What a Trust Won’t Protect You From

What’s inside the guide

• What a properly funded revocable living trust actually accomplishes for your family, and why probate avoidance is the real product
• Why creditor claims can still reach trust assets, even after the paperwork is signed and the deed is recorded
• The “bulletproof asset protection” pitch, and why an irrevocable arrangement built for that purpose looks nothing like the trust most people are sold
• The specific gaps a revocable trust leaves open, taxes, Medi-Cal, and property reassessment among them, and what actually closes each one
• How to tell whether you were sold protection your trust cannot deliver

Does a living trust protect my assets from creditors?

Not on its own. A revocable living trust is one you can amend or cancel and whose assets you can pull back out at any time, and the law generally treats anything you control that easily as still yours for creditors to reach. Real asset protection uses different, irrevocable structures built for that specific purpose, not the standard revocable trust most families sign for probate avoidance.

Does a living trust protect my home from Medi-Cal or nursing home costs?

No. Assets held in a revocable living trust remain fully countable for Medi-Cal eligibility purposes, because you can revoke the trust and take the assets back whenever you want (42 U.S.C. §1396p(d)(3)(A)). A living trust also does not reduce income tax, property tax, or estate tax, since California itself has no state estate or inheritance tax to begin with (Rev. & Tax. Code §13301).

Does putting my house in a trust protect it from a Prop 19 property tax reassessment?

No. Whether your home gets reassessed when it passes to your kids turns on the Prop 19 parent-child exclusion rules, occupancy and the homeowners’ exemption filing, not on whether title sits in a revocable living trust (Cal. Const. art. XIII A §2.1). Moving the house into your trust does not change that analysis either way.

If you already have a trust and want to know where your own gaps are, start with our trust health check.