California Trust Attorneys

What a trust does for California real property

A revocable living trust lets property pass without probate, which for a California family whose main asset is a home is usually the whole point. Probate here is calculated against gross value, so a valuable house with a mortgage produces a fee based on the whole property.

It is also private. Probate is a public record; a trust administration is not.

And it provides for incapacity as well as death, because a successor trustee can act if the settlor cannot.

Funding, which is the step that decides whether any of it works

A trust controls only property that has been transferred into it. For real property that means a deed from the owner personally to the owner as trustee, recorded in the county where the property sits.

Unfunded trusts are the most common estate planning failure we see in California. Sometimes the deed was never prepared. Sometimes it was prepared and never recorded. Very often the property was refinanced, the lender required title in personal name, and it was never transferred back.

The check takes minutes: pull the most recent recorded deed and read the vesting. If it names you personally rather than you as trustee, the trust does not control the house.

What a trust does not do

It does not protect assets from your own creditors during life, because a revocable trust remains yours.

It does not by itself produce income tax savings, and a revocable trust has no separate tax identity while you are alive.

It does not remove the need for a will. A pour-over will catches whatever was not transferred in, which matters precisely because funding is so often incomplete.

It does not maintain itself. A trust drafted for circumstances that have since changed produces disputes as reliably as no trust at all.

When to revisit it

After any refinance, because that is the most common way a funded trust becomes unfunded. After buying or selling property. After a marriage, divorce, birth or death. After moving to or from California.

Also worth revisiting where the property has appreciated substantially, because Proposition 19 changed what happens when a home passes to a child and the plan may have been built on the previous rules.