California lawmakers are weighing a change to how married couples move community property into a trust. The proposal, Assembly Bill 2658, would settle a question that has caused hesitation among planners and clients for years. For couples in Folsom and across the Sacramento region, the answer affects how a trust is drafted and funded.
What AB 2658 Would Change
The bill would amend Probate Code sections 100 and 102. A married person or registered domestic partner could create a trust and fund it with that spouse’s one-half interest in community real property, community personal property, and quasi-community personal property, then direct that interest at death.
The bill also addresses character. Property placed into such a trust would keep its community property character unless both spouses agree otherwise in writing.
The Uncertainty It Addresses
Existing law leaves room for argument. A spouse who transfers only their half of a community asset may worry the transfer quietly converts that property to separate property, or that the other spouse’s written consent was required. Neither result is what most couples intend.
AB 2658 was introduced in February 2026 and remains in the Judiciary Committee. It is not law, and its terms may change.
Why Community Property Character Matters
This is not a technicality. Character drives real financial results for a surviving spouse.
- Community property may receive a full basis adjustment on both halves at the first death, which can reduce capital gains tax on a later sale.
- Separate property generally receives an adjustment on the decedent’s half only.
- Blended families often want each spouse’s half directed to different children, which requires careful titling.
- Older trusts may lack language confirming that transferred assets keep their community property character.
A Folsom trust lawyer can review how your assets are titled and whether your trust says what you believe it says.
A Recent Decision Worth Knowing
In July 2026, the Fourth District Court of Appeal decided Grimberg v. Pour. The case involved allegations that a successor trustee diverted trust assets and sold trust real estate below market value. A guardian ad litem obtained authorization to record a lis pendens against the trustee’s own property as security for a potential surcharge claim.
Short Deadlines Apply
The trustee appealed, and the court dismissed the appeal. Orders authorizing a lis pendens are not appealable, even in probate. The only remedy is a writ petition filed within twenty days of written notice, with a possible extension of up to ten days.
Miss that window and the order stands.
What This Means for Your Plan
No plan should be built around a pending bill. But both developments point the same way. Precise drafting protects families, while vague trust language invites disputes years later.
If your trust was signed more than five years ago, ask whether it addresses community property character directly.
For a review of your current documents, the attorneys at Yee Law Group Inc. can explain your options. Our Folsom trust lawyer assists California families with trust drafting, funding, amendments, and administration.
