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Selling a House in Probate: How Long, How Much & How to Skip It

An 11-minute video on a parent’s house in California probate: whether it needs probate, each court step, fees set by law and Prop 19. With the transcript.

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What the video covers

Transcript

0:00 Can you sell Dad's house?

0:00 Can you sell Dad's house the week after the funeral? 0:02 Can you even go inside? 0:04 Who pays the bills on it now? 0:06 Do you owe a tax? 0:07 And what if your brother has already moved in? 0:10 In California, most of those answers start with one word. 0:13 Probate. 0:14 It's the court process that settles what someone leaves behind. 0:18 It can take 9 to 18 months, and the main fees are set by law. 0:22 But some families can skip it, or shorten it. 0:25 And most never hear how. 0:27 In the next 11 minutes, you'll learn if your parent's house needs probate, 0:32 every step if it does, what it really costs, 0:34 and the legal shortcuts that can save your family months. 0:38 Let's start with the question that decides everything.

0:41 Does the house need probate?

0:44 Whether a house goes through probate doesn't depend on how much your family loves each other. 0:48 It depends mostly on one piece of paper: the deed. 0:52 The deed says who owns the house, and how they own it. 0:56 The county keeps a record of it, so you can get a copy. 0:59 There are four common ways a parent's house is held. 1:02 Three of them can keep it out of probate court. 1:04 One. 1:05 The house is in a living trust. 1:07 Then the person your parent chose, called the successor trustee, takes over. 1:13 Usually, no judge. 1:14 But only if the house was actually moved into the trust. 1:18 A trust holds only what's been put in it. 1:20 Two. 1:21 Mom and Dad owned it together, and Mom is still living. 1:24 Depending on the deed, she may need only a sworn form filed with the county, 1:29 or a short court order saying the house is hers. 1:33 Three. 1:33 Dad signed a transfer on death deed. 1:35 It works like naming a beneficiary on a bank account. 1:39 The house goes to the person named on it. 1:42 The law that allows these deeds is set to expire on January first, 1:46 twenty thirty-two, unless lawmakers extend it. 1:49 Deeds signed before then still count. 1:52 Four. 1:53 The house is in Dad's name alone. 1:55 No trust. 1:56 No transfer deed. 1:57 That's the one that usually means probate. 2:01 And here's what surprises people most. 2:03 Even if Dad left a will, the house usually still goes through probate. 2:08 A will tells the court who gets the house. 2:10 It doesn't keep the house out of court. 2:13 No will at all? 2:14 Then California law decides who inherits. 2:16 A husband or wife and the children come first, then other family. 2:21 Now, the shortcut most families never hear about. 2:24 For deaths since April first, twenty twenty-five, 2:27 if the house was Dad's main home and it's worth seven hundred fifty thousand dollars or less, 2:33 the family can ask the court to decide who inherits it in one shorter case. 2:38 No full probate. 2:39 You must wait forty days after the death to file. 2:42 And the value counts the whole house, before any loan is subtracted. 2:47 For bank accounts and belongings, 2:49 there's a simple form called a small estate affidavit, 2:52 when they add up to two hundred eight thousand, eight hundred fifty dollars or less. 2:57 But a typical California home sells for about nine hundred thousand dollars. 3:02 So for many families, a house in one name means probate. 3:06 Here's every step.

3:08 Probate, step by step

3:10 Step one. 3:11 If you have the original will, 3:13 you must deliver it to the court within thirty days of learning of the death. 3:18 It goes to the county where Dad lived. 3:21 Step two. 3:21 Someone asks the court to open the case. 3:24 Usually it's the person named in the will. 3:26 But anyone with a stake in the estate can file. 3:30 No will? 3:30 The law has a waiting line for who runs the estate, starting with a husband or wife, 3:36 then the children. 3:37 Step three. 3:38 The court sets a hearing. 3:39 By law, it's fifteen to thirty days after filing, 3:42 though busy courts often take longer. 3:45 Before it, a notice runs in the local newspaper. 3:48 Three times. 3:49 Yes. Your family's business, in the newspaper. 3:53 Step four. 3:53 And this answers our first question. 3:56 At the hearing, the judge appoints the person who will run the estate. 4:00 That person gets a court paper called letters. 4:03 Until letters are issued, nobody can sell Dad's house. 4:07 Not even the person named in his will. 4:09 They can only pay for the funeral and keep things safe. 4:13 So, can you sell the house the week after the funeral? 4:16 If it's in Dad's name alone, no. 4:19 The court may also require a bond: a kind of insurance that protects the estate. 4:24 The will, or every beneficiary in writing, can waive it. 4:28 Step five. 4:28 The inventory. 4:29 Within four months of the letters, 4:31 everything in the estate has to be listed and valued. 4:35 The house is usually valued by a court-appointed appraiser called a probate referee. 4:40 Step six. 4:41 Paying the bills. 4:42 Known creditors get a notice, and they have at least four months to file a claim. 4:47 Valid bills are paid from the estate before the family receives the rest. 4:52 Step seven. 4:53 The finish line. 4:54 Within a year of the letters, 4:56 the person running the estate must ask the court to hand everything out, 5:00 or report why it isn't ready. 5:02 Then the judge signs off, and the house can be deeded to the family. 5:06 From start to finish, 5:08 California's courts say a typical probate takes 9 to 18 months. 5:12 Sometimes longer. 5:14 Selling the house, a family disagreement, 5:16 or a relative nobody can find can all add time. 5:19 Tap that like button if you've learned something new, 5:22 and subscribe to keep current with the latest legal updates.

5:26 What probate costs

5:29 Now, the question everyone asks. 5:31 What does probate cost? 5:33 In California, the main fees are set by law, as a percent of the estate's value. 5:38 Four percent of the first hundred thousand dollars. 5:41 Three percent of the next hundred thousand. 5:44 Two percent of the next eight hundred thousand. 5:46 Then one percent, up to ten million. 5:49 That's what the law allows the lawyer. 5:51 And the same amount again for the executor. 5:53 Say Dad's house is the whole estate, and it's worth nine hundred thousand dollars. 5:58 That's twenty-one thousand dollars for the lawyer, 6:01 and twenty-one thousand for the executor. 6:03 Forty-two thousand dollars in all. 6:06 And here's the catch. 6:07 The fee is figured on the full value of the house. 6:10 The mortgage isn't subtracted. 6:12 The court's appraiser gets a small cut too: 6:15 one tenth of one percent of what they value. 6:17 About nine hundred dollars on that house. 6:20 Extra work, like a court fight, can cost more. 6:23 But the judge must approve it. 6:25 Here's something most families don't know. 6:28 A lawyer hired to handle the probate is usually paid at the end, from the estate, 6:33 under fees set by law. 6:35 Not out of your pocket, up front. 6:37 And yes, you're allowed to do probate without a lawyer. 6:40 Just know that one missed step can cost you months.

6:44 The house in the middle (and a quick quiz)

6:46 So while all this happens, what about the house itself? 6:50 Can you live in it? 6:51 The person running the estate is in charge of the house now. 6:54 They can leave it with the family member who's set to inherit it, 6:57 unless the estate needs it. 6:59 Who pays the bills? 7:00 The estate does. 7:01 The person in charge pays the property tax and keeps the house safe and in good shape. 7:07 If the house is rented out, 7:09 the rent goes to the estate until everything is handed out. 7:12 Can you sell it during probate? 7:15 Often, yes. 7:15 But there are rules. 7:17 When a judge has to approve the sale, 7:19 the price must be at least ninety percent of a recent appraisal. 7:23 And at that hearing, another buyer can show up and outbid yours, 7:27 right there in the courtroom. 7:29 Yes, a probate sale can turn into a live auction. 7:33 Sometimes the person in charge can sell without that hearing. 7:36 But first, they have to mail the family a notice. 7:39 Then comes the hardest part. 7:40 Brothers and sisters who don't agree. 7:43 One wants to keep the house. 7:45 One wants to sell. 7:46 And one has already moved in, rent free. 7:49 Once the house passes to them, any co-owner can ask a court to divide it, 7:54 or to order it sold. 7:55 It's called a partition. 7:57 Most families would rather settle it with a buyout or a mediator. 8:01 Knowing the court option exists can change the conversation. 8:04 Quick quiz. 8:05 True or false? 8:07 If Dad had a will, the house skips probate. 8:10 False. 8:10 A will doesn't keep the house out of court. 8:13 The person named in the will can sell the house right away. 8:17 False. 8:18 Not until the court issues letters. 8:20 California has an inheritance tax. 8:23 False. 8:23 Which brings us to taxes.

8:25 Taxes and Prop 19

8:28 You may have seen videos saying California takes your parents' house when they die. 8:32 Let's get the facts straight. 8:34 California has no inheritance tax, and no estate tax. 8:38 A federal estate tax return is only needed for very large estates: 8:43 over fifteen million dollars, for deaths in twenty twenty-six. 8:47 Income tax? 8:48 For tax purposes, an inherited house is valued as of the day your parent died. 8:53 Sell it for about that price, and there's usually little or no gain to tax. 8:58 The real surprise is property tax. 9:01 And that's Prop 19. 9:03 Your parents may pay tax on a value set decades ago. 9:06 When you inherit, the house can be reassessed at today's value, 9:10 and the bill can jump. 9:12 To keep your parents' lower tax, 9:14 a child must make the house their own main home within one year. 9:18 File for the homeowners' exemption within one year, 9:21 and file the Prop 19 claim with the county within three years. 9:25 A rental doesn't qualify. 9:26 And if no child lives there anymore, the lower tax ends. 9:31 There's a limit, too. 9:32 The break covers your parents' old taxed value, plus about one million dollars more. 9:38 Above that, the tax goes up. 9:40 So if you're inheriting together, talk about Prop 19 before anyone signs anything.

9:45 Keep your family out of court

9:47 And if this made you think about your own house, here's the short list. 9:51 A living trust, with your house actually deeded into it. 9:55 There's no fee percentage set by law, like probate's. 9:59 Or a transfer on death deed, while California still allows them. 10:04 Name beneficiaries on bank, retirement and life insurance accounts. 10:09 Those can pass outside probate. 10:11 And keep a will that sends anything you missed to your trust. 10:14 Then review it all every few years. 10:17 Already lost a parent, and the house never made it into their trust? 10:21 A court petition may still move it there, 10:23 if the evidence shows that's what they wanted.

10:26 When to call

10:28 So when is it time to call an attorney? 10:31 When the house is in a parent's name alone. 10:33 When brothers and sisters don't agree. 10:35 When a will or trust surprises you. 10:37 Or when a deadline is coming and you're not sure which one. 10:41 At California Inheritance Law, our attorneys and staff help families with probate, 10:45 trusts and inheritance disputes throughout California. 10:49 We offer free phone consultations. 10:52 Tell us about your family's house, and find out what your options are. 10:56 Your parent's house deserves a plan. 10:57 Not a guessing game. 10:59 Visit CaliforniaInheritanceLaw.com. 11:02 Call us today for a free consultation!

General information, not legal advice. Stories in the videos are illustrative. The rules behind each point are explained, with their Probate Code sources, in the guides linked above.

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