Legal Question in Wills and Trusts in California

Title is now in your name as trustee of your "living trust." Therefore, when you die, the home need not go through probate. Similarly, if you become incompetent, the successor trustee can automatically take over without the need for a conservatorship (at least as to that asset).

The term "living trust" is derived from the legal latin "inter vivos trust" that means "during life". Living trusts are usually revocable and amendable during your life so any assets you put into the trust can be taken out during your life. You can amend the terms of the trust during your life. Sometimes, unfortunately, the fact that you have complete control of the assets in the trust has unintended results. If you are sued and the plaintiff obtains a judgment against you, they can take the assets in the trust to pay the judgement. The IRS looks at the assets in a living trust as yours so, at your death, the assets in the trust are used in calculating your taxable estate for computing estate taxes.

If your home is in the living trust it is not protected from law suits. The house will be included in calculating your taxable estate for calculating estate taxes. The good news is that the house will not be subject to probate because assets in a trust are not subject to probate. Therefore, upon your death, the house will pass to whoever you have designated in your trust without any court interference or delay. You can remove the house from the trust at anytime and sell it, mortgage it, or put it back into your name. In case of a prolonged absence from the country, your becoming incapacitated or unable to manage your assets, your successor trustee named in your trust can manage your trust assets.