Probate Sale vs Trust Sale in California: What's the Difference?

Why the difference matters

If your parent's home was held in a living trust, the successor trustee usually has the power to sell it under the trust document. If it was not in a trust, and doesn't qualify for a simpler transfer, it generally goes through probate, and the sale follows the Probate Code. That affects your timeline, your paperwork and how buyers see the property.

Which path applies to you?

• Home titled in a living trust: the successor trustee sells. No court.
• Home held in joint tenancy: it generally passes to the surviving joint tenant outside probate.
• Primary residence worth up to $750,000, no trust: a simpler court petition may be available for deaths on or after April 1, 2025.
• Everything else: usually full probate, with a personal representative appointed by the court.

Check the deed. The vesting tells you which path you are on, and an estate attorney can confirm.

Selling from a living trust

• No court. The successor trustee signs the listing and purchase agreements and works with escrow directly.
• Trustee notice. When a revocable trust becomes irrevocable at death, the trustee must serve a notification on beneficiaries and heirs within 60 days under Probate Code section 16061.7. It warns that a contest generally can't be brought more than 120 days after the notice is served.
• Disclosures. Transfers by a fiduciary administering a trust are generally exempt from the Transfer Disclosure Statement, unless the trustee is an individual trustee of a revocable trust who was a former owner or recent occupant. Known material facts should still be disclosed.

Many families wait until the 120 day period has passed before closing, on the advice of their attorney. Ask yours.

Selling in probate: full vs limited authority

A personal representative appointed under the Independent Administration of Estates Act gets either full or limited authority.

• Full authority: the representative may sell without court confirmation, after giving heirs a Notice of Proposed Action at least 15 days in advance. If no one objects, the sale proceeds.
• Limited authority: court supervision is required. The sale must be reported to and confirmed by the court before title passes, and the petition is generally due within 30 days of the sale.

How a court-confirmed sale works

1. A probate referee appraises the property. The accepted offer must generally be at least 90 percent of that appraised value.
2. The buyer's offer is accepted subject to court confirmation, usually with a deposit of 10 percent of the price.
3. At the hearing, other buyers can overbid. The first overbid must be at least 10 percent more on the first $10,000 of the original bid plus 5 percent of the rest, under Probate Code section 10311. On a $360,000 offer, that is $378,500.
4. The court confirms the highest qualifying bid, and escrow closes.

Because of the hearing, court-confirmed sales favor buyers with financing and inspections done in advance. Conditional offers are typically not accepted at the hearing.

Smaller estates and other shortcuts

For deaths on or after April 1, 2025, California allows a simpler court petition to transfer a decedent's primary residence in California worth up to $750,000, and a small estate affidavit for other assets up to $208,850. Trust property and joint tenancy property don't count toward those limits.

This is general information, not legal or tax advice. Talk to a California attorney, a CPA, or a HUD-approved housing counselor about your situation.

Tax and timing

Under IRS rules, inherited property generally takes a basis equal to its fair market value at the date of death, which can sharply reduce taxable gain when an estate sells promptly. If a child plans to keep the home instead, Proposition 19 decides whether the parent's property tax base carries over.

Joe Hall has spent his career on complex sales, including distressed property and sales with legal moving parts. He can list the home for the best price the process allows, or sell it off market as-is if the estate needs speed. See your selling options or contact Joe.