Avoiding Probate in Washington State
Probate is the legal process by which a court oversees how the assets of an estate are divided up. The probate process may occur, regardless of whether the deceased has a will. How to avoid probate in Washington depends on your goals and the complexity of the estate. You may want your family members to avoid going through the process because, depending on the nature of the estate, it may take a long time to complete, require significant participation from the administrator or executor, and, if legal counsel is used, it can generate a significant amount of attorney’s fees.
Probate is a legal process that includes:
- Proving that a will, if there is one, is valid
- Identifying and creating an inventory of the deceased’s property and liabilities
- Having property appraised
- Paying legitimate debts and taxes
- Distributing what property is left as the will directs (or as state law requires, if there is no will).
Why Avoiding Probate in Washington State May Make Sense
Typically, the probate process includes both preparing the necessary paperwork, as well as having appearances by lawyers. Because their fees, as well as the court costs, are typically paid by the estate, it can impact the amount which might otherwise go to those who will receive an inheritance.
If you’re the one doing the estate planning, avoiding probate in Washington State won’t do you any favors personally because your assets will be distributed after you pass away. However, preventing probate may be in your beneficiaries’ interests because …
- It may cut down on the costs and the bureaucracy they would need to face otherwise.
- It’s a way to potentially leave them more assets while saving them time, energy and possibly frustration with the probate system.
Several Approaches Could be Used for Avoiding Probate in Washington State
There are several ways to avoid probate in Washington. Though some estate planners will utilize one approach to avoid probate, you may want to pick and choose which options are right for you. A combination of approaches may be the best fit for your goals and future estate. Here are some options…
- Living Trusts
A living trust is revocable, meaning you may end or change it, as long as you’re mentally competent. At its core, a living trust is essentially a legal vehicle that provides that a trustee (the person responsible for the assets and making sure they’re properly distributed) will hold all the property that you transfer into a trust (which, by law, would be the new owner) to benefit its beneficiaries (usually you and your spouse, those who get the benefit of the assets). Conceptually, a trust is akin a separate entity with the sole purpose of holding title to a person’s property and overseeing its distribution according to the dictates of the trust’s terms.
After you (and your spouse, if applicable) pass away, the trust transfers the assets to those you designate as your ultimate beneficiaries (normally family members, but it can be anyone you wish, or a nonprofit organization). If you set up a revocable living trust you also need to have a will executed. It would state that your probate assets (assets not transferred into the trust) should be “poured over” into the trust.
A revocable living trust can prevent the expense of probate. If you own property out of state, you may also avoid additional probate proceedings where it’s located. Setting up a revocable trust does entail some expense, so you need to decide whether the benefits outweigh the costs of avoiding probate in Washington State, which could be substantial, depending on how many assets you own, their complexity and location.
If you’re concerned about privacy, a revocable living trust arrangement (which spells out your assets and beneficiaries) need never enter the public eye, though the will you create would be part of probate and become a public record. If you own a business, a revocable living trust may provide for continuity of control after you pass away or become incapacitated.
- Joint Ownership and Tenancy in Common
If you own property jointly with another person, and this ownership includes the “right of survivorship,” then if an owner passes away the surviving owner automatically assumes ownership of balance of the property. No probate is necessary to transfer the property.
If you own property as “tenants in common”, your share of the property would not automatically transfer to the other “tenant”. Your share would most likely become subject to probate.
You and others may hold assets as joint tenants with rights of survivorship. They will pass to the surviving owners when one dies, without probate proceedings. This may work well if a couple (married or not) share real estate, vehicles, bank accounts or other valuable property. Each owner (a joint tenant) owns an equal share.
- Community Property Agreements
If you’re married, you can create and sign a community property agreement. Under it, when one spouse dies, his or her property becomes community property and passes to the survivor. Community property, by state law, left to one through a community property agreement may be transferred to the survivor without going through the probate process.
- Payable-on-Death Designations for Bank Accounts
You may create a “payable-on-death” (POD) designation to bank accounts. You would control what’s in the account during your life. After you pass away the beneficiary would get access to the account through the bank without needing to go through probate proceedings.
- Transfer-on-Death Registration for Securities
By state law you can register stocks and bonds in a transfer-on-death (TOD) form, which is very common. Under this arrangement, the named beneficiary inherits it at your death. There are no probate court proceedings required, and your beneficiary will need to work with your broker to transfer the account.
- Transfer-on-Death Deeds for Real Estate
Ownership of your real estate can transfer to another after you pass away with a transfer-on-death deed, also known as a beneficiary deed. The deed is signed and recorded, but it has no legal effect until you pass away. The deed can be revoked by you and you can later sell the property, which would nullify the transfer-on-death deed. [should we add a sentence along the lines of “upon your death, the transfer-on-death deed becomes irrevocable. The named grantee/beneficiary will need to record a copy of your death certificate to effectuate the transfer.]
Although probate can be complex, avoiding it may be complex, too. How to avoid probate in Washington State requires some thought and consideration of your goals and priorities. You may have heard of how friends or family members structured their assets to prevent probate, but what they did may or may not be right for you.
If you have questions or concerns about probate and how it might be avoided, consult with one of our experienced estate planning professionals who can evaluate your situation, give you some options and suggest what might work for you and your family. For more information or to discuss your concerns about avoiding probate in Washington State, call our offices in Seattle or Tacoma today for a FREE phone consultation at (253) 358-8473. We look forward to working with you.