Do I need a trust?

Do I need a trust? Friends say everyone should have one. A seminar flyer says the same. But if what you own is a house and a 401(k), the answer may be simpler than it sounds.

This page walks through that common case: what happens to each asset at death, what a trust adds, and the simpler tools that sometimes do the job. It is part of our guide to estate planning documents. We use Washington as the worked example, with each rule tied to its statute.

Start with what you own, not with the document

A trust is a tool for particular jobs. So the useful question is what each of your assets will do without one.

What happens to your 401(k)?

A 401(k) follows its beneficiary form. The IRS puts it simply: the owner names beneficiaries "under procedures established by the plan" (IRS). Your will doesn't override that form.

Some plans require particular beneficiaries, such as a spouse, under the plan's terms (IRS). If you are married, check with your plan before naming anyone else.

So for the 401(k), the job is not a trust. It is making sure the form is current and names a backup. Retirement accounts usually stay in your own name, as our post on what a living trust is explains.

One Washington rule worth knowing: if you divorce, a beneficiary designation to your former spouse on a nonprobate asset is generally revoked (RCW 11.07.010). There are exceptions, and the rule may not reach every account, so update the form yourself rather than rely on it.

The house is the real question

A house in your name only, with no other arrangement, goes through probate after you die. In Washington, the small estate affidavit is limited to estates of $100,000 or less, and it is written for personal property such as accounts and cars (RCW 11.62.010). A house rarely fits.

There are two common ways to pass a Washington house outside probate.

Option 1: a revocable living trust

You sign the trust, then deed the house into it. At your death, property in a trust that becomes irrevocable is a nonprobate asset in Washington (RCW 11.02.005). Your successor trustee can sell it or hand it on without a probate case.

The trust also works while you are alive. If you have a stroke and spend two months in rehab, your successor trustee can pay the property tax and arrange repairs. In Washington, a named successor trustee who is willing to serve is entitled to act (RCW 11.98.039).

Option 2: a transfer on death deed

Washington lets you record a deed that passes the house to a named beneficiary at your death (RCW 64.80.060). It must be recorded with the county before you die. You can revoke it, and it gives the beneficiary no rights while you are living (RCW 64.80.030, RCW 64.80.090).

It is simpler than a trust. But it does nothing if you become unable to manage. And it passes the house to a person outright, with no instructions about how or when.

Not every state offers transfer on death deeds, so check your own state's rules.

What about the years before death?

This is the part a will, a beneficiary form and a transfer on death deed all leave out. None of them lets anyone act for you while you are alive.

For that, the key document is a durable financial power of attorney. In Washington, a power of attorney ends at incapacity unless it contains durability wording (RCW 11.125.040). So the wording matters.

A trust adds a second route for the assets inside it. Some people like having both: the trustee looks after the house, and the agent handles the rest.

When a trust earns its keep

A trust is worth a serious look if any of these sound like you.

• You want one person to be able to manage your house if you are ill, with written instructions.
• You own property in more than one state.
• You want to set conditions, such as paying out over time or keeping the dog's walker paid.
• You want your plans kept out of a court file. In Washington, whoever holds a will must deliver it to the court or the executor after death (RCW 11.20.010).
• The people who would inherit are not the ones who would naturally manage things.

A will, beneficiary forms and possibly a transfer on death deed may be enough if:

• Most of your savings already have named beneficiaries.
• Your house is going to one person, outright.
• You are comfortable with a durable power of attorney covering the incapacity years.

Here is a typical case, a composite. Margaret, 66, owns a condo in Spokane and has a 401(k) and a small checking account. She names her niece on the 401(k) form and adds a payable-on-death beneficiary at the bank.

For the condo, she weighs a transfer on death deed against a trust. She chooses the trust, because she wants someone to step in if she is ever in the hospital for a long stretch.

What would it cost?

A trust costs more up front than a will, and funding it takes a new deed. Our post on what a living trust costs has published prices from online services and law firms, checked October 2026. For a side-by-side look at the two documents, see will vs trust, and for the kinds of trust, revocable vs irrevocable trusts.

Who would carry it out?

Whatever you choose, someone has to act. A trust needs a successor trustee; a will needs an executor. Both are fiduciaries, meaning legally required to act in your interest and follow what you wrote.

If the people you'd name are your own age, or live far away, that matters as much as the document. Our guide to choosing professional help compares family, lawyers and trust companies. A Kinly membership includes a revocable trust and a will written for your state, and Trella Trust Company can be named trustee or executor, first or as backup.

Common questions

Do I need a trust if I only have a house and a 401(k)?

Not necessarily. The 401(k) passes by its beneficiary form either way. For the house, a trust avoids probate and helps if you can't manage. In Washington, a transfer on death deed avoids probate more simply, but does nothing during your lifetime.

Should I put my 401(k) in my trust?

Usually not. Retirement accounts generally stay in your own name, with a beneficiary form saying who receives them. Some people name their trust as beneficiary for particular reasons, which is worth discussing with a lawyer or tax adviser.

Can a will do the same job as a trust?

Not quite. A will works only after death, and it works through probate. A funded trust can pass property without probate and lets a successor trustee manage it if you are unable to.

Is a trust only for wealthy people?

No. People use trusts to keep a home out of probate and to plan for incapacity, not only for taxes. Whether one makes sense depends more on what you own and who will act than on how much.

Sources

• Retirement topics: Beneficiary (IRS)
• RCW 11.02.005: Definitions, including nonprobate asset (Washington State Legislature)
• RCW 11.07.010: Effect of dissolution on nonprobate assets (Washington State Legislature)
• RCW 11.20.010: Duty of custodian of will (Washington State Legislature)
• RCW 11.62.010: Small estate affidavit (Washington State Legislature)
• RCW 11.98.039: Successor trustee (Washington State Legislature)
• RCW 11.103.030: Revocation or amendment of trusts (Washington State Legislature)
• RCW 11.125.040: Power of attorney, termination (Washington State Legislature)
• Chapter 64.80 RCW: Uniform Real Property Transfer on Death Act (Washington State Legislature)