Gene Hackman, the legendary actor, took a smart step by creating a revocable living trust in 1995 and amending it in 2005. But even with a well-prepared estate plan, his experience shows how easy it is to overlook a critical detail: naming enough successor trustees. His first two choices — his wife and his attorney — had both passed away before him, leaving only the third-named trustee to administer the trust. Coverage of Hackman’s estate planning error and a legal analysis discussing how a survivorship clause and trustee-succession provisions affected administration outcomes in Hackman’s estate highlight how even thoughtful planning can produce unintended complications if key provisions are not reviewed and updated over time. This article will discuss the mistake he made as well as other common mistakes to avoid when creating a living trust.

1. Failing to fund the trust

A living trust is only effective if your assets are transferred into it. Real estate, bank accounts, investments, and business interests must be re-titled in the name of the trust. Any property left out of the trust may still have to go through probate—defeating a main benefit of having the trust. As you acquire new assets, be sure to update the trust accordingly. LegalZoom highlights failure to fund the trust as one of the most common and costly mistakes in estate planning.

Do you have to sell real estate to put it into a trust?
No, you don’t need to sell your home or other real estate to transfer it into a trust. Instead, you change the title of the property from your name to your name as trustee of the trust. This is done by signing and recording a new deed (usually a grant deed or quitclaim deed). The deed must be notarized and filed with the county recorder where the property is located. You still own the property—it’s just held in your capacity as trustee.

In California, this transfer does not trigger a property tax reassessment thanks to Proposition 13 and Revenue and Taxation Code § 62(d). In Solano County, you can find more information or record your deed through the Assessor/Recorder’s Office.

2. Not naming enough (or the right) successor trustees

The successor trustee manages the trust if you become incapacitated or after your death. In Hackman’s case, both his wife and attorney—his first and second choices—had passed away, creating a potential gap in trust administration. Always name multiple alternate trustees, and keep those choices updated. Consider naming a professional fiduciary or trust company if no personal option is a good fit.

3. Overlooking the need to update the trust

Life changes—your trust should too. Events like marriage, divorce, the birth of a child or grandchild, or the death of a beneficiary should prompt a review. Even if nothing changes in your family, laws can change, and your documents should keep up. Review your trust every 2–3 years or after any major life event.

4. Not coordinating the trust with other estate documents

A living trust should work in harmony with your will, powers of attorney, healthcare directives, and beneficiary designations. A pour-over will is still necessary to catch any assets not placed in the trust. Beneficiary designations on retirement accounts and life insurance policies should reflect your overall estate planning goals. Conflicts between documents can cause delays or even legal disputes.

5. Assuming a trust avoids all taxes or offers complete asset protection

A living trust helps avoid probate and allows you to manage assets during incapacity, but it does not protect your assets from creditors while you’re alive. It also won’t shield your estate from federal estate taxes if your estate exceeds the current exemption limit. If your estate is large or includes complex assets, you may need additional planning—like irrevocable trusts or charitable giving strategies—to achieve your tax and asset protection goals. Charles Schwab explains common misconceptions about the limitations of living trusts.

Why details matter more than you think

Gene Hackman’s estate plan was generally solid—but his situation shows how easy it is to miss an important detail, like updating trustee appointments. A living trust can save your loved ones time, money, and stress—but only if it’s done right. Avoiding these five common mistakes can help ensure that your plan does what it was designed to do. If you’re thinking about creating or reviewing a living trust, the Law Offices of David Knecht can help. We have extensive experience in estate planning.  Call us today at (707) 451-4502 to schedule a consultation and protect your legacy.

Many Californians ask: Is there a California estate tax? The short answer is no. California does not impose a state-level estate or inheritance tax. Most residents—regardless of how much they own—will never pay estate tax to the state of California. However, that doesn’t mean estate planning isn’t important. In fact, taxes are just one part of the bigger picture.

California has no estate or inheritance tax

• The California State Controller’s Office confirms that for deaths on or after January 1, 2005, there is no California estate tax return required.

• There is also no inheritance tax in California, which means heirs do not owe state taxes on what they receive from an estate.

Federal estate tax still applies—but only to the ultra-wealthy

• As of 2024, the federal estate tax exemption is $13.61 million per person, or $27.22 million per married couple—meaning that only the largest estates are taxed.  Note: The federal exemption is scheduled to drop roughly in half on January 1, 2026 unless Congress acts, which may affect higher-net-worth families.

• For a broader look at planning strategies—including trusts, gifting, and preparing for future changes in tax law—City National Bank offers a helpful overview.

Solano County: What Local Families Should Know

Families in Fairfield, Vacaville, and other Solano County cities may not face estate taxes, but they still have to deal with local court procedures if no plan is in place.

• The Solano County Superior Court Probate Division handles matters related to wills, trusts, conservatorships, and guardianships.

• If your estate must go through probate, expect a public, formal court process that can take many months and involve court fees and statutory executor fees.

• A revocable living trust is one of the most effective ways to avoid probate in Solano County.

• The court also handles small estate affidavits and spousal property petitions, which may simplify things for smaller estates.

Why do estate planning if there’s no estate tax?

Even if your estate won’t owe federal or state estate tax, here’s why planning is still essential:

• Avoiding probate: Probate is public, time-consuming, and often expensive. A trust can allow your assets to transfer privately and efficiently.

• Naming guardians for minor children: A will ensures you—not a judge—choose who raises your children if something happens to you.

• Control over distributions: You may want your beneficiaries to receive assets at certain ages, or with protections in place for special needs or addiction issues.

• Medical and financial decisions: Estate planning includes powers of attorney and health care directives in case of incapacity—not just after death.

• Preventing family conflict: Clear instructions and proper legal documents help avoid confusion and reduce the risk of disputes.

What other taxes might apply?

Even without estate tax, other taxes can still affect your estate or your beneficiaries:

• Capital gains tax: Assets get a “step-up in basis” at death, but gifting assets before death can eliminate that benefit and result in higher taxes for the recipient.

• Income tax on inherited retirement accounts: Beneficiaries of IRAs or 401(k)s now often must withdraw the funds within 10 years, creating taxable income.

• Property taxes: Inheriting real estate in California may trigger reassessment unless certain exclusions apply (like the parent-child exemption).

• Gift tax rules: Large gifts made during life may require IRS reporting and count against your lifetime exemption, even if no tax is due at the time.

Who needs estate planning?

Even though “no” is the answer to the question, “Is there a California Estate Tax,” there are still important reasons for estate planning. A plan is not just for the wealthy, and here are a few common situations where planning makes a big difference:

• Young parents need to name guardians and ensure life insurance or other funds are managed wisely for their children.

• Homeowners want to avoid probate delays and fees when passing their property on to loved ones.

• Blended families often need to coordinate inheritances carefully to avoid conflict or accidental disinheritance.

• Retirees may want to plan for incapacity, manage taxes on retirement funds, and protect surviving spouses.

• Business owners need to prepare for succession or sale of the business in the event of death or disability.

Contact an Experienced Estate Planning Law Firm

While California has no estate tax—and federal estate tax impacts only a small percentage of families—estate planning is still crucial. A well-crafted plan protects your loved ones, avoids probate, reduces taxes, and ensures your intentions are carried out smoothly. For clients in Vacaville, Fairfield, and throughout Solano County, the Law Offices of David Knecht offer experienced guidance and peace of mind. Contact us at (707) 451-4502.