Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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Opening a savings account in your name as trustee of your revocable living trust in Washington State in 2025 involves specific considerations to ensure you comply with legal requirements and properly manage trust assets. Here’s a breakdown:

1. Trust Establishment and Authority:

• Valid Trust Document: You must have a legally valid revocable living trust established in Washington State.
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• Certification of Trust: Banks will typically require a Certification of Trust, which provides key details about the trust and your authority as trustee without needing the full trust document.
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• Trustee Authority: The bank needs to confirm your authority as trustee to open and manage accounts on behalf of the trust.
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• Compliance with Washington Law: Ensure your trust and the account comply with Washington State’s specific trust laws and regulations, particularly the Washington Trust Act. 

The Washington Trust Act generally refers to Revised Code of Washington (RCW) Title 11, which covers probate and trust law in Washington State. More specifically, it can refer to the Washington Trust Act of 1984 (RCW 11.02.900), which reorganized and expanded provisions related to trusts in Title 11. Additionally, specific chapters within Title 11, like RCW 11.98 (Trusts) and RCW 11.96A (resolution of disputes involving trusts and estates), are often considered part of the broader “Washington Trust Act”. 

Here’s a more detailed breakdown:

Key Aspects of the Washington Trust Act:

• RCW Title 11:This is the primary body of law governing trusts in Washington State. 
• Washington Trust Act of 1984:This act, codified as RCW 11.02.900, significantly revised and expanded trust law in Washington, building upon earlier legislation. 
• Specific Chapters:
  • RCW 11.98: Deals with the powers and duties of trustees, the creation and administration of trusts, and related matters. 
  • RCW 11.96A: Provides procedures for resolving disputes related to trusts and estates, including both nonjudicial (mediation, arbitration) and judicial methods. 
  • RCW 11.103: Addresses revocable trusts, including the requirement for express revocation language. 
  • RCW 11.98B: The Uniform Directed Trust Act, which clarifies the duties and liabilities of trust directors. 
• Trustee Responsibilities:The act outlines the fiduciary duties of a trustee, including acting in the best interests of the beneficiaries and following the terms of the trust. 
• Beneficiary Rights:The act also addresses the rights of trust beneficiaries, including the right to information about the trust and its administration. 
• Nonjudicial Dispute Resolution:The act encourages the use of nonjudicial methods like mediation and arbitration to resolve trust-related disputes. 

In essence, the Washington Trust Act provides a comprehensive framework for the creation, administration, and resolution of disputes related to trusts in Washington State. 

2. Tax Identification Number (TIN/EIN):

• Trust’s EIN: You need to obtain a unique Employer Identification Number (EIN) for your trust from the IRS.
• Grantor Trusts and Social Security Numbers: During your lifetime, as the grantor and trustee of a revocable living trust (a “grantor trust” for income tax purposes), you can use your Social Security Number for reporting income. However, upon your death, the trust will need its own EIN.
• Provide EIN to Bank: The bank will require the trust’s EIN to open the account. 

3. Account Titling and FDIC Insurance:

• Proper Account Titling: Title the account clearly to indicate it belongs to the trust. A common format is “[Your Name], Trustee of the [Name of Your Trust]” Dated “date you signed your Trust”.
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• FDIC Insurance: Deposits in trust accounts are FDIC-insured, but the insurance limits are calculated based on the number of beneficiaries per grantor, up to five. Make sure to understand how FDIC insurance applies to your trust account and ensure your funds are adequately protected. 

FDIC insurance applies to revocable living trust accounts, but the coverage is calculated differently than for individual or joint accounts. 

Here’s how FDIC insurance applies to revocable living trust accounts:

• FDIC insurance places revocable living trust accounts in the “Trust Accounts” category.
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• Coverage is based on the number of eligible beneficiaries named in the trust.
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• Each owner is insured up to $250,000 per eligible beneficiary.
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• As of April 1, 2024, if a trust has five or more eligible beneficiaries, the maximum coverage per owner for all trust accounts at the same bank is $1,250,000.
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• If a trust has multiple owners, each owner’s coverage is calculated individually based on the number of eligible beneficiaries.
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• Eligible beneficiaries include living people, charities, or non-profit organizations.
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• For formal trust accounts, the account title or bank records must indicate a trust relationship, and the beneficiaries must be identified in the trust document.
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• The FDIC combines the balances of all revocable and irrevocable trust accounts held by the same owner at the same bank to determine total coverage. 

In summary, FDIC insurance coverage for a revocable living trust account depends on the number of eligible beneficiaries and the total account balance at the same FDIC-insured institution. 

Example:

A single owner with a revocable living trust account naming three eligible beneficiaries at an FDIC-insured bank would have a maximum coverage of $750,000 (1 owner x 3 beneficiaries x $250,000). 

Important Notes:

• This information provides a general overview of FDIC insurance rules for trust accounts.
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• While there’s no limit on the number of beneficiaries for estate planning purposes, FDIC coverage is capped at $1,250,000 per owner for all trust accounts at the same bank.
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• For complex trusts or specific questions, it is recommended to consult a legal professional specializing in trusts and estates or contact the FDIC directly.

4. Bank Selection and Account Features:

• Trust-Friendly Bank: Choose a bank experienced with trust accounts. Some banks specialize in trust services. BECU is a goo choice.
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• Fees and Rates: Compare the fees associated with trust accounts and the interest rates offered on savings accounts.
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• Account Access: Consider your preferred method of accessing and managing the account (online banking, check writing, etc.). 

5. Record Keeping and Fiduciary Duties:

• Detailed Records: As trustee, you have a fiduciary duty to keep accurate and detailed records of all transactions within the savings account. This includes deposits, withdrawals, and interest earned.
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• Prudent Investor Rule: You are required to invest and manage trust assets prudently, considering factors like risk and return, to benefit the beneficiaries, according to RCW 11.100.020.
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• Beneficiary Communication: Keep beneficiaries informed about the trust’s administration and provide access to relevant information, including a copy of the trust instrument. 

6. Tax Implications:

• Income Taxation: As long as you are alive, any interest earned on the savings account will be taxed on your personal income tax return. Upon your death, the trust becomes irrevocable and is taxed as a separate entity.
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• Estate Tax: Assets held in a revocable living trust are included in your estate for Washington State estate tax purposes.
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• Consult a Tax Advisor: It’s crucial to consult with a tax professional to understand the trust’s tax obligations and ensure proper reporting. 

7. Legal and Professional Guidance:

• Estate Planning Attorney: Work with Christopher S. Mulvaney to ensure your trust is properly set up, that you understand your role as trustee, and to guide you through the process of establishing and managing the trust account. 

By taking these steps, you can successfully open and manage a savings account for your revocable living trust, ensuring your trust assets are handled according to your wishes and complying with Washington State laws.

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.