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Selling a House in a Trust After Death: A Step-by-Step Guide for Trustees

When a homeowner places a property in a trust, it can simplify the transfer of ownership after their passing. However, selling a house in a trust after death involves a series of legal steps and responsibilities for the trustee. Understanding the process in Texas can help prevent delays and legal complications.

What Happens to a House in a Trust After the Owner’s Death?

When the owner (grantor) of a trust passes away, the property held in the trust does not go through probate. Instead, it is managed by the designated trustee according to the terms of the trust document. The house may be:

• Transferred to beneficiaries
• Sold to distribute proceeds among beneficiaries
• Managed or maintained under trust provisions

Who Has the Authority to Sell the House?

The trustee has the authority to sell the house, but their actions must align with the trust’s instructions. If the trust document permits the sale of the property, the trustee can proceed. If the trust does not specify, legal guidance may be required to determine the best course of action.

Steps to Selling a House in a Trust After Death

1. Review the Trust Document

The trustee must carefully review the trust document to confirm their authority to sell the property and identify any restrictions or conditions.

2. Obtain a Death Certificate

A certified copy of the grantor’s death certificate is required to establish the trustee’s authority to manage trust assets.

3. Notify Beneficiaries

Trustees have a fiduciary duty to keep beneficiaries informed about major trust decisions, including selling a house.

4. Obtain a Title Report

The title report ensures there are no liens, disputes, or issues with ownership that could complicate the sale.

5. List the Property for Sale

Once legal and financial matters are cleared, the trustee can list the house for sale through a real estate agent.

6. Accept an Offer and Close the Sale

After accepting an offer, the trustee will work with an attorney and title company to ensure a smooth closing, with proceeds distributed as outlined in the trust.

Are There Tax Implications?

Selling a house in a trust may have capital gains tax and other tax considerations. If the trust is a revocable living trust, beneficiaries may receive a stepped-up basis, reducing capital gains taxes. Consultation with a tax professional is recommended to navigate these aspects.

Conclusion

Selling a house in a trust after death can streamline the process of transferring property, avoiding probate. However, trustees must follow legal procedures and trust terms carefully. If you need assistance, The Lange Firm in Sugar Land, Texas, can provide the guidance you need to manage trust assets efficiently.

Alternate text for image: A modern house with a “For Sale” sign in the front yard, symbolizing a property being sold from a trust after the owner’s passing, in a suburban neighborhood with trees and a clear sky.