When Bellevue families start estate planning, one of the first questions is whether to use a revocable or irrevocable trust. Both have their place, but they serve very different purposes. This article compares the two types of trusts under Washington law and helps you decide which makes sense for your family.
What Is a Revocable Living Trust?
A revocable living trust is the most common trust used in Bellevue estate planning. You create the trust, transfer your assets into it, and serve as your own trustee during your lifetime. Because it is revocable, you can change the terms, add or remove assets, or dissolve the trust entirely at any time. You retain full control — the trust is essentially invisible during your life. At your death, the assets pass to your beneficiaries without going through King County probate court. A successor trustee (someone you name) manages the distribution.
The revocable trust's main benefit is probate avoidance. Washington probate is not as expensive as probate in California, but it still costs $5,000 to $15,000 and takes 6 to 12 months for a typical estate. With a properly funded revocable trust, your family avoids that process entirely. See our comparison of revocable trusts and wills in Washington for more details.
What Is an Irrevocable Trust?
An irrevocable trust cannot be changed or dissolved once it is created (with limited exceptions). When you transfer assets into an irrevocable trust, you give up ownership and control — those assets no longer belong to you. This sounds scary, but it is exactly what makes irrevocable trusts powerful. Because the assets are no longer yours, they are not part of your taxable estate, and they are generally protected from your creditors. The trustee you name manages the assets for the benefit of the beneficiaries you choose.
Irrevocable trusts are used for several specific purposes in Washington estate planning:
- Estate tax reduction: Washington's estate tax exemption is $2.193 million (as of 2024). If your estate is above that, an irrevocable trust can remove assets and reduce the tax. This is especially relevant for Bellevue tech professionals with significant stock holdings.
- Asset protection: If you are in a high-liability profession (physician, business owner, real estate investor), an irrevocable trust can shield assets from future lawsuits.
- Medicaid planning: An irrevocable trust can help qualify for long-term care Medicaid by removing assets from your estate, though Washington has a 5-year lookback period.
- Special needs planning: A special needs trust (also called a supplemental needs trust) is irrevocable and allows a disabled beneficiary to receive inheritance without losing government benefits.
- Life insurance: An irrevocable life insurance trust (ILIT) owns your life insurance policy so the death benefit is not counted in your taxable estate.
Key Differences at a Glance
| Feature | Revocable Trust | Irrevocable Trust |
|---|---|---|
| Can you change it? | Yes, anytime | No (limited exceptions) |
| Control of assets | You keep full control | Trustee controls assets |
| Avoids probate? | Yes | Yes |
| Reduces estate tax? | No | Yes |
| Asset protection | No | Yes |
| Medicaid planning | No | Yes (with 5-year lookback) |
| Tax ID needed? | No (uses your SSN) | Yes (separate tax return) |
Which Trust Is Right for Your Bellevue Family?
For most Bellevue families, a revocable living trust is the right starting point. It avoids probate, keeps things simple, and maintains your control. You can always add an irrevocable trust later if your situation changes. A Bellevue living trusts attorney can help you evaluate your situation.
An irrevocable trust may be right for you if:
- Your estate exceeds the Washington estate tax exemption of $2.193 million.
- You are in a profession with high lawsuit risk.
- You want to protect assets for a child with special needs.
- You want to qualify for Medicaid long-term care benefits.
- You own a business and want to transfer ownership to the next generation with tax benefits.
Keep in mind that you do not have to choose one or the other. Many Bellevue estate plans use both — a revocable trust for day-to-day assets and an irrevocable trust for tax reduction or asset protection. Talk to a Bellevue estate planning attorney about a combined strategy. See our Washington estate planning cost guide for pricing information.
Frequently Asked Questions
01Can I change an irrevocable trust in Washington?
Generally no, but Washington allows some flexibility. With the consent of all beneficiaries and the trustee, certain irrevocable trusts can be modified or terminated. Washington also allows "decanting" — transferring assets from one irrevocable trust to another with better terms. However, these are complex legal procedures and should only be attempted with an attorney.
02Does a revocable trust protect assets from creditors?
No. Since you retain control of a revocable trust, creditors can reach the assets. If asset protection is your goal, you need an irrevocable trust.
03Does a revocable trust save on Washington estate tax?
No. Assets in a revocable trust are still part of your taxable estate. To reduce Washington estate tax, assets must be in an irrevocable trust or gifted during your lifetime.
04Is a trust better than a will in Washington?
It depends on your situation. A trust avoids probate but costs more upfront. A will is simpler and cheaper but requires probate. See our trust vs. will comparison for a detailed breakdown. If you just need a basic plan, start with a will in Bellevue.
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