Can You Sell a House in a Trust in California? Trustee Steps

Yes. In California, the trustee of a living trust can usually sell a house held in the trust without going to probate court. If you created the trust and are still the trustee, you sell it like any other home, signing as trustee. After the person who created the trust dies or becomes incapacitated, the successor trustee sells it, as long as the trust gives the trustee the power to sell (most do, and Probate Code §16226 grants that power unless the trust limits it). Beneficiaries generally don’t have to approve the sale unless the trust requires it, but the trustee must act in their best interest.

Selling a home can be a complex process, and it becomes even more intricate when the property is held in a trust. Trusts are common estate planning tools that provide several benefits, including asset protection, tax advantages, and seamless asset distribution. If you find yourself in the position of selling a home held within a trust in California, this guide will walk you through the necessary steps to ensure a smooth and successful transaction.

Understanding Trusts in California: Before delving into the specifics of selling a home held in a trust, it’s essential to grasp the basic concept of trusts in California. A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. The trust document outlines the trustee’s powers, the beneficiaries’ rights, and the terms under which the assets are to be managed and distributed.

Types of Trusts: In California, two primary types of trusts are commonly used:

1. Revocable Living Trust: This trust allows the grantor (the person who establishes the trust) to maintain control over the assets during their lifetime. They can amend or revoke the trust and act as the trustee until their incapacity or passing. Afterward, a successor trustee assumes responsibility.

2. Irrevocable Trust: Once established, an irrevocable trust generally cannot be changed or revoked without the consent of the beneficiaries. It offers greater asset protection and potential tax advantages but limits the grantor’s control over the assets.

Selling a Home in a Trust: Step-by-Step Guide

1. Identify the Trustee: The first step in selling a home held in a trust is to identify the trustee. The trustee is the person responsible for managing and administering the trust’s assets, including the home. If you are the trustee, you will have the authority to sell the property on behalf of the trust.

2. Review the Trust Document: Carefully review the trust document to understand the specific provisions regarding the sale of trust assets. The document should outline the trustee’s powers, including the authority to sell real estate. Additionally, it may contain any specific requirements or restrictions related to selling the home.

3. Engage Professionals: Consider enlisting the assistance of professionals experienced in trust administration, such as attorneys, real estate agents, and certified public accountants. They can provide guidance, ensure compliance with legal and tax requirements, and help navigate any complexities throughout the selling process.

4. Obtain Required Documentation: Gather all necessary documentation related to the trust and the property. This may include the trust agreement, property deed, title insurance, and any relevant financial statements. Consult with an attorney to ensure you have all the essential paperwork in order.

5. Prepare a Certification of Trust: Under Probate Code §18100.5, the trustee signs a short certification, usually prepared by the trust attorney, confirming that the trust exists and the trustee has the power to sell. Title companies and buyers’ lenders rely on it instead of reading the whole trust, which keeps the family’s details private.

6. Prepare the Property for Sale: Before listing the property, ensure it is in good condition for sale. Consider making necessary repairs, staging the home to enhance its appeal, and obtaining a professional appraisal to determine its market value. These steps will help maximize your chances of attracting potential buyers and securing a favorable sale price.

7. Market the Property: List the property for sale, either through a real estate agent or by utilizing online platforms. Advertise the property, highlight its features, and provide relevant details about the trust sale. Transparency about the trust’s nature and the advantages it offers can attract potential buyers who understand the benefits of purchasing property within a trust structure.

8. Negotiate and Close the Sale: Once you receive offers from interested buyers, review them carefully and negotiate the terms that best align with the trust’s objectives. Once you’ve accepted an offer, work with your attorney and escrow officer to navigate the closing process, including the transfer of title and distribution of proceeds to the trust beneficiaries.

Selling a home held in a trust in California requires careful attention to legal, financial, and administrative details. By familiarizing yourself with the trust document, engaging professionals, and following the necessary steps, you can ensure a smooth and successful sale. Remember to consult with experts to navigate the specific requirements of your trust and seek professional advice tailored to your unique circumstances.

Related Guides

• Can a trustee sell a house without beneficiary approval?
• What happens to a mortgage when the owner dies
• House not in a trust? See selling real estate in probate in Los Angeles, Orange and San Diego Counties

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Selling a home held in a trust in Los Angeles, Orange or San Diego County? The Aventus Group at Compass is led by Daniel Taylor, a former litigator who now focuses on trust, probate and conservatorship sales. Learn about our trust sales services, request a free valuation, or contact us. We’re happy to coordinate with your trust attorney, who advises on the legal questions.