The problem a trust solves: California probate, priced
California sets probate fees by statute, on the gross estate — the home's full value, ignoring the mortgage. The schedule: 4% of the first $100k, 3% of the next $100k, 2% of the next $800k, 1% of the next $9M — and it pays out twice, once to the attorney and once to the executor.
| Gross estate value | Combined statutory fees (approx.) |
|---|---|
| $600,000 | ~$30,000 |
| $1,000,000 | ~$46,000 |
| $1,500,000 | ~$56,000 |
| $2,000,000 | ~$66,000 |
Add filing and appraisal costs, and a timeline that commonly runs a year or more during which the home sits in limbo. A $500k home with a $450k mortgage still probates on $500k. Estates under a threshold (around $209,000 in 2026, adjusted periodically) can use simplified procedures — but almost no California home fits under it, which is why the living trust became the default estate-planning move here.
What a revocable living trust actually is
You create the trust, transfer the home's title into it, and typically serve as your own trustee — meaning nothing about daily life changes. You can sell, refinance, rent, or move; you can amend or revoke the trust whenever you like. At death, your named successor trustee transfers the home to your beneficiaries without a court's involvement — usually in weeks, privately (probate is a public record; trust administration isn't).
- Property taxes: transferring your home into (or out of) your own revocable trust is excluded from Proposition 13 reassessment — your tax base doesn't change.
- Income taxes: a revocable trust is a “grantor trust” — the IRS ignores it while you're alive. Same deductions, same $250k/$500k home-sale exclusion, nothing new to file.
- Your mortgage: federal law (the Garn–St Germain Act) protects transfers into your own revocable living trust when you remain the occupant — the lender's due-on-sale clause can't be triggered by it. Notify your insurer so the policy names the trust correctly.
- Buying in a trust: you can also purchase directly in one — major lenders routinely allow vesting in a revocable living trust on conventional loans.
What a living trust does NOT do
- No lawsuit or creditor protection. It's revocable — since you can take the home back out at will, the law treats it as yours. Anyone promising “asset protection” from a standard living trust is selling something.
- No income or estate tax savings by itself. The federal estate-tax exemption is high enough that most households never owe it; the trust's job is probate, not taxes. (Irrevocable trusts are a different, specialized tool with real trade-offs — genuinely a talk-to-an-estate-attorney topic.)
- It doesn't replace the rest of the plan. A trust typically travels with a pour-over will, powers of attorney, and healthcare directives — and it only works for assets actually titled into it. The classic failure is paying for a trust and never recording the deed transferring the house.
The Prop 19 wrinkle your heirs inherit
Since 2021, California's parent-child reassessment exclusion is much narrower: an inherited home generally keeps its low Prop 13 tax base only if a child moves in as their primary residence, and even then only up to the old assessed value plus $1M — an inherited home kept as a rental is typically reassessed to market value. A trust doesn't change that either way (it's about how the home passes, not how it's taxed when it does) — but families planning around a low tax base should know the rules changed, and this is precisely the conversation to have with an estate-planning attorney before deciding anything.
Selling or refinancing a home that's in a trust
Routine. As trustee of your own revocable trust you sign the listing, the escrow instructions, and the deed; title and escrow companies handle trust sales every day and will ask for a trust certification. Some lenders ask you to briefly take title out of the trust for a refinance and put it back after — mildly annoying, standard. After the original owner's death, the successor trustee can sell from the trust as well — commonly with an appraisal at death establishing the stepped-up basis, another detail your CPA will care about (our CPA guide explains who does what).
This guide is education, not legal or tax advice. Estate planning is personal — the right structure depends on your family, your assets, and your goals. A licensed California estate-planning attorney can set up a trust properly for a flat fee that is a small fraction of one probate.