Many people create a revocable living trust for one major reason—avoiding probate. A trust can also provide privacy and smoother administration, but probate avoidance is usually at the top of the list.
For a trust to accomplish that goal, it must actually own the assets you want it to control, including your real estate. So, what happens if you forget to put your real estate into your revocable living trust?
When a trust is first created, the initial funding process usually involves transferring existing assets, including real estate, into the trust. But life continues after your estate plan is signed. You may buy new property years later, or acquire investment real estate, and if those new assets are not transferred into your trust, the trust cannot control them.
A revocable living trust only governs the assets that are titled in the name of the trust. If real estate remains in your personal name, then legally, it is not part of your trust. And when that happens, the property may have to go through probate.
While probate in Washington is generally more straightforward and less costly than in some states—California, for example—it still adds time, expense, and complexity. And when you created a trust specifically to avoid probate, it’s understandably frustrating to need probate anyway.
Because this scenario is so common, many trusts are paired with a document called a pour-over will. A pour-over will acts as a safety net. It essentially says that any assets that need to be probated should be transferred (“poured over”) into the trust upon your passing. However, it’s important to understand that the pour-over will works through probate. It doesn’t eliminate the probate process; it simply directs the asset into the trust once probate is completed.
This situation is a good reminder that estate planning is not a one-time event. Whether you have a trust or a will, it’s important to review and update your plan periodically. Major life events—such as a birth, death, marriage, or divorce—are good reasons to revisit your documents. Even without a major event, reviewing your estate plan every five to ten years is generally a good practice.
If you have a revocable living trust and later acquire new real estate, transferring it into the trust is usually simple. Most of the time, this involves preparing and recording adeed to move the property from your name into the name of your trust. Once that’s done, the trust can fully control the property.
It’s also worth remembering that placing real estate into a revocable living trust does not limit your control. You can still sell it, refinance it, or rent it out just as you normally would—you’re simply acting in your capacity as trustee. This structure becomes incredibly helpful upon your passing, when your successor trustee can immediately step in and administer the property according to your wishes.
If you need help with a revocable living trust our office, contact us to schedule your consultation today! Visit us online at www.dallawfirm.com or check out our YouTube channel for more discussions about trusts and estate planning: https://www.youtube.com/@dallawfirm
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Normandy Park, WA 98148T (206) 408-8158
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