Top 5 things you need to know about Trust

KEY TAKEAWAYS

●       Control without court. A trust is a legal arrangement that lets you decide who gets your assets, when they get them, and how, without going through probate court.

●       Probate is expensive and slow. In California, probate can take a year or longer and may involve significant statutory and administrative costs. A properly funded living trust can help avoid formal probate.

●       No one-size-fits-all. There is no single trust that fits every family. The right structure depends on your assets, your goals, and your family’s situation.

●       2026 estate tax update. The 2026 federal estate and gift tax basic exclusion amount is $15 million per individual, indexed for inflation. For many families, this provides greater planning certainty.

●       Not just for the wealthy. If you own a home, have children, or hold investments, a trust may be one of the smartest things you can do for your family’s future.

Most people I talk to have heard of trusts. And most of them think trusts are for someone else, for the ultra-wealthy, for large estates, for people with armies of lawyers managing their money. When they come into my office, they are often surprised to hear that trusts are one of the most practical, accessible planning tools available to everyday families, not just the exceptionally rich.

If you own a home, have children, or hold any meaningful investments, a trust is probably worth understanding. And in 2026, with notable changes to both federal estate tax law and California’s own probate and Medi-Cal rules, there is good reason to revisit what you thought you knew.

A trust is a legal arrangement where you place your assets into a structure managed by a trustee, for the benefit of the people you choose. It lets you control what happens to your money, your property, and your investments, both during your lifetime and after, without putting your family through the delays, costs, and public exposure of probate court.

In this post, I want to walk you through five things every family should understand about trusts, explained the way I explain them to clients in my office, not in legal jargon.

1. A Trust Gives You Control That a Will Simply Cannot

Here is a misconception I run into constantly: people think a will is enough. They have written one, they have named their beneficiaries, and they assume that is the plan. What they do not realize is that a will only takes effect after you die, and even then, it has to go through a court process before a single dollar can be distributed to your family.

A revocable living trust becomes part of your estate plan during your lifetime, but it only controls assets that are properly transferred to or otherwise coordinated with the trust. This is why funding the trust matters as much as creating it. A trust that is never funded offers far less protection than most families expect.

When assets are properly held in or coordinated with the trust, the arrangement works during your lifetime if you become incapacitated, and it continues working after you pass. There is no waiting period or court approval required for your family to access what you intended for them.

More importantly, a trust lets you be very specific about how your wishes are carried out. You are not just naming who gets what. You are deciding the terms.

Do you want your children to receive assets outright at age 25, or in stages at 25, 30, and 35? You can specify that. Do you want funds set aside specifically for college tuition, with limits on how the rest can be spent? You can do that too. Do you want to ensure that a child with special needs continues to qualify for government benefits even while receiving support from your estate? There is a specific trust structure designed for exactly that situation.

In my practice, I work with a lot of Bay Area tech professionals who have a mix of vested stock options, real estate equity, and retirement accounts. The details of how those assets are held and how they transfer matter enormously. A trust allows that level of precision. A will, by itself, does not.

2. Without a Trust, Your Family Will Likely Go Through Probate, and That Is a Problem

Let me be direct about what probate means for a California family in 2026.

Probate is the court-supervised process that validates your will and oversees the distribution of your assets. California has several simplified procedures for smaller estates, but estates that do not qualify for those procedures and have not otherwise avoided probate may be subject to formal probate. The current threshold for certain small-estate simplified procedures is $208,850. In the Bay Area, where even a modest home can be worth well over a million dollars, many families will not qualify for those simplified procedures.

California probate generally includes a period during which creditors can submit claims, and the overall administration of even a relatively straightforward estate can take a year or longer. If there are complications such as real estate disputes, contested assets, or tax issues, the timeline can stretch to two, three, or even four years.

The costs are significant. California sets executor and attorney fees by statute. On a $1 million estate, the statutory ordinary fees can total approximately $46,000 when both the personal representative and the attorney receive the full statutory amount. That figure does not include additional filing, publication, appraisal, and administration costs that can arise during the process. That money comes out of your estate before a single dollar reaches your children.

Probate is generally a public court process, which means filings and information about the estate can become part of the public court record.

A properly funded living trust can allow a successor trustee to administer trust assets without formal probate, potentially reducing delays, costs, and public court involvement. For families with young children, stability matters more than people often realize.

One note worth mentioning: California now allows a simplified court process for transferring a qualifying primary residence valued at up to $750,000. While this can be useful for some families, it is still a court-supervised process with eligibility requirements. A properly funded living trust can provide a more comprehensive way to manage the transfer of a broader range of assets.

3. There Is No One-Size-Fits-All Trust, and That Is Actually a Good Thing

One of the reasons trusts can feel overwhelming is that there are many types, and the differences matter. But that variety is also what makes trusts so powerful. There is almost always a structure that fits your specific situation.

Here are the most common types my clients ask about:

Revocable Living Trust

This is the most widely used trust in California estate planning. You maintain full control over your assets during your lifetime, and you can change or revoke the trust at any time as long as you are mentally competent. When you pass, your successor trustee administers trust assets according to your instructions, without formal probate. This is typically the starting point for most families.

Irrevocable Trust

Once established, this type of trust generally cannot be changed or dissolved. Certain irrevocable trust structures can provide asset-protection and estate-tax-planning benefits, depending on how they are designed and funded. For families with larger or more complex estates, irrevocable trusts remain an important planning tool worth discussing with qualified legal and tax professionals.

Special Needs Trust

If you have a child or family member with a disability who receives government benefits like SSI or Medi-Cal, a special needs trust, when properly structured, can provide supplemental resources without necessarily disqualifying the beneficiary from needs-based government benefits. The assets in the trust are intended to supplement, not replace, government benefits.

Cross-Border or International Trust

For families with ties to multiple countries, something I see often among Bay Area tech professionals and immigrant families, planning across jurisdictions is genuinely complex. A trust created in California may not automatically be recognized in another country. And U.S. citizens with international assets may face specific IRS reporting requirements that need to be addressed proactively. A cross-border estate plan requires working with professionals who understand both sides of the equation. This is an area where thoughtful, coordinated planning can make a meaningful difference.

No single type of trust is right for every family. The right choice depends on your assets, your family structure, and your goals. That is why the conversation matters as much as the documents themselves.

4. The 2026 Federal Estate Tax Update Is Worth Understanding, Even If You Think It Does Not Apply to You

Most families are not thinking about estate taxes. They assume that threshold is for someone else, for the truly wealthy. And for the vast majority of Americans, that assumption is correct.

But if your assets have grown over the years, whether through real estate appreciation, RSU vesting, or business interests, it is worth knowing where the line is and what the current rules are.

The 2026 federal estate and gift tax basic exclusion amount is $15 million per individual, or $30 million for a married couple, indexed for inflation. This provides more certainty for families planning around federal estate taxes, particularly those who had been uncertain about what the prior law’s scheduled sunset might have meant for their plans.

For most families, this is welcome clarity. But it does not eliminate the need for planning. Trusts remain essential tools for avoiding probate, protecting assets, providing for minor children, and ensuring your wishes are carried out the way you intend, regardless of your estate’s size relative to the federal threshold.

And if your estate could eventually approach those levels, through real estate appreciation, equity compensation, or a business sale, a conversation now is far better than a scramble later.

I would also note that California currently does not impose a separate state estate or inheritance tax on deaths occurring on or after January 1, 2005. Federal rules are the primary estate-tax consideration for California families.

5. Trusts Protect More Than Money. They Protect Your Family’s Stability

I want to end with something that does not always make it into the legal literature but that I have seen matter enormously in my practice: a trust is not just a financial document. It is a plan for how your family will function during one of the hardest moments they will ever face.

When someone passes without a trust, the practical consequences are immediate. Accounts may be frozen. A surviving spouse may not be able to access funds right away. Children may have to wait months or years to receive what was intended for them. And the process, the paperwork, the court filings, the legal fees, falls on people who are already grieving.

A trust changes that. When my clients have a properly funded trust in place, their families know exactly what to do. The successor trustee has clear authority and clear instructions. Trust assets can be administered without formal court involvement. There is no ambiguity about who gets what or when.

I also see trusts serve another purpose that often surprises people: they reduce family conflict. Vague wishes leave room for disagreement. A well-drafted trust leaves very little room for interpretation. Everyone knows what was intended because it is clearly written down and legally binding.

For multigenerational families, grandparents who want to fund education for grandchildren, parents who want to stage distributions over time, families with blended households or complex dynamics, a trust provides a framework that a will simply cannot match.

That peace of mind is not a luxury. For any family with meaningful assets, children, or real estate, it is something worth building.

Frequently Asked Questions About Trusts

Do I need a trust if I already have a will?

In California, a will alone may not be enough if you own real estate or have assets that do not qualify for simplified transfer procedures. A will must go through probate court, which can take a year or longer and involves statutory fees based on the gross value of the estate. For many California homeowners, an estate plan includes both a living trust and a pour-over will, with the trust handling assets properly transferred to it and the will serving as a backstop for assets that remain outside the trust.

Do trusts only make sense for wealthy families?

No. If you own a home, have children, or hold any meaningful savings or investments, a trust can be a valuable planning tool. Trusts are about control, clarity, and avoiding probate as much as they are about tax planning. The right approach depends on your specific assets and goals.

What happens if I have assets in another country?

Cross-border planning adds complexity that a standard California trust does not automatically address. A trust created here may not be recognized abroad, and there are specific IRS reporting requirements for U.S. citizens with international assets. If you have ties to another country through property, bank accounts, or family, it is important to work with professionals who understand both jurisdictions.

How often should I update my trust?

I generally recommend reviewing your trust every two to three years, and immediately after any major life event: marriage, divorce, birth of a child, significant change in assets, or a move to another state. Laws change, and your life changes. A trust that reflected your situation several years ago may not accurately reflect it today.

Final Thoughts

A trust is not just a tool for managing wealth. It is a way to make your wishes clear, simplify the administration of your estate, and give your family greater certainty during a difficult time.

For Bay Area families, trusts can be especially valuable when you own real estate, have children, hold significant investments or business interests, or have financial and family connections outside the United States. The right approach depends on your assets, your goals, and your family’s circumstances.

The estate-planning landscape continues to evolve, including changes to federal estate-tax rules and California probate and Medi-Cal rules. If your estate plan was created several years ago, or if you have never created one, this may be a good time to review whether it still reflects your current situation.

At InVision Capital Advisor, we help Bay Area families integrate estate considerations into their broader financial and wealth-planning strategy. When appropriate, we also work alongside qualified estate-planning attorneys and tax professionals to help ensure that financial, legal, and tax considerations are addressed together.

The goal is simple: to help you make intentional decisions about the wealth you have built and the legacy you want to leave.