Trust Inheritance – Inheriting and Selling Real Estate through a Trust

When a loved one passes away, they may leave their real estate as a trust inheritance. Here’s how it works:

1. A property owner sets up a trust, and names a beneficiary for their property.
2. While the property owner is alive, the property is held in the name of a trust.
3. When the owner passes away, the property then belongs to the beneficiary.
4. At that point, the beneficiary can choose to either:  transfer the property into their name, OR sell it.

This article covers how to sell real estate that is a trust inheritance:

• The difference between a Named Successor Trustee and a Beneficiary.
• Who can sell a trust inheritance.
• What you need to sell a trust inheritance.

Named Successor Trustee vs. Beneficiary

The distinction between a beneficiary and a trustee is important.

The beneficiary is who will receive the trust property as an inheritance.

The named successor trustee is who will either manage the trust property, or distribute it to the beneficiaries.

There can be one or more named successor trustees. Also, a trustee can also be a beneficiary.

Who Can Sell a Trust Inheritance?

The only people who can sell real estate are the named successor trustees of the trust.

It doesn’t matter who is the “beneficiary” in the trust. If someone inherits property as a beneficiary, they have two choices. They can move the title into their name, and then sell it. On the other hand, they can have the named successor trustees sell the property. After the sale, the successor trustees give the beneficiary the proceeds.

What Do I Need to Sell a Trust Inheritance?

The escrow officer handling the sale will need two documents:

1. A complete copy of the trust. .PDF format is easiest.
2. A certified copy of the death certificate. If you don’t have one, the title company can order a copy for a fee.

Contact me with any questions about selling a property. You can also read my article about Proposition 19. Proposition 19 has recently changed the rules for inheritance property.

Finally, you can also read more about Proposition 19 on the California State Board of Equalization’s website.