many cases, ensure that a surviving spouse has lifetime assets to As access to assets and income or residence while preserving principle for children from a previous marriage for example. Number five, and we alluded to this, I. If the trust avoids something called a living probate. That’s the guardianship or conservatorship, right?

Even with a durable power of attorney, financial institutions are sometimes reluctant to accept older powers of attorney and require additional legal steps. So that’s another thing. This is not about that in this episode, but an old power of attorney is unlikely to be usable at a bank. They’re very finicky.

A trust gives your successor trustee, though. So if you have a revocable trust and you have a successor trustee, and these accounts that you have [00:08:00] are in the trust. They give that successor trustee authority to act on the trust behalf without having to prove incapacity or anything like that. I’ve had multiple times where a power of attorney was rejected by a bank or put under significant scrutiny, but because assets were titled into the trust, they could immediately access those access and manage accounts. Okay.

Six benefit of a trust. revocable trust is the streamlined administration of your assets at death. So we talked about how it can avoid probate. By avoiding probate, you’re making the administration process much easier. Probate can freeze accounts and delay transfers. Trusts allow for faster, more flexible management of assets upon death. Your successor trustee, we’ve talked about this, doesn’t have to wait for court approval to sell property or access bank accounts or pay bills. I’ve got a client who recently died with rental property and utility bills due, and because these properties were in trust, the trustee was able to pay those expenses with the trust accounts [00:09:00] and continue to collect rent, maintain the properties.

Oftentimes, if there’s a house that’s in someone’s name, a utility company’s reluctant to change that name without a court order, and so the trust made it much easier in that situation. Another thing to consider, and another thing that a revocable living trust does well is managing out-of-state property.

If you own real estate outside of Washington and only have your will, your family’s going to have to do something called an ancillary probate if you own property in another state. However, if you have, say you have a property in Arizona, right, and you live in Washington and the Arizona property is like a vacation house or something, Airbnb, I don’t know if you died with a will, you’re going to have a probate in Washington and you’re going to have a probate in Arizona in order to deal with those two properties in clear title, if you have those properties in trust, the trust has [00:10:00] the authority, grants and provisions to allow the successor trustee to deal with those out of state assets and in state. So if real estate outta state can be titled in the trust, it avoids probate in that state. Okay? And this happens all the time, all the time.

Another reason, a revocable living trust is a good idea. And maybe the best idea for your estate plan is that it can help with the business succession planning. Okay? If you’re a small business owner, business ownership presents unique challenges. And if an owner dies and becomes incapacitated, operations can grind to a halt, right?

A trust can hold business interest and appointed trustee to immediately take over. Minimize distributions and disruptions. And so I just did this with a client actually who had a business that he wanted to give to his kids, but he also wanted to benefit a key employee that had been with him for a long time.

And so we transferred his company into his [00:11:00] trust and specifically distributed that company at his passing according to his wishes. And that made it so that the transition of the company was so much easier. There’s no probate, no court supervision, no public knowledge of what is done with the company or who owns it.

The customers just go on like nothing happened necessarily. Right? The company continues in business without the owner or founder, you know, having any impact on the customer base. So it ensures continuity of payroll contracts, things like that, right? The trust is very flexible. A revocable living trust in particular, is very flexible.

They can be amended, they can be changed at any time during your lifetime. As long as you’re competent, you can change your trust. You’re not locking yourself into a rigid plan with a revocable trust. You can amend it as your relationships or assets or even, you know, goals, family goals and stake goals change.

I’ve had [00:12:00] clients over the years make many updates to their trust regularly updating their trust. It’s very simple to do and it’s a no brainer, basically, right? That you can manage that through your lifetime and it can become what you want it to do. Want it, Want it to be. At the time that you need it, right?

So if you have a new grandkid or something that’s born, you can create a grand children’s trust or something. You know, you don’t have to start from scratch and create something out of whole cloth. You just amend what you’ve got.

Finally, with a revocable trust, you can have potentially better family harmony. A well drafted trust can reduce ambiguity and conflict among family members. It clearly states your wishes, names, people who are in charge and ideally avoids gray areas that can lead to litigation. The other benefit too, of avoiding probate is that there’s no lawsuit for a family to stick their nose in.

There’s no judge that’s going to get involved, and the trust allows your family to spend more [00:13:00] time think and honoring your legacy rather than arguing about minutiae. Right. It’s just much better. Right? It’s much better. And so the revocable trust, I think, is the most versatile tool in an estate plan.

It distributes your assets, it avoids probate, it avoids guardianships and conservatorships. It’s easy to amend during your lifetime. It’s easy to manage during your lifetime. It doesn’t change your income taxes or anything like that. It’s just so much easier to deal with. And so if you’re looking to do your estate plan.

And wondering if a revocable trust is right for you. I would strongly consider it and call me with questions. I’d be glad to help. Next time, we will be talking about something just as important as this revocable trust. We’re going to be diving deeper into what most people miss after they create a mo revocable living trust, which is funding it.[00:14:00]

Creating the trust is just the beginning, but if your assets are not properly titled. Or aligned with the trust, you could still end up in probate. And so next time I’ll walk you through what funding really means, which assets to pay attention to, how to avoid the what I see as the number one mistake with trust in Washington.

Trust me, you will not want to miss next week’s episode. And that’s it for today. I’d like to thank you for listening to today’s episode of Legacy Talk. If you like today’s episode would like to learn more, please like and subscribe for more great content. I’ve been your host, James Jones, to your legacy.

Thank you for listening to the Legacy Talk podcast by attorney James A. Jones. If you found today’s episode helpful, we ask that you like and follow us on all major platforms so you don’t miss out on the latest episode. If you have questions for Attorney Jones, reach out at info@joneslegacylaw.com or visit our website at jones legacy law [00:15:00] com.

Join us again next week for another episode of the Legacy Talk podcast.