[WSBAPT] Revoked Trust - Assets

[Joshua McKarcher]

Jeanne,

I would strongly encourage you to have the trustees retitle all assets at the time of termination; or simply restate the existing trust to do whatever you want the new wills to do (i.e., so you can leave property titled in trust).

Leaving aside formal legal arguments about what "should" happen, I would be far more concerned about the practicalities (and accompanying costs in time) of being able to convey and obtain title insurance for any real property (or to get banks to permit collection/retitling of bank accounts, etc.) later in life when assets that are titled to the trust need to be collected, retitled, sold, etc.

If the clients or their PR later need to sell the real property, for example, I would expect a title company to require the trust document, trustees' signatures, and/or maybe an affidavit/certification. It would muddy the waters to sign affidavits that state the trust is in existence and the signatories are the "current" trustees, etc., without reciting that it's actually revoked and the signatories are the pre-revocation trustees, etc. etc. That is a lot of fuss that leaves you at the whim of a title company and its underwriter -- and potentially in the position of asking clients to sign documents you know are not truthful (such as if the documents do NOT recite the facts about prior revocation, etc.). All of this can be avoided now by just retitling the property (for the cost of a $100 deed and $10 excise tax affidavit fee) or by maintaining and restating the trust vs. going with the will.

If you stick to your course, I would at minimum get a local title company "on board" re what they will require at the time of a future sale to a third party who will require title insurance to close the deal.

Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jeanne Dawes
Sent: Thursday, March 26, 2020 10:40 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Revoked Trust - Assets

Dear Listserve Mates:

I hope everyone is staying healthy and adjusting to our new circumstances.  Question:
If a couple revokes their Revocable Living Trust without actually transferring the assets out of the Trust, will the assets (real property) pass in accordance with the couple's will, which now is not a pourover will, but one that contains a SNT for surviving spouse?


Jeanne J. Dawes
Attorney at Law
Gore & Grewe, P.S.
103 E. Indiana Avenue, Suite A
Spokane, WA 99207-2317
Voice:  509-326-7500
Fax:      509-326-7503
jjdawes at goregrewe.com<mailto:jjdawes at goregrewe.com>
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