Most people facing this question have just learned that a parent's or spouse's house is part of a probate estate. They may have been named executor. They may be an heir who now wonders whether they can move in, rent the house out or sell it. Often a sibling is waiting on an answer, and nobody has done this before. This page walks through who controls the house, what the court expects, and how property tax and income-tax basis fit in. It is written for the person carrying the job, not for someone in a family dispute.
What It Means When a House Is in Probate
Probate is the court-supervised process for passing a deceased person's property to the people entitled to it. It applies when nothing else controls the transfer, such as a trust, a joint tenancy or a beneficiary deed. A house usually ends up in probate because the owner held title in their name alone, with no living trust and no co-owner with a right of survivorship. For a broader look at the routes a home can take, see what happens to a house after a death.
The case is handled in the Superior Court of the county where the estate may be administered. There, the court appoints a personal representative, the person the court authorizes to manage and transfer the estate's property. If the will names that person, they are the executor. If there is no will, the court appoints an administrator. Probate Code section 8461 sets an order of priority for administrators. It begins with the surviving spouse or domestic partner, then children, then grandchildren, and the list continues through more distant relatives.
The personal representative's first job concerns care of the house. Under Probate Code section 9650, the personal representative "shall pay taxes on, and take all steps reasonably necessary for the management, protection, and preservation of, the estate in his or her possession." Probate Code section 9656 adds that the personal representative may insure estate property against damage or loss.
Who Owns the House During Probate
During probate, the house is managed as estate property, not as any one family member's home. The personal representative acts for the estate and does not own the house personally. Probate Code section 9650 gives the personal representative the right to take possession or control of the estate's property, and to receive rents from it until the estate is distributed. It is a duty, too: the representative "shall" take that possession or control, subject to an exception for property left with the person entitled to it.
That exception matters to a family. Real property may be left with the person presumptively entitled to it until the personal representative judges that possession is needed for the administration. If the representative asks for it, that person has to surrender it.
The words for who receives the house also differ. An heir is a person who inherits under California's rules for estates without a will. A beneficiary is a person named in a will to receive property. Neither one can sell or mortgage the house while the estate is being administered.
A surviving spouse or domestic partner may stand in a different position. Under Probate Code section 13650, a surviving spouse may file a spousal or domestic partner property petition. This asks the court to declare that administration is not needed for property passing to the survivor. When several siblings inherit together, the choices that follow are a separate question, explored in inherited house with siblings.
How the Probate Process Affects the House Step by Step
Each stage of a California probate touches the house in a particular way. The steps below follow the usual order.
- The case opens. The court appoints the personal representative and issues letters, the court document that gives that person authority to act for the estate.
- The inventory is filed. Probate Code section 8800 requires an inventory and appraisal within four months after letters are first issued to a general personal representative, or within any further time the court allows as reasonable. Partial inventories are permitted, but all of them have to be filed within that period.
- The house is valued. The Judicial Council's DE-147 form says the personal representative must arrange for a court-appointed referee to value the property, unless the court waives that appointment. The State Controller's Probate Referees page says the Controller appoints probate referees.
- Ownership is reported. Along with the inventory, Probate Code section 8800 requires a certification that the decedent owned no California real property, or that a change in ownership statement was filed with the recorder or assessor of each county where the decedent owned property.
- Creditors are notified. The Judicial Council's DE-147 Duties and Liabilities of Personal Representative says notice of administration goes to each known creditor within four months after appointment. Where the decedent received Medi-Cal, it says the State Director of Health Services is notified within 90 days after appointment.
- The house is cared for. DE-147 says the estate keeps appropriate insurance in force for the whole administration and keeps estate money separate from anyone else's.
- The house is distributed or sold. The court's final order passes the house to the people entitled to it, or a sale is completed under the rules in the next section.
How long these steps take depends on the estate and the court. A probate attorney can describe what a particular county's calendar looks like. When a house is the main asset, a closer look at how probate affects real estate covers authority and valuation in more depth.
Selling the House During Probate: Court Confirmation and the Independent Administration of Estates Act
A house can be sold before probate closes. The question for the family is who has authority to sell it, and whether the court has to approve the sale.
Probate Code section 10308 states the general rule:
"Except as provided in Section 10503, all sales of real property shall be reported to and be confirmed by the court before title to the property passes to the purchaser, whether the sale is a private sale or a public auction sale and notwithstanding that the property is directed by the will to be sold or authority is given in the will to sell the property."
The same section says that if the personal representative does not file the report and petition for confirmation within 30 days after the sale, the purchaser may file them. It also requires notice of the confirmation hearing.
The exception in that rule is tied to the Independent Administration of Estates Act. This California law lets a personal representative who holds that authority handle certain estate transactions without returning to court for each one. Whether it applies to a sale depends on the authority the court granted when the case opened. A probate attorney can say which track a particular estate is on.
Listing, pricing, offers and escrow make up the selling process itself, which is a separate subject. Whether to sell at all is weighed in keep or sell an inherited house.
Property Tax and the Stepped-Up Basis: What Changes at Death
Two separate tax questions follow a house through probate: property tax and income-tax basis. For a family already stretched thin, it helps to know that each question has its own office or professional.
Property tax. The State Board of Equalization's Change in Ownership FAQ explains that a transfer is generally a change in ownership, which leads to reassessment, unless an exclusion applies. Where an estate is probated, the page says the change in ownership filing is due at the same time the inventory and appraisal is filed.
For a transfer on or after February 16, 2021, Rev. & Tax. Code section 63.2 can exclude a parent-child transfer from reassessment. It can also exclude a grandparent-grandchild transfer, but only if all of the grandchild's parents who are the grandparents' children have died. Several conditions apply:
- The house has to be the transferor's principal residence.
- It has to become the transferee's principal residence within one year.
- The transferee has to file for the homeowners' or disabled veterans' exemption within a year.
- A claim has to be filed with the assessor.
The claim is due 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 comes earliest. A claim is also timely if it is filed within six months after the assessor mails a notice of supplemental or escape assessment. If the house has not gone to a third party, a later claim can still be considered, but the exclusion applies only going forward.
Value above a set limit is still reassessed. The State Board of Equalization's Proposition 19 page notes that this limit is adjusted every two years. The county assessor's office reviews exclusion claims and supplies current forms.
Basis. Basis is the starting value used to figure gain or loss when property is sold. Under 26 U.S.C. § 1014(a), the basis of inherited property is generally its fair market value at the date of death, with different values in some cases, such as when an alternate valuation date is elected. A higher basis can reduce the taxable gain on a later sale, but the result depends on the estate and the sale. A CPA, an enrolled agent or a tax attorney reviews basis questions. For more on how this plays out at sale, see taxes when selling an inherited house.
What Keeps a House Out of Probate
A house avoids probate when something other than a will, or the rules for estates without a will, controls who receives it at death. The common arrangements include the following:
- A living trust. When the house was held in a revocable trust, the successor trustee manages it. This is the person named to take over and distribute the trust property after the original trustee dies, and they work under the trust document rather than a court case.
- Joint tenancy. When the decedent held the house as a joint tenant, the surviving joint tenant takes the deceased owner's share.
- Community property with right of survivorship. This is a form of title available to spouses and registered domestic partners, under which the survivor takes the property.
- A revocable transfer on death deed. A recorded deed of this kind names a beneficiary who takes the house at death.
Creating any of these is estate planning, which is a separate subject from settling an estate.
Probate Code section 13050 confirms that joint tenancy property and property in a revocable trust are left out when the estate is valued for California's simplified procedures. Those procedures are the affidavit for collection or transfer of personal property, the affidavit for real property of small value, and the petition to determine succession to the decedent's primary residence. For the personal property affidavit, Probate Code section 13100 requires that 40 days have passed since the death and that the estate stay under a value limit that is adjusted periodically. The California Courts publish the current limits. Whether an estate qualifies depends on what it holds and how title was held, which is the question taken up in does an estate need probate.
