By: Michael Gunning
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Which Types of Trusts are Available in Washington State?
Many Washington residents are (for the most part) aware that trusts are available. People often recognize the term from depictions of wealth on television, or have heard the term “trust fund kids” in pop culture references. Wealth instruments such as these are utilized to distribute a decedents estate assets under certain legal circumstances. Nonetheless, in truth, trusts are not only for the rich and famous, and are most valuable for almost every type of estate plan you can think of.
Additionally, there are numerous other types of trusts that can be called upon for different functions. Today, we’ll look at the two most basic forms of trusts: ‘Inter-vivos’ (during life) and testamentary. It’s important to note that both trusts can be used by Washington State residents to enforce their estate planning wishes, but they work in somewhat different ways.
Inter-vivos Trusts, as indicated by the Latin name, are made while the individuals creating them are still alive. These trusts can also be either ‘revocable’ or ‘irrevocable.’ A revocable trust may be invalidated by the individual who produced it at any time. Irrevocable trusts, however, once filed with the court typically must remain in existence.
Both forms of inter vivos trusts will help a family avoid probate matters, but will also come with differences in other areas like protection of assets from creditors. In the majority of cases, it’s a beneficial idea to have a ‘pour-over’ clause written into a will when setting up an inter vivos trust to avoid probate, so you can be sure to find any assets that could have been omitted when creating or appending to the trust.
Testamentary trusts then, are made within the will document of the testator. This type of trust is often used to guarantee that there will be no controls on the manner in which assets are distributed to your heirs, or to help by protecting your assets from creditors. While a Testamentary trust will not necessarily help your family avoid probate, they could help a testator ensure that their heir doesn’t spend the entirety of their inheritance immediately after receiving it. You also have the option to place additional conditions on the distribution of specific assets.
It is critical that Washington State residents understand the way in which these types of trusts are organized and worded with special attention paid to whether they can be enforced and how the trustee will be able to understand the testator’s intent. Deciding on a proper trustee is one of the most important pieces of the trust process.
If you have additional questions, get in touch with our Estate Planning Attorneys for more information at 509-328-2150.