What Happens to Homes During Probate?

After someone passes away, something needs to be done with their property. Usually, this is handled through California’s probate process. During the process, most assets are frozen until it is determined how they should be divided among creditors and heirs. While this is rarely an issue for retirement accounts or investments, it can pose significant issues when homes are involved. 

You’re not alone if you’re wondering, “What happens to a house during probate in California?” Understanding how real property is handled during probate can help you prepare more effectively to transfer or sell your loved one’s house while managing their estate. 

Options for Homes During Probate

Depending on whether the decedent had a will, there are four main ways a home may be handled during the probate process:

1. Sell the House

During probate, the estate representative is responsible for identifying all of the assets and remaining debts under the decedent’s name before anything else can be done. Before the assets can be divided, the estate’s value must be used to pay off debts such as credit card balances, taxes, and unpaid medical bills. If there are no liquid funds to accomplish this, selling or mortgaging the house may be necessary to settle the estate’s debts.

2. Transfer to Named Heirs

Most parties who have put enough thought into estate planning to have a will also have provisions to cover their final debts. As such, it is unlikely that the house will need to be sold. 

If someone has a will, they likely named one or more beneficiaries who should receive the home after they pass. The beneficiaries may be one or more individuals or an organization. These parties may be granted the deed to the property outright, or the home could be placed in a trust on their behalf. Regardless of the specifics, the estate representative is responsible for following the instructions left in the will. 

3. Transfer to Intestate Heirs

The estate is subject to California’s intestate laws if there is no will. In this situation, the representative is responsible for identifying the decedent’s possible legal heirs. Typically, spouses, children, grandchildren, parents, and siblings receive priority, in that order. The house will usually go to the closest intestate heir. However, if there are multiple heirs with equal claims on the estate, this can lead to disputes. 

4. Medicaid Estate Recovery Seizure

If the deceased benefited from Medicaid while alive, the house may be subject to a lien after their death. This usually occurs if there are no other funds or assets the state can claim to cover the costs of the Medicaid benefits the decedent received. 

If someone set to inherit the house chooses to pay off the lien, they can; otherwise, the state may seize and sell the house. Additionally, if the decedent is survived by a spouse, child under 21, or a disabled adult dependent who uses the house as their primary residence, the home cannot be seized

FAQs About Homes and Probate

Because real estate is so complicated, some questions come up frequently. Below, we’ve answered some of the most common home probate questions we receive:

Can You Live in a House During CA Probate?

Houses are an asset, but may also be someone’s primary residence. Anyone who used the home as their primary residence before the owner’s death may continue until the process is resolved at the representative’s discretion.

Can You Rent Out a Probate Property?

If a property is unoccupied or renters already occupied it, the estate representative may rent it out during the probate process. The proceeds may be used to benefit the property, such as covering taxes, maintenance, and repairs. 

How Does California’s Probate Homestead Exemption Work?

The Homestead Exemption law gives the surviving spouse and minor children the right to remain in the decedent’s home, even if they do not inherit the property. They do not automatically own the property but have the right to use it and continue living in it. This right ends when the surviving spouse passes away, or the children turn 21

Can You Simplify the Transfer of Homes During Probate?

Yes, it’s possible to simplify the transfer process for a home with proper estate planning. A skilled attorney can help you choose from options like the following to reduce the struggle of transferring the property:

  • Joint Tenancy
  • Life Estate Deeds
  • Transfer on Death Deeds
  • Revocable Living Trusts

If you have questions about how probate will affect a house, you should get in touch with the professionals at The Dayton Law Firm P.C. Schedule your consultation with our experienced estate planning and administration attorneys to learn more about protecting the family home today.