A trustee can sell trust real property without a court hearing, without confirmation, and without anyone bidding against your buyer in open court. That freedom is most of what a trust bought the family.
The duties do not disappear along with the hearing, and a sale is the transaction beneficiaries second-guess most often.
Read the trust's powers. Nearly every California trust grants the trustee power to sell real property, but check for co-trustee requirements, consent conditions, or a specific gift of that house to a named beneficiary. Selling a specifically gifted property is a breach even at a good price.
Title companies will want a certification of trust, the death certificate, and proof you are the acting trustee. Get those assembled before you accept an offer, not during escrow.
Price and process
Get an appraisal or a defensible broker opinion, list it openly, and keep the documentation of how the price was reached. A trustee who sells quietly to an acquaintance at a number that seemed fine is the fact pattern that generates surcharge claims, even when the price genuinely was fine.
The date-of-death appraisal is doing double duty
It sets the beneficiaries' tax basis and it is your evidence that the sale price was reasonable. Get it early, from a qualified appraiser, and keep it. A property that sells near its date-of-death value usually produces little or no taxable gain, which is a conversation worth having with the accountant before escrow closes rather than in April.
A trustee who never occupied the property has reduced disclosure obligations under California law, and reduced does not mean none. Known material defects still get disclosed. So does anything an inspection turned up. The cost of disclosing a bad foundation is a price adjustment. The cost of concealing it is a lawsuit against you, personally, after the trust has distributed.
Practical items that eat the calendar
- An occupant who is a family member and has no intention of leaving on your timeline
- Deferred maintenance on a house last updated in 1979, which many Los Angeles buyers will finance around and some will not
- Unpermitted work that has to be disclosed and priced in
- Vacant property insurance, which costs more and which some carriers will not write at all past a certain point
- Personal property still inside, because escrow does not close around forty years of accumulation
“Handle occupancy before you list. I have watched two sales fall out because a brother living in the house declined to allow showings, and the trustee, who was his sister, did not want to be the person who forced the issue. That reluctance cost the trust more than a year of carrying costs.”
Delia Vasquez-HartCalifornia reassessment rules for transfers between parents and children changed significantly with Proposition 19, and whether a child can keep a low tax base depends on facts including whether they will occupy the property. That question should be answered before you decide between selling and distributing in kind, because it can be worth more than the difference in sale price. Get specific advice on it rather than relying on what a neighbor did in 2018.
Questions we get asked
Do I need beneficiary consent to sell?
Usually not if the trust grants the power. Getting written consent anyway is cheap insurance when the beneficiaries are cooperative, and it is informative when they are not.
Can a beneficiary buy the property?
Yes, and it needs an independent appraisal, full disclosure to everyone, and written consent. If the buyer is also the trustee, treat it as requiring court approval.
Will there be capital gains tax?
Often very little, because of the basis step-up at death. Gain is measured from date-of-death value, not from what the parents paid in 1974.
Can we sell before the 120-day contest window closes?
Selling is generally different from distributing, and a sale that is clearly in the trust's interest can proceed. Distributing the proceeds is the step to hold.
Order a date-of-death appraisal and resolve who is living in the property, in that order, before you interview listing agents. Both take longer than you expect and neither improves with delay.