California Estate Real Estate Glossary

A person appointed by the California probate court to manage an estate when the deceased left no will, or when the named executor is unable or unwilling to serve. An administrator has the same authority as an executor — the difference is appointment by court rather than designation by will. Also called: Personal Representative.

The closing document that itemizes all financial transactions in a real estate sale — purchase price, loan payoffs, agent commissions, closing costs, and net proceeds to the seller. In trust and probate sales, the trustee or executor reviews this carefully, as it becomes part of the final accounting to beneficiaries.

A sale conducted between parties with no special relationship — neither related by family nor otherwise connected in ways that could compromise the negotiation. Trustees and executors must ensure that property sales are conducted at arm's length to meet their fiduciary duty. Sales to family members or related parties require additional safeguards and documentation.

A person or entity named to receive assets from a trust or estate. In a living trust, beneficiaries receive distributions according to the trust's instructions after the grantor's death. Beneficiaries have legal rights including the right to be notified of the trust administration, to receive accountings, and to petition the court if they believe the trustee is breaching fiduciary duties. Not the same as an heir — heirs are determined by law; beneficiaries are designated by document.

A trustee's or executor's failure to meet their legal obligations to beneficiaries or heirs. Common examples include: selling trust property below market value without justification, self-dealing, commingling personal and trust funds, failing to account, and making distributions before paying creditors. Breach can result in personal liability for the trustee or executor.

An estimate of a property's market value prepared by a licensed real estate broker — less formal and less expensive than a full appraisal, but generally not accepted for fiduciary purposes. Trustees and executors should obtain formal appraisals (not BPOs) for documentation of fiduciary compliance in trust and probate sales.

The body of California statute that governs wills, trusts, probate administration, and the rights of heirs and beneficiaries. Key sections relevant to real property sales include: Section 16061.7 (trustee notification requirements), Section 10400 et seq. (IAEA), Section 15642 (trustee removal), and Section 10309 (court confirmation of probate sales).

Federal and California state tax on the profit from selling an appreciated asset. For inherited or trust property, capital gains are calculated on the difference between the sale price and the stepped-up basis (fair market value on the date of death) — not the original purchase price. Properties sold shortly after inheritance often have minimal or zero capital gains liability due to the stepped-up basis.

Under California Probate Code Section 18100.5, a document prepared by an estate attorney that confirms the trust's existence, the trustee's identity and authority, and the trust's powers — without disclosing the full trust document. Title companies require this document before completing a trust property sale. Essential to prepare before listing trust property.

Property acquired during a California marriage that is owned equally by both spouses. Community property with right of survivorship passes to the surviving spouse automatically without probate. Community property in a California living trust may receive a double step-up in basis at the death of the first spouse — a significant tax advantage over joint tenancy treatment.

The judicial approval required for most California probate real estate sales that are not conducted under IAEA authority. At a court confirmation hearing, a judge reviews the proposed sale and other buyers may submit overbids. The court confirms the sale to the highest bidder. Court confirmation adds 4-8 weeks to the probate sale timeline. See also: IAEA, Overbid.

The fair market value of an asset on the exact date the owner died. Critical for establishing the stepped-up basis for capital gains tax purposes. A professional appraisal specifically dated as of the date of death is the IRS-preferred method of establishing this value for real property.

The legal document that transfers ownership of real property. In a trust sale, the trustee signs a Grant Deed as "Trustee of [Trust Name] dated [date]" — not in their individual name. In a probate sale, the executor signs a Probate Grant Deed as "Executor of the Estate of [Decedent]." Recording the deed with the county recorder transfers legal title to the buyer.

A California trustee's obligation to act solely in the interests of the beneficiaries — not in their own interest. The duty of loyalty is the core fiduciary obligation. Violations include self-dealing, undisclosed conflicts of interest, and making decisions that benefit the trustee at the expense of beneficiaries.

The person named in a will to manage the deceased's estate through the California probate process. An executor's authority is granted by the probate court — not by the will itself — and is evidenced by Letters Testamentary. If there is no will, or if the named executor cannot serve, the court appoints an Administrator. Also called: Personal Representative.

Compensation claimed by an executor or attorney for services beyond the normal scope of estate administration — contested claims, litigation, tax audits, and similar complications. Extraordinary fees are in addition to the statutory fee schedule and must be approved by the probate court.

A person legally obligated to act in another party's best interests. In California estate real estate, trustees and executors are fiduciaries — they must act in the best interests of beneficiaries or heirs, not in their own interests. The fiduciary duty includes loyalty, prudence, impartiality, record-keeping, and communication.

The income tax return filed for a trust or estate during administration. Form 1041 (federal) and California Form 541 (state) are required for each year the trust or estate has income, including income from property sales. The trustee or executor is responsible for ensuring these returns are filed on time.

The federal estate tax return, due nine months after the date of death (with extension available). Required only when the gross estate exceeds the federal exemption — approximately $13.6 million per individual in 2024. Most California trust and probate estates do not require a Form 706, but the calculation should be verified for any significant estate.

A living trust into which the grantor has actually transferred assets — including real property by recording a new deed naming the trust as owner. An unfunded trust provides no probate avoidance benefit for assets that were never transferred into it. Verifying that real property is properly titled in the trust before listing is a critical step in trust sale preparation.

The person who creates and funds a living trust. During their lifetime, the grantor typically serves as their own trustee and retains full control over trust assets. Upon the grantor's death, the successor trustee named in the trust document takes over. Also called: Settlor or Trustor.

The most common type of deed used to transfer California real property. In a trust sale, the trustee signs a grant deed transferring property from the trust to the buyer. In a probate sale, the executor signs a probate grant deed. The deed must be recorded with the county recorder to complete the transfer of title.

A person who is legally entitled to inherit from a deceased person under California intestate succession laws — regardless of what a will or trust says. Different from a beneficiary, who is designated by a will or trust document. When someone dies without a will (intestate), their estate passes to their heirs according to California Probate Code.

A California court petition, named after Estate of Heggstad (1993), used to establish that property was intended to be part of a living trust even if the deed was never formally changed to name the trust as owner. Requires evidence of the grantor's intent — often a schedule of assets attached to the trust or other documentary evidence. Faster and less expensive than full probate, but still requires court involvement.

California Probate Code Section 10400 et seq. A California law that allows executors to manage and sell estate assets with reduced court supervision. Under full IAEA authority, an executor can sell real property by sending a Notice of Proposed Action to heirs and waiting 15 days — avoiding the court confirmation hearing and overbid process entirely. Can reduce the probate sale timeline by 2-4 months. Should always be requested at the initial probate hearing.

Dying without a valid will. When someone dies intestate in California, their property passes to heirs according to California's intestate succession laws — typically spouse, children, parents, and siblings in that priority order. Intestate estates must go through probate. Real property held in a living trust passes outside of intestate succession regardless.

A trust that cannot be modified or revoked by the grantor after creation — unlike a revocable living trust. Property transferred to an irrevocable trust during the grantor's lifetime generally does not receive the stepped-up basis at death. Important distinction for estate planning purposes. Most California family homes are held in revocable (not irrevocable) trusts.

A form of co-ownership where the surviving owner automatically inherits the deceased owner's share without probate. Commonly used by married couples for real property. The surviving joint tenant obtains sole ownership by recording a certified death certificate and an Affidavit of Death of Joint Tenant with the county recorder. Does not require a trust or probate proceeding.

The court-issued document that gives a California executor legal authority to act on behalf of the estate — including the authority to sell estate real property. Issued at the initial probate hearing after the executor is formally appointed. Multiple certified copies are needed. Without Letters Testamentary, an executor has no legal capacity to sign real estate contracts or access estate accounts.

A legal document that holds assets during a person's lifetime and distributes them to beneficiaries upon death — without probate. The grantor typically serves as their own trustee during their lifetime. Property must be formally transferred into the trust (the deed must be changed) for the trust to own it. Upon the grantor's death, the successor trustee can sell trust property without court involvement. The primary estate planning tool for California homeowners seeking to avoid probate.

The notice required under California IAEA when an executor proposes to sell estate real property without court confirmation. Must be mailed to all heirs and beneficiaries at least 15 days before the proposed action. If no heir objects in writing within 15 days, the sale proceeds without a court hearing. An heir can object to force court confirmation.

California probate requires that notice to creditors be published in a local newspaper after the estate is opened. After publication, creditors have a limited period to file claims against the estate — generally four months from the date Letters Testamentary are issued or 60 days from actual notice, whichever is later. Estate assets should not be distributed before the creditor claim period expires.

A higher offer submitted at the California probate court confirmation hearing by a buyer other than the one whose offer was accepted. Any member of the public can appear at the hearing and submit an overbid. The minimum first overbid is the accepted price plus the greater of $500 or 10% of the first $10,000 plus 5% of the balance. If overbids are submitted, the court conducts an open auction. The overbid process can benefit the estate by driving the final price above the originally accepted offer.

A California court proceeding in which a co-owner of real property asks the court to divide or sell the property when the co-owners cannot agree. Courts almost always order a sale (partition by sale) rather than a physical division of residential real estate. Any co-owner can file a partition action regardless of other co-owners' objections. Often used when siblings who inherit property as tenants in common cannot agree on what to do with it.

The umbrella term for the person responsible for administering a California estate — includes both executors (named in a will) and administrators (appointed by the court when there is no will or the named executor cannot serve).

A form filed with the county recorder at the time of a California real property transfer. Used by the county assessor to determine whether the property should be reassessed for property tax purposes. In trust and estate sales, the PCOR triggers the Proposition 19 analysis for parent-child transfers.

The court-supervised process for administering a California estate when a person dies owning assets in their individual name exceeding $184,500 in value. Probate validates the will, appoints an executor, supervises the payment of debts, and oversees the distribution of assets. Real property owned individually (not in trust) at death generally requires probate before it can be sold or transferred.

A licensed appraiser appointed by the California State Controller's Office to appraise estate assets as of the date of death. The probate referee's appraised value establishes the minimum acceptable sale price for court confirmation purposes (any offer must be at least 90% of appraised value) and the stepped-up basis for tax purposes. Fee: 0.1% of appraised value, paid from estate assets.

California's 1978 property tax initiative that limits annual increases in assessed value to 2% and reassesses property to market value only upon a change of ownership. The "Prop 13 base" is the low assessed value many long-term California homeowners carry. Proposition 19 (2021) significantly restricted the ability to pass this low Prop 13 base to children through inheritance.

California ballot measure effective February 2021 that changed property tax reassessment rules for inherited property. Under Prop 19, the parent-child exclusion from property tax reassessment is only available if the inheriting child uses the property as their primary residence within one year. Investment properties, vacation homes, and properties not occupied as a primary residence by the heir are now fully reassessed at current market value upon transfer.

See: Living Trust.

See: Grantor.

A federal tax provision (Internal Revenue Code Section 1014) that resets the cost basis of inherited or trust property to its fair market value on the date of the original owner's death. Heirs pay capital gains tax only on appreciation occurring after the date of death — not on the property's full lifetime appreciation. For highly appreciated California real estate, the stepped-up basis can eliminate most or all capital gains tax on a sale completed shortly after inheritance.

The person or institution named in a living trust to take over as trustee when the original trustee (typically the grantor) becomes incapacitated or dies. The successor trustee has immediate legal authority to manage and sell trust assets without court involvement — authority derived from the trust document, not a court. California law imposes specific notification requirements and fiduciary obligations on successor trustees.

A form of co-ownership in which each owner holds a fractional interest in a property and can sell or transfer their interest independently. Unlike joint tenancy, a tenant in common's interest does not automatically pass to the other owners upon death — it becomes part of their estate. When siblings inherit property as tenants in common and cannot agree, any co-owner can file a partition action to force a sale.

A California-required form in which the seller discloses known material defects in a residential property. Trustees and executors must complete the TDS based on their actual knowledge of the property's condition. For trustees who have never occupied the property, the TDS should reflect limited personal knowledge. A pre-sale home inspection is strongly recommended to expand the seller's knowledge base and ensure accurate disclosure.

The process of managing and distributing the assets of a revocable living trust after the grantor's death. The successor trustee manages the administration — notifying beneficiaries, inventorying assets, paying debts, filing tax returns, selling real property as needed, and distributing proceeds to beneficiaries. Unlike probate, trust administration occurs outside of court and is typically faster and less expensive.

The person or institution that manages assets held in a trust according to the trust document's instructions. During the grantor's lifetime in a revocable trust, the grantor typically serves as their own trustee. Upon the grantor's death, the successor trustee assumes the role. A trustee is a fiduciary — legally obligated to act in the interests of the beneficiaries.

See: Grantor.

A living trust that was created but never had assets formally transferred into it. The most common example: a living trust that holds no real property because the property deed was never changed to name the trust as owner. Property in an unfunded trust must typically go through probate. A Heggstad petition may be available in some circumstances. See also: Funded Trust.

A legal document that specifies how a person's assets should be distributed after death and names an executor to administer the estate. Unlike a living trust, a will must go through California probate court to be validated and enforced. Real property held in a will (as opposed to a living trust) is subject to the probate process. A will does not avoid probate — it governs how probate proceeds.