Selling a House Held in a California Living Trust

Trust Administration Without a Probate Case

According to the California Courts self-help guide, assets that a person has put into a living trust are meant to reach the beneficiaries without a probate court case. The Probate Code says trust administration is intended to proceed expeditiously and free of court intervention while staying subject to the court's jurisdiction, so a trustee or beneficiary can still petition the court about the trust's internal affairs.

That self-help statement is conditional: it covers assets actually placed in the trust. Anything left outside the trust remains subject to administration under the Probate Code, except where another law says otherwise. A California trust attorney can check whether the house was titled in the trust.

The Trustee's Notice: When, to Whom and What It Says

When a revocable trust, or a portion of it, becomes irrevocable because a settlor dies, the continuing or successor trustee has a duty to serve a formal notification by trustee under Probate Code section 16061.7.

Who gets it: each beneficiary of the now-irrevocable trust and, when a settlor's death is the trigger, each heir of the deceased settlor, whether or not the trust leaves that heir anything. When it is due: within 60 days after the death, or within 60 days after the trustee learns of a person entitled to notice; if the trustee office was vacant, the 60 days start when the new trustee begins serving.

What it says: the settlor's identity and the trust's date, each trustee's name, address and telephone number, the trust's principal place of administration, and the recipient's right to request a true and complete copy of the trust terms. The trustee must provide that copy to any beneficiary, or any heir of the deceased settlor, who asks for it.

A settlor cannot waive the notification requirement, and a trustee who fails to serve it on a beneficiary can be responsible for resulting damages, attorney's fees and costs unless the trustee made a reasonably diligent effort to comply. A California trust attorney can help identify everyone entitled to the notice for your trust.

The 120-Day Window to Contest the Trust

Under Probate Code section 16061.8, a person served with the notification cannot bring an action to contest the trust more than 120 days after service, or more than 60 days after a copy of the trust terms is delivered to them during that 120-day period, whichever is later. The notification must state this deadline in a separate paragraph in at least 10-point bold type.

These are two different clocks: the trustee's 60 days run from the death, while each recipient's 120 days run from the date the notice is served on that person.

The Probate Code also says a trustee, in deciding when and how to distribute trust assets, may consider that the period to contest the trust has not yet run. The section is phrased as something a trustee may consider rather than as a fixed waiting period. A California trust attorney can explain how the open window bears on the timing of a sale.

The Trustee's Power to Sell the House

A trustee holds, without needing court authorization, the powers the trust instrument grants and, unless the instrument limits them, the powers given by statute. One statutory power is to acquire or dispose of property, for cash or on credit, at public or private sale, or by exchange.

Holding a power does not by itself require or permit using it, and every exercise of a trustee's power is subject to the trustee's fiduciary duties. Because the statutory powers apply except as the trust instrument limits them, the trust's own terms can restrict or condition a sale.

Since these powers don't depend on court authorization, a trustee's sale is not routed through the court-confirmation hearing that applies to many sales of probate estate property. To show authority to a buyer, lender or title company, a trustee may present a certification of trust instead of the full trust instrument; it is an acknowledged declaration signed by all currently acting trustees, it may be recorded, and a person who relies on it without actual knowledge that it is wrong is protected from liability. A California trust attorney can review whether your trust's terms allow, limit or condition a sale.

Debts and Creditors After the Settlor's Death

After a settlor dies, property that was in the settlor's revocable trust can be reached by the settlor's creditors, and by the probate estate's administration expenses, to the extent the probate estate is not enough to pay them. A lawsuit on a liability of someone who has died generally has to be brought within one year after the death, with listed exceptions that include the revocable-trust claim procedure.

If the house carries a mortgage, a specific gift of it passes subject to that loan, without a right to have other assets pay it off. A California trust attorney can explain how debts and claims affect the trust's handling of the house.

When the Trustee Decides to Sell

If the trustee decides to sell, we buy houses as-is, in any condition, and you can leave the repairs to us. Take what you want to keep and leave the rest; we'll handle the cleanout and the repairs after closing.

You choose the closing date, and we close through a reputable local title company. We cover the standard closing costs.

This is general information about how the process works, not legal or tax advice. Every situation is different — talk with a California attorney (and a tax professional) about yours.