Short answer: A trust is a legal arrangement where you, as the grantor, transfer assets to a trustee, who manages them for a beneficiary under written terms. In California, the trust used in most estate plans is a revocable living trust, and it avoids probate only for the assets you actually retitle into it. A trust does not, by itself, reduce your income tax, property tax, or estate tax. How a trustee gets paid, what duties a trustee owes, and what happens when the trust becomes irrevocable are all set by California law, not by guesswork.
What is a trust, and who are the key parties?
A trust has three roles. The grantor (sometimes called the settlor or trustor) creates the trust and transfers assets into it. The trustee holds legal title to those assets and manages them according to the trust document. The beneficiary receives the benefit of the assets, whether that means income now or a distribution later. In a typical California living trust, the same person often fills all three roles while alive: you are your own grantor, trustee, and primary beneficiary, with a successor trustee named to step in if you become incapacitated or die.
What’s the difference between a revocable and an irrevocable trust?
A revocable living trust can be amended or canceled by the grantor at any time, for any reason, as long as the grantor has capacity. You can change beneficiaries, swap trustees, or add and remove assets. Because you keep this level of control, a revocable trust does not remove the assets from your own taxable estate and does not, on its own, shield those assets from your own creditors.
An irrevocable trust is much harder to change once it is signed, and the grantor typically gives up direct control over the assets placed inside it. That loss of control is the trade-off for whatever protection or tax planning the irrevocable trust is designed to accomplish. Irrevocable trusts are specialized tools used for specific goals, such as certain estate tax strategies, special needs planning, or holding a life insurance policy outside the taxable estate. They are not part of a standard California estate plan and should only be set up with a clear purpose in mind.
Does a living trust avoid probate in California?
A funded revocable living trust generally avoids probate for the assets titled in its name, because those assets already belong to the trust rather than to you individually at the time of death, so there is nothing for a probate court to transfer. A will does not do this. A will only takes effect once a court validates it through the probate process, so a plan built around a will alone still goes through probate.
The word that matters is “funded.” A trust that sits signed in a drawer while your house, bank accounts, and investment accounts remain titled in your own name has not accomplished anything. Those un-retitled assets still go through probate, trust document or not. Funding the trust, meaning actually changing the title on your accounts and real property to the name of the trust, is the step that most often gets skipped and the step that determines whether probate is avoided at all.
What a trust does not do: taxes and long-term care
A revocable living trust does not reduce your income tax, property tax, or estate tax. California has no state estate tax and no state inheritance tax at all, with or without a trust (Rev. & Tax. Code § 13301). On the federal side, the 2026 estate and gift tax exemption is $15,000,000 per person, or $30,000,000 for a married couple (IRC § 2010(c)). Most California families fall well under that number, which means the estate tax planning that irrevocable trusts are sometimes used for simply is not relevant to them, and a revocable trust would not accomplish it anyway.
A revocable living trust also does not protect assets from long-term care costs. Because the grantor can revoke the trust and take the assets back at any time, those assets remain fully countable when California determines Medi-Cal eligibility (42 U.S.C. § 1396p(d)(3)(A)). If asset protection for a future nursing home stay is the goal, that requires a different and more specialized planning conversation, not a standard revocable trust.
How is a trustee paid, and what duties does a trustee owe?
A trustee is paid according to whatever the trust document says (Prob. Code § 15680). If the document is silent on compensation, the trustee is entitled to reasonable compensation under the circumstances, since there is no fixed statutory percentage for trust administration the way there is for probate (Prob. Code § 15681).
Whatever the pay arrangement, the trustee’s underlying duties do not change. A trustee must administer the trust according to its terms and the law, and while California sets no fixed deadline for finishing distributions, the trustee must act within a reasonable time (Prob. Code § 16000). A trustee may not use trust property for personal benefit (Prob. Code § 16004). Beneficiaries are entitled to accountings showing what the trustee has done with the assets (Prob. Code §§ 16060 through 16063), and a beneficiary or other interested party who is not getting straight answers can petition the probate court to compel an accounting, instruct the trustee, or, in serious cases, remove the trustee altogether (Prob. Code § 17200).
What happens when the trust becomes irrevocable, such as at death?
A revocable trust typically becomes irrevocable when the grantor dies, since there is no longer anyone with the power to amend or cancel it. At that point the successor trustee has a specific legal obligation: send formal notice to all beneficiaries and legal heirs within 60 days, which starts a 120-day window during which the trust can be legally contested (Prob. Code § 16061.7). This notice requirement exists precisely so that beneficiaries and heirs know the trust exists and have a real chance to raise an objection before that window closes.
Figures verified July 2026.
What to do next
If you already have a trust, confirm it is actually funded, meaning your home and major accounts are titled in the trust’s name, not just sitting on a shelf. If you are starting from scratch, the right structure depends on your family situation, your assets, and whether anything beyond ordinary probate avoidance is actually a concern for you. An estate planning attorney can walk through your specific accounts and property and tell you what a properly funded living trust would and would not change for your family.
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