Should You Have a Living Trust or a Will in California? Our Guide for 2025-26
Our law firm has prepared this page as a helpful guideline for Californias interested in comparing information on Living Trusts vs Wills in their family’s estate planning.
Read more below to learn about detailed scenarios and benefits comparing Living Trusts & Wills in California.
Schedule a consultation today and we’ll answer any other questions you have about revocable living trusts and more.
Living Trusts vs Wills: Essential Comparisons for Californians in 2025-26
Most Californians think estate planning is about choosing between a will or trust based on wealth. The real deciding factor is your life situation. If you own a home worth over $208,850, a living trust can save your family $20,000+ in probate costs and months of court proceedings. The upfront investment pays for itself many times over.
We believe that proper estate planning is critical to protecting your family from California’s expensive court system while you’re alive and after you’re gone. The choice between a will and living trust isn’t as clear cut as your estate value — it’s about whether you want your family dealing with judges or handling things privately.
You're a clear candidate for a living trust if:
- You own California real estate worth more than $300,000
- Your total assets exceed $200,000
- You own property in multiple states
- You own a business or professional practice
- You want to avoid court supervision of your affairs
Wills vs Living Trusts: Which Is Best by Estate Value in California
Thresholds for 2025 Scenarios
Wills vs Living Trusts: California-Specific Scenarios Based on Estate Value Thresholds
Under $208,850 Total Assets: If your entire estate is worth below $208,850, you don’t own real estate, and are not likely to have any grandchildren, a will-based plan usually makes sense. Your heirs can use California’s Affidavit for Collection of Personal Property to collect assets without going to court.
$208,850 – $7.5 Million: This is the asset range where living trusts really make sense in California. Your estate falls above the small estate threshold, so probate is expensive, but you’re not dealing with complex estate tax planning yet.
For just your average priced $900,000 home, probate costs about $21,000 and takes at the very least eight months. A living trust generally costs a small fraction of this amount upfront, but saves your family the probate costs and gets everything wrapped up more quickly upon your passing.
Over $7.5 Million: At this level of assets, you’re a candidate for a living trust & estate tax planning, since now the federal estate tax becomes a consideration over time. The federal estate tax exemption is quite high ($15 million for 2026). However, in the future there is always the risk of the exemption being reduced.
It is worth noting: complex estates often benefit from more complex trusts, tax planning strategies, and sophisticated asset techniques that go well beyond the basic revocable trust discussion.
The Clear Advantages of a Living Trust for Californians
- Probate Avoidance (#1 Benefit) In California, probate is expensive and slow. Court fees alone run $400-800 for most estates. Attorney fees are set by state law at a percentage of the gross estate value: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, and so on. Quick “napkin math”: on a $800,000 estate (pretty typical for a California homeowner), statutory fees are $20,000. Add court costs, appraisal fees, and attorneys fees beyond the statutory amount – and the costs can quickly add up to $25,000-35,000, and a lengthy 12-18 month legal process. A properly funded trust avoids all of this. Working with our firm, we can help set up your living trust to avoid probate. Upon your passing, your successor trustee can typically wrap up your estate in 30-90 days instead of 12-18 months.
- The Privacy Protection Probate is public. Anyone can walk into the courthouse and see what you owned, what you owed, who got what, and whether your family fought about it. Trust administration is private. Your financial details stay within the family. This isn’t just about privacy for your business and personal affairs. Public probate records can expose your beneficiaries to scams, identity theft, or simply unwanted attention if you’re leaving them significant assets.
- Incapacity Planning Here’s something most people don’t think about: what happens if you become incapacitated but don’t die? With a will, your family has to go to court to get authority to manage your affairs. It’s called a conservatorship, and it’s expensive, public, and ongoing court supervision. With a trust, your successor trustee can step in immediately when your doctor certifies you can’t manage your affairs. No court, no public records, no delays in paying your bills or managing your investments.
- Multi-State Property Management Consider the scenario where you own your primary residence in California, a rental property in Arizona and a vacation home in Oregon. With a will, your family faces probate proceedings in California, Arizona, and Oregon. With a trust holding all the properties, everything is handled in one private process.
- Tax Implications (Mostly Neutral) A revocable living trust doesn’t change your tax situation while you’re alive. You still report all income and deductions on your personal tax return. After you die, the trust may need to file tax returns, but this isn’t more complex than what would happen with a will-based plan.
California Estate Planning Made Simple
At Staker|Johnson Law Corporation, we focus exclusively on California estate planning and business law.
Our process includes:
- Comprehensive initial consultation to understand your unique situation
- Clear, fixed-fee pricing with no hidden costs
- Professional document preparation using California-specific language and provisions
- Detailed trust funding assistance to ensure your plan actually works
- Ongoing support for questions and plan updates
- Coordination with your other professional advisors as necessary
Understanding California Estate Planning Fundamentals
What Makes California Estate Planning Unique
California state laws create some unique opportunities and complexities that don’t exist elsewhere when it comes to estate planning matters.
First, we’re a community property state, which means assets acquired during marriage belong equally to both spouses (with some exceptions). This affects how you can distribute property and what happens if one spouse dies.
Second, California has relatively high probate fees. For example, while most other states allow for ‘reasonable’ caps on probate attorney fees, California allows attorneys to charge a percentage of the gross estate value. On a $1 million estate, that’s potentially $23,000 in attorney fees alone, plus court costs.
Third, Proposition 19 (passed in 2020) changed how inherited property taxes work in California. The old rules that let you pass property to heirs at low property tax assessments are mostly gone now. This makes proper estate planning even more critical for California property owners.
Recent 2024-2025 Changes:
- Small estate procedures threshold increased to $208,850
- New digital asset laws require specific authorization language
- Enhanced domestic partnership rights now mirror marriage in estate planning
Who Needs a Living Trust?
- Single Adults
- Married Couples
- Families with Minor Children
- Blended Families and Second Marriages
- Business Owners and Professional Practices
- Multi-Generational Wealth Transfer
- Collections and Personal Property
The Cost of Doing Nothing: California Intestate Succession
Let’s consider what happens if you do nothing about your estate plan. California has an intestate succession law that decides who gets your assets if you die without a will or trust. It sounds fair in theory, but in practice, it rarely matches what people actually want.
Here’s how California divides your assets if you die without estate planning:
If you’re married with no children: Your spouse gets all community property. Your spouse and your family split any separate property you may have.
If you’re married with children from this marriage: Spouse gets all community property plus 1/3 or 1/2 of separate property (depending on how many children). Children from this or a prior relationship split the rest.
If you’re single with children: Children split everything equally. If one child has passed and has issue, their children (your grandchildren) receive their parent’s share.
The real cost of not having a living trust is the cost and delay of a possible probate proceeding when assets are involved without proper estate planning. The probate process can take 9 to 18 months, costs thousands in court fees and attorney costs, and information in the case becomes public record.
Notably, if you own real estate in multiple states without a proper estate plan in place, your family may have to go through probate in each state upon your death. Two separate court proceedings, two sets of attorney fees.
Living Trust Expert Law Firm in California
We believe estate planning should be straightforward, affordable, and actually implemented properly – not left sitting in a drawer because it’s too complex to understand or use.
Schedule a consultation today and we’ll answer any other questions you have about revocable living trusts and more.
Living Trusts in California: Our View After 35 Years of Legal Experience
Think of a living trust like a bucket that holds your assets. While you’re alive, you control the bucket completely – you can add things, take things out, or even throw the whole bucket away if you want. That’s why we call it “revocable.”
You play three roles:
- Grantor: The person who creates and funds the trust (you)
- Trustee: The person who manages the trust (also you, while you’re alive and capable)
- Beneficiary: The person who benefits from the trust (you again, then your heirs after you pass)
When you pass, the person you named as successor trustee takes over. They follow your written instructions, distribute your assets, and never set foot in a courthouse. No judge, no public records, no 9 to 18-month waiting period.
Here’s where we notice that some individuals get confused with the term “trust”. We should emphasize that with a revocable living trust, you don’t lose control of your assets when you put them in a trust. You still own everything, you still get all the income, you still make all the decisions. The trust is just a legal container that avoids probate.
The Funding Process: Creating a trust document is only the initial task. We then have to “fund” the trust by actually transferring your assets into it.
This means:
- Deeding real estate to the trust
- Changing bank account titles to the trust
- Updating investment account registrations
- Assigning business interests to the trust
Combining Trusts and Wills: The Pour-Over Will Strategy
Did you know – even if you have a living trust, you still need a will. It’s called a “pour-over will,” and it serves several critical functions.
What a Pour-Over Will Does:
- Names guardians for minor children (trusts can’t do this)
- “Pours over” any assets you forgot to put in the trust
- Handles personal property that wasn’t worth putting in the trust
- Provides backup instructions if the trust fails for some reason
The pour-over Will essentially says “anything I own at death that’s not already in my trust should go into my trust and be distributed according to the trust instructions.”
Why This Matters: Let’s say you created a trust and put most of your assets in it, but you forgot about that old savings account or inherited some money right before you died. Without a pour-over will, those assets get distributed under California’s intestate succession laws instead of according to your trust instructions.
Special California Considerations
Community Property with Right of Survivorship California allows married couples to hold real estate as “community property with right of survivorship.” This means when one spouse dies, the surviving spouse automatically owns the entire property without probate.
This sounds like it eliminates the need for a trust, but it has limitations:
- Only works for jointly owned property
- Doesn’t provide incapacity planning
- Can create tax complications in some situations
- Doesn’t help if both spouses die simultaneously
Proposition 19 Impacts on Inherited Property Proposition 19, which took effect in 2021, dramatically changed California property tax rules for inherited property. The old rules let children and grandchildren inherit property at their parents’ low property tax assessments. Now, that only works if:
- The property is the parent’s primary residence, and
- The child uses it as their primary residence, and
- The assessed value increase doesn’t exceed $1 million
For investment property or vacation homes, inherited property gets reassessed at current market value, potentially creating huge property tax increases for heirs.
This makes estate planning more important because families need to plan for these tax consequences. Sometimes it makes sense to sell property before death, use life insurance to provide liquidity for tax payments, or structure ownership to minimize the impact.
State Disability Insurance Coordination California’s State Disability Insurance (SDI) provides some income protection, but it’s limited and temporary. Your estate planning documents should coordinate with any disability insurance you have to ensure seamless coverage if you become incapacitated.
Full Transparency - Setting Up a Living Trust
Initial Cost and Complexity A comprehensive trust-based estate plan involves a reasonable upfront fee that is a fraction of the cost of a probate in California, even when compared to a simple will. The upfront difference is notable, especially for younger families.
The complexity isn’t just financial – it’s administrative. You’ll need to update account titles, coordinate with financial institutions, and make sure new assets get added to the trust. Some people find this ongoing responsibility burdensome.
Asset Transfer Requirements You can have the most beautifully drafted trust in the world, but if you don’t actually transfer your assets into it, it’s not effective. The technical term is “funding the trust,” and it requires:
- Recording new deeds for real estate
- Working with banks to retitle accounts
- Coordinating with investment companies
- Updating business entity documents
If you omit funding a significant asset to the trust, that asset could go through probate upon your passing.
Limited Creditor Protection A revocable living trust doesn’t protect your assets from creditors while you’re alive. Since you can revoke the trust and take everything back, creditors can reach those assets too. You’d need an irrevocable trust for creditor protection, but that means giving up control – a much more complex decision.
Not Suitable for All Asset Types Some assets don’t play well with trusts:
- Retirement accounts (401k, IRA) should name individual beneficiaries, not trusts (with some exceptions)
- Life insurance should usually name individuals as beneficiaries
- Vehicles can be put in trusts but it’s often not worth the hassle for cars (though it might make sense for valuable collector cars or RVs)
When to Review Your Estate Plan
Your estate plan isn’t a “set it and forget it” document.
California law changes, your life changes, and your plan needs to keep up. Review your estate plan when:
- You get married or divorced
- You have children or grandchildren
- You buy or sell significant assets (especially real estate)
- You move to a different state
- Tax laws change significantly
- Your net worth increases substantially
- Your health status changes
Life Events Triggering Updates
- Marriage
- Divorce
- New children
- Death of beneficiaries
- Real estate transactions
- Business changes
- Retirement
Example Case Study: A Southern California Family Without a Living Trust
Example Case Study, Owning a Home Without a Living Trust – “The Martinez Family”
The Martinez family owned a $850,000 home in Ventura County. When Mr. Martinez passed away with only a will, here’s what happened:
Real costs incurred:
– Statutory attorney fees: $20,300
– Court filing fees: $1,250
– Property appraisal: $800
– Accounting fees: $1,500
– Total: $23,850
Hidden costs:
– 16 months of uncertainty for the family
– Public record of all family financial information
– Widow couldn’t sell the house during probate
– Lost potential rental income: $2,400/month × 16 months = $38,400
Total family impact: $62,250
A living trust would have cost only a few thousand upfront and allowed immediate property transfer with privacy.
Estate Planning FAQs: California Living Trusts & Wills
Can I change my mind after creating a living trust?
Absolutely. A revocable living trust can be modified or completely revoked any time while you’re alive and mentally competent. You can add or remove assets, change beneficiaries, update distribution instructions, or even dissolve the entire trust if your situation changes.
What happens to my digital assets?
California law now requires specific authorization language in estate planning documents to give your trustees/executors access to digital assets like social media accounts, cloud storage, cryptocurrency, and online financial accounts. Without proper language, your family might not be able to access or manage these assets.
How does divorce affect my estate planning?
California law automatically revokes gifts to ex-spouses in wills and trusts upon divorce, but you should still update your documents promptly. You’ll also need to update beneficiary designations on retirement accounts and life insurance, and consider whether you need separate trusts if you previously had a joint trust.
What if I move out of California?
A properly drafted California trust will work in other states, but you should have it reviewed by an attorney in your new state. Different states have different laws about trust administration, income taxes, and estate planning requirements that might affect your plan.
Can I put my house in a trust if I still have a mortgage?
Yes, most mortgage lenders allow you to transfer your residence to a revocable living trust without triggering the due-on-sale clause. You should notify your mortgage company and insurance company of the change, but it typically doesn’t affect your loan terms.
What happens if I become incapacitated?
With a trust-based plan, your successor trustee can step in immediately when your doctor certifies you can’t manage your affairs. With only a will-based plan, your family has to go to court for a conservatorship proceeding, which is expensive, public, and involves ongoing court supervision.
How do I choose a successor trustee?
Look for someone who is trustworthy, financially responsible, and willing to serve. They don’t need to live in California, but they should understand the responsibility involved. Many people choose adult children, close friends, or professional trustees depending on their situation.
What's the difference between a trust and a will for tax purposes?
For most people, there’s no difference. A revocable living trust doesn’t provide any tax advantages during your lifetime – you still report all income and pay all taxes personally. After death, both trusts and wills are subject to the same estate tax rules.
How much does probate really cost in California?
California sets attorney fees by statute as a percentage of the gross estate value. For an $800,000 estate, statutory attorney fees alone are $20,000, plus court costs, appraisal fees, and other expenses. Total costs typically run $25,000-35,000 plus 12-18 months of court supervision.
Do I still need a will if I have a living trust?
Yes, you need what’s called a “pour-over will.” It names guardians for minor children (which trusts can’t do), handles any assets you forgot to put in the trust, and provides backup instructions if something goes wrong with the trust.
What's the biggest difference between a living trust and will in California?
A will requires probate court supervision, while a living trust allows your family to distribute assets privately. For a $800,000 home, this means your family either pays $20,000+ in probate costs and waits 12-18 months, or handles everything privately within weeks.
Do I need a living trust if I only own a small home?
If your home’s value exceeds $208,850. California’s probate fees are based on gross asset value, not equity. Even a modest $500,000 home could trigger $13,000 in statutory attorney fees alone.
At Staker|Johnson, our California estate planning law office based in beautiful Ventura County, CA has been helping families throughout the state secure their legacies for over 35 years.
Ready to protect your family’s future? Whether you need a comprehensive living trust or a well-crafted will, Staker|Johnson Law Corporation has the California-specific expertise to create an estate plan that actually works.