The Role of Revocable Trusts in Washington Rental Property Ownership

Many Spokane Valley residents own their homes or rental properties through a revocable living trust. Such trusts provide a flexible tool for retaining control of real estate while avoiding the need for probate when the grantor the trust dies. Essentially, the property is transferred to the trust itself, and any successor trustee named in the trust documents automatically assumes control upon the original grantor or trustee’s death.

Successor Trustee Had Right to Evict Tenant with Notice

If you use a revocable trust to hold rental property, it is a good idea to inform any tenants of the trust and its terms. This can help avoid confusion later when a successor trustee assumes control and may need to sell the property or otherwise alter the terms of the tenant’s lease. Many people are unfamiliar with how revocable trusts work, and this can lead to misunderstandings–even litigation–due to their lack of familiarity with the law in this area.

Consider this recent decision from the Washington Court of Appeals, Jacobs v. McKinney. In this case, a husband and wife owned a residential rental property, which they rented to a tenant starting in 1997. In 2008, the owners placed the property in their revocable trust. The wife died in 2015, while the husband died in 2022. At that time, a successor trustee assumed control of the trust.

In accordance with Washington landlord-tenant law, the successor trustee informed the tenant that he was terminating the lease with 90 days notice, as the trust planned to sell the property. The tenant, believing the trustee’s notice was fake, refused to vacate and instead reported the successor trustee to the police for fraud.

Nearly a year later, the tenant had still not vacated the house. The successor trustee then filed an eviction lawsuit. The tenant, representing herself throughout the litigation, continued to insist there was no evidence that the successor trustee had the ownership of the property or the authority to evict her.

The courts sided with the trust. As the Court of Appeals explained in its decision affirming an earlier Superior Court ruling, the county property records showed the residence was owned by the trust. And the successor trustee provided copies of the trust documents, which proved he had the lawful authority to act on the trust’s behalf. That was all the proof the courts needed to establish the trustee’s lawful ownership of the property, including its right to retake possession from the tenant. The tenant argued the successor trustee “needed to record his appointment” first, but the Court of Appeals said there was “no legal support for this argument.”

Contact Moulton Law Services Today

Managing trust property is an important responsibility for any trustee or successor trustee. A qualified Spokane trust administration lawyer can provide you with important guidance and advice on this and many other subjects. Contact Moulton Law Offices, P.S., today to schedule a free consultation. We serve clients throughout the Spokane Valley, Kennewick, and Yakima area.

Source:

https://scholar.google.com/scholar_case?case=3986949750847280302