California Living Trusts

Last updated: October 2026

A living trust is the document most California estate plans are built around, for one reason: assets held in a funded trust pass to your beneficiaries without probate. That matters more here than in most states, because California probate fees are calculated on the gross value of the estate rather than on the work involved. But a trust only works if it is properly drafted and actually funded, and the second half is where most plans fail. Bay Legal, P.C. creates trusts, guides trustees through administration, and litigates trust disputes across California.

What does a living trust actually do?

It holds title to your property. You create the trust, transfer your assets into it, and serve as your own trustee during your lifetime with full control to buy, sell, spend, amend, or revoke. When you die or become incapacitated, the successor trustee you named steps in and follows the terms you wrote — without a court. Probate Code section 15200 sets out how a trust is created; section 15400 governs revocation and amendment of a revocable trust.

Three consequences follow, and they are the reason trusts dominate California planning:

• No probate on trust assets. Property held in the trust transfers under its terms rather than through court administration.
• Privacy. A will admitted to probate becomes a public record — its terms, the assets, and the beneficiaries. A trust does not.
• Continuity during incapacity. If you can no longer manage your affairs, the successor trustee takes over the trust assets immediately, without a conservatorship proceeding.

Why does funding matter more than drafting?

Because an unfunded trust avoids nothing. Funding means transferring ownership of your assets into the trust’s name: recording new deeds for real property, retitling bank and brokerage accounts, assigning business interests. A trust that names assets it does not actually hold is a document describing a plan that was never carried out.

This is the single most common defect in California estate plans, and it usually surfaces at the worst moment — when the family discovers that the house was never deeded into the trust and the estate is going through probate after all. It is also the part clients most often intend to finish later and do not. Funding should be completed as part of creating the trust rather than left as homework.

A pour-over will is the safety net, not the solution. It directs anything left outside the trust at death into it — but those assets still pass through probate first, with the statutory fees under Probate Code section 10810 applying to them. The net catches what falls; it does not stop the fall.

Which type of trust fits your situation?

Spendthrift protection is governed by Probate Code section 15300 and following, and it protects a beneficiary’s interest — not yours. That distinction is the subject of the next section, and it is the point most often gotten wrong.

Does a living trust protect assets from creditors?

Not your revocable one. This deserves stating plainly because the opposite is widely believed and widely implied.

A revocable living trust offers no creditor protection during your lifetime. Because you retain the power to revoke it and take the assets back, the law treats those assets as yours — reachable by your creditors, and counted in your estate. A revocable trust avoids probate and preserves privacy. It is not an asset protection device, and it does not shield property from a divorce, a business liability, or a lawsuit against you.

Irrevocable trusts can offer protection, and the mechanism is the trade: you give up ownership and control, and in exchange the assets are no longer yours to be reached. That is a real cost, not a formality, and it is why irrevocable planning is a considered decision rather than a default. Spendthrift provisions protect a beneficiary’s interest from that beneficiary’s creditors — a separate benefit that applies downstream, not to you.

What are a California trustee’s duties?

Substantial, personal, and enforceable. Probate Code section 16000 and following sets out the fiduciary duties a trustee owes: to administer the trust according to its terms, to act loyally in the beneficiaries’ interests, to deal impartially between them, to keep trust property separate and clearly identified, to invest prudently, and to keep beneficiaries reasonably informed.

Two statutory obligations catch new trustees out most often:

• The 60-day notification. When a revocable trust becomes irrevocable on the settlor’s death, Probate Code section 16061.7 requires the trustee to serve a formal notification on beneficiaries and heirs within 60 days. It must contain specified content, and it starts the clock on the period in which the trust can be contested. Missing it leaves that period open.
• Accountings. Under Probate Code section 16062, a trustee must account to beneficiaries at least annually, on termination, and on a change of trustee, unless the trust or the beneficiaries waive it. Poor record-keeping from the outset makes this far harder than it needs to be.

A trustee who breaches these duties is personally liable, and a family member who accepted the role as a favour is exposed on the same terms as a professional. Most first-time trustees benefit from counsel not because the role is adversarial but because the deadlines are unforgiving.

How are trust disputes resolved in California?

Through the probate department of the Superior Court, on petition under Probate Code section 17200, which lets a trustee or beneficiary bring almost any question about the internal affairs of a trust before the court. Common petitions ask the court to interpret ambiguous terms, compel an accounting, surcharge a trustee for losses, approve or reject accounts, or modify or terminate the trust.

Trustee removal is available under Probate Code section 15642 on grounds including breach of trust, insolvency, unfitness, hostility that impairs administration, and excessive compensation. Contests to the validity of the trust itself — undue influence, lack of capacity, fraud — run on their own timeline, which is why the 60-day notification matters so much to both sides.

Venue follows the trust’s principal place of administration, which is usually the county where the trustee resides or administers it.

Who handles trust matters at Bay Legal?

Sivendra Ganesh Maraj leads estate planning and probate, and handles trust creation and administration. Ryan R. Wong handles trust administration disputes and probate litigation. Where a dispute becomes contested litigation, it runs through the firm’s litigation group under managing attorney Jayson R. Elliott and lead litigation attorney Evan Livingstone.

Bay Legal, P.C. serves clients statewide from offices in Palo Alto and Los Angeles, including families across San Francisco and the wider Bay Area, with virtual consultations where that suits the client.

Frequently Asked Questions

What is a living trust, and how does it work?

A legal arrangement in which a trustee holds and manages property for named beneficiaries. You create it, transfer your assets into it, and serve as your own trustee with full control during your lifetime. When you die or become incapacitated, the successor trustee you named administers it under your terms, without court involvement.

Do I need to be wealthy to benefit from a trust?

No. The question is usually whether you own real property in California. Because probate fees are calculated on gross value under Probate Code section 10810, a single home with a mortgage can generate substantial statutory fees. Homeowners of modest means often benefit more, proportionally, than wealthy families with liquid assets.

What does it mean to fund a trust, and why does it matter?

Transferring ownership of assets into the trust’s name — recording new deeds, retitling accounts, assigning business interests. It matters because an unfunded trust avoids nothing. Assets left outside pass through probate regardless of what the trust document says. Incomplete funding is the most common defect in California estate plans.

Can a living trust protect my assets from creditors?

A revocable living trust cannot. Because you keep the power to revoke it, the law treats the assets as yours and creditors can reach them. Certain irrevocable trusts can offer protection, but only because you give up ownership and control. Spendthrift provisions protect a beneficiary’s interest from that beneficiary’s creditors, which is a different thing.

Can I change or cancel my trust?

A revocable living trust can be amended or revoked at any time while you have capacity, under Probate Code section 15400. An irrevocable trust generally cannot, though California law provides limited routes to modification in defined circumstances, usually requiring court approval or the consent of all beneficiaries.

What are a trustee’s legal responsibilities?

Administering the trust according to its terms, acting loyally and impartially, keeping trust property separate, investing prudently, and keeping beneficiaries informed. Two deadlines matter most: the notification to beneficiaries within 60 days under section 16061.7, and periodic accountings under section 16062. A trustee who breaches these duties is personally liable.

Does a trust have to be registered in California?

No. California does not require trusts to be registered with any court, which is part of why they preserve privacy. What does have to happen is proper titling — assets must actually be held in the trust’s name — and proper record-keeping, which becomes essential when accountings are required.

How much does a trust cost compared with a will?

A trust costs more to prepare than a will. The comparison that matters is against probate, since a will does not avoid it. Bay Legal works on flat fees quoted before drafting begins, so the cost is known in advance. Ask what funding assistance is included, since a trust that is not funded does not work.

Related Questions

What is the difference between a trustee and an executor?

A trustee administers a trust under its terms, generally without court supervision. An executor, called a personal representative in California, administers a probate estate under court supervision. The same person often fills both roles in one family’s plan.

What is a pour-over will?

A will directing that anything still owned outside the trust at death be transferred into it. It is a safety net rather than a substitute for funding, because those assets pass through probate before reaching the trust.

Who should I name as successor trustee?

Someone organised, trustworthy, and willing — the role carries real duties and personal liability. A professional fiduciary or corporate trustee is worth considering where the family is complex, the assets are difficult, or naming one relative over another would create conflict.

What happens if my successor trustee cannot serve?

The trust should name alternates. If it does not, or if all named trustees decline, the court can appoint one on petition — which reintroduces exactly the court involvement the trust was meant to avoid.

Can a trust be contested?

Yes, on grounds including lack of capacity, undue influence, fraud, and improper execution. The notification required within 60 days of the settlor’s death starts the limited period in which a contest may be brought, which is why serving it correctly matters to trustees and beneficiaries alike.

Talk to a California trust attorney

Whether you are creating a trust, have just been named successor trustee, or are a beneficiary who cannot get an accounting, the useful first step is the same: a conversation about what the document actually says and what the law requires next. To discuss a trust matter with a Bay Legal attorney, call the office nearest you or email intake.

Bay Legal, P.C. — serving California statewide

Northern California office

667 Lytton Ave Ste 3, Palo Alto, CA 94301

(650) 668-8000

Southern California office

3211 Cahuenga Blvd W Ste 212, Los Angeles, CA 90068

(213) 668-8000

Intake: intake@baylegal.com

Fax: (650) 963-0041

Website: https://baylegal.com

This page is general information about California law and does not constitute legal advice or create an attorney-client relationship. Bay Legal, P.C. does not provide tax advice. For advice on your specific situation, contact a licensed California attorney and a qualified tax professional.