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TrustTrust LitigationTrustee Duties

Selling a House as a Trustee

By August 20, 2025November 10th, 2025No Comments

Table of Contents

Key Takeaways

Understanding the Trustee’s Role

Review the Trust Documents

Steps to Sell a House as a Trustee

Fiduciary Duties When Selling Trust Property

Legal Consequences of a Breach

How The Grossman Law Firm Can Help

Related Resources

FAQ

Key Takeaways

  • A trustee can sell trust real estate, but must follow the trust’s terms and the California Probate Code.
  • Trustees must act in the best interests of the beneficiaries and obtain fair market value for the property.
  • Certain sales may require court approval before they can proceed.
  • Trustees who breach their fiduciary duties can be held personally liable.
  • Working with an experienced California trust litigation attorney can prevent costly mistakes.

Understanding the Trustee’s Role

Selling a house as a trustee is one of the most significant actions you can take during trust administration. Under the California Probate Code, trustees must act in the best interests of the beneficiaries and carry out the terms of the trust faithfully. That includes managing, maintaining, and, when appropriate, selling trust real estate.

At The Grossman Law Firm, we regularly guide trustees and beneficiaries through the dos and don’ts of selling a trust property in California, ensuring compliance with both the trust terms and applicable law.

Review the Trust Documents

Before taking any steps toward selling the property, review the trust instrument carefully. It often specifies:

  • Whether the trustee has the power to sell real estate
  • If court approval is required
  • How the sale proceeds must be distributed

If the trust limits or conditions your power to sell, you must follow those restrictions precisely. Failing to do so can expose you to liability.

Steps to Sell a House as a Trustee

1. Obtain a Professional Appraisal

Before listing, hire a qualified appraiser to determine the property’s fair market value. The appraisal helps establish a defensible sale price and protects you if beneficiaries question the sale later.

2. Prepare the Property for Sale

You have a duty to preserve and maximize the value of trust assets. It may include:

  • Making reasonable repairs;
  • Cleaning, decluttering, and staging the home; and
  • Improving curb appeal.

3. Hire an Experienced Real Estate Agent

Although you may sell the property yourself, most trustees benefit from working with a real estate agent experienced in trust sales. The agent can handle marketing, negotiations, and paperwork while keeping the sale compliant with California’s legal requirements.

4. Seek Court Approval (If Required)

Some trust documents or beneficiary disputes may require a petition for court approval under California Probate Code §17200. A trust litigation attorney can advise whether approval is needed and handle the petition process if so.

5. Close the Sale and Distribute Proceeds

Once the sale closes, ensure that proceeds are distributed according to the trust’s instructions. Maintain detailed records of the transaction, including appraisals, offers, and closing statements, to demonstrate transparency and good faith.

Fiduciary Duties When Selling Trust Property

As a trustee, you have a fiduciary duty to act solely in the best interests of the beneficiaries. This includes:

  • Avoiding self-dealing (buying the property yourself or selling to a relative without consent);
  • Keeping accurate financial records; and
  • Ensuring the sale reflects fair market value.

If you ignore these duties, beneficiaries can challenge the sale or file a petition to remove the trustee under California Probate Code §15642.

Legal Consequences of a Breach

When a trustee breaches their fiduciary duty, by misusing funds, underpricing the property, or failing to act prudently, they can be:

  • Held personally liable for the trust’s financial losses;
  • Ordered to compensate beneficiaries for damages; or
  • Removed by the probate court.

If you’re a beneficiary who suspects the trustee has mismanaged trust assets or acted in bad faith, you can petition the probate court to compel an accounting, suspend the trustee, or seek their removal. Under California Probate Code §§ 16420–16440, beneficiaries may recover losses caused by a trustee’s negligence or intentional misconduct. To learn more about common trustee violations, read our article “20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties.”

How The Grossman Law Firm Can Help

At The Grossman Law Firm, we assist trustees and beneficiaries throughout California in navigating trust property sales and resolving disputes when things go awry. Attorney Scott Grossman has over two decades of experience handling probate and trust litigation, ensuring trustees follow the law and beneficiaries receive what they’re entitled to.

If you’re selling a house as a trustee or believe a trustee has mishandled a sale, our team can review your situation and explain your legal options.

Call (888) 443-6590 or fill out our Get Help Now form.

Our Intake Specialists can evaluate your case to assess your situation at no cost to you.

Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.

Related Resources

FAQ

Can a trustee sell a house without court approval?

In many cases, yes, but only if the trust document authorizes it; if the trust is silent or beneficiaries object, the trustee may need to obtain court approval first.

Does a trustee have to get the beneficiaries’ consent before selling?

Not necessarily. The trustee must act in accordance with the terms of the trust and the fiduciary standards. However, transparency and notice are always good practices.

What happens if the trustee sells the property for less than market value?

Beneficiaries may have grounds for a breach of fiduciary duty claim. The trustee can be held personally responsible for the difference between the fair market value and the sale price.

Can beneficiaries stop a trustee from selling trust property?

Yes, if the sale violates the trust’s terms or fiduciary duties. That means beneficiaries can file a petition in probate court to stop or reverse the sale.

Originally Published Dec 7, 2023