Seller Guide
How a trustee's sale differs from a court-supervised probate sale, what authority you have to prove, and where the overbid still applies.
Most people who inherit a house in Los Angeles are handed two problems at once. The first is the property, which is usually the largest asset in the estate and often the one with the most opinions attached to it. The second is a question of authority: who is actually permitted to sign a listing agreement, accept an offer and convey title. Those two problems get confused constantly, and the confusion is expensive. Before anyone discusses price, the sale needs a clear answer to a narrow question, which is whether the property is being sold by a trustee under a trust instrument or by a personal representative under the supervision of the probate court.
That single distinction governs almost everything that follows. A trustee holding title under a properly funded revocable trust generally sells the way any owner sells, on ordinary contracts and an ordinary timeline. A personal representative appointed by the court sells under the Probate Code, which imposes its own notice requirements, its own limits on what may be agreed, and in some cases a public hearing at which a stranger may raise your buyer's price in open court. The same house, the same street and the same buyer pool can produce two very different transactions depending on which of those two channels it moves through.
This guide explains the mechanics of both, the paperwork title and escrow will demand before they insure anything, and why the disclosure position of a seller who never lived in the property is more dangerous than it first appears. It is written for executors, successor trustees and their families, and it is deliberately specific about what to verify rather than assume. None of it is legal, tax or accounting advice. Trust and probate administration is squarely legal work in California, and every reader of this guide should be represented by a qualified probate or trusts and estates attorney before signing anything.
A trust sale happens when the decedent transferred the property into a revocable living trust during their lifetime and a successor trustee now holds legal title. The trustee's power to sell comes from the trust instrument, not from a judge, and in the ordinary case no court is involved at all. The trustee signs the listing agreement, accepts an offer, and conveys by trustee's deed. The obligations that do apply are owed to the beneficiaries rather than to the court: a duty of loyalty, a duty of impartiality among beneficiaries, and a duty to obtain a reasonable price. Those duties are real, and a trustee who sells cheaply to a friend of the family has a problem regardless of how smoothly escrow closed.
A probate sale happens when there was no trust, when the trust was never funded with this particular property, or when the estate must be administered for some other reason. Here the seller is a personal representative appointed by the Superior Court, and their authority comes from Letters issued by the court. The California Courts self-help material describes formal probate as generally running nine to eighteen months and sometimes longer, with a petition, published notice, a hearing, an inventory and appraisal, creditor notice, and a final accounting. The property sale sits inside that structure rather than alongside it.
There is a third situation that surprises families regularly. A trust exists, the decedent clearly intended the house to be in it, and the deed was never recorded into the trust. In that case the property may not be a trust asset at all, and the successor trustee may have to petition the court to confirm that it belongs to the trust before it can be sold. Practitioners generally refer to that petition by reference to Probate Code section 850 and to the Heggstad line of cases. It is a court proceeding with its own timeline, and discovering the problem at the point of opening escrow is the worst moment to discover it.
In a probate sale, the operative document is the Letters issued by the court. Letters Testamentary are issued where the decedent left a will naming an executor. Letters of Administration are issued where there is no will, or where the named executor cannot or will not serve, and the court appoints an administrator instead. Escrow and the title insurer will want a certified copy issued recently, because Letters can be revoked or suspended, and title needs comfort that the person signing still holds the office. They will also read the Letters closely, because the authority granted under the Independent Administration of Estates Act is stated on the face of them.
In a trust sale, the operative document is usually a certification of trust under Probate Code section 18100.5. That statute allows a trustee to present a short sworn statement establishing the existence of the trust, its date, the identity of the settlors and the currently acting trustees, the trustee's powers, whether the trust is revocable, and how title is to be held, without handing over the whole instrument. A person acting in good faith reliance on a certification, without actual knowledge that it is wrong, is protected. The statute also discourages third parties from demanding the entire trust document outside a beneficiary or litigation context, though in practice title companies routinely ask for the pages evidencing successor trusteeship and the power to sell.
Expect the file to be built early rather than at the end. A certified death certificate, the trust instrument or the relevant excerpts, an affidavit of death of trustee recorded against the property in a trust sale, the certification of trust, current Letters in a probate sale, and identification for every signing fiduciary. Where two or more successor trustees serve together, the instrument may require them to act jointly, and a contract signed by only one of them may not bind the trust. Ask your escrow officer and the title underwriter, in writing and before listing, exactly what they will require to insure the transaction.
The Independent Administration of Estates Act is the mechanism that keeps most California probate sales out of the courtroom. Under Probate Code section 10501, some acts always require court supervision, including the sale of estate property to the personal representative or to the attorney, the allowance of the representative's compensation, and the settlement of accounts. The sale of real property is different: it requires court supervision only where the representative holds limited authority rather than full authority. A representative with full authority may sell real property without a confirmation hearing. A representative with limited authority may not.
Full authority is not automatic and it is not permanent. It is requested in the petition, granted by the court, and stated on the Letters, and an interested party can petition to have it revoked. It may also be conditioned on a bond. So the first question in any probate listing is not what the property is worth; it is which authority the Letters actually grant, because the answer determines whether your buyer is signing a contract that closes on its own terms or one that will be reopened in front of a judge.
Full authority still comes with a procedural step. Before selling real property under that authority, the personal representative generally gives a Notice of Proposed Action, Judicial Council form DE-165, to the persons entitled to it. Probate Code section 10586 requires that the notice be delivered not less than fifteen days before the date specified in it. Recipients may waive notice in advance, and they may also object. An objection does not automatically kill the sale, but it moves the question in front of the court, which is precisely what the notice procedure exists to allow. Build those fifteen days into the escrow timeline rather than discovering them mid-transaction.
Where confirmation is required, the accepted offer is not the end of the process. The personal representative petitions the court to confirm the sale, notice is given, and a hearing is set. Probate Code section 10309 requires, for a private sale of real property, that the sum offered be at least ninety per cent of the appraised value, with the appraisal made within one year before the confirmation hearing and the valuation date falling in that same window. If the property has not been appraised recently enough, or the court concludes the appraisal is inaccurate, a new appraisal is required. In practice this means the probate referee's valuation sets a floor beneath which the sale cannot be confirmed.
At the hearing, the court may accept a higher bid from the floor. Probate Code section 10311 sets the threshold: the offer must be for an amount at least ten per cent more on the first ten thousand dollars of the original bid and five per cent more on the amount of the original bid above ten thousand dollars. The overbidder must be a responsible person and the offer must otherwise comply with the law. The court retains discretion to decline a qualifying higher offer and order a new sale instead, and where the credit terms of the two offers differ, the higher offer cannot be considered unless the personal representative accepts it.
The commission consequences are set out in Probate Code section 10165. Where the sale is confirmed to an overbidder, the agent or broker who procured the successful purchaser is paid half of the compensation on the amount of the original bid, plus all of the compensation on the difference between the original bid and the confirmed price, with the remaining half of the compensation on the original bid distributed under the rules in the following subdivision. Buyers who intend to overbid should arrive with certified funds and an understanding that they are bidding on the property as it stands, usually without the contingencies a conventional buyer would expect.
Sellers in this position are routinely told they are exempt from disclosure. That is a dangerous simplification. Civil Code section 1102.2 exempts sales or transfers by a fiduciary in the course of the administration of a trust, guardianship, conservatorship or decedent's estate from the statutory Transfer Disclosure Statement, and Civil Code section 1103.1 contains a parallel exemption for the natural hazard disclosure statement, along with a broad exemption for sales made pursuant to court order, including probate sales. So the form obligation often falls away. The obligation not to conceal known material facts about the property does not.
The exemption is also narrower than most people assume. Both statutes provide that the fiduciary exemption does not apply where the trustee is a natural person who is a trustee of a revocable trust and is a former owner of the property, or was an occupant in possession within the preceding year. A surviving spouse who lived in the house and now sells it wearing a successor trustee hat is, on the face of those provisions, not exempt at all. Whether a given trustee falls inside or outside the exception is a legal question with a factual answer, and it should be put to the estate's attorney rather than resolved by the listing agent.
The practical risk runs the other way from what sellers expect. A fiduciary who never occupied the property genuinely knows less about it, which is exactly why an unrepaired condition can surface after closing with nobody able to say when it was first noticed. The stronger position is usually more disclosure rather than less: obtain the property's permit history, commission a pre-listing inspection, disclose the reports themselves along with everything the family actually knows, and record clearly what is unknown because no fiduciary ever lived there. Other requirements, including Megan's Law notice and applicable smoke and carbon monoxide device rules, are not swept away by the fiduciary exemption and should be confirmed with counsel.
Some of these transactions begin before anyone has died. An elderly owner is declining, a family member holds a power of attorney, and someone suggests selling the house to fund care. This is the point at which a listing agent should slow down rather than speed up. A power of attorney is a private document with defined powers, and title insurers scrutinise them closely, particularly where the instrument is old, where it is not durable, or where the agent stands to benefit. Whether the power actually authorises a sale of this property on these terms is a question for the estate's lawyer and the title underwriter, not for the transaction.
Where a conservatorship has been established, the sale is a court matter. Conservatorship sales of real property in California proceed under the Probate Code with court involvement and, in the ordinary case, confirmation and the possibility of an overbid, in the same general shape as a probate sale. The purpose is protective, and the conservator's own view about the right price is not the final word. Anyone in this position should be asking their attorney early which statutory route applies, what notice must be given to which relatives, and how long the court's calendar will actually take in the relevant Los Angeles courthouse.
Capacity questions also arrive after death, in a different form. If a trust amendment was signed shortly before death, or a successor trustee was substituted late, expect the beneficiaries to examine it. Probate Code section 16061.7 requires a trustee to serve notification on beneficiaries and heirs within sixty days of the event making a revocable trust irrevocable, and the statutory notice warns recipients that an action to contest the trust generally cannot be brought more than one hundred and twenty days from service, or sixty days from delivery of the trust terms within that window, whichever is later. Selling into an unresolved contest is a decision to take with counsel, not around it.
A clean trust sale can run on a normal Los Angeles timeline, because the constraint is the market rather than the calendar of a court. What slows it down is almost always the paperwork: an affidavit of death of trustee that has not been recorded, a trustee who cannot produce the pages showing their appointment, a co-trustee overseas, or a property that turns out never to have been transferred into the trust. Each of those is solvable, and each takes weeks rather than days. Solve them before the property is exposed to the market, not after an offer is accepted.
A probate sale runs on the court's clock. There is one detail that catches sellers and agents alike: Probate Code section 10150 does not allow a personal representative to give a broker an open-ended exclusive. The court's permission is required, the exclusive right to sell is limited to a period not in excess of ninety days, and further extensions of up to ninety days each require court approval on a showing that the extension is necessary and advantageous to the estate. Any listing agreement presented in a probate sale should be read against that limit.
Sequencing matters for tax reasons too, and this is the point at which the estate's accountant earns their fee. A property that passes at death is generally revalued for income tax basis purposes at the date-of-death value, which is why the appraisal in the file matters beyond the sale itself. Whether a parent-child transfer of the assessed value is available, and on what conditions, is governed by Proposition 19 and is fact-specific. Whether the City of Los Angeles transfer tax under Measure ULA applies to this transfer, and at what threshold, is a separate question with its own exemptions. Get both answers in writing before you choose between selling and distributing.
Probate and trust rules, court procedures and statutory thresholds change, and every estate turns on its own facts, so verify the current position with the court and the relevant agency and obtain advice from your own probate or trusts and estates attorney and tax adviser before acting on anything in this guide.
Work With Ben
Every property is its own set of facts. Tell Ben what you are looking at and he will tell you what to check first.
Start the ConversationBen will reach out shortly to set up your tour.