Table of Contents
Understanding Ownership in a Revocable Living Trust
Roles of the Grantor, Trustee, and Beneficiaries
What Happens When the Grantor Dies or Becomes Incapacitated
Changing or Ending a Revocable Trust
Common Disputes Over Trust Ownership
How The Grossman Law Firm Can Help
Key Takeaways
- In California, a revocable living trust allows the grantor to transfer property into the trust while keeping full control during their lifetime.
- The grantor remains the legal owner of trust property until death or incapacity.
- Once the grantor passes away, the trust becomes irrevocable, and property ownership shifts to the beneficiaries through trust administration.
- The trustee manages the assets in accordance with the trust terms but does not personally own the property.
- Disputes over ownership or trust management can lead to trust litigation in the California probate court.
Understanding Ownership in a Revocable Living Trust
When someone creates a revocable living trust, they transfer assets—such as a home, bank accounts, or investments—into the trust.
Legally, the trust becomes the holder of the title, but the grantor (also called the settlor) still maintains full ownership and control while they are alive.
That means the grantor can:
- Sell or refinance property within the trust.
- Add or remove assets at any time.
- Revoke (cancel) the trust in its entirety.
The revocable trust is often described as a legal “container”—it holds assets but does not change who truly owns them while the grantor is living.
Roles of the Grantor, Trustee, and Beneficiaries
Understanding each party’s role clarifies who controls and owns the property within a revocable trust.
The Grantor
The grantor creates and funds the trust. In most cases, they also serve as the initial trustee, meaning they manage their own property just as they did before placing it in the trust.
During their lifetime, the grantor retains all ownership rights and can amend or revoke the trust at will.
The Trustee
The trustee is responsible for managing trust assets in accordance with the trust document.
If the grantor acts as trustee, they manage their own assets. If they appoint someone else—or a successor trustee—that person has a fiduciary duty to act in the best interests of the beneficiaries and the trust.
It’s important to note:
- The trustee does not own the property personally.
- Their authority exists only in a management capacity for the trust.
- Misusing or mismanaging trust property can result in a breach of fiduciary duty claim under California Probate Code §§16002–16004.
The Beneficiaries
Beneficiaries are the individuals or entities designated to receive the trust property after the grantor’s death.
Until that time, beneficiaries have a future interest, not present ownership. Once the grantor dies and the trust becomes irrevocable, the beneficiaries are entitled to their distributions.
What Happens When the Grantor Dies or Becomes Incapacitated
Upon the grantor’s death, the revocable trust automatically becomes irrevocable. At that point:
- The successor trustee takes over management of the trust.
- The property remains in the trust’s name but is administered for the beneficiaries’ benefit.
- The successor trustee must gather, value, and distribute the trust assets in accordance with the trust terms.
If the grantor becomes incapacitated before death, the successor trustee assumes control and manages the assets on their behalf—ensuring bills, mortgages, and taxes continue to be paid.
In both situations, ownership shifts from the grantor to the beneficiaries, but the trust itself remains the legal titleholder until assets are distributed.
Changing or Ending a Revocable Trust
One of the biggest advantages of a revocable trust is flexibility.
Under California law, the grantor can amend, restate, or revoke the trust at any time while competent.
Common reasons to modify a trust include:
- Adding or removing assets.
- Updating beneficiaries or distribution terms.
- Appointing a new trustee.
To revoke a trust, the grantor can transfer property out of the trust and back into their individual name. Once the trust is revoked, it no longer holds legal title to any property.
Common Disputes Over Trust Ownership
Even with a properly drafted trust, disputes can arise—especially after the grantor passes away. Common issues include:
- Disagreements over who owns property (trust vs. estate).
- Claims of undue influence in transferring assets to the trust.
- Allegations of trustee misconduct or breach of fiduciary duty.
These disputes often lead to trust litigation in California probate court, where beneficiaries seek to enforce their rights or remove a trustee who fails to perform their duties.
The Grossman Law Firm frequently handles cases where beneficiaries must compel a trustee to account, distribute assets, or correct title issues related to trust property.
Related Resources
- Overview of California Trust Litigation
- Can a Trustee Be Removed for Mishandling Assets?
- 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties
- When Does a Revocable Trust Become Irrevocable?
- Can’t Afford a Probate or Trust Attorney?
FAQ
Who owns the property in a revocable living trust while the grantor is alive?
The grantor retains ownership and control of the property. The trust only holds title for administrative purposes.
Does the trustee own the property?
No. The trustee manages the property on behalf of the trust and its beneficiaries but does not own it personally.
What happens when the grantor dies?
The trust becomes irrevocable, and ownership passes to the beneficiaries as outlined in the trust document. The successor trustee oversees this process.
Can a beneficiary challenge a trust if they suspect wrongdoing?
Yes. If a trustee fails to account, mismanages assets, or acts against the beneficiaries’ interests, California beneficiaries can file a petition in probate court seeking relief or the trustee’s removal.
How The Grossman Law Firm Can Help
At The Grossman Law Firm, we help beneficiaries and heirs throughout California enforce their rights in trust and probate litigation.
If you believe a trustee is mishandling property in a revocable or irrevocable trust—or if you need to confirm your ownership rights—we can help you understand your options and take action.
Call (888) 443-6590 or fill out our Get Help Now form.
Our Intake Specialists can evaluate your case to assess your situation at no cost to you.
Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published: Nov 7, 2023