Many people have heard of creating a trust instead of a will and want one because they’ve heard it is somehow better and avoids probate. A revocable trust can be a great estate planning tool for certain types of estates, however it is typically not the first alternative for residents of Oregon or Washington. California residents love them because the cost and time of probate, the court procedure for disbursing an estate pursuant to a will, can be exorbitant and exhausting there. Not so much here in the Pacific Northwest. Court filing fees are modest and attorney fees are generally reasonable because they are not tied by statute to a percentage of the estate as in some states.
There are real situations in which a trust is a valuable and necessary estate planning tool – they can be useful for long-term distribution schemes, may help in tax planning, and do offer privacy for larger estates. There are also a variety of trusts, both living and testamentary, so sometimes there is confusion about what is meant when someone recommends a Trust. But, generally, people are comparing revocable trusts with wills. In Oregon and Washington, a big reason to create a trust rather than a will is when real property is owned in multiple states. Depending on how it is titled, real property generally requires an ancillary probate in the state in which it is located and this can get costly and time consuming quickly. That is one obvious situation where it’s worth considering adopting a trust, even with the complexity and cost of establishing one and administering one.
But, consult with an estate planning attorney before launching into one just because someone you know has one in a pretty binder and don’t create one just because they seem like the thing to do if you’re financially savvy. Do what makes sense for you!