Someone you love died, and somewhere in the middle of the funeral arrangements and the phone calls, you found out you're the successor trustee. Which means the house is now, somehow, your responsibility.

If you're feeling like you have no idea what you're supposed to do — that's normal. Most people who end up in this seat have never done it before, and nobody handed them a manual.

Here's the good news, and I'll get to the harder parts after.

The house probably isn't going to probate

If your parent set up a living trust and actually put the house into it, that trust became irrevocable the day they died, and you as successor trustee took control of the property. The house skips probate entirely.

That's the whole reason they did the trust. It worked. You're not going to court for this.

(If you're reading this and there wasn't a trust, you're on a different road — a real one, with a court process, but not necessarily a terrible one. I wrote about that here: [LINK TO YOUR AB 2016 POST].)

The one deadline that really can't slip

Within 60 days of the death, you have to send a written notice to every beneficiary of the trust and every heir at law of the person who died.

That's California Probate Code §16061.7, and it's the deadline I'd worry about first.

Two things people get wrong:

•       You have to notify heirs even if they get nothing. The estranged sibling who was written out still gets a notice. The law assumes they might want to contest, and they're entitled to know.

•       Missing it doesn't just delay things — it can follow you personally. A properly served notice starts a 120-day clock for anyone who wants to challenge the trust. Once that clock runs out, it's over. If the notice never goes out, that window can stay open indefinitely, and a trustee who didn't send it can be held responsible for the damage that causes.

This is attorney work. I don't say that to pass the buck — I say it because it's the single easiest way to protect yourself, and it isn't expensive compared to what a contested trust costs.

Get the date-of-death value, and get it early

This is the part where I can actually be useful to you.

When someone dies, the property gets what's called a stepped-up basis under IRC §1014 — the tax “cost” of the house resets to its fair market value on the date of death. So if your dad bought the house in 1978 for $60,000 and it was worth $1.8 million the day he died, your basis is $1.8 million, not $60,000.

If you sell close to the date of death, the capital gains hit is usually small. If you sit on it for four years while it keeps appreciating, that gain is taxable.

To claim that basis, you need documentation of what the home was worth on that date. An appraisal dated as close to the death as possible is the cleanest way to do it. Keep the report forever — the IRS can look at an inherited property sale years down the road.

Don't guess at this number. Don't use an online estimate. Get it documented.

The paperwork that will stop your sale cold

Here's the one that catches people.

The county recorder's records still show whatever deed was recorded when the house went into the trust — usually with your parent's name on it as trustee. There's nothing on the public record saying you're in charge now.

So before you can sell, you record an Affidavit of Death of Trustee with the county recorder, with a certified death certificate attached. The title company will require it before they'll issue a policy. Without it, escrow doesn't close.

I've seen trustees decide to handle the paperwork later and discover that “later” turned out to be the week they were supposed to close. Get it recorded early, when there's no pressure on it.

The form nobody tells trustees about

Within 150 days of the death, a Change in Ownership Statement — Death of Real Property Owner (form BOE-502-D) has to go to the county assessor.

And this is the part that surprises people: it's required even though the property was in a trust. Trustees skip it all the time because they assume the trust took care of everything. Filing late can mean a penalty.

One form, one deadline, easy to handle if you know about it. Which is why I'm telling you.

Keeping it versus selling it

If one of the children is going to move in and keep the low property tax bill, there's a claim to file — form BOE-19-P — and real conditions attached to it.

The child has to make the home their primary residence within one year of the transfer and file for the homeowners' exemption within that same year. The BOE-19-P itself has to be filed within three years of the transfer, or before the property goes to a third party, whichever comes first.

Now, the honest part, and it's specific to where we live.

Under Proposition 19, the exclusion only shelters the parent's old assessed value plus a little over a million dollars. Here in Alameda, Santa Clara, and San Mateo Counties, the gap between a 1980s assessed value and today's market value is often much bigger than that. So even a child who moves in and does everything right can still see a meaningful jump in the tax bill.

That doesn't mean don't do it. It means run the actual numbers before you decide, instead of assuming the low tax bill just carries over. I'm happy to help you figure out what the house is worth today so you and your CPA have a real number to work with.

Who does what

It helps to know where the lines are:

•       Your attorney handles the 60-day notice, reads the trust, tells you what authority you actually have, and keeps you out of trouble with the beneficiaries.

•       Your CPA handles the basis calculation, the capital gains math, and any estate tax filings.

•       I handle the house — what it's worth, what it needs, whether to sell as-is or do the work first, how to deal with everything still inside it, and how to run a sale when there are siblings who don't all want the same thing.

Nobody expects you to do all three yourself. The trustees who have the hardest time are usually the ones who tried.

If you're in the middle of this right now

You don't have to have it figured out. Most people in your position are handling grief and paperwork at the same time, and those two things don't mix well.

If you'd like to talk through where the house fits into all of it — no pressure, no listing conversation unless you want one — I'm glad to. Sometimes it just helps to hear the order things go in.

I'm a REALTOR®, not an attorney. This is general information, not legal advice, and reading it doesn't make you my client. Every family's situation is different, court practices vary by county, and laws change. Please talk to a licensed California probate attorney before you make any decisions about an estate.

Helen K. Burke

Senior Real Estate Specialist | Probate and Estate Specialist | CDPE

Intero Real Estate | DRE #01175866

Serving Alameda, Santa Clara, and San Mateo Counties