A Living Trust vs. Probate

And What Two New Laws Mean for You

In Part 1, I wrote that an estate plan protects you during your lifetime, and that a major life event — or a change in the law — is a good reason to review it. In this second part, I want to explain why so many families with a home or children choose a living trust over a simple will, and what two new laws mean for your plan.

Probate: Delay, Cost, and No Privacy

When a person dies owning assets in their own name above a certain limit, those assets generally must pass through probate — the court process of proving a will (or, if there is none, applying the state’s default rules), paying debts, and distributing what remains. Probate has three drawbacks a trust is designed to avoid.

• A typical California probate takes roughly one to two years, and often longer in busy courts like Los Angeles. During that time, your family may have only limited access to the assets they need.
• California sets attorney’s and executor’s fees by statute, as a percentage of the estate’s gross value — before any mortgage is subtracted. On a home worth $1,000,000, the attorney’s statutory fee is roughly $23,000, and the executor is entitled to the same — about $46,000 in ordinary fees combined, plus court costs, appraisal fees, and publication. A living trust passes that same home to your family with no probate and none of those statutory fees.
• No Privacy. Probate is a public court proceeding. Your will, the value of your estate, an inventory of what you owned, and the names of your beneficiaries all become public record that anyone can read. A trust is administered privately; the required notices go only to your beneficiaries and heirs, not to the world.

What California’s New Law Changed — and Didn’t

Effective April 1, 2025, a new California law (Assembly Bill 2016) made it easier to transfer a modest home without a full probate. A decedent’s primary residence worth up to $750,000 can now pass through a simplified court petition rather than a full probate administration. (That figure is scheduled to begin adjusting for inflation in 2028.)

This is welcome relief for smaller estates. But here in Culver City it comes with a large asterisk: most homes are worth well more than $750,000. If your house exceeds that figure — as so many in our neighborhood do — your estate still faces a full probate unless your home is held in a living trust. And even when the new $750,000 procedure applies, it is still a court petition, with a waiting period and notice to your heirs — slower and more public than the private, near-immediate transfer a trust provides. The new law makes a trust more relevant, not less.

The Federal Change: A Reason to Dust Off an Older Trust

At the federal level, the law signed in July 2025 made the federal estate-tax exemption permanent and raised it to $15 million per person — $30 million for a married couple — beginning in 2026. For the overwhelming majority of families, this means no federal estate tax at all.

It also means something specific for anyone holding an older trust. Many trusts drafted years ago, when the exemption was far lower, contain a mandatory “bypass” or “A-B” provision that automatically splits the estate into separate trusts when the first spouse dies. That structure was designed to save an estate tax that most families will now never owe — and it can do real harm: it can lock a surviving spouse into an irrevocable trust, add years of accounting and administration, and cost the family a valuable second “step-up” in tax basis that reduces capital-gains tax when assets are later sold.

I wrote years ago that a bypass trust could become “unnecessary, cumbersome, and costly.” Today that is truer than ever. If you have a trust you have not reviewed in some time, have an attorney look at it.

One Last Thing: Fund the Trust

A trust only avoids probate for the assets actually transferred into it. I regularly see trusts that were signed but never “funded” — the home was never retitled into the trust’s name. If you have a trust, make sure your home and your accounts are actually held in it. It is one of the most common, and most costly, gaps I see.

Life and its transitions are difficult enough. A well-crafted, up-to-date estate plan is a modest investment compared to the delay, expense, and worry it spares you and the people you love.

310.210.1835 / Fax: 310.667.8927

Ron@OstrinLaw.com / OstrinLaw.com

This article is for general informational purposes only and is not intended as legal or financial advice.

Ronald Ostrin is an attorney whose practice focuses on estate planning, conservatorships, elder law, trust administration, and litigation. He has served Culver City residents for nearly four decades, and on the Court Appointed Counsel Panel of the Los Angeles Superior Court.