Selling Inherited Property With Siblings in California

Who Has Authority to Sell — and Where That Authority Comes From

Do all siblings have to agree to sell? Not when the house is still in an estate or a trust, and yes when the siblings already own it outright.

In probate, the personal representative holds the authority to sell estate real property, not the heirs as a group. Under Probate Code section 8400, a person has no power to administer the estate until appointed personal representative and the appointment becomes effective, which happens when the person is issued letters, the court document that proves the appointment. A person named executor in the will may, before then, pay funeral expenses and take necessary measures to maintain and preserve the estate, but that is not a power to sell.

In a trust, the successor trustee holds the authority to sell trust real property under the trust's own terms. Beneficiaries, including siblings, receive their shares as the trust directs.

After a distribution, or after a transfer on death deed or the death of a joint tenant leaves the siblings holding title themselves, no one sibling has a role that lets them sell the whole house. Each co-owner signs for their own share, so a sale of the entire property needs every owner, and when they cannot agree, a partition action in court is the remedy the law provides.

How much a probate court is involved depends on what authority the court granted the personal representative. Some estates are administered under independent administration authority, which lets the personal representative act with less court supervision; others are supervised by the court at each major step.

Selling Through Probate: The Court-Supervised Process

For siblings waiting on a probate sale, the key question is whether a judge must approve the buyer and price. The starting rule is Probate Code section 10308: except as provided in Probate Code section 10503, all sales of estate real property must be reported to and confirmed by the court before title passes to the buyer, whether the sale is private or at public auction, and even if the will directs or authorizes the sale. If the personal representative does not file the report and a petition for confirmation within 30 days after the sale, the buyer may file them.

The exception is independent administration. Under Probate Code section 10503, the court-confirmation requirements, such as published notice of sale, court approval of agents' and brokers' commissions, the appraised-value rule and the court's examination of the sale, do not apply to a sale made with that authority. A personal representative who sells that way may set the price and terms, at a public auction or a private sale.

Whether a particular sale needs court confirmation therefore depends on two things together: whether the court granted authority to sell real property without supervision, and whether anyone objects to the notice of proposed action. That notice is a written description of the planned sale that the personal representative gives to the heirs and other interested persons, who have a period to object. If no one objects and the authority was granted, the sale can close without a confirmation hearing; if someone objects, the sale generally goes to the court.

When confirmation is needed, the court sets a hearing, other buyers may bid in court, and the court approves the sale. A fuller walk-through of selling inherited property during probate covers the sale steps in order. Whichever route applies, the estate's duties about notices, liens, taxes and disclosures stay the same regardless of who the buyer is.

Selling Through a Trust: What the Successor Trustee Controls

A living trust often spares a family the probate court, but it puts real responsibility on one person. The successor trustee steps into the trustee's role after the parent dies and manages trust property, including the house, for every beneficiary under the trust's terms.

The trust document governs the sale. Some trusts give the trustee broad discretion to sell; others require beneficiary consent or direct that a particular child may buy or keep the house. The trust's own language is the place to look, and a title company asked to insure the buyer will usually want to see the parts of it showing who the trustee is and what power to sell the trust gives.

A trustee's sale is not a sale of probate estate property, so the confirmation rule in Probate Code section 10308 does not govern it; the trust's terms and the trustee's duties to all beneficiaries do. Being able to sell without a judge's approval does not mean acting for one sibling over another.

A house that passed by a transfer on death deed sits outside both a trust and a probate estate. The named beneficiaries hold title directly as co-owners, so the co-owner rules described above govern any sale.

When siblings believe a trustee or executor is acting improperly, that is a contested matter, a different subject handled by an attorney who litigates trust and probate cases.

When Siblings Disagree: California's Partition Law

Partition is a court proceeding that resolves a dispute among co-owners of property who cannot agree on what to do with it. Under Code of Civil Procedure section 872.210, a partition action may be brought by, among others, an owner of an estate of inheritance, an estate for life or an estate for years in real property owned by several persons concurrently.

Partition takes two forms. Partition in kind physically divides the property among the owners, which is often not practical for a single house on one lot. Partition by sale means the court orders the property sold and the proceeds divided.

California's version of the Uniform Partition of Heirs Property Act adds steps for inherited property that give the other co-owners a chance to buy before a sale. Under Code of Civil Procedure section 874.317, if any cotenant requested partition by sale, the court, after determining the property's value, sends notice that any cotenant except one who requested the sale may buy all the interests of those who requested it. A cotenant who wants to buy gives notice to the court not later than 45 days after that notice is sent, and the price for each interest is the court-determined value of the whole parcel multiplied by that cotenant's fractional share. If more than one cotenant elects to buy, the court divides the right among them by their existing shares. The court then sets a payment date not sooner than 60 days after its notice; if no one pays on time, the court resolves the case as if no interest had been bought.

So what happens when siblings disagree? Often the family keeps talking, sometimes with a mediator; if that fails, a co-owner may file for partition, and the law above governs. A sibling living in the house, sometimes rent-free while others carry costs, is a situation that often surfaces in these cases. How the court treats it depends on the facts, and a contested partition case is handled by an attorney who litigates trust and probate cases.

Property Tax and the Step-Up in Basis: What Changes at Inheritance

Two numbers change when a parent dies: the heirs' starting cost for income tax, and possibly the house's assessed value for property tax.

Basis is the starting cost from which taxable gain is measured. Under 26 U.S.C. § 1014(a), the basis of property acquired from a decedent is generally the fair market value at the date of death, or, where the estate makes the elections the section describes, the value at an alternate valuation date or a value determined under a special-use rule, or, to the extent a conservation-easement exclusion applies, the decedent's own basis. In plain words, the heirs' starting point is usually the value at death, not what the parent paid decades ago.

Do siblings owe capital gains tax when they sell? Gain is measured from that basis, so a sale at or near the date-of-death value may produce little or no taxable gain. The result depends on the sale price, the basis that applies, each heir's share and other facts that a CPA, an enrolled agent or a tax attorney reviews. The "two-year rule" people search for usually refers to a federal exclusion for selling a main home, which has ownership and use conditions; those same professionals can say whether it applies.

Proposition 19 changed the parent-child exclusion from property tax reassessment. For a transfer on or after February 16, 2021, Rev. & Tax. Code section 63.2 lets a claim exclude a parent's principal residence from reassessment only if it becomes the child's principal residence within one year, the child files for the homeowners' or disabled veterans' exemption within a year, and the value stays under a limit, with any value over it added to the assessment. A claim generally must be filed within three years after the transfer, or before the property is transferred to a third party, or before an eligible transferee stops living there, whichever is earlier; a claim filed within six months after a supplemental or escape assessment notice is mailed also counts as timely, and a late claim on property not yet sold to a third party applies from the lien date of the year it is filed. The county assessor's office administers the claim and can give the current value limit.

Ways to Sell: Listing, Owner Sale, and Direct Sale

Once the person with authority is ready to sell, the family has three broad routes, each with tradeoffs.

A listing with a licensed real estate agent puts the house on the open market. It tends to reach the most buyers and can produce competing offers, and the family pays a commission, often prepares the house, and waits on showings and a buyer's financing.

A sale by the owners without an agent saves the commission but leaves pricing, marketing, paperwork and negotiation to whoever holds authority, which can be hard when siblings are far apart.

A direct sale goes to a buyer who pays cash and takes the house in its present condition. The tradeoff is real: a direct offer is often lower than what the house might bring on the open market, because that buyer absorbs the repairs, the risk and the cost of reselling. In return the family typically gets less preparation, fewer showings and less dependence on a buyer's loan. A reader can get an offer on an inherited property from Silver Lining Inherited Property for a direct as-is sale, and asking for one carries no obligation to sell. A side-by-side look at a cash offer versus a listing goes further, as does guidance on an inherited house needing repairs.

No buyer changes the estate's authority, the court's steps or the law's duties. Disclosure is one example: under Civ. Code section 1102.2, the transfer disclosure article containing that section does not apply to sales ordered by a probate court, sales by a fiduciary in administering a trust or decedent's estate, sales from one co-owner to others, or sales to a spouse or a blood relative of a seller, among others; the fiduciary exemption does not apply where the trustee is a natural person who is a trustee of a revocable trust and a former owner of the property or an occupant within the preceding year. Other disclosure duties may still apply, and the estate's attorney or a licensed agent can identify them.

Comparing written offers and estimated net proceeds, meaning the price less commissions, repairs, carrying costs, loan payoffs and closing costs, is how a family tells which route fits.

Practical Steps for Co-Heirs Moving Toward a Sale

For siblings ready to act, the work runs in a fairly steady order.

1. Find the governing document. The will, the trust or the deed determines who has authority and which rules apply.
2. Confirm how title is held now. The house may still be in the estate or the trust, or it may already belong to the siblings as co-owners.
3. Name the person with authority. That is the executor or administrator once letters issue, the successor trustee, or every co-owner acting together.
4. Bring in the right professionals. An estate or trust sale usually involves the estate's or trust's attorney, and a CPA or enrolled agent handles the tax side.
5. Plan for the contents. Clearing and selling household belongings is an estate sale, a separate job usually handled by an estate-sale company.
6. Track carrying costs. Property taxes, insurance, utilities and upkeep continue while siblings decide, and they come out of what each heir eventually receives.

For a smaller estate, California has simplified procedures that may apply. The petition to determine succession to the decedent's primary residence is available under Probate Code section 13151 when 40 days have passed since the death and the home's gross value is within a limit that is adjusted periodically. The affidavit for real property of small value is available under Probate Code section 13200 no sooner than six months after the death. The court publishes the current dollar limits for both.