Make a Living Trust in California

If you're a resident of California and trying to decide whether you need a living trust, you might be wondering what to take into consideration. What happens to your property under California laws if you don't have a trust? When might you want a living trust? How do you make a living trust? Below is an introduction to what a living trust does and a discussion of whether it makes sense for your situation.

What Is a Living Trust?

A "living" trust (also called an "inter vivos" trust) is simply a trust you create while you're alive. The beneficiaries you name in your living trust receive the trust property when you die. You could instead use a will, but wills must go through probate—the court process that oversees the transfer of your property to your beneficiaries.

Many people create a revocable living trust as part of their estate plan. These trusts can be modified or revoked at any time. Typically, you'll name yourself as the "trustee" of your trust. This means that while you're alive, you retain control of the trust and its property. In your trust document, you'll also name a "successor trustee" to take over and manage the trust after you die; this person will distribute the property in the trust to your beneficiaries. (If you create a shared living trust, as is often done by spouses, then your successor trustee would assume control after both spouses have died.)

In contrast, irrevocable trusts can't be revoked or modified after they're signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.

Do I Need a Living Trust in California?

When you set up a living trust to transfer your property to your loved ones after your death, you can potentially save them a lot of time, hassle, and money. Property left through a will (rather than a living trust) might be tied up for months or even years in probate court, and could involve court costs and lawyers' fees. By contrast, property left through a trust can be distributed to your beneficiaries almost immediately, and often without the need for an attorney.

Some states have fully adopted a model law called the Uniform Probate Code, which streamlines the probate process, but unfortunately California isn't one of these states. However, California does offer simplified probate processes for "small" estates:

• Spousal or domestic partner petition. Your surviving spouse or domestic partner can petition the probate court for any amount of property to be transferred without probate administration. (Cal. Prob. Code §§ 13650, 13651 (2024).)
• Small estate affidavit. Your inheritors can skip the probate process altogether and instead use a simple affidavit process to claim personal property. An inheritor can use the small estate affidavit if the estate's total assets that are subject to probate are $184,500 in value or less (for deaths on or after April 1, 2022). (Cal. Prob. Code § 13101 (2024).)
• Affidavit for real property of small value. An inheritor can claim real estate valued at $61,500 or less (for deaths on or after April 1, 2022) by using an affidavit for real property of small value. The inheritor must file the affidavit with the county clerk-recorder where the deceased person lived or where the real estate is located if the deceased person lived out of state. (Cal. Prob. Code § 13200 (2024).)
• Petition to determine succession to real property. Your estate may be able to use a separate probate shortcut to obtain personal property and real estate. An inheritor may file a petition with the probate court to transfer property without probate if the total value of the estate is $184,500 or less. (You can exclude a great deal of property when adding up the value of the estate—for example, real estate outside of California, joint tenancy property, property that goes to a surviving spouse, life insurance proceeds, death benefits, payable-on-death accounts, and much more.) (Cal. Prob. Code § 13151 (2024).)

If your estate qualifies for one of these shortcuts, the probate process might be straightforward and relatively inexpensive. So you might not need to worry about making a living trust just to avoid probate.

Additionally, in California, you can transfer real property using a transfer-on-death deed; this can keep your home out of probate without using a living trust. (Cal. Prob. Code § 5642 (2024).)

In California, If I Make a Living Trust, Do I Still Need a Will?

Yes, you'll still need a will. This might seem confusing—isn't the point of a living trust to avoid needing a will? Yes, it is, and your will might never be used. But you should still write one, for one or both of the following reasons:

• Designating a guardian for minor children. You can't use a trust to name a guardian for your minor children. For this reason alone, if you have minor children, you should write a will that names the guardian.
• Accounting for property that you haven't transferred to your trust. It happens all the time—people create a trust and forget to formally transfer property to the trust (for example, they never get around to changing the deed on their house). Or, people buy or inherit property after they've set up their trust, and forget or don't know to take ownership as the trustee of their trust. Either way, the property won't be distributed according to the terms of the trust. You should have a will as a backup to dictate how to distribute assets that aren't in the trust.

If you don't have a will, any property that isn't transferred by your living trust or other method (such as joint tenancy) will go to your closest relatives as determined by California state law.

Can a Living Trust Reduce Estate Tax in California?

Probably not. Revocable living trusts can help your estate avoid probate, but not federal estate taxes. But estate taxes aren't an issue most people have to worry about, since the federal estate tax is levied only on estates worth more than $13.61 million (for deaths in 2024). This amount is adjusted slightly each year for inflation. Some states impose their own state estate tax, but California isn't one of them.

That said, if you have an estate worth more than $13.61 million—or you and your spouse have a combined estate of close to $27.22 million—you might be able to use a more complicated trust to reduce or avoid estate taxes, but you'll definitely need the help of a lawyer.

How Do I Make a Living Trust in California?

To make a living trust in California, you:

1. Choose whether to make an individual or shared trust.
2. Decide what property to include in the trust.
3. Choose a successor trustee.
4. Decide who will be the trust's beneficiaries—that is, who will get the trust property.
5. Create the trust document. You can get help from an attorney or use WillMaker & Trust (see below).
6. Sign the document in front of a notary public.
7. Change the title of any trust property that has a title document—such as your house or car—to reflect that you now own the property as trustee of the trust.

You can use WillMaker & Trust to make a living trust using your computer. WillMaker & Trust has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With WillMaker & Trust, you can also make a will, powers of attorney, health care directives, transfer on death deeds, and many other useful documents. Use it just for yourself or for your entire family.

For more on California estate planning issues, see California Estate Planning.