If the house was not in a trust, you want selling a house in probate in Virginia instead. The rules are different.
Someone has died, there is a house, and it is in a trust. You are probably the successor trustee, or you are about to be, and nobody handed you a manual.
Here is the plain version of what happens next.
The short answer is that you can usually sell it, you probably do not have to go through probate court to do it, and the tax bill is almost always much smaller than people expect. That last part is the piece most families do not know, so let’s start there.
We are not attorneys or CPAs. Nothing here is advice for your situation. But we have bought houses from families in exactly this spot, and these are the questions that come up every time.
The Good News: The Tax Clock Just Reset
When somebody dies, the property in their estate gets a new tax basis. It resets to what the property was worth on the day they died. The IRS calls this the basis step-up, and it is in the tax code at section 1014.
Here is what that means in real money.
Say your mother bought her house in Norfolk in 1988 for $70,000. On the day she died it was worth $390,000.
If the trust had sold it while she was alive, the gain would have been measured from the $70,000 she paid. A $320,000 gain.
Selling it now, after she has died, the gain is measured from the $390,000 it was worth on the day of her death. Sell it for $390,000 and the taxable gain is close to zero. Sell it a few months later for $400,000 and the gain is about $10,000, not $330,000.
Same house. Same price. A completely different tax bill.
This is why we tell people not to panic about the tax question before they have talked to a CPA. Families brace for a number that usually is not there.
Two things to know:
- It works the other way too. If the house is worth less than what they paid, the basis steps down. Rare around here, but it happens.
- The clock matters a little. The step-up is to the date-of-death value. Any gain after that is yours. If the house sits for three years while it appreciates, that appreciation is taxable.
If you want the mirror image of this page, we wrote a separate one on selling a house in a trust before death. The tax math there runs the opposite direction, and it is the single most expensive thing families get wrong.
What Actually Happens the Day Someone Dies
If the house was in a revocable living trust, three things happen more or less automatically.
The trust becomes irrevocable. The person who could change it is gone, so it is now fixed.
The successor trustee takes over. That is whoever the trust document names next. Often a spouse, often an adult child. You do not get appointed by a court. The trust already appointed you.
The house skips probate. This is the whole reason the trust exists. Virginia’s probate tax applies to property passing by will or intestacy. Property in a trust passes under the trust, so it sits outside that. No qualification before the Circuit Court clerk, no Commissioner of Accounts, no four-month inventory deadline for this asset.
That is a real saving in time and paperwork. Be careful about how big a saving you tell yourself it is, though — Virginia probate is cheap compared to most states. The probate tax is $1.00 per $1,000 of estate value plus a local share of about 33 cents. The trust is saving you months and privacy, not a fortune in tax.
You Have 60 Days to Send a Letter
This one surprises people, and missing it causes arguments later.
Virginia law says that within 60 days after you learn that a formerly revocable trust has become irrevocable, you have to notify the qualified beneficiaries. You tell them the trust exists, who created it, that they can ask for a copy of the trust document, and that they can ask you for a report.
Do it in writing. Keep a copy.
We are not raising this to scare you. We are raising it because the families who end up fighting are almost always the ones where somebody felt kept in the dark. A letter in the first two months costs you an hour and prevents a lot of that.
Can You Actually Sell It?
Usually yes.
Virginia law gives a trustee broad power over trust property. The Code says a trustee may “acquire or sell property, for cash or on credit, at public or private sale.”
But that is a default rule, not a guarantee. Virginia law also says the trust document itself can change the rules. So the real answer is in the trust, not in the statute.
What to do: find the trust document and read the section on trustee powers and on what happens at death. Some trusts direct the trustee to sell and split the money. Some direct the trustee to deed the house to named people. Some leave it up to you. These are very different jobs.
If you cannot find the document, or you read it and cannot tell, pay an attorney for an hour. That is cheaper than finding out at the closing table.
What the Title Company Will Want
You do not have to hand over the whole trust document, and you should not want to. It names the beneficiaries and says who gets what.
Virginia has a statute for exactly this. It is called a certification of trust. It confirms the trust exists, who the current trustee is, what powers they have, and how title is held. The law says it “need not contain the dispositive terms of a trust.” Your family’s private business stays private.
Expect them to also ask for:
- A death certificate for the person who created the trust
- Copies of the specific pages naming the successor trustee and granting the power to sell
- Whatever the trust requires to prove you have taken over
That is all normal. It is not them being difficult.
The Part Nobody Tells You: Creditors Can Still Reach the House
Here is the thing that catches families out, and we would rather you heard it from us than from a lawyer’s letter.
A revocable trust does not put the house out of reach of the dead person’s debts.
Virginia law says the property of a trust that was revocable at the settlor’s death is subject to claims of the settlor’s creditors, plus costs of administration, funeral expenses, and the statutory allowances for a surviving spouse and children. That applies to the extent the probate estate is not enough to cover them.
There are real limits on it. Somebody has to make a written demand on the personal representative first. And no proceeding can be started more than two years after the death.
What this means in practice: if your mother died owing money, the house is not automatically safe just because it was in a trust. Before you distribute the money from a sale, get a clear picture of what she owed. Paying out to beneficiaries and then getting a demand is a bad position to be in.
Talk to an attorney about this one if there is any debt in the picture at all.
What It Costs to Sell in Virginia
Two taxes show up on a Virginia deed:
- Grantor’s tax. $1.00 per $1,000 of the sale price. Virginia law says the seller pays this one. On a $390,000 sale that is about $390.
- Recordation tax. $2.50 per $1,000 to the state plus a local tax equal to one third of that. By custom the buyer pays.
One thing worth clearing up: there is a $0.10 per $100 regional fee you may read about online. It does not apply in Hampton Roads. That one is only for Northern Virginia localities.
Sell the House, or Deed It to the Beneficiaries First?
If there are several beneficiaries, you have a choice, and it matters.
The trustee sells, then splits the cash. Cleaner. One decision maker, one closing, one set of paperwork. Everybody gets a number instead of a share of a house.
The trustee deeds the house to the beneficiaries, then they sell. Now you have three or four owners who all have to agree on a price, a buyer, and a closing date, and all have to sign. If they get along, fine. If one of them wants to keep it and the others want the money, you have just created a problem that ends in a lawyer’s office.
There are tax reasons a CPA might point you one way or the other. But the practical reality is simple: the more people who have to sign the deed, the more ways the sale can stall.
When the House Needs Work
Here is the version we see most often in Hampton Roads.
A house goes into a trust twenty years ago. The owner stays in it. Nothing gets updated. Then they die, and the house needs a roof, an HVAC system, a kitchen and flooring. Meanwhile the family is grieving, sorting through a lifetime of belongings, and often living somewhere else entirely.
You have three real options:
- Fix it and list it. Gets the most money. Takes the most time, cash and attention, and somebody has to manage contractors.
- List it as-is. Financed buyers will discount hard for work they have to take on, and some of them cannot get a loan on a house with a bad roof.
- Sell it as-is for cash. Less money, no repairs, and a closing date you can plan around.
If the house is in decent shape, an agent will beat our number. We will tell you that on the walkthrough, and we have done it plenty of times.
If it needs real work and nobody in the family has the time or the money to manage it, that is when a cash sale earns its discount. Here is exactly how we work out an offer:
We look at what the house will be worth once the work is done. Our offer lands between 70% and 80% of that number, and that range has to cover both what we pay you and what we spend on the renovation.
Say the house will be worth $390,000 fixed up and needs $55,000 of work. 75% of $390,000 is about $292,000. Take out the $55,000 of renovation and the offer is around $237,000.
No repairs, no commissions, and we pay all the closing costs. We can also work around your timeline — if you need six weeks to clear the house out, that is fine. We buy across Hampton Roads: Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Hampton and Newport News.
Common Questions About Selling a House in a Trust After Death
Do we have to go through probate to sell a house held in a trust? Generally no. That is the point of the trust. Property in the trust passes under the trust rather than by will, so it sits outside Virginia’s probate process and outside the probate tax.
Who signs the deed? The successor trustee, acting as trustee. Not the beneficiaries, unless the trust has already distributed the house to them.
Will we owe capital gains tax? Usually very little, because of the basis step-up under section 1014. The gain is measured from the value on the date of death, not from what the person originally paid. Ask a CPA for your actual numbers.
Does the title company need the whole trust? No. Virginia allows a certification of trust, which proves the trustee’s authority without revealing who the beneficiaries are or what they inherit.
Can creditors come after the house? Yes, in some cases. Virginia law makes the property of a trust that was revocable at death subject to the settlor’s creditors, administration costs, funeral expenses and family allowances, to the extent the probate estate is not enough. A proceeding has to start within two years of the death.
What if the beneficiaries disagree about selling? Read the trust first — it may already decide the question. If it leaves it to the trustee, you have authority but you also have a duty to act fairly toward all of them. This is a conversation to have with an attorney before it becomes an argument.
This article is general information about Virginia law and federal tax rules. It is not legal or tax advice, and we are not attorneys or CPAs. Trust documents differ, and your situation may turn on details this page does not cover. Please talk to a Virginia estate attorney and a CPA before you make a decision.