California Living Trust Guide: How It Works & Why It Matters
- Lindsay Spiller
- Aug 21
- 4 min read
Updated: Aug 31
Planning for the future is one of the most important steps you can take to protect your family and your assets. In California, one of the best options available is the living trust. Most people assume that drafting a will is enough, but in California, a will alone often means your estate will pass through probate, a lengthy and costly court process. A living trust avoids that outcome.
This guide explains how living trusts work in California, why they matter, and when it makes sense to consult a California estate planning attorney to create one.
What Is a Living Trust?
A living trust is a legal document that allows you to pass your assets - your home, your financial accounts, stock holdings, etc. - to your beneficiaries upon your death without the court's involvement or court cost. It doesn't affect how you use your assets in the meantime. You may enjoy, add to or deplete the assets in the same way as if you owned them as an individual. Since the living trust is a revocable document, you may revoke in at any time, in which case the title to the assets will return to you as before. You can also amend the living trust and changes to its terms, the beneficiaries, or add or delete assets an at any time. When you pass away, a successor trustee you’ve chosen distributes your assets to your beneficiaries according to your instructions.
Key point --- It avoids probate. Unlike a will, a properly funded living trust bypasses probate in California, saving your family time, money, and stress.
Why avoid Probate?
Probate is the legal process of administering a deceased person's estate. California's probate system is most expensive and time-consuming probate systems in the country.
Probate costs: California law sets statutory attorney’s fees based on the value of the estate, not just the complexity. This can result in tens of thousands of dollars in fees.
Probate delays: The process often takes 12-18 months or longer, during which heirs may not have access to assets.
Public record: Probate proceedings are public, meaning anyone can view the details of your estate.
The Benefits of a Living Trust.
Keeps your estate private.
Allows assets to be distributed much more quickly.
Can save your beneficiaries thousands in fees and court costs.
What Assets Can Go Into a Living Trust?
Common assets transferred into a California living trust include:
Real estate (primary residence, rental property, vacation homes).
Bank accounts (checking, savings, CDs).
Investments (stocks, bonds, mutual funds).
Business interests.
Personal property of significant value.
Note: Retirement accounts (IRAs, 401(k)s) are generally not placed in the trust itself but can name the trust as a beneficiary in some cases.
Living Trust vs. Will in California
Feature | Living Trust | Will |
Avoids Probate? | Yes | No |
Takes Effect | During life & after death | After death only |
Privacy | Private | Public |
Cost | Higher upfront cost, but saves money later | Lower upfront cost, but probate is expensive |
Control During Life | Yes (Revocable) | Limited |
A living trust doesn’t necessarily replace a will. Most people will include an accompanying “pour-over will” to cover any assets that for whatever reason are not placed into the trust.
Do You Need a Living Trust in California?
Not everyone needs a living trust, but it’s highly recommended if:
You own real estate in California.
You have assets exceeding $184,500 (the threshold for simplified probate in California).
You want to avoid probate and keep your estate private.
You want to provide clear instructions for managing your estate if you become incapacitated.
Common Misconceptions About Living Trusts
“I’m too young to need one.” Estate planning isn’t only about death, it also protects you if you become incapacitated.
“Living trusts are only for the wealthy.” In California, even modest estates can benefit as they may be subject to probate costs.
“I can do it myself with an online form.” DIY trusts often fail because assets aren’t properly transferred (“funded”) into the trust, leaving families in probate anyway.
How to Set Up a Living Trust in California
Consult an estate planning attorney. Every family’s needs are different, and California has unique legal requirements.
Draft the trust document. Your lawyer will prepare a customized document tailored to your assets and wishes.
Transfer assets into the trust. Deeds, bank accounts, and titles must be updated to reflect ownership by the trust.
Choose a successor trustee. This person (or institution) will manage the trust after your death or incapacity.
Keep your trust updated. Review regularly and update when you buy property, change beneficiaries, or experience major life events.
At Spiller Law, we provide personalized estate planning services in San Francisco and across California, helping clients create effective living trusts that truly protect their families.
Protect your family’s future with a properly prepared California living trust. Schedule a free consultation with Spiller Law today to learn how we can help.
Spiller Law is a San Francisco business, entertainment and estate planning law firm. We serve clients in the San Francisco Bay Area, Silicon Valley, Los Angeles, and California. Feel free to arrange a free consultation using the Schedule Appointment link on our website. For other questions, call our offices at 415-991-7298.
The information provided in this article is for general informational purposes only and should not be construed as legal advice or opinion. Readers are advised to consult with their legal counsel for specific advice.
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