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Attorneys for the Business of Life

Understanding Revocable Living Trusts

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Understanding Revocable Living Trusts

We, like many attorneys, have clients say something like, “I’ve been told that I need a trust so I can avoid probate.” These clients are generally referring to what are called revocable living trusts (“RLT”). These trusts are vehicles that allow you to get your assets to the next generation. Probate, the thing they are trying to avoid, is the process of passing assets through a written Will or having the assets pass in accordance with state laws through a similar process called intestacy.

A good analogy for RLTs is to think of them as reusable shopping bags. It is not the reusable part that is important, but the fact that you have a bag to place your items in. Something you have already paid for. Here are some other similarities between reusable shopping bags and revocable living trusts.

Carry items or assets

Just like a bag, an RLT is something that enables you to carry items, or in this case, assets, and hand them off to someone else. You place your assets into the trust during your lifetime. If done correctly, this allows you to avoid the probate process. However, just as with an RLT, probate will allow you to pass your assets to the next generation. In Washington and several other states, probate is relatively easy and straight-forward.

Think of probate as paying for bags at check-out. Your items still get bagged, you just have to wait until you reach check-out. As with reusable shopping bags, one consideration for RLTs is that you pay for them beforehand; whereas with probate your estate will pay someone to transfer your assets at your death. It is generally just an issue of when assets get transferred. By it self, just avoiding probate may not be a sufficient reason for most people to use an RLT.

List where things go

You can think of both a Will and an RLT as a list of instructions that you give to the cashier at check-out. Each one tells them how you want things bagged. The main difference is that with an RLT, you should have already bagged things as you shopped, and you are just telling the cashier how to rearrange the bags or split up items. With a Will, the cashier bags things at check-out. With either a well-written Will or RLT, you can be confident that someone, either a personal representative or trustee, will follow your instructions for who gets what.


One advantage to a revocable living trust is privacy. The probate process is public, so anyone can, though most people won’t, look at what assets you are passing on and who gets them. In this case, RLTs would provide privacy; the public would not be able to see what assets you have or who gets those assets. It would be like placing all your items in your reusable shopping bag as you go, because you don’t want other people to see what you are buying. It doesn’t necessarily mean you are buying things you don’t want others to see, just that you don’t want other shoppers violating your privacy.For some people, this is an advantage to having an RLT in place.

Already Paid For (Funding the RLT).

One important note: to be effective, you need to fund your RLT during your lifetime. What does that mean? Funding your RLT is like putting all your items in your reusable bag. Generally, you will put all your assets into the trust, including real estate and various investment and bank accounts (usually by making the trust a beneficiary).

Remember that you have already paid for the reusable bag, but if you forget to put your items in the bag, you will have to buy another bag for them at check-out (or pay the cashier to place them in the bags you already have). Similarly, if you don’t put your assets in your RLT during your lifetime, your estate will have to pay to use the probate process to get those assets into the trust. Except unlike incredibly inexpensive reusable shopping bags, RLTs and probate can each cost you thousands of dollars. You don’t want to spend thousands on an RLT and then have your estate pay thousands more to put your assets into that trust. If you don’t fund the trust, an RLT is just a very expensive but very empty bag that you will need to pay to fill.

Other things to consider.

Admittedly that analogy breaks down a bit,but I hope it helps to get those points across. Another reason to have an RLT is if you have assets like business interests or real estate in another state. You don’t want to make your loved ones struggle through multiple probate processes in different states. An RLT can decrease the risk of multiple probatesand allow your assets to be easily transferred.

Finally, it is important to note, with all its advantages, an RLT by itself will not help you with tax planning for a large estate. You may need something other than a reusable bag to help you carry your top-of-the-line 100” flat screen tv to check-out!

Ultimately, not everyone needs or will want an RLT. A good estate planning attorney can help you decide if you need an RLT or if a simple Will works just as well for you.

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