⚠️ Most Common Trust Mistake: Not Funding It
Creating a living trust is only half the job. You must FUND it (transfer assets to it).
Unfunded trust = Useless trust. If you die with assets NOT in your trust, those assets go through probate ($38,000-$68,000+ fees).
This guide shows you how to properly fund your California living trust step-by-step.
What is Living Trust Funding?
"Funding" means transferring ownership of your assets from your individual name to your trust's name.
Instead of: "John Smith owns the house"
It becomes: "John Smith, Trustee of the John Smith Living Trust dated January 15, 2025, owns the house"
You still control everything (you're the trustee), but legally the trust owns it, which avoids probate when you die.
Living Trust Funding Checklist California
✓ Complete Funding Checklist
STEP 1: TRANSFER REAL ESTATE (Most Important)
- ☐ Prepare deed (grant deed or quitclaim deed)
- ☐ Sign deed in front of notary
- ☐ Record deed with county recorder
- ☐ Keep recorded deed with trust documents
- ☐ Notify mortgage company (if you have mortgage)
- ☐ Notify homeowner's insurance
STEP 2: RETITLE BANK ACCOUNTS
- ☐ Checking accounts (if balance over $184,500)
- ☐ Savings accounts (if over $184,500)
- ☐ Money market accounts
- ☐ CDs (certificates of deposit)
STEP 3: TRANSFER INVESTMENT ACCOUNTS
- ☐ Brokerage accounts
- ☐ Stocks and bonds
- ☐ Mutual funds
STEP 4: TRANSFER BUSINESS INTERESTS
- ☐ LLC membership interests
- ☐ Corporation stock
- ☐ Partnership interests
STEP 5: DO NOT TRANSFER (Use Beneficiary Designations)
- ☐ IRA, 401(k), 403(b) — Name trust as beneficiary (NOT owner)
- ☐ Life insurance — Name beneficiaries directly
- ☐ Health Savings Account (HSA) — Keep in individual name
How to Transfer House to Living Trust California
This is the MOST IMPORTANT step (and most commonly skipped).
Step-by-Step: Transfer Home to Trust
Step 1: Prepare the Deed
You need a deed that transfers property from you to yourself as trustee:
"John Smith and Mary Smith, husband and wife, hereby grant to John Smith and Mary Smith, as Trustees of the Smith Family Trust dated January 15, 2025, the following property..."
Living Trust California prepares your deed for free (included in $150 package).
Step 2: Sign Deed in Front of Notary
- Both spouses must sign (if joint ownership)
- Bring government ID to notary
- Notary completes acknowledgment
Step 3: Record Deed with County Recorder
- File deed with county recorder where property is located
- Cost: $0-$75 recording fee
- Can mail or deliver in person
Step 4: Keep Recorded Deed with Trust
- County returns recorded deed to you
- Keep with original trust documents
- This proves property is in trust
How to Retitle Bank Accounts to Trust
Step 1: Contact Your Bank
Call or visit branch. Say: "I need to retitle my account to my living trust."
Step 2: Bring These Documents:
- Copy of your trust (first few pages + signature page)
- Trust certification (bank may provide form)
- Government ID
Step 3: Bank Retitles Account
Account name changes from "John Smith" to "John Smith, Trustee of the John Smith Living Trust"
Important: Account number stays the same. Direct deposits, automatic payments continue unchanged.
What NOT to Put in Living Trust
| Asset | Put in Trust? | What to Do Instead |
|---|
| IRA, 401(k), 403(b) | ✗ NO | Name beneficiaries directly |
| Life insurance | ✗ NO | Name beneficiaries directly |
| Health Savings Account | ✗ NO | Keep in individual name |
| Vehicles | ⚠ OPTIONAL | Usually not worth it (small value, DMV hassle) |
How to Change Living Trust California
To amend (change) your revocable living trust:
- Create "Amendment to Living Trust" document
- Specify what you're changing (beneficiaries, trustee, distributions)
- Sign in front of notary
- Keep amendment with original trust
How to Revoke Living Trust California
To revoke (cancel) your living trust:
- Create "Revocation of Living Trust" document
- Sign in front of notary
- Transfer all assets OUT of trust back to your individual name
- Notify banks, county recorder (if real estate)
💡 Living Trust California Includes Funding Support
When you create trust with Living Trust California ($150), you get:
- ✓ Deed prepared and ready to sign (included free)
- ✓ Step-by-step funding instructions for every asset type
- ✓ Sample letters to banks and financial institutions
- ✓ Complete funding checklist
- ✓ California attorney review of all documents
Key Takeaways
- Funding your trust is CRITICAL — unfunded trust doesn't avoid probate
- Transfer home first (most valuable asset, most commonly forgotten)
- Record deed with county — this makes it official
- Retitle bank accounts over $184,500
- Do NOT put retirement accounts in trust (triggers taxes)
- Living Trust California prepares your deed free (included in $150)
- Complete funding within 30 days of signing trust