What is the difference between a trust sale and a probate sale?

I am often asked by my clients what is the difference between a trust sale and a probate sale. Both mean that the owner of the home has passed away and the estate is now selling the home. The difference lies in if and how the court may be involved.

The simplest method for the seller is to sell the home through a trust sale. This requires no special action on the part of the buyer. Many smart homeowners will place their home into a trust, so that when they pass away, the plans for settling the estate (and the plans for the home), are easily addressed by the instructions of the trust. By having a trust, it enables the estate to bypass the court system and ends saving significant time and money for the estate. In a trust sale, there is usually one trustee who is the decision maker and has the authority to sell the home, though sometimes several siblings may all be trustees and therefore decision makers as well. The greater number of trustees generally means the more challenging the decision making process can be, though most of these challenges are behind the scenes from the buyer and usually happen pre-sale. Early in my career, I represented a family in San Mateo where the brother had passed away and three of his six siblings were trustees; it was quite a process but eventually we got it done and the home sold with multiple offers in the first week significantly over the asking price, so they were happy.

Probate is the process where the deceased's estate is processed and administered by the court. Depending on the situation this process can take anywhere from six months to two years and requires court supervision for the transfer of assets. In probate, the attorney’s fees and the administrator’s commission are based on a statuary fee schedules that is set by the court.

On the other hand, trust fees are typically charged on an hourly basis. A trust has more flexibility to transfer the title to the property to children/heirs subject to the loan or continue to hold the property for the benefit of the minors until they reach the legal age of majority. The flexibility allows the trustee to time the sale of real property with favorable markets.