Trusts vs. Last Wills in California

By Stephanie Kurose, J.D.

Trusts vs. Last Wills in California

By Stephanie Kurose, J.D.

In California, trusts and last wills both allow an individual to designate beneficiaries—either another person or entity—who eventually receive their property when they die. Beyond that, however, trusts and wills serve different purposes and are useful for different situations. Both are regulated under California state law.

Man sitting on blue couch in living room and looking at documents

Trusts Avoid the Probate Process

The main difference between a trust and a last will is that trusts avoid the probate process. Probate is the court process of settling a deceased's estate. In probate, a court oversees the distribution of a deceased's property. It is often time-consuming, lengthy, and expensive. Many people create trusts specifically to avoid court oversight and dictate on their own terms how and to whom their property is distributed upon their death. A trust's beneficiaries can receive the property without any court supervision.

On the other hand, last wills do go through the probate process. The probate court oversees the administration of the will and the distribution of the deceased's estate, ensuring that the will's executor follows all California laws. The cost of probate is taken from the deceased's estate.

Unique Terms Used for Trust and Wills

The formal terms used for trusts and last wills are different, with the exception of beneficiaries. The creator of a trust is called a "settlor" or "grantor." The settlor/grantor designates a "trustee" to manage the trust on behalf of the beneficiary. While the grantor is still alive, the grantor and trustee are usually the same individual. However, the grantor must also name a "successor trustee" to manage the trust upon their death. In addition, many trusts generally allow the trustee to take over management of the trust before the grantor dies, if they become mentally incapacitated.

The person who drafts a will is called a "testator." The testator designates an "executor" to administer their estate according to the terms of the will when they die. Once the testator dies, they are called the "decedent."

Difference in Privacy Issues

Another major difference between a trust and a last will is the level of privacy. Upon filing for probate, a last will becomes a public record in California. All documents filed with the probate court can be accessed by the public forever. Assets, beneficiaries, and everything else in a will is available for anyone to see.

By contrast, trusts are not made public and maintain a level of privacy by avoiding the probate process. Upon the death of a grantor, the trust's assets are distributed by the trustee without any court interference.

Deciding Between a Will or Trust

A person is not able to designate a guardian for minor children in a trust. If they wish to do so, they must designate a guardian in a last will. Trust assets can be used to provide for your children in the future, but trusts are not the proper vehicle for assigning guardianship.

California, along with many other states, has in place a simplified probate process for those estates that meet the statutory definition of "small," including a value of less than $100,000. If an estate meets the criteria, it can avoid the probate process even where the decedent has left a valid will. The simplified process is only available for small estates if all of the beneficiaries designated in the will submit affidavits to the court stating that no conflict exists. If one beneficiary does not sign or if there are conflicts in the administration of the estate, the estate must go through the normal probate process.

Trusts and wills are useful estate planning tools, and it's possible to have both. If a person wants the best of both worlds, they can create a trust and a pour-over will, which serve as a type of safety net for assets that are not transferred into trust before the testator's death. They only have one beneficiary: the testator's trust. Upon the death of the testator, the pour-over will transfers assets into the trust to be distributed according to the trust's terms.

Deciding between a trust, will, or combination of the two depends on a person's situation and goals. These differences provide some insight for making that choice.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.