Inherited a House? Now What? A California Checklist to Protect Your Money (and Your Family)

by Dar Mardan

What should you actually do first after inheriting a house in California?

A few days after a loss, the house becomes more than a home.

It becomes paperwork.

Pressure.

Family opinions.

A thousand unanswered questions.

Most people assume inheriting a house feels like winning the lottery.

Until they realize how fast it can turn into delays, conflict, and expensive mistakes.

Here's the truth: selling an inherited home in California isn't "list it and see what happens."

It touches legal authority, trust versus probate, title issues, taxes, property-tax reassessment, timing, and family dynamics — usually all at once, and usually while you're still grieving.

Below is the checklist I walk families through, built specifically for California, so you protect the value of the inheritance and avoid the traps that cost heirs the most money.

The 6 Things to Do First After Inheriting a House

1. Secure the Home — and Keep the Utilities On

Your first job isn't pricing or paperwork.

It's protecting the asset.

• Change the locks.
• Confirm the homeowner's insurance is active and appropriate for a vacant or transitioning property.
• Keep the utilities on.

That last one isn't optional.

Power, water, and gas prevent avoidable damage — frozen pipes, mold, pest issues — and keep the home functional for inspections, repairs, and showings later.

An unsecured or unpowered house can lose value fast, long before anyone's ready to think about selling.

2. Get the Right Team Early: A Realtor Who Knows Probate, and a Probate Attorney

You need two people in your corner right away.

An experienced Realtor who specifically understands inherited home sales, trusts, and probate. Not every agent does.

And a probate attorney, at least initially, to confirm the legal path — especially if the trust is missing, outdated, or unclear.

I'm not an attorney, and this isn't legal advice.

But as a CPA and REALTOR®, I work alongside probate attorneys every day. I help families avoid the common real estate and tax mistakes, and I connect them with the right probate attorney when the situation calls for it.

3. Pull the Property Title — Don't Assume It's Clean

Before you plan repairs, pricing, or even a timeline, verify the title.

Title issues that commonly surface on inherited homes include:

• Mortgages or HELOCs still attached to the property
• A reverse mortgage that becomes due at death
• Unpaid property taxes
• Mechanics' liens
• Recorded restrictions or other items that can delay closing

The best first step is pulling a property profile, and, when things look complicated, a preliminary title report.

If you reach out to me, I can pull a property profile so you can see exactly what's recorded against the property — and help you make sense of it.

4. Confirm Legal Authority: Who Can Actually Sign?

This is where many families lose months.

You need to determine:

• Is there a trust?
• Is the home actually titled into the trust — not just mentioned in it?
• If it's not in a trust, does the sale require probate?

If the home isn't titled into a trust, you often can't sell yet.

In most cases, you need the probate court to establish who has legal authority to sign and sell.

California's probate courts are busy. According to the California Courts Self-Help Guide to property after someone dies, a formal probate case commonly takes several months from filing to closing, and more complex or contested estates can stretch to a year or longer.

Bringing in a probate attorney early is exactly what keeps a family from taking a wrong turn that adds months to that timeline.

5. Understand the Step-Up in Basis — It Can Save You Real Money

This is where heirs can accidentally lose a significant amount of money, and it's the one most people have never heard of.

In most inheritance situations, you receive a step-up in basis: your tax basis in the property becomes its fair market value on the date of death, not what your parent originally paid for it decades ago. The IRS explains the mechanics in Publication 551, Basis of Assets.

To protect yourself, strongly consider getting a date-of-death appraisal.

It's one of the most important financial documents in the entire process, because it's the documentation that supports your reduced — or eliminated — capital gains tax when you eventually sell.

As a CPA and REALTOR®, this is exactly the intersection I work in. I can help you understand how the step-up applies to your situation, but you need the right documentation in hand to use it.

6. Inspect the Home Before You Spend a Dollar

Before you remodel or throw money at upgrades, get a home inspection and focus on what I call the Big Five — the items that most affect value and buyer confidence:

• Plumbing and water leaks
• HVAC
• Roof
• Electrical
• Foundation

Most families do better by neutralizing the home rather than renovating it: decluttering and depersonalizing, a deep clean, and a neutral coat of paint.

That protects estate cash and avoids sinking $30,000 to $60,000 into upgrades that may never pay you back at closing.

Don't Forget Property Taxes: How Proposition 19 Fits In

Taxes on an inherited home aren't limited to capital gains.

California's Proposition 19 changed how property taxes are reassessed when a home passes from parent to child (or in some cases, grandparent to grandchild). In many situations, the property will be reassessed to current market value unless the heir moves in as a primary residence and files the required claim within the applicable deadlines, and even then, value limits can apply.

That reassessment can mean a dramatically higher annual property tax bill than what your parents were paying — sometimes enough to change whether keeping the home makes financial sense at all.

You can review the current rules through the California State Board of Equalization's Proposition 19 information. Because timing and filing deadlines matter here, this is a conversation to have with your CPA or estate attorney before you decide whether to sell, rent, or move into the home.

Trust vs. Probate: Quick Comparison

The 5 Biggest Mistakes to Avoid

These are the mistakes I see cost families the most, roughly in order of how often they show up.

1. Ignoring title issues until the last minute. Liens and unpaid taxes surface during escrow instead of before it, killing your timeline.
2. Rushing into a quick, low offer. Grief and pressure make a lowball cash offer feel like relief instead of what it actually is.
3. Missing the step-up in basis. Failing to document fair market value at death can mean paying capital gains tax you never owed.
4. Family conflict because roles aren't clear. Nobody agreed on who's the trustee, who signs, or who decides, so nothing moves.
5. Over-renovating and draining the estate. Spending money the sale price will never return.

If You Have Aging Parents, Have This Conversation Now

If you have a close relationship with your parents, don't wait for a loss to start this conversation.

Confirm two things while you still can:

• That they have a proper will and trust in place.
• That the home is actually titled into the trust, not just referenced in an estate plan that never got fully funded.

That planning, done now, is what saves your family from probate delays and the ongoing carrying costs — taxes, insurance, utilities, maintenance — that pile up while a home sits waiting for legal authority to catch up.

Frequently Asked Questions

How long does probate take in California?

It depends on the county, the complexity of the estate, and whether anyone contests it.

Many straightforward cases take several months from start to finish. More complicated or disputed estates can take a year or longer.

Who can sell an inherited house?

Usually the trustee, if the home is titled into a trust, or the court-appointed executor or personal representative, if probate is required.

Until legal authority is formally established, signing a sale contract typically isn't possible.

Do I have to pay capital gains tax when I inherit a house?

Not always.

In many cases, heirs benefit from a step-up in basis, which can significantly reduce or even eliminate capital gains tax, especially when the home is sold close to its date-of-death value.

Documentation matters here, so talk with your tax professional and consider a date-of-death appraisal before you list.

Will my property taxes go up when I inherit a house in California?

Often, yes.

Under Proposition 19, the home is generally reassessed to current market value on transfer, unless you qualify for the parent-child exclusion by moving in as your primary residence and filing on time.

Review your specific situation with a CPA or estate attorney before deciding whether to keep, rent, or sell.

Should I renovate before selling?

Usually not, at least not major renovations. They often don't pay you back.

Start with an inspection, focus on the Big Five, and let decluttering, cleaning, and a neutral paint job do the rest.

The Bottom Line

An inherited house isn't just an asset. It's a set of decisions, on a deadline, usually made while you're grieving.

The families who come out ahead are the ones who secure the home first, confirm legal authority before making promises, document the step-up in basis, and get the right advisors involved early — a probate attorney if needed, and a Realtor who's actually done this before.

The families who lose money are the ones who guess.

Ready to Protect What You've Inherited?

At Vidar Group Real Estate, we help California families work through the entire inherited-home process before they make a decision. That includes:

• Confirming whether the home is titled into a trust or needs probate
• Pulling a property profile so you know what's recorded against the home
• Connecting you with a probate attorney when one is needed
• Understanding the step-up in basis and what documentation protects you
• Reviewing how Proposition 19 affects your property taxes
• Prioritizing inspection items and avoiding unnecessary renovation spend
• Pricing and marketing the home once you're ready to sell

For tax, legal, or estate-planning questions, we encourage clients to involve the appropriate CPA, attorney, or other qualified advisor — I'm happy to help coordinate that.

If you're navigating an inherited home anywhere in Orange County — Newport Beach, Corona del Mar, Irvine, Mission Viejo, or the surrounding communities — schedule a complimentary consultation with Dar Mardan and let's map out the smartest next move.

Click Here to Book a Call with Dar Mardan

About Dar Mardan

Dar Mardan leads Vidar Group Real Estate, helping longtime homeowners, families, and heirs make confident decisions during life's most difficult transitions.

Whether a sale involves probate, a trust, Proposition 19, divorce, or a home that needs work before going on the market, Dar and the team take a hands-on, full-service approach to organize the details, coordinate trusted advisors, prepare and market the property, and guide clients through their options with patience and care.

Vidar Group Real Estate Real Broker Dar Mardan, REALTOR® | DRE #02121982 714-612-3870 dar@vidargroupre.com

Equal Housing Opportunity. Dar Mardan is a licensed Realtor regulated by the California Department of Real Estate. This article is provided for general informational purposes only and is not legal, tax, accounting, or financial advice. Probate procedures, tax rules, and timelines may change and vary by county and by estate. Review your specific situation and consult the appropriate attorney, CPA, or other qualified professional before making a decision.