An additional means by which a person can control the distribution of his or her assets is through a “Trust.” In Washington State, a Trust is created by a “Trustor” who puts property into under the control of a “Trustee” for the benefit of a third party, called the “beneficiary.” Trusts created during the settlor’s life are called Living Trusts; Trusts created after the settlor’s death (i.e. in a Will) are called Testamentary Trusts. Trusts can be revocable or irrevocable.
A Trust can be a valuable legal tool. There are many types of Trusts and whether a Trust is advisable and what type of Trust is preferred depends on each person’s goals and circumstances.
A Trust offers numerous benefits to the Trustor and the beneficiary, including the following:
- Avoiding Probate: Assets put into Trust are not subject to probate, thereby avoiding the costs and delays associated with that process;
- Ensuring Privacy: A Trust is a private contract between the settlor and the Trustee, and so usually they do not need to be filed with a court clerk. Therefore, unless a lawsuit is required to settle your Trust after your death, your assets will be distributed to beneficiary without that action becoming part of the public record;
- Planning for Mental Disability: an irrevocable living Trust allows a person to specify how his or her mental incapacity should be determined and the care the disabled person is to receive, and designate a Disability Trustee to manage your property;
- Protecting Assets: avoid paying unnecessary taxes or ensure medical bills will be paid.