Living Trusts in California: Every Question Answered

0:00 She spent 40 years paying for this house.

0:03 Every Thanksgiving happened here.

0:05 Every birthday.

0:07 "This house," she always said, "is for you kids."

0:11 Then, she was gone.

0:13 And her house went to court.

0:15 18 months of waiting.

0:17 Every page, public.

0:19 $46,000 in fees.

0:22 Not because she didn't love them.

0:24 Because she never signed one document.

0:27 A living trust.

0:29 Do you need one?

0:31 Is a will enough?

0:32 What does it cost?

0:34 Can you still sell your house? What about your kids? Your taxes?

0:39 Your dog?

0:41 30 questions. 10 minutes. Plain answers, with the California law behind every one. So your family never has to sit in that courtroom.

0:50 This is the California Attorney Registry's plain-language guide. It's legal information, not legal advice.

1:00 A living trust is a legal document that holds your property while you're alive, and hands it to the people you choose when you die, without a judge. It's called living because you make it now, while you can still argue about the details.

1:14 Is a living trust revocable or irrevocable? Most are revocable: you can change it or cancel it whenever you like. In California, a trust is revocable unless it expressly says it isn't. Irrevocable trusts are a different tool, for specific tax or asset planning.

1:33 Who's who in a living trust? There are four roles. The settlor, sometimes called the trustor, creates it. The trustee runs it. The beneficiaries receive it. And the successor trustee takes over when you can't.

1:47 Yes, you can be your own trustee, and most people are. While you're alive, you're the settlor, the trustee, and the beneficiary. The owner, the manager, and the customer. It's the only job where you can't get fired.

2:00 No, a living trust isn't public. It isn't filed with any court, and when a bank needs proof, your trustee shows a short certification of trust. A probate file, on the other hand, is open to anyone. Including the cousin you haven't heard from since 2009.

2:20 No, a will doesn't avoid probate. A will is the instruction sheet probate follows.

2:26 In California, a single home usually pushes the estate over the $208,850 small-estate limit. So a will alone usually means court.

2:38 Yes, even with a trust, you still need a will, just a short one. A pour-over will catches anything you forgot to put in the trust. And if you have young children, your will is where you nominate their guardian, and courts give that choice real weight.

2:54 A trust is worth it if you own a home in California, or property in another state, or if you want someone you trust to step in when you can't manage your affairs. If you own little and everything already has a beneficiary, a will may be enough.

3:12 What does a living trust cost? With an attorney, often a few thousand dollars for a typical family. Ask for a written flat fee that includes funding the trust and recording the deed. Online templates cost less, but one deed recorded the wrong way can send your house to probate anyway. That's an expensive bargain.

3:32 Married couples in California usually share one joint trust that tracks community and separate property. And here's a tax point families miss: when one spouse dies, community property usually gets a new tax basis on both halves. That can erase decades of capital gains on the house.

3:51 Does a trust need to be notarized or filed? You sign the trust, and it's usually notarized, but it isn't filed anywhere. The deed that moves your house into it is different: that one is notarized and recorded with the county.

4:05 Is an old A-B trust still right? Maybe not. Like a flip phone, it made sense at the time. Older trusts often split in two when the first spouse dies, mostly to avoid estate tax. Today a surviving spouse can usually claim the other's unused exemption by filing an estate tax return, so many old A-B trusts deserve a fresh look.

4:30 What goes into the trust? Your home, by a new deed. Bank and brokerage accounts, retitled. Business interests, assigned. And property in other states, so your family avoids a second probate there. Your couch and your toaster? They can stay where they are.

4:47 What stays out of the trust? Retirement accounts and life insurance. Don't retitle them. Keep their beneficiary designations current instead.

4:57 No, your property tax won't go up just because you move your home into your own revocable trust. It isn't a change in ownership under Proposition 13. File the preliminary change of ownership report with the deed.

5:11 No, your lender can't call your loan just because you move your home into a living trust you benefit from. Federal law bars it, so your bank isn't allowed to panic. But after any refinance, check that the house is still in the trust.

5:25 If you forget something, the pour-over will catches it, but that can mean probate. A court petition can sometimes move a forgotten asset into the trust, and that's a court case too. So fund it now, while it's easy.

5:41 Time for a quick game. True or false, trust edition. No prizes. Just bragging rights.

5:47 Does a living trust reduce income taxes?

5:50 False. Sorry. While you're alive, it uses your own Social Security number, and usually nothing on your tax return changes.

5:59 Can you still sell your home after it's in the trust?

6:02 True. You're the trustee, so you sign, and the sale goes through.

6:06 Does a revocable trust protect your assets from creditors?

6:10 False. If you can take it back, so can your creditors.

6:13 Your trust only starts working when you die.

6:16 False. It works the day you sign and fund it. That's why it protects you if you ever can't manage your affairs.

6:23 Four for four? Nicely done. And if you're enjoying the video, gently tap that Like button. Also subscribe for additional amazing content like this.

6:36 A revocable trust doesn't protect you from lawsuits, or from nursing home costs. You control it, so the law treats it as yours. Protecting assets from long-term care costs or creditors takes different planning, and that's a conversation for an attorney.

6:53 Will your family owe estate tax? Probably not. The federal estate tax only reaches estates above $15 million per person. If that's you, congratulations, and please call an attorney this week. California has no estate or inheritance tax at all.

7:11 Your kids can keep your low property tax only in some cases. Since Proposition 19, a child keeps a parent's property tax base only if they move in as their main home, and above a value limit, part of it is reassessed. A trust doesn't change that, so plan for it.

7:31 Your successor trustee should be someone honest, organized, and willing. Not necessarily your oldest child or a relative. It can be a family member, a bank, or a licensed professional fiduciary, and a trustee can be paid reasonable compensation. Name a backup too.

7:49 If your kids are young, your trust can hold their share until the ages you choose. And if a beneficiary has a disability, a special needs trust can protect their benefits.

8:01 You may leave someone out. Even your brother-in-law. But a spouse keeps their share of community property, and if you marry or have a child after signing, California may give them a share unless you update the trust.

8:14 Yes, you can provide for your pet. Your dog can have a trust fund! California allows a trust for the care of your animals, with a caregiver and money set aside. Your dog can't be the trustee, though. We checked.

8:31 Yes, you can change or cancel your trust anytime, while you have capacity. Small changes take an amendment. Bigger ones, a restatement that rewrites the whole trust. And you can revoke it the way the trust allows, usually with a signed document delivered to the trustee.

8:48 How often should you review your trust? A trust isn't a slow cooker. You can't set it and forget it. Review it after a marriage, a divorce, a birth, a move, a new home, or a refinance. Otherwise, every 3 to 5 years.

9:06 If you can't manage your affairs, your successor trustee steps in for everything in the trust, without a court conservatorship. For everything else, you need a durable power of attorney for finances and an advance health care directive.

9:21 What happens when you die? The trust becomes irrevocable. Your successor trustee notifies beneficiaries and heirs within 60 days, records an affidavit to take over the house, pays final bills and taxes, then distributes.

9:36 How long does it take? Settling a trust often takes a few months to a year, without a judge, a court calendar, or statutory fees. Many trustees hire an attorney to help, and the trust can usually pay for it.

9:50 Yes, someone can challenge a trust, but the window is short: generally 120 days after the trustee's notice. A no-contest clause can discourage a challenge, though California enforces it only in limited cases.

10:07 Ready to set one up? The California Attorney Registry lets you search every licensed attorney in California by city and practice area, including estate planning. Every record links to the State Bar, and contact details are free.

10:22 Look for experience: the State Bar certifies specialists in estate planning, trust and probate law.

10:29 Already handling a trust? Submit your case for review: seven questions, in your own words. Attorneys who handle that kind of matter can send you a proposal, and you choose one, or none. It's free.

10:42 Estate planning attorneys: your profile is already on the roll. Claim it free.

10:50 Remember the house she spent 40 years paying for? With a funded trust, her kids could have had the keys in months. Privately. No courtroom.

10:58 So write it. Fund it. And review it when life changes.

11:02 We're glad that you made it to the end, and please hit that Like button and Subscribe to the channel for more incredible videos! Visit CaliforniaAttorneyRegistry.com, for all of your legal needs.