In California, a trust does not have to be recorded to be legal unless it holds title on real estate. If a trust does not hold title on real estate property, all assets held in the name of the trust are kept private. The trustee maintains a record of all trust property in a trust portfolio. After the trust grantor dies, the trustee distributes all the trust's property to trust beneficiaries.
Funding a Trust
For a living trust to be legal in California, the person who sets up the living trust, known as the trust grantor, must fund it with high-value assets like real estate, heirlooms and personal property. The trust grantor can either sell the property directly to the trust or retitle it using an assignment form, which transfers ownership of personal and real estate property from one entity to another. Only a certified real estate appraiser is qualified to set value on real estate.
California law requires any deed transfer involving real estate property be recorded in the county clerk’s or county recorder’s office in the county where the property is located. The trust grantor must record the original trust document, real estate deed and appraisal report. All documents must remain in a trust portfolio after a public record is made. It is not necessary to record trusts involving other assets, such as stocks, bonds and personal property.
Once a record of a real estate transfer is made, the general public has complete access to the details of the deal, including the purchase price and transfer date. The county clerk may offer ways to protect personal and financial information from appearing in public record. For example, you may have the county clerk redact certain confidential sections or withhold the full trust document from the record altogether.
Benefit of a Public Record
The benefit of having a public record is that if you record a real estate deed transfer, for example, in the county clerk or county recorder's office, you have an incontestable record of the transfer, which is especially important if an original document becomes lost, stolen or destroyed.