How Do Testamentary Trusts Differ From Revocable Living Trusts?
A testamentary trust is contained within your Will, and becomes effective only upon your death. No property needs to be transferred into a testamentary trust to make it valid. Testamentary trusts should be utilized where there exist specific concerns about the effect having control of substantial sums of cash might have on a beneficiary, for example, minors or persons of diminished mental capability.
A revocable living trust is an agreement that a trustee (usually yourself) shall hold all the property you transfer into the name of the revocable living trust for the benefit of the trust beneficiaries (usually yourself and your spouse). A revocable living trust is effective only as to property expressly transferred into the trust. With a few exceptions, revocable living trusts offer few advantages to Washington residents and are inappropriate for those who do not: 1) require heightened privacy, 2) hold large numbers of out-of-state real property parcels, or 3) have ongoing businesses in need of continuity of administration.