Trust Sales

Trust & Probate Sales


Trust Sales

Often times a property is being sold by the heirs after their parents (or other loved ones or friends) have passed. Typically, a Family member or very close friend is named as the Successor Trustee. This type of sale requires specific expertise that most agents do not have (they simply do not handle many of this type of transaction). The issues that often come up in this type of sale are quite different than a standard Real Estate Transaction; the majority of Agents have little or no experience with them.

Title to the property is held in the name of the Trust; however, it is the Sucessor Trustee who will be making decisions and signing on behalf of the Trust. The Trustee’s legal standing needs to be confirmed by Title. This Title issue and several other things that come up which are unique to Sales of Property in Trust are handled quickly and in advance by Rick & Sandee.

While these transactions are less complicated than Probate sales or sales involving a Guardian, there are many pitfalls that the Sellers (Trustee) and their Agent need be aware of. It is critical that the Agent, Successor Trustee and the Attorney all to work together on behalf of the Estate and the heirs.


Marketable Title

The very first thing we do when selling a home in a Trust is order a Preliminary Title Report. We then sit down with our Escrow Officer, the attorney and a copy of the Trust and determine if there are any Title issues that must be dealt with before the Deed can transfer.

Often some action needs to be taken to ensure the Trust actually has marketable title to the property. Our escrow officer, working with the Title Attorney, lets us know what needs to be done in advance, thus avoiding costly delays. Issues we routinely run across (and fix): Liens paid off, but not reconveyed, Property Taxes in arrears, claims to the property made by other related (and non-related) parties.

Trust Sales Considerations


Value at the time of death

The value of the property at the time of the death of the owner is important because the IRS grants a “Stepped Up Basis” to the property. This means that the basis, as it relates to Capital Gain Tax on the property, is moved up to the value of the property when the owner passed. This greatly reduces the chance the heirs will have to pay Capital Gain tax after the sale.

The value is typically established by a licensed Appraiser, usually within 30 days of death. If that has not been done, or if it has been years since the date of death, we can provide a Broker Price Opinion of Value, going back as far as 20 years, at no charge to the Estate. Or if preferred, we provide a referral to a licensed Appraiser with extensive experience in Values at Time of Death.

Of course, as with all tax matters, consult a Tax Professional before making any decisions.


Exempt Seller Disclosure

Trust sales are typically exempt from some of the California mandated Disclosure Requirements when selling Real Property (although recent law changes have increased the disclosures required).

The main exemptions are extensive seller questionnaires and the otherwise legally mandated Transfer Disclosure Statement. Replacing those is a 1-page document titled: Exempt Seller Disclosure. This does not eliminate or change the requirement that the seller (Successor Trustee) disclose any known material facts that may affect the property.

This reduced requirement reflects the fact that in the vast majority of Trust Sales by (Successor) Trustees, the Trustee has not lived in the property (or has not for several years).


Entity Sellers 

The Successor Trustee will be signing all documents on behalf of the Trust. This includes the Residential Listing Agreement and the CAR Residential Purchase Agreement and Escrow Instructions. On both of these documents, there is a specific disclosure regarding Entity Seller (Signing on behalf of a Trust, Estate, LLC, partnership etc...). The Full Name of the Trust (or Probate, including Case #) is added and the person signing on behalf of the Entity is listed along with their Title.

This section discloses to all parties that the signor is in fact signing on behalf of the Trust or Estate and has legal authority to do so.

Work With Rick

Rick has decades of experience and is involved on the Local, State, and National Levels of Organized Real Estate. This commitment gives him additional expertise and information that other Agents typically do not have. Contact Rick today.

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