One of the questions I hear quite often when someone inherits a home is:
“Is this a trust sale or a probate sale—and what's the difference?”
That's a great question because people sometimes use the terms interchangeably, but they're not the same thing.
Both situations can involve selling a home after someone passes away. But who has authority to sell the property, what documents are needed, and whether the court is involved can be very different.
If you're dealing with an inherited property in San Diego County, here's a simple explanation of what you should know.
What Is a Trust Sale?
Let's start with a trust sale.
A living trust is an estate-planning arrangement that can hold assets, including real estate, for the benefit of designated beneficiaries.
When the person who created the trust passes away, a successor trustee named in the trust may step in to manage the trust assets according to the terms of the trust.
If the home was properly placed into the trust, it can generally be administered without going through formal probate.
That can make a significant difference in how the real estate transaction proceeds.
But there's an important detail here:
Having a trust document doesn't automatically mean the house is actually in the trust.
One of the things that should be verified is how title to the property is held.
That's why I recommend that the trustee work with their estate or trust attorney to confirm their authority before we begin the sale.
What Is a Probate Sale?
A probate sale is different.
Probate is a court-supervised process used to administer certain property after someone dies.
In formal probate, the court appoints a personal representative to manage the estate.
If there's a will, that person may be the executor named in the will and appointed by the court.
If there's no will—or the named executor can't serve—the court may appoint an administrator.
The personal representative is responsible for managing the estate, which can include dealing with real property.
So here's one of the easiest ways to remember the distinction:
Trust sale: Trustee.
Probate sale: Court-appointed personal representative.
Of course, the actual legal circumstances can be more complicated, which is why an attorney should determine exactly what authority exists in a particular estate.
Does a Trust Sale Have to Go Through Probate Court?
Generally, property that was properly transferred into a living trust can pass according to the trust without formal probate.
That's one of the major reasons people establish living trusts.
But that doesn't mean trusts can never become involved with a court.
Disagreements among beneficiaries, questions about the trust, title problems or other issues can potentially require legal or court involvement.
That's why I never tell a trustee, “You don't need an attorney because you have a trust.”
That's not my role.
I handle the real estate.
The attorney handles the legal questions.
Does Every Probate Sale Require the Court to Approve the Sale?
Not necessarily.
This is another area where people can become confused.
A property being sold as part of a probate estate does not automatically tell us exactly how that sale will proceed.
The authority granted to the personal representative and the circumstances of the estate matter.
Some probate real estate transactions may involve court confirmation or additional procedures, while others may proceed differently depending on the representative's authority.
Before I market a probate property, I want to understand what authority we're working under so we can structure the real estate transaction appropriately.
Again, that's something I coordinate with the estate's attorney.
Is Selling a Trust Property More Like a Traditional Sale?
From the buyer's perspective, a trust sale can sometimes look fairly similar to a traditional real estate transaction.
There's still a property.
There's still a seller.
There's still a purchase agreement, inspections, disclosures, title, escrow and closing.
But behind the scenes, I need to understand who has authority to sign on behalf of the trust and make decisions regarding the property.
That's why documentation matters.
When I receive a call about an inherited home, one of my first questions is:
“How is title currently held?”
That answer can tell us quite a bit about where we need to start.
What If There's a Trust, but the House Was Never Put Into It?
This is something families sometimes discover after someone passes away.
They know Mom or Dad created a trust.
They have the trust documents.
But then someone looks at the deed and discovers that the property may not have been transferred into the trust.
At that point, don't assume what happens next.
There may be legal procedures available depending on the circumstances, but that's a question for the estate attorney.
From the real estate side, I wait until we have clarity regarding who has authority to sell.
This is another reason I encourage families to get organized before rushing to put the house on the market.
What About Repairs and Preparing the House?
This part is actually very similar whether I'm working with a trustee or a personal representative.
We still need to figure out what makes financial sense for the property.
Does it need to be cleaned?
Are there belongings that need to be removed?
Is someone occupying the home?
Are there deferred maintenance issues?
Would repairs increase the likely net proceeds?
Or would selling the home as-is make more sense?
I don't automatically recommend remodeling an inherited property.
First, let's determine its current market value.
Then let's look at what improvements might realistically accomplish.
That gives the trustee or personal representative information they can use when deciding how to proceed.
Who Makes the Decisions?
In a trust sale, the trustee generally manages the trust property according to the trust and applicable law.
In formal probate, the court-appointed personal representative manages the estate and has duties established by California law and the court's orders.
But here's something important:
The beneficiaries aren't necessarily the people signing the real estate contract.
That's why determining authority early is so important.
When there are multiple family members involved, everyone may have opinions about the property.
One person wants to renovate it.
Another wants to sell immediately.
Someone else wants to keep it.
Those family conversations can become complicated.
My job isn't to decide what the family should do.
My job is to give the authorized person good real estate information so informed decisions can be made.
My Role in Both Types of Sales
Whether I'm working with a trustee, executor or administrator, my role is essentially the same:
I handle the real estate.
That can include evaluating the property, reviewing comparable sales, developing a pricing strategy, helping coordinate clean-outs and vendors, recommending appropriate preparation, arranging professional photography and marketing, negotiating offers, working with title and escrow, and helping move the transaction toward closing.
I also understand that an inherited property isn't always just another house.
There may be decades of belongings inside.
Family members may live out of town.
The home may have deferred maintenance.
There may be occupants.
And several family members may be involved in the decision-making process.
That's why these transactions often require more communication, patience and coordination.
Trust Sale or Probate Sale? Start With the Documents
If you've inherited a property and aren't sure whether you're dealing with a trust sale or probate sale, don't guess.
Start by gathering the documents you have.
Find the trust or will.
Find the deed if you have it.
Talk with the estate attorney.
Determine how title is held and who has authority to act.
Then we can start looking at the real estate.
And you don't have to wait until everything is completed before talking to me.
I'm happy to look at the property early and help you understand the real estate options while your attorney works through the legal side.
Minnie's Market Tip
"Before you decide what to do with an inherited house, find out who has authority to make the decisions. Once we know that, we can build the right real estate strategy around the property."
About Minnie Rzeslawski
Minnie Rzeslawski is a Broker Associate with RE/MAX City Real Estate and Broker/Owner of The 24K Real Estate Group. With 38 years of experience serving buyers and sellers throughout San Diego County, she specializes in residential real estate, probate sales, trust sales, first-time homebuyers and strategic home marketing.
Minnie is committed to educating her clients so they can make confident real estate decisions.
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