The Benefits of Putting Your Property in a Trust

When you’re getting ready to sell a home, there are a lot of things you expect to think about: pricing, condition, timing, marketing. What most sellers don’t expect to think about is what happens if a loved one passes away mid-transaction or what happens to their own home if something happens to them. It’s not a fun topic, but it’s one of the most overlooked parts of real estate, and it can be the difference between a smooth closing and a long, costly probate process.

I sat down with my title rep, Austin Kikuchi from Ticor Title, to walk through the real impact of trusts, wills, and probate when it comes to selling a home in Southern California.

A real example from last week. Austin shared a story from a recent transaction where both parents passed away unexpectedly during the deal. They had a trust in place, but no one knew who was next in line to take over and sign the closing documents. The team eventually figured out who the right people were and got the deal closed, but it created delays and stress that could have been avoided. That’s the reality when paperwork isn’t kept current.

Family rights aren’t always what you think. When I take a listing, I always look closely at the disclosures to make sure the people signing are the ones actually on title. Family situations can get complicated, especially when emotions are involved. Sometimes a family member believes they have rights over a property, but the trust documents say otherwise. We saw this play out just last week. Reviewing the trust documents early protects everyone and prevents conflicts at the closing table.

The first steps every homeowner should take. If you’re not sure where you stand, the first step is to talk to your real estate agent and ask how your property is vested. From the title side, that’s something we can see clearly. The second step is to locate your trust documents. The trust acts as the governing law for how your property and any other assets within it get handled when it comes time to sell.

Revocable vs. irrevocable trusts. This is one of the most important distinctions to understand. A revocable trust can be adjusted, amended, or changed at any time. You can update your game plan as your life changes. An irrevocable trust comes with strict guidelines. Whoever set it up has the rights and decisions on what happens next, and it can’t be easily changed. Austin emphasized that you should always speak to your attorney about which type makes sense for your situation.

What about wills? A will is not the same as a trust. Wills go straight to probate. You can technically write your wishes down on a napkin, and while it captures your intent, it doesn’t legitimately allow the property to transfer until the court process plays out. In California, that probate process can take six months to two years, and it’s often costly.

Why probate is especially expensive in California. Probate costs are based on the full market value of the home, not the equity. That matters a lot in a state like California where home values have appreciated significantly. A family member may have purchased the home decades ago at a low price, and now the home is worth several times that. Probate doesn’t care about the original purchase price. It cares about today’s market value, and the costs scale accordingly.

The bottom line is to be prepared. Look over your documents. Make sure your trust is up to date and that the right people know where to find it. If you need a recommendation for an estate planner or a CPA, reach out to either of us and we’re happy to help.

If you’re thinking about selling your home in Orange County or San Diego and want to make sure you’re set up the right way, give me a call at 619-379-7664, email me at kevin@kevinsmithsells.com, or visit blog.kevinsmithsells.com.

For trust and title-specific questions, you can also reach Austin Kikuchi at Ticor Title directly. Call (949) 292-1224 or email Austin.Kikuchi@ticortile.com.