We are often asked by clients about the benefits of living trusts. While a living trust can be a useful substitute for a Will, its benefits have been overstated in some of the recent publicity.

The following are among the benefits promised in recent advertisements for living trusts:

1. By use of a living trust, one may avoid the cost and trouble of "probate." (Probate is the legal process for transferring a deceased person's property to the heirs.)

2. For persons with estates in excess of $600,000, a living trust can help to avoid estate taxes.

3. A living trust can provide for continued management of one's assets in the event of disability or incompetence.

There is some truth, and some "puffery," in each of these advertising claims. Note the following:

1. In Washington State at least, probate is not so expensive nor so cumbersome as is often believed. In addition, there is extra time and effort involved in establishing a living trust (vs. a will). For instance, the bulk of one's assets must be transferred to the trustee. An extra annual tax return (for the trust) may also be required.

2. Yes, by proper drafting, a living trust may be used to avoid estate taxes. However, this is no less true of a will.

3. A durable power of attorney is often a simpler way of providing for disability, than a living trust.

In short, a living trust is sometimes an appropriate alternative to a will. We have drafted many living trusts, and in certain circumstances recommended them. However, the advantages have been somewhat overblown in recent advertising.

If you have questions about living trusts, or any other estate or tax planning matters, please call the attorney with whom you work, or Eileen Peterson or Al Falk of our Tacoma office.