Revocable Living Trusts in California
Why it matters: A living trust in California can help your family save money and keep control. Do you want your loved one’s assets to go to you or to the government?
What is a Revocable Living Trust?
A revocable living trust is a legal document that holds your assets during your lifetime and distributes them after death—without probate court involvement.
Key characteristics:
You maintain complete control while alive
You can change or cancel it anytime
It becomes irrevocable when you die
Governed by California Probate Code Division 9
Think of it this way: You're creating a container (the trust) that holds your assets. You control the container during life, and your chosen successor takes over seamlessly when you die or become incapacitated.
Key Benefits of Living Trusts
Benefit #1: Avoid probate
California probate may cost 4-6% of estate value
Probate may take 9-18 months
Living trusts bypass this entirely
Benefit #2: Privacy protection
Wills become public record
Trusts remain private
No court documents revealing your assets
Benefit #3: Incapacity planning
Successor trustee manages assets if you're incapacitated
No need for court-appointed conservatorship
Seamless financial management continues
Benefit #4: Control and flexibility
You modify it anytime
You specify exactly how the assets are distributed
You can include conditions for beneficiaries
What Assets Go in Your Trust?
Must be transferred (funded):
Real estate (record new deed)
Bank and investment accounts
Business interests
Stocks and bonds
Valuable personal property
Don't transfer to trust:
Retirement accounts (IRA, 401k)—use beneficiary designations instead
Life insurance policies—use beneficiary designations
Vehicles (usually)
Critical mistake: Creating a trust but not funding it. An unfunded trust is worthless—assets still go through probate.
Common Trust Mistakes to Avoid
Mistake #1: Not funding the trust
As many as 70% of trusts are improperly funded
Unfunded assets go through probate anyway
You must actually transfer title to trust
Mistake #2: Forgetting to update
Life changes require trust updates
Births, deaths, divorces, moves
Review every 3-5 years
Mistake #3: DIY online trusts
California-specific requirements often missed
No guidance on funding
Generic provisions may not fit your situation
Frequently Asked Questions
Q: Do I lose control of my assets with a living trust in California?
A: No. With a revocable living trust, you maintain complete control. You can buy, sell, mortgage, or gift assets just like before. You're both the trustor and the trustee, so you're essentially giving assets to yourself to manage.
Q: What happens if I forget to put an asset in my trust?
A: You have three options: (1) Transfer it into the trust now, (2) Use a Heggstad petition to confirm it should have been in the trust (California Probate Code Section 850), or (3) It goes through probate or your pour-over will. This is why proper trust funding is critical.
Q: Can I have both a living trust and a will?
A: Yes—and you should. Most living trusts California attorneys draft include a pour-over will that catches any assets not in the trust and directs them into it. You also need a will for naming guardians for minor children.
Q: How often should I update my living trust?
A: Review your trust every 3-5 years or after major life events: marriage, divorce, births, deaths, significant asset changes, moves to another state, or changes in tax law. California trust law changes periodically, so periodic reviews ensure compliance.
Q: Is a living trust worth it for a small estate?
A: It depends. California's small estate procedures allow some estates to avoid formal probate. However, living trusts still offer benefits for incapacity planning and privacy. If you own real estate in Santa Cruz County, a trust is almost always worthwhile given high property values.
Q: What's the difference between a living trust and a testamentary trust?
A: A living trust is created during your lifetime and avoids probate. A testamentary trust is created by your will and only takes effect after death—meaning your estate still goes through probate first. ──────────────────────────────────────────────────
Legal Disclaimer: This article provides general information about California elder law and is not intended as legal advice. Elder law matters are complex and highly individual. For advice specific to your situation, please consult with a licensed California attorney.
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Last Updated: October 2025