With any legal document, it is important to discuss the details of your specific situation with a qualified attorney, but this post will hopefully give you an idea of revocable living trusts and their elements in California.
California law generally requires the following elements to create an enforceable revocable living trust:
Sound complicated? To make things a little easier, I have briefly explained each element below. If you have any remaining questions, feel free to contact me to discuss your California estate plan.
A Settlor Creates the Revocable Living Trust
The person that creates a revocable living trust is called the “settlor.” Generally, it is the settlor’s property that is placed in the trust. Chances are, if you’re thinking about creating a trust, you are the settlor.
With a revocable living trust, the settlor creates the trust during their lifetime and reserves the right to revoke, change, or amend the trust. The settlor essentially retains full ownership and control over any property transferred to the trust. After the settlor’s death, the trust becomes irrevocable and the terms or purpose of the trust usually cannot be amended.
The Settlor Must Intend to Create the Revocable Living Trust
It might seem obvious, but before you can create a trust, you must express your intention that a trust be created.  There are no magic words that a settlor must use to do this. So, in some cases, a revocable living trust might be created without even using the word “trust.” In other cases, an intention to create a trust can be inferred merely by the settlor’s acts or conduct. So, if a court thinks that the settlor intended a trust to be created, that may be sufficient.
The best practice, however, is to always opt for clarity. So, clearly identify yourself in the opening declaration of the document and clearly state that you intend to create a trust. Leave out words like “wish,” “hope,” or “request,” that create uncertainty about your actual intent.
The Revocable Living Trust Must Have a Lawful Trust Purpose
A revocable living trust may have any purpose as long as it is lawful and not against public policy. Examples of trust purposes against public policy include situations where the settlor’s dominant intent is to: encourage divorce, destroy property, force someone to adhere to a specific religion, or promote family strife.
The lawful purpose should also be reasonably certain and ascertainable by anyone reading the trust document. In one example, a settlor attempted to create a trust by allowing the trustee to dispose of the trust property “as he may see fit.” The court found that this language did not create a reasonably certain purpose and the entire trust was invalid and unenforceable. So, be sure to clearly identify one or more reasonably certain legal purposes of the revocable living trust.
The Revocable Living Trust Must Have a Trustee
A trust creates two primary groups of people: the trustee and the beneficiaries. The trustee’s role is to hold legal title of the trust property for the benefit of the beneficiaries. In other words, the trustee controls the management and ownership responsibilities of the property, and the beneficiaries receive the advantages of the property.
The trustee has certain legal duties that they must abide by in exercising their control over trust property. During the settlor’s life, these duties are owed to the settlor. After the settlor’s death, these duties are owed to the beneficiaries. These duties include the duty to carry out the terms of the trust, the duty of loyalty, and others.
Choosing the right trustee (or trustees) is one of the most important decisions in creating a trust. Settlors can select adult individuals or corporations to be a trustee. Many settlors choose their children, close friends, or trustworthy personal relationships to fulfill this role. The trust should, in many cases, also designate a successor trustee to take over the management of the property in the event that the first trustee is no longer able to fulfill their duties.
Property Must Fund the Revocable Living Trust
A trust is created only if there is trust property (sometimes called the “res”). The trust property must be definite and ascertainable. The property does not have to be specifically described, but it must be capable of being readily identified. If the property funding the trust is real estate or other titled property, the title of the property will need to be changed and recorded to reflect that the property now belongs to the trust.
The Revocable Living Trust Must Have Beneficiaries
A revocable living trust must have at least one beneficiary. A beneficiary is someone that receives money, property, or other benefits under the trust. The identity of the beneficiaries must be ascertainable with reasonable certainty. The same person cannot be the sole trustee and the sole beneficiary of a trust, but a trust may allow for a trustee to be one of several beneficiaries or a beneficiary to be one of several trustees.
A Written Document is Usually Required to Create a Revocable Living Trust
California law provides five methods of creating a trust:
- A declaration by the owner of property that the owner holds the property as trustee;
- A transfer of property by the owner during the owner’s lifetime to another person as trustee;
- A transfer of property by the owner, by will or by other instrument taking effect upon the death of the owner, to another person as trustee;
- An exercise of a power of appointment to another person as trustee; and
- An enforceable promise to create a trust.
Notably missing from these requirements is any element of a writing. However, there are several exceptions and it can be difficult to prove the existence of a trust created simply by oral declaration.
California law requires the existence and terms of a trust created by oral declaration to be established by “clear and convincing evidence.” This is a higher than normal burden of proof and it means that evidence of the oral declaration of the settlor alone is not enough to support finding that a trust was created. So, in almost all cases a revocable living trust should be created by a writing.
Importantly, if a piece of real estate funds the revocable living trust, the trust must be in writing. So, a trust created by oral declaration can only relate to personal property, not real property.
Creating a revocable living trust can be difficult, but not impossible, to accomplish without a qualified attorney to assist you. It is important to get reliable answers to your legal questions before attempting to create a revocable living trust on your own. If you are located in Irvine or Orange County and would like to talk about creating a revocable living trust for your estate, contact me today.
 Steinhart v. County of Los Angeles (2010) 47 Cal.4th 1298, 1319.
 Prob. Code, § 15201.
 Lonely Maiden Productions v. GoldenTree Asset Management, (2011) 201 Cal.App.4th 368, 379–380.
 Prob. Code, § 15203.
 Estate of Berges (1977) 76 Cal.App.3d 106, 110.
 Estate of Ralston (1934) 1 Cal.2d 724, 725.
 See, e.g., Prob. Code, § 16000.
 Prob. Code, § 15202.
 Reagh v. Kelley (1970) 10 Cal.App.3d 1082, 1089.
 Prob. Code, § 15205.
 Hill v. Conover (1961) 191 Cal.App.2d 171.
 Prob. Code, § 15200.
 Prob. Code, § 15207, subd. (a).
 Prob. Code, § 15206.