Does a Living Trust Need To Be Recorded in California?

Jun 18, 2024
Living Trusts

Are you considering setting up a trust for your heirs but are concerned about your estate affairs becoming public knowledge? At AmeriEstate, we understand your desire to keep your estate private. Fortunately, when you create a living trust in California, you do not need to record the document with the county or state. Establishing a revocable trust protects your assets and maintains your privacy. Living trusts are an important estate planning tool that provides numerous benefits for you and your heirs, not the least of which is keeping your trust out of public records.

Why Living Trusts Are Not Recorded

Living trusts have a lot of benefits, but one of the primary reasons people create them is to keep their financial affairs private. On the other hand, if you create a will, it becomes a public record when you die. Anyone interested in your estate holdings can see what is in the will and who is supposed to inherit it. California’s probate code requires legal dispensation of an estate, with some exceptions.

After you pass, your estate, including anything you identify in your will, goes through the probate process. If any heirs disagree with your allocations, they can contest your wishes in court. Likewise, if your relatives or others think they have a right to inherit any of your estate, they can also contest your will in court. While there are good reasons to create a will, privacy is not one of them.

In California, a living trust document is private. If you name yourself trustee, no one else even needs to know the trust exists except your successor trustee until you pass. After you die, only your beneficiaries and those who would legally inherit from you if you did not have a will or trust have a right to know what the trust contains. You do not have any legal requirement to file your trust with the County or the Court.

Does a Living Trust Need To Be Recorded in California? | AmeriEstate Legal Plan

Transferring Real Estate

One privacy exception is real estate. If you want to include real estate, you must transfer the title to the trust and file it with the County Clerk’s office, which only documents the trust name as the titleholder.  In most cases, anyone can submit a request to find out current and previous property owners. That said, no other information about the trust is on record, and the information is no more than what is available for any real estate property.

Realizing the Full Benefits of a Living Trust

In addition to maintaining privacy, saving your heirs from the expense, and reducing the stress and time it takes to get through probate, a living trust provides other benefits, including:

  • Control: Establishing a trust lets you decide how to allocate your estate after you pass. You determine who inherits what and can also control when they receive their inheritance, how much they receive at a time and how they can spend it. You also control what assets to include in the trust.
  • Flexibility: Choosing a revocable trust allows you to amend or dissolve your trust at any time. You can add and remove assets or change your mind about who inherits and the terms of inheritance. If you no longer want the trust, you can remove all the assets and dissolve it.
  • Tax Savings: Paying taxes is one of the responsibilities of a trustee. However, the trust only owes taxes on the income it earns, not the principal assets. A living trust can help you avoid or reduce estate taxes and your beneficiaries reduce or avoid taxes on their inheritance.
  • End-of-Life Decision-Making: Creating a living trust gives you the power to make important end-of-life decisions, such as long-term and medical care choices, and pay for them. In doing so, you spare your loved ones from making difficult decisions. Should you become incapacitated, your successor trustee will handle the trust and manage your estate without placing it in conservatorship.
  • Creditor Protection: Establishing a trust does not protect your assets from creditors after you pass, as your creditors have a right to collect your debts from your estate. However, you can set up a trust to shelter the assets from your beneficiaries’ creditors.

At AmeriEstate, we can help you set up your revocable trust to ensure you and your beneficiaries receive the full benefits this legal arrangement offers.

What Happens After You Pass

When you die, your revocable trust becomes irrevocable, and no one can alter the terms or dissolve the trust. If you are the trustee, your successor trustee will take over management and dispensation of the trust after you pass. The successor trustee is responsible for:

  • Obtaining the death certificate
  • Procuring the trust document
  • Notifying beneficiaries and heirs in writing about the administration of the trust
  • Taking inventory of the trust’s assets and value
  • Obtaining asset titles
  • Settling your debts
  • Managing the trust, including filing taxes

The successor trustee must distribute the assets according to your wishes and the trust terms. If you set your trust up for lump-sum distribution to your beneficiaries, your successor trustee will handle that after all other requirements are met.

However, if you establish a trust that will pay your beneficiaries in installments over a designated period, the successor trustee manages the trust until the final distribution. They will also continue any income-earning strategies you establish. Likewise, if you die before any beneficiaries reach adulthood, your successor trustee will manage the trust until the beneficiaries turn 18.

Why You Need a Successor Trustee

The successor trustee ensures your trust meets legal requirements after you die and manages and distributes the assets according to the trust terms. The successor trustee’s responsibilities are significant, and choosing someone you trust is essential, whether that person is someone you know or a qualified individual or entity. The successor trustee has a fiduciary responsibility to adhere to the terms and look out for your beneficiaries’ best interests.

If you don’t name a successor trustee, the court will appoint one for the trust after you die. The same holds should your successor trustee pass before closing out the trust. We recommend identifying at least two alternates who will fill the role if your first choice can't. Naming successor trustees and alternates gives you the freedom to choose as you wish.

Securing Your Trust Documents

People often ask us whether trusts are public records in California because they are beneficiaries or successor trustees and can’t locate the trust document. Securing the trust document in a safe place is critical. You also want to make sure your successor trustee and alternates know where it is and can access it since these documents are not recorded with the county or state.

Furthermore, your successor trustee will need any titles and deeds to properties that are part of the trust. You should also keep these where they can locate them when the time comes. One of the biggest challenges people have with living trusts is managing organizational tasks. Working with an experienced advisor can help you stay on top of all the details involved in creating and managing a living trust.

Who To Turn to When Establishing Your Trust

If you need help setting up your trust, you can count on AmeriEstate to help you create a sound trust portfolio and document that adheres to your wishes. We also know that a living trust is a living document. When your life or your wishes change, we’ll make sure your trust reflects your new circumstances and goals. Contact us today to learn more about what we can do for you!