From your description it sounds like you started divorce proceedings but did not complete them. It also sounds like your husband may have funded the trust in part with community property. I suggest that you contact a qualified estates and trusts lawyer with litigation experience immediately.
I would need more information to answer your question. Answers to these questions are dependent in large part on the language of the trust document. For example, what are you saying your sister did wrong? Does the trust have a no-contest provision? Is the trustee estate opened or closed?
There is no law in California family law mandating separate rooms for kids, even if the kids are of the opposite sex. If there is an existing final custody order, and the other parent is seeking to change custody, he or she will have to show a material or substantial change of circumstance such that it impacts the best interest of the children to convince the court that something (i.e., the living situation) must be changed.
Your question presents a number of issues: How old is your husband's mother? Does she have any memory problems? Is your husband receiving anything from the trust, or is he a beneficiary only after his mother's death?
It may be possible for your husband to ask for an accounting. However, if his mother has capacity and is not incapacitated, she can change the trust and remove your husband as a trustee.
There is not enough information to fully answer your question. Are you the child's mother or father? What is the custody arrangement? Do you have visitation? Will the other side agree to the name change?