Real Estate in Probate: Selling or Transferring Property After Death

Not All Real Estate Goes Through Probate

Before assuming a property needs to go through probate court, check how it's titled.

Joint tenancy with right of survivorship generally passes automatically to the surviving owner. Record the death certificate or other proof required by the county to update the deed.

Community property with right of survivorship works the same way in the nine community property states that recognize it.

Property in a revocable living trust transfers according to the trust terms. The successor trustee handles the transfer or sale without court involvement.

Transfer-on-death deed (available in about 30 states) passes the property to the named beneficiary upon death. File the death certificate with the county recorder.

Solely owned property without any of these designations goes through probate. That's when the executor's work begins.

The Executor's Obligations for Probate Real Estate

From the moment you're appointed, you have a fiduciary duty to protect, maintain, and preserve the property:

Secure the property immediately. Change the locks if the home will be vacant. Check that the security system (if any) is active. Remove valuables and sensitive documents.

Maintain insurance. Homeowner's insurance must stay active throughout the administration period. Many policies have vacancy clauses that limit coverage after 30 to 60 days of an unoccupied home — contact the insurer to add a vacancy endorsement or switch to a vacant property policy.

Pay ongoing expenses from estate funds. Mortgage payments, property taxes, HOA dues, utility bills, and maintenance costs are legitimate estate expenses. Pay them from the estate bank account, not your personal funds.

Get a professional appraisal. The probate court requires a date-of-death valuation for the estate inventory. Hire a licensed appraiser — Zillow estimates and tax assessments won't satisfy the court or the IRS.

Selling Property During Probate

Selling real estate in probate adds steps that a normal sale doesn't require:

Court approval. Many states require the executor to petition the court for permission to sell, especially if the will doesn't explicitly authorize real estate sales. The court reviews the sale terms — price, buyer, and conditions — and may require the property to be listed at or above the appraised value.

Notice to beneficiaries. State law and the will determine what notice is required for a proposed sale. Where notice is required, beneficiaries must be told how to object; a contested sale may require a court hearing.

Overbidding. Some states (notably California) allow interested buyers to appear at the court confirmation hearing and outbid the original buyer. This protects beneficiaries by ensuring the estate gets the highest possible price, but it can scare off buyers who don't want to participate in a court auction.

Title issues. Title companies examine the chain of ownership carefully in probate sales. Any irregularity — a missing death certificate, a lien that wasn't discovered, a beneficiary who didn't receive proper notice — can delay or kill the closing.

Transferring Property to Heirs

If the will leaves the property to a specific beneficiary and there's no need to sell it, the executor executes a deed transferring ownership:

• Executor's deed (most common in probate transfers) — conveys the property with limited warranties, based on the executor's court-granted authority
• Personal representative's deed — functionally identical, just different terminology in some states

Record the deed with the county recorder and provide the proof of authority and other supporting documents required by local rules.

Tax Implications

Stepped-up basis. Inherited property receives a "stepped-up" cost basis equal to its fair market value on the date of death. If the deceased bought the house for $100,000 and it's worth $400,000 at death, the heir's basis is $400,000. If they sell it immediately for $400,000, there's no capital gains tax.

Property taxes. Some states (California, notably) reassess property tax upon transfer of ownership, which can significantly increase the tax bill. Check your state's rules.

Estate tax. Real estate counts toward the gross estate for federal and state estate tax purposes.

The Executor's Complete Handbook includes a property management checklist and asset inventory worksheet that tracks real estate from initial securing through final disposition — whether that's a sale, a transfer, or a long-term hold during administration.