When my client's are looking for homes, sometimes they use internet search sites such as Realtor.com and Zillow and then I get questions about terms they find on these sites or hear from other sources. One of the big questions I hear a lot is "What is a Trustee Sale?" and "What is a probate sale?". Without getting into too many specifics I will try to answer this for all of you wondering the same thing.
First off, every state has very different laws and regulations in regards to real estate. So this may not pertain to you if you are looking to buy or sell in a place other than California. Now, to be clear, there is a large difference between a "trust sale" and a "trustee's sale". A trustee's sale, here in California, simply put, is a foreclosure. I believe what most people are really asking about, when it comes to these terms, has to do with probates.
I have included the following information that is written on the California Association of Realtor's webite CAR.ORG
Q 1. What is probate?
A "Probate" is
the court-supervised administration of a decedent's estate. The
procedure begins with the filing of a petition with a probate court for
the probate of a decedent's will or for letters of administration if
there is no will.
The probate proceeding involves "proving the will" (if there is a will),
appointing the personal representative, determining the decedent's
assets which are subject to probate, determining and paying the
decedent's debts and taxes, and transferring title to the beneficiaries
(if there is a will) or to the heirs at law (if there is no will).
Q 2. What property is subject to probate?
A The probate
proceeding, generally, is required only for property to which the
decedent directly held title at his or her death, and not property which
is indirectly held, property owned by contract, or which passes by
operation of law to another at the decedent's death.
Q 3. What property is
not subject to probate?
A The following property is
not subject to probate administration:
- Property held in a trust (Cal. Prob. Code § § 5000, 13050, Estate of Heigho (1960), 186 Cal. App. 2d 360, 364-365);
- Property held by decedent as a fiduciary or as trustee for another (e.g., Totten Trust) (Cal. Prob. Code § § 80, 5000);
- Property held in joint tenancy (Cal. Prob. Code § § 5304, 13050);
- Property held in a multi-party account (Cal. Prob. Code §§ 5304, 13050);
- Property which is a life estate (Cal. Prob. Code § 13050);
- Property held as community property with the right of survivorship (Cal. Civ. Code § 682.1); Okay, so you don't want your property to go through probate? Then something you can do is put your property into a "Trust". This next bit of information was also taken from CAR.org
In an attempt to avoid probate costs, court supervision, and public access to private information, many people put title in their property into a revocable living trust.
First, the trust document needs to be created designating the names of the trustors, trustees, and beneficiaries.
Second, title of all real (and personal) property needs to be placed into the trust in the following way:
Furthermore, unless the trust instrument expressly provides other wise, community property that is transferred into a revocable living trust remains community property during the marriage, regardless of the identity of the trustee, if the trust provides that the power to modify the trust may be exercised only with the joinder or consent of both spouses. I hope you this answered questions you have about probates and trusts. Always consult your Realtor or an attorney when you have questions regarding your property. And feel free to call me when you are ready to buy or sell www.amberdolle.com“We, John Smith and Mary Smith, husband and wife, quitclaim to John Smith and Mary Smith, co-trustees of the Smith Family Trust, the real property…”
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