What happens to sale proceeds from a parent’s house under California law?

Disclaimer: This is general information, not legal advice. I am not a lawyer. For guidance about your specific situation, consult a California probate or estate attorney.

Detailed answer — how leftover money from a sold home is handled in California

When a deceased person’s house is sold and debts are paid, whether any leftover money is distributed under that person’s will depends on how title to the house was held and whether the sale occurred as part of a probate administration or as a nonprobate transfer. Below are the common scenarios and the rules that typically apply in California.

1) House was a probate asset (owner held title in their sole name)

If the house was owned solely by your parent (title in only your parent’s name) and no nonprobate transfer method applies (no living trust, no transfer-on-death deed, no right of survivorship), the house is usually a probate asset. In probate: the personal representative (executor or administrator) sells the house if needed to pay debts or to distribute the estate. Sale proceeds become part of the probate estate. After the representative pays valid creditor claims, funeral costs, taxes, administrative costs, and any allowed allowances, the remaining balance is distributed according to the decedent’s valid will. If there is no valid will, distribution follows California intestacy law.

For a clear overview of probate and executor duties in California, see the California Courts probate self-help pages: https://www.courts.ca.gov/selfhelp-probate.htm. For statutory text, consult the California Probate Code online: https://leginfo.legislature.ca.gov/faces/codes.xhtml?lawCode=PROB.

2) House passed outside probate (nonprobate transfers)

Some ownership forms bypass probate. If any of the following applied, the proceeds may not become part of the probate estate and therefore may not be distributed under the will:

Joint tenancy or community property with right of survivorship: Ownership automatically passes to the surviving co-owner on death. If the surviving owner sells the home, the proceeds usually belong to that surviving owner (subject to reimbursement claims in some cases).
Transfer-on-death (TOD) deed: If the deceased used a properly executed TOD deed naming a beneficiary, title transfers to that beneficiary at death without probate. The beneficiary then controls the property or the proceeds if sold.
Revocable living trust: If the house was titled in a trust or transferred to a trust, the trustee follows the trust terms; the property does not go through probate and does not follow the will.

California’s resources explain these transfer methods in more detail: https://www.courts.ca.gov/selfhelp-estateplanning.htm and the Probate Code pages on the official legislative site above.

3) Sale by someone else before probate — is it valid?

If an outside party (for example, a child or a creditor) sold the house without proper authority, whether that sale was valid depends on title and whether the seller had legal authority. A surviving joint owner can usually sell. But if someone sold the decedent’s sole-owned property without probate appointment or written authority (e.g., not the executor and no trustee under a trust), the sale may be invalid and could be reversed or could give rise to claims against the seller. If you suspect an unauthorized sale, you should ask for transaction records and consult a probate attorney promptly.

4) Creditor claims, expenses, and priority

When an estate goes through probate, California law gives creditors a window to file claims against the estate. Priority items commonly paid first include secured debts (mortgages), funeral expenses, and administration costs. Only after valid claims and administration expenses are paid does any remaining cash go to beneficiaries under the will or by intestacy.

5) Homestead protections and tax considerations

California has protections that may limit how much of a decedent’s residence can be reached by certain creditors, and tax obligations (federal or state) may affect the estate. The details can be fact-specific—ask an attorney or review the relevant provisions and court explanations.

Common fact patterns (hypotheticals) and likely outcomes

Hypothetical A: Dad owned the house alone, named you as beneficiary in his will. The executor sells the house, pays mortgage and final bills, and distributes the remainder to you after probate accounting. Outcome: proceeds follow the will.
Hypothetical B: Mom and dad held title as joint tenants. Dad died, title passed to mom automatically. Mom sells the house and pays debts. Outcome: sale proceeds typically belong to mom (not distributed under dad’s will).
Hypothetical C: Dad put the house in a revocable trust naming a beneficiary. Trustee sells the house and pays trust obligations. Outcome: proceeds follow the trust, not the will.

Helpful hints — what you can do right now

Check the deed and title: look for joint tenancy language, survivorship clauses, or a TOD deed. Request a copy of the recorded deed from the county recorder or examine the title online.
Ask the executor or trustee for a written accounting and copies of closing documents and checks showing debts paid.
Confirm whether the house went through probate or was transferred via a trust, joint title, or TOD deed.
Collect key documents: death certificate, deed, mortgage payoff statement, settlement statement (HUD-1 or closing disclosure), and the will or trust documents.
If you suspect an unauthorized sale or dispute distribution, contact a probate attorney promptly. Many estate issues have strict timelines for objections and creditor claims.
Use California Courts resources for basic self-help steps: https://www.courts.ca.gov/selfhelp-probate.htm and review the California Probate Code on the official legislative site: https://leginfo.legislature.ca.gov/faces/codes.xhtml?lawCode=PROB.

When to get a lawyer

Consider hiring an attorney if:

You can’t get a clear accounting from the executor or trustee.
You suspect the sale was unauthorized or someone sold the property who lacked authority.
There are creditor claims or disputes among beneficiaries that threaten distribution.

Even if you do not hire counsel immediately, an initial consultation can clarify whether the proceeds should follow the will or were properly disposed of outside probate.