Living Trust: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

A living trust is a trust created and funded during the settlor’s lifetime that holds title to assets and avoids probate for anything properly transferred into it before death.

How it works in California

Most living trusts in California are revocable: the settlor can amend or cancel the trust at any time while alive and can serve as their own trustee. Prob. Code, § 15400 sets this as the default; a trust is revocable unless the trust instrument expressly makes it irrevocable. Setting up a living trust involves signing the trust document and then retitling assets, such as real property and financial accounts, into the trust’s name.

Prob. Code, § 15200 lists the ways a trust can be created, including a declaration by the owner that they hold property as trustee, or a transfer of property to a trustee. A living trust typically uses both: the settlor declares the trust and then transfers assets into it over time.

Why it matters

A living trust avoids probate only for what actually gets moved into it. Say a widow signs a trust and transfers her house into it, but never retitles a brokerage account before she dies. The house passes under the trust’s terms without court involvement, but the brokerage account may still have to go through probate, because it was never actually funded into the trust.

Common mistakes

Signing the trust document and stopping there, without retitling assets into the trust’s name. An unfunded trust does nothing to avoid probate. Confusing a living trust with a will: a living trust can also address what happens if the settlor becomes incapacitated, something a will can’t do, since a will only takes effect at death. Never checking, later, whether the trust actually holds the assets it’s supposed to.

Related terms

• Certification of trust: a short document that proves a trust exists without handing over the whole trust instrument.
• Heggstad petition: a court process to bring an asset into a living trust that was left out during the settlor’s life.
• Irrevocable trust: a trust the settlor generally can’t change once it’s signed, unlike most living trusts.
• Pour-over will: the backup will that catches assets never transferred into the living trust.
• Revocable trust: another name for the type of living trust most people set up.
• Settlor: the person who creates and funds the living trust.
• Trust decanting: a way to move assets from an old trust into a new one with updated terms.
• Trust funding: the ongoing work of retitling assets into the living trust, without which the trust can’t do its job.

Part of the California estate planning glossary. For the full treatment, see How Much Does a Living Trust Cost in California?