The successor trustee of your dad's trust should "take ownership" by filing the appropriate affidavit of death of trustee.
Someone needs to be responsible for the payment of property taxes, insurance, the sale, and for the distribution of the proceeds from the sale.
I do not see any advantage to an attempted assignment of your purported interest in the trust. Your share of the proceeds from the sale can, of course, be transferred to your revocable living trust.
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I agree with Mr. Daymude. I do not see any advantage to using an assignment, other than saving some relatively minor costs and fees associated with recording title documents.
In addition, an assignment may not be effective unless it is very carefully drafted. In Kucker v. Kucker (2011) 190 Cal.App.4th 90, the Court seems to acknowledge that real property may be transferred to a trust via assignment. However, the Court found that the particular assignment at issue was "ineffective to transfer the Trustor's real property to the Trust" because it did not describe the real property so it could be identified and, thus, violated the Statute of Frauds.
You can leave the property in the trust "during administration." There is no timeline for moving property out of the "administrative trust" and into the names of the children. If you want to sell it from the trust, fine.
I would not use an assignment for real property. Either the trust owns it or you own it and, notwithstanding how the taxing authorities may view it, sooner or later it is going to be sold and you will need to provide title insurance. That may be a problem if you have some of the property interest in the original trust, some in yours and some in your siblings' names. I would be much more concerned about this from the standpoint of a seller trying to convey clear title to a buyer that any other issue. Your estate/trust settlement attorney may or may not be a real estate expert, but if it were my father's trust, I would get advice from a real estate title expert.
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The Successor Trustee acts as the owner during the time the Trust administration is happening. If it takes a year or more, then that is what it takes. S/He is responsible to preserve the asset and take steps to sell it or whatever you decide. The Affidavit of Successor Trustee needs to be done so that the Successor Trustee has the authority to sell it later. Title is then in X as Successor Trustee of the Z Trust. As such, there is nothing YOU own; what you have is an expectation of a share of it but until the Successor Trustee signs a Deed to transfer property to you or gives you a share, you have nothing yet to put into your own Trust.
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I agree with the other attorneys here. I would just further add that your question seems to be primarily about risk and you should know that ONLY doing an Assignment raises serious issues of risk.
For starters, the effectiveness of using an Assignment in your circumstances is questionable. Normally, you would need to file an "Affidavit of Successor Trustee" along with a "Preliminary Change in Ownership Report" with the County Recorder. Since the transfer is between a parent and at least one child, you'd also want to file a "Claim for Reassessment Exclusion for Transfer Between Parent and Child" (you don't want property taxes to go up) as well as a "Change in Ownership Statement Death of Real Property Owner".
It's the lack of the latter document however that can potentially cause all of you major tax problems. You see, under California Revenue and Taxation Code section 480, a transferee is required to file a Change in Ownership Statement within 150 days after the date of death (or less-90 days if requested in writing by the Assessor). And under California Revenue and Taxation Code section 482, if a person required to file, fails to file, a penalty could be assessed at the rate of 10% of the taxes applicable to the new base year value, up to $5,000-if your father's home was eligible for a homeowners' exemption, or up to $20,000, if not. This is a penalty that could be assessed even though there has been no change in ownership. I'm guessing that dad's real estate was his home, so if true, the penalty would be capped at $5,000.
On the other hand, you should know that penalties can be appealed for good cause. But why get into that trouble in the first place? It is best to file all the required documents.
Besides tax risk, there are a few tangential concerns and risks as well. If you are going to hold onto the property for a couple of years before selling, you will need to pay property taxes and the cost to keep up the property. Sometimes people rent out the real estate (if possible) to defray these costs. If you choose this path, and the property remains in dad's trust, you will probably need to file 1041 trust tax returns. Also, you will want to make sure the property is properly insured no matter which way you go. These items raise further issues of risk.
In summary, I believe there's potentially both tax and real estate risk here. Thus, I'd recommend you talk to an attorney to figure out the best course of action for you and your siblings.