If you own your home in California you should have a revocable trust and an estate plan to avoid the substantial expense of probate, protect your assets and ensure your beneficiaries receive the benefit of your wishes.
Key Takeaways About If You Own Your Home in California You Should Have a Trust:
- If you own your home in California, there is a simple legal reality that often goes unaddressed until it is too late: any asset not protected by a trust must pass through Probate Court before it can be transferred to heirs or beneficiaries.
- Probate costs in California (and in most states) are not based on the equity in the house or the price you originally paid. They are calculated using the property’s retail or appraised value at the time of death.
- California probate fees are statutory. That means they are set by law, not negotiated.
- In this simplified example, a probate consisting of only a single family house with a value of $950,000 (the present median value of a single-family home in San Diego, CA), the total probate-related cost exceeds $44,070.
- When a home is appropriately titled within a trust, it does not go through the process of probate.
If you own your home in California, there is a simple legal reality that often goes unaddressed until it is too late: any asset not protected by a trust must pass through Probate Court before it can be transferred to heirs or beneficiaries. For most families, the home is the single largest asset subject to this process.
This is why the principle “Own Your Home in California You Should Have a Trust” is not a slogan. It is a practical conclusion drawn from how California probate law actually works.
How Probate in California Values Your Home
One of the most common misunderstandings about probate is how a home is valued. Probate costs in California (and in most states) are not based on the equity in the house or the price you originally paid. They are calculated using the property’s retail or appraised value at the time of death.
That valuation applies regardless of mortgages, liens, or outstanding loans. Even if a home is heavily financed, probate fees are calculated on the full appraised value.
In California, where home values are often high, this distinction matters.
Why California Homeowners Face Disproportionate Probate Costs
California probate fees are statutory. That means they are set by law, not negotiated. The higher the estate’s value, the higher the required fees.
To illustrate how this works, consider a simplified example based on a modest San Diego home value.
Assume the only asset in an estate without a properly structured trust is a single-family home with an appraised value of $950,000, which is the current median selling price of a single-family home in San Diego County. Even in this straightforward situation, the estate must go through probate to transfer or sell the house.
Typical probate-related costs may include:
- Initial probate filing fee: $435
- Additional filing to transfer title or sell the home: $435
- Required public notice in a local newspaper: approximately $250
- Probate referee fee (one-tenth of one percent): $950
- Executor’s statutory fee: roughly $21,000
- Attorney’s statutory fee: roughly $21,000
In this simplified example, the total probate-related cost exceeds $44,070. These costs are paid out of the estate before heirs receive anything. The average time it will take to get the single-family home through the probate process is one year or more. And this assumes there are no disputes, delays, or additional assets.
When an executor is also a beneficiary of the estate, the manner in which compensation is handled can have significant tax consequences. While inherited assets are generally not treated as taxable income, executor compensation is different. Any fee paid to an executor for performing those duties is considered ordinary income and is subject to taxation.
When a beneficiary is also serving as executor, it may be advantageous for them to decline or waive the executor’s fee. This most often increases the value of their inheritance (tax-free) when compared to the actual amount they would receive in executor’s fees, less the taxes paid on that income. This usually results in a more favorable overall outcome.
What Makes Probate Especially Burdensome
Cost is only part of the issue. Probate is also:
- Public, meaning all filings and asset values, become part of the court record
- Slow, often taking a year or longer to complete
- Procedural, requiring court approval for many routine actions
- Stressful for executors, who carry personal fiduciary liability
Executors, even if they are family members or close friends, are legally responsible for complying with probate rules, tax obligations, and court deadlines. For that reason, most probated estates require legal counsel, further increasing cost and complexity.
Why Does a Trust Change the Outcome
When a home is appropriately titled within a trust, it does not go through the process of probate. The trustee, in this example, could transfer or manage the property based on the instructions within the trust itself, without court involvement.
For California homeowners, this offers several critical advantages:
- Avoidance of probate court and statutory fees
- Faster transfer of the home to heirs or beneficiaries
- Privacy, since trust administration is not a public proceeding
- Greater control over timing and conditions of distribution
The cost of creating a trust and estate plan is typically a fraction of the cost of probate. More importantly, it shifts control from the court system back to the family.
Timing Matters More than Most People Realize
Many people delay estate planning because they feel healthy, because probate seems abstract, or because they assume their family can “handle it later.” In reality, the legal consequences are fixed at the moment of death.
Once probate is required, there is no way to create a trust and place a home into it retroactively.
This is why the conclusion remains consistent across nearly every California estate planning analysis: If You Own Your Home in California You Should Have a Trust.
A properly prepared trust does not eliminate responsibility. It eliminates unnecessary loss, delay, and exposure. For homeowners, it is one of the most effective steps available to protect what they have built and to preserve options for the people they care about most.
We invite you to contact our experienced trust and estate planning attorneys or call today to schedule a free and substantive consultation at 866-631-3470.
