Can You Sell a House in an Irrevocable Trust in California?

Usually, yes. An irrevocable trust is one the person who created it can’t simply cancel or rewrite, but that doesn’t freeze what’s inside it. A trustee can generally sell a house the trust holds if the trust document allows it, or at least doesn’t forbid it, and the sale serves the beneficiaries. This guide explains who decides, the duties that shape a sale, what can be done if the trust restricts selling and the tax questions that come with it.

Two common kinds of irrevocable trust

Many irrevocable trusts started out as revocable living trusts. When the person who made one dies, the trust, or their share of it, becomes irrevocable, and the successor trustee administers it under its terms. If that’s the situation, our guide to selling a house in a living trust after a death walks through the steps, including the notice the trustee has to send within 60 days.

Other trusts are irrevocable from the day they’re signed, for purposes such as tax planning, long-term care planning or providing for a beneficiary over time. These can hold a house for years, sometimes while the person who created the trust is still alive. The rules below apply to both kinds, but the trust document comes first.

Who decides whether to sell

The trustee does, unless the trust document gives someone else a say. A trustee has the powers the trust document grants and, unless the document limits them, the powers state law grants, without needing a court’s permission (Probate Code §16200). Those include the power to sell property at a public or private sale (§16226).

If the person who created the trust is still alive, they generally can’t change it on their own. They can modify or end it without going to court if every beneficiary agrees in writing (§15404).

Beneficiaries don’t have to approve a sale the trust allows, but they have rights. The trustee has to keep them reasonably informed (§16060), and a beneficiary can ask the court to review the trustee’s actions or to instruct the trustee (§17200).

The duties that shape a sale

Having the power to sell isn’t the end of the question, because a trustee has to use every power within their fiduciary duties (§16202). The main ones:

Loyalty: run the trust solely in the beneficiaries’ interest (§16002).
Impartiality: weigh the different interests of different beneficiaries (§16003). That matters when, say, one beneficiary has the right to live in the house now and others inherit it later.
No self-dealing: the trustee can’t use trust property for their own profit or take part in a deal where their interest is adverse to the beneficiaries (§16004). A trustee who wants to buy the house personally needs an attorney’s help.
Prudence: manage trust assets as a prudent investor would, with reasonable care, skill and caution (§16047). The factors the law lists include expected tax consequences and any special value an asset has to a beneficiary, which a family home may have.

A few practical rules come with the job. A new trustee who takes over an irrevocable trust from a previous trustee has 60 days to send beneficiaries a formal notice (§16061.7). The trustee can show their authority to sell with a short certification of trust instead of the whole trust document (§18100.5).

Disclosures are lighter than in an ordinary sale. Trustees selling in the course of administering a trust are exempt from California’s Transfer Disclosure Statement; the exception for trustees who are former owners applies only to revocable trusts (Civil Code §1102.2). Known problems with the house should still be shared with the buyer.

A trustee can also ask every beneficiary to sign a written consent before closing. A beneficiary who consents with full knowledge of the facts generally can’t later hold the trustee liable for that decision, though there are exceptions, such as when the trustee had a conflicting interest and the deal wasn’t fair (§16463).

When the trust restricts a sale

Some trusts tell the trustee to keep the house, for example for a beneficiary’s lifetime, or require someone’s consent before selling. Those terms generally control, but they aren’t always the end of the road:

If the person who created the trust is alive, they and all the beneficiaries can agree in writing to change it (§15404).
If all the beneficiaries agree, they can ask the court to modify or end the trust. The court can refuse if the trust as written is needed to carry out a material purpose, unless the reasons for the change outweigh that purpose (§15403).
A trustee or beneficiary can ask the court to modify the trust because of circumstances its creator didn’t know about or anticipate, when following the terms would defeat or substantially impair the trust’s purposes. The court can then authorize acts the trust doesn’t allow (§15409).
A trustee can petition the court for instructions or for added powers (§17200).

Each path is best handled with an attorney, and all but the first involve a court hearing.

Taxes work differently, too

The step-up in basis that makes many inherited houses cheap to sell doesn’t apply to every trust. When property passes from someone at death, its tax basis generally resets to its value on the date of death (Internal Revenue Code §1014). That covers a living trust that became irrevocable at death.

But in Revenue Ruling 2023-2, the IRS said that when someone funds an irrevocable trust with a completed gift and the trust isn’t included in their estate, the trust’s assets don’t get a new basis when they die, even if they were treated as the trust’s owner for income tax purposes. For a house bought decades ago, the difference in taxable gain can be large, so it’s worth having a CPA confirm which rule applies before pricing the sale. Our article on capital gains tax on an inherited house explains the step-up in more detail.

Who pays tax on a gain depends on the trust, too. It may be taxed to the person who created the trust, to the trust itself on its own return (Form 1041) or to beneficiaries who receive distributions. And if the trust was set up for Medi-Cal or other benefits planning, it makes sense to have the attorney who drafted it, or another elder law attorney, review a sale first.

Ways to sell

A trustee has the same options as any seller. Listing with an agent reaches the most buyers and often brings the most money, though that can mean preparing the house and arranging showings. A beneficiary can buy the house, as long as the price and terms are fair to the other beneficiaries.

Selling for cash trades some of the price for speed and simplicity. EZ Home Offer buys houses across Alameda County as-is, with whatever belongings are left inside. We’re real estate investors, not agents. We make a written cash offer, usually within 24 hours, charge no fees or commissions and cover typical closing costs. A cash offer is usually below full market value, which matters to a trustee’s duty to the beneficiaries, so it’s worth comparing it with what an agent expects. We can close in as little as 3 days once title is clear, or later on the trustee’s schedule. Our inherited house page has more on how that works.

Sources

General information about California rules as of October 3, 2026, not legal, tax or financial advice. Laws change and every situation is different, so check the details with an attorney, CPA or other professional.