Sell Inherited Property in Los Angeles

Probate in Los Angeles County: When It Applies and What It Involves

Probate is generally the path when a house passes under a will or by intestacy and was not in a trust, in joint tenancy or covered by a transfer on death deed. For a Los Angeles County decedent, that case belongs to the Probate Division of the Los Angeles County Superior Court. The court's Probate page says the Probate Division handles guardianship, decedents' estates, trusts and conservatorships, and it lists resources including Probate Notes to review before a hearing, local forms and local rules for the Probate Division, a self-help center and a list of probate courthouses in the county. A family in Woodland Hills, Van Nuys, Pomona or East Los Angeles files in that same court system.

Nobody has power over the estate until letters issue. 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. That holds even for an executor named in the will, except that a named executor may, before the appointment takes effect, pay funeral expenses and take necessary measures to maintain and preserve the estate.

Court confirmation depends on the authority granted. Under Probate Code section 10308, a sale of estate real property generally must be reported to and confirmed by the court before title passes to the buyer, except for a sale made under the independent-administration authority referred to in Probate Code section 10503. Whether a particular sale needs confirmation depends on the authority the court granted and on whether anyone objects to a notice of proposed action, the written notice that tells heirs and beneficiaries of a planned sale and gives them a chance to object. Under Probate Code section 10503, the court-confirmation requirements, such as published notice of sale, court approval of agents' and brokers' commissions, sale at not less than 90 percent of appraised value and the court's examination of the sale, do not apply to a sale made with that authority. If a sale does need confirmation and the personal representative does not file the report and petition within 30 days after the sale, Probate Code section 10308 lets the buyer file them.

Smaller estates sometimes use simplified procedures instead. The petition to determine succession to the decedent's primary residence, under Probate Code section 13151, is available to a successor once 40 days have passed since the death, for a primary residence whose gross value is within a dollar limit the statute sets and adjusts periodically; the petitioner must deliver notice to each heir and devisee named in the petition within five business days of filing. The affidavit for real property of small value, under Probate Code section 13200, may be filed no sooner than six months after the death, requires a probate referee's inventory and appraisal, and uses the adjusted dollar amount in effect on the date of death for a decedent who died on or after April 1, 2022. The current amounts are published as the statutes provide.

None of this changes with the buyer. A cash buyer or an as-is buyer goes through the same letters, notices and court steps as any other buyer.

Selling Through a Trust or Outside Probate in Los Angeles

A successor trustee's authority to sell comes from the trust document, not from a court order. The trustee follows the trust's terms and the duties California places on trustees, and a buyer's title company commonly asks for proof that the trust exists and that the trustee may sign. A trust keeps the house out of probate, but it does not change the property tax, basis or disclosure rules discussed below.

A transfer on death deed moves the house without probate. Under Probate Code section 5652, the deed transfers all of the owner's interest at death to the beneficiary, subject to the beneficiary's right to disclaim; a beneficiary who does not survive the owner takes nothing, and when there is more than one beneficiary they generally take as tenants in common in equal shares. The transfer is also subject to liens, encumbrances, easements, leases and other limitations of record, and it carries no covenant or warranty of title. Once title is cleared, the beneficiary sells as any other owner would.

Joint tenancy works differently again. The surviving joint tenant already owns the whole property, and the usual step is recording a document with the death certificate that clears the deceased owner's name from the record. No probate is needed for that transfer.

Every deed for property in the county, from Burbank to Torrance to unincorporated areas, is recorded by the Los Angeles County Registrar-Recorder/County Clerk. Its Recording Requirements page says the property must be located in Los Angeles County, signatures must be original, the document must be properly acknowledged unless exempt, the Assessor's Parcel Number is required on deeds, and a completed Preliminary Change of Ownership Report must accompany documents affecting a change in ownership.

These rules govern real property, the land and the house. Personal property, the furniture and belongings inside, passes under different rules, and clearing or selling the contents is work estate-sale companies do as a separate category.

Property Tax and Proposition 19 in Los Angeles County

The first property tax step after a death is a filing, not a payment. The Los Angeles County Assessor's Death of a Real Property Owner page says the Assessor's Office must be notified within 150 days of the date of death or, if the estate is probated, at the time the inventory and appraisal is filed, using the Change in Ownership Statement Death of Real Property Owner form (BOE-502-D/ASSR-176), even if the property was in a trust. Rev. & Tax. Code section 480 sets the same rule: the personal representative files before or when the inventory and appraisal is filed, and in other transfers at death, including through a trust, the trustee or the transferee files within 150 days after the date of death. Failing to file within 90 days after the assessor mails a written request can bring a penalty the statute describes.

Proposition 19 limits the parent-child exclusion. For transfers on or after February 16, 2021, Rev. & Tax. Code section 63.2 excludes from reassessment a parent's principal residence passing to a child (and, where all the qualifying parents are deceased, a grandparent's residence passing to a grandchild) only if it becomes the child's principal residence within one year and the child files for the homeowners' or disabled veterans' exemption within a year. Even then, the exclusion is limited by a value test the statute ties to the home's prior taxable value and its market value at transfer. A claim must be filed with the assessor; under the statute it is generally due within three years after the transfer or before the property is transferred to a third party, whichever is earlier, with later-filing alternatives the statute describes. The Assessor's page lists the related claim forms, and the Assessor's office publishes the current figures.

An heir who plans to sell rather than move in generally falls outside the exclusion, so the property is reassessed. The Los Angeles County Treasurer and Tax Collector's Secured Property Taxes General Information page describes a supplemental bill, an additional tax bill issued after reassessment on a change in ownership. The same page says the annual bill is mailed by November 1 and due in two installments, with delinquency dates of December 10 and April 10. Those bills are carrying costs while the estate is open.

The county assessor's office is the place for reassessment and exclusion questions; a CPA, an enrolled agent or a tax attorney reviews income tax and basis.

Basis, Capital Gains, and Federal Tax Rules for Inherited Property

Basis is the starting value used to measure gain or loss on a sale, and for inherited property it usually resets. Under 26 U.S.C. § 1014(a), the basis of property acquired from a decedent is generally its fair market value at the date of death, or, where the estate makes the election that section refers to, its value at the alternate valuation date, with two further alternatives in that text for special-use valuation and a conservation-easement exclusion.

For a family selling a Santa Monica bungalow or a Long Beach duplex their parents bought decades ago, the practical meaning is that gain or loss is measured against that basis, not against what the parents paid. The basis is fixed by those rules; the sale price is what changes from one year to the next.

The primary-residence exclusion that many people associate with a "two-year rule" is a separate federal provision. Whether it can apply to an inherited house depends on facts such as whether the heir lived in the property as a main home and for how long after inheriting.

California's Franchise Tax Board administers state income tax on a sale. Whether a particular sale produces taxable gain, and how much, is a question for a CPA, an enrolled agent or a tax attorney.

Three Ways to Sell an Inherited House in Los Angeles

Once authority is settled, the method of sale is a separate choice. An inherited house in Inglewood follows the same legal steps as one in Arcadia, and each method below has its own tradeoffs.

A listing reaches the widest group of buyers and is built to find the open-market price, at the cost of commissions, preparation and waiting on a buyer's financing. A sale by owner keeps the seller's side free of an agent's commission, but every task an agent would handle falls to the family, often from far away.

A direct sale lets the house go as it stands, but the price usually reflects that. The buyer is absorbing the repair bill, the chance that the work costs more than expected, and the expense of reselling later, so the offer is often below what the open market might pay. In return, the family does less preparation, hosts fewer showings and depends less on whether a buyer's lender approves a loan.

A direct or cash sale does not skip or shorten probate, a court's confirmation, a required notice, a required disclosure, a lien or a tax. The way a family tells which method fits is by comparing written offers and estimated net proceeds: the price less commissions, repairs, carrying costs, loan payoffs and closing costs. Whether to sell at all, or rent first, is its own decision covered in selling or renting inherited property.

Disclosures, Liens, and Title in an Inherited Property Sale

"As-is" describes the condition a buyer accepts, not the end of a seller's disclosure duties. Civil Code section 1102.2 lists sales to which its article of seller disclosure rules does not apply, including sales ordered by a probate court in the administration of an estate, and sales by a fiduciary in the course of administering a trust or a decedent's estate. That fiduciary exemption does not apply when the trustee is a natural person who is a trustee of a revocable trust and is a former owner of the property or occupied it within the preceding year. The section also lists sales from one co-owner to another and sales to a spouse or blood relative of a seller, among others. Civil Code section 1103.1 has parallel exemptions from its natural hazard disclosure article, including sales ordered by a probate court in the administration of an estate and sales by a fiduciary in the course of administering a trust or decedent's estate, with a similar limit for a natural-person trustee of a revocable trust where the seller is a former owner or occupant within the preceding year. Whether any disclosure duty still applies depends on how the sale is made, and the estate's attorney or a real estate attorney reviews which ones do.

A title company examines the chain of ownership in any Los Angeles County sale and identifies the liens and clouds that must be cleared before closing. Common items include:

• A mortgage. It is paid from sale proceeds at closing unless a buyer assumes it.
• Unpaid property tax. Delinquent installments owed to the Treasurer and Tax Collector are cleared in escrow.
• Estate debts. A claim for repayment of public health benefits can be among an estate's debts, and the estate's attorney addresses it.

On the mortgage, 12 U.S.C. § 1701j-3(d) bars a lender, for residential property with fewer than five dwelling units, from calling a loan due under a due-on-sale clause upon certain transfers, including a transfer to a relative resulting from the borrower's death and a transfer where the borrower's spouse or children become owners. That protects an heir's ownership; it does not change the payoff owed when the house is sold to someone else.

Deeds also carry a transfer tax question. Rev. & Tax. Code section 11911 lets a county impose a documentary transfer tax at fifty-five cents for each five hundred dollars of value on sales above one hundred dollars, and lets a city within that county impose half that rate, with a credit against the county tax. The Registrar-Recorder's Deeds page says that if no transfer tax is due, an exemption statement must appear on the document, and that a grant deed contains implied warranties while a quitclaim deed contains none. A checklist of what escrow asks for appears in documents needed to sell.

When Heirs Disagree: Co-Ownership and Partition in Los Angeles

Shared ownership is common after a death, especially with several adult children. When heirs take title as tenants in common, each owns a fractional share, and a buyer who wants the whole property generally needs every owner on the deed. Families in the San Fernando Valley and the South Bay often discover this when one sibling lives in the house and another lives out of state.

When co-owners cannot agree, California's partition statutes let a co-owner ask the court to divide the property physically or to order a sale and divide the proceeds, with provisions written for property that passed to relatives. For Los Angeles County property, that petition is filed in Los Angeles County Superior Court.

A contested partition, or a conflict with a trustee or executor where misconduct is suspected, is a different subject handled by an attorney who litigates trust and probate cases. Where heirs do agree, a sale or a buyout among them follows the same authority, title and tax steps described above; a multi-unit building adds tenant questions explained in inherited duplex sales.