David Mount, REALTOR with The Redux Group of eXp Realty in Fairfax, Virginia
571.946.8418
David Mount

Main Content

Selling a House in a Trust After Your Spouse Dies in Virginia: Taxes, Timing, and What to Do If There’s No Date-of-Death Appraisal (2026)

Home > Blog > Selling a House in a Trust After Your Spouse Dies in Virginia: Taxes, Timing, and What to Do If There’s No Date-of-Death Appraisal (2026)

Selling a House in a Trust After Your Spouse Dies in Virginia: Taxes, Timing, and What to Do If There’s No Date-of-Death Appraisal (2026)

Certified Probate Real Estate Specialist (CPRES) seal awarded to David Mount, Northern Virginia REALTOR

David Mount is a Certified Probate Real Estate Specialist (CPRES). He has completed formal CPRES training to help surviving spouses, trustees, executors, and heirs sell trust-held and inherited property across Northern Virginia, including Fairfax County, Loudoun County, Arlington, Alexandria, Prince William County, Falls Church, McLean, Vienna, Reston, and Herndon.

Contact David: 571-946-8418 · david.mount@thereduxgroup.com

Updated July 14, 2026 by David Mount, REALTOR®, The Redux Group of eXp Realty | Northern Virginia

Quick Answer: A surviving spouse can sell a Virginia home held in a revocable living trust at any time. No probate, no court approval, no waiting period. Taxes are where timing matters. The deceased spouse’s share of the home gets a step-up in basis to its value on the date of death (IRC §1014), and if the sale closes within 2 years of the death, an unmarried surviving spouse can exclude up to $500,000 of gain instead of $250,000 (IRC §121(b)(4)). If nobody ordered an appraisal at the time of death, a licensed appraiser can produce a retrospective appraisal later, even years later, and the IRS accepts it. Virginia has no estate tax and no inheritance tax.

This article is educational content, not tax or legal advice. Every estate is different. Confirm your numbers with a CPA and a Virginia estate attorney before you act. David works with both and can introduce you.

What’s in this guide

When Can You Sell a House Held in a Trust After Your Spouse Dies?

Right away, if you want to. If the home is titled in a revocable living trust and you’re the surviving trustee, Virginia law gives you clear authority to sell. That authority comes from the trust document itself and from Va. Code §64.2-778, which grants trustees the power to sell real property. No probate. No court filing. No judge. The title company will ask for two things: a Certification of Trust (Va. Code §64.2-804) and a certified death certificate.

The step-by-step process, including the documents, the deed check, and the one title trap that turns a trust sale into an unnecessary probate, is covered in our companion guide: Selling a Home Held in a Trust in Virginia: A Step-by-Step Guide for Successor Trustees.

So the legal answer is simple: whenever you’re ready. The harder question is when it’s smart to sell. That comes down to two tax rules, and they’re worth ten minutes of your attention because together they can be worth $47,000 or more.

What Is the Step-Up in Basis for a Surviving Spouse in Virginia?

The step-up in basis is a federal rule (IRC §1014) that resets the cost basis of inherited property to its fair market value on the date the owner died. Basis is what the tax code measures your profit against when you sell. Higher basis, smaller taxable gain.

Think about what that means for a couple who bought in Burke or Vienna in the 1990s for $200,000. The house might be worth $1,000,000 today. Without a step-up, that’s $800,000 of built-in gain waiting to be taxed. The step-up wipes out a large piece of it.

Virginia is a common-law state, not a community-property state, and that detail matters. For a home you owned together, including a home in a typical joint revocable trust, the result at the first death is what CPAs call a half step-up:

  • Your spouse’s half resets to its value on the date of death.
  • Your half keeps its original basis: half of what you paid, plus half of your improvements.

(In community-property states like California, both halves step up. Virginia couples don’t get that treatment.) One exception worth knowing: if the home sat entirely in your late spouse’s separate trust, the whole property may step up, not just half. More on that in the trust-structure section below.

Two other facts that surprise a lot of Northern Virginia families, in a good way:

  • Virginia has no estate tax and no inheritance tax. Both were repealed for deaths after July 1, 2007.
  • The federal estate tax exemption is $15 million per person in 2026 ($30 million per couple, made permanent by the 2025 tax law). Very few local estates owe any federal estate tax.

For most surviving spouses in Fairfax, Loudoun, Arlington, Alexandria, and Prince William, the entire tax question is capital gains on the home sale. That’s it. And the two rules in this article are the ones that decide it.

How Long Do You Have to Sell and Keep the $500,000 Exclusion?

Two years from the date of your spouse’s death. That’s the deadline under IRC §121(b)(4), and it works like this.

Married couples filing jointly can exclude up to $500,000 of gain when they sell their primary residence. A single filer gets $250,000. A widow or widower files single, so you’d expect the exclusion to drop to $250,000 the moment a spouse dies. Congress built in a grace period instead. An unmarried surviving spouse keeps the full $500,000 exclusion if:

  • The sale closes within 2 years of the date of death;
  • The couple met the ownership and use tests (the home was your primary residence for at least 2 of the last 5 years) immediately before the death;
  • You haven’t remarried as of the closing date.

The deadline is a cliff, not a slope. Close the sale at 23 months and you can exclude $500,000. Close at 25 months and you can exclude $250,000. On a longtime-owned Northern Virginia home, the difference is real money, often tens of thousands of dollars.

The step-up and the exclusion stack. The step-up shrinks your gain first, then the exclusion shelters what’s left. For many surviving spouses the combination takes the tax bill to zero. Here’s what that looks like with actual numbers.

A Fairfax County Example with Real Numbers

Say you and your husband bought your Fairfax County home for $200,000, put $50,000 of improvements into it over the years, and deeded it into your joint revocable trust. He passes away when the home is worth $1,000,000, and you’re weighing whether and when to sell.

Step 1, basis before his death: $250,000 ($200,000 purchase plus $50,000 improvements). Your half is $125,000. His half is $125,000.

Step 2, the step-up: His half resets to half the date-of-death value: $500,000. Your half stays at $125,000. New combined basis: $625,000.

Step 3, sell within 2 years for $1,100,000: Gain is $1,100,000 minus $625,000, or $475,000. Your exclusion inside the window is $500,000. Taxable gain: zero.

Step 4, the same sale after the 2-year window: The exclusion drops to $250,000, so $225,000 of that gain is now taxable (plus any further appreciation). At a 15% federal capital gains rate plus Virginia’s 5.75% income tax, that’s roughly $47,000 in tax that selling inside the window would have avoided.

Your improvements, your trust’s structure, and your income all move these numbers, which is why a CPA should run your specific math. The pattern holds across Northern Virginia, though: the step-up plus the two-year window makes a timely sale tax-free for most surviving spouses, and waiting past the window can create a large, avoidable bill.

What If Nobody Got a Date-of-Death Appraisal?

You haven’t lost anything. This is fixable at any time with a retrospective appraisal.

The worry usually surfaces a year or two after the loss, when the family finally turns its attention to the house: “Nobody appraised it when he died. Did we ruin the step-up?” No. The step-up is set by law at the date-of-death fair market value whether or not anyone documented that value at the time. What you need is evidence, and appraisers produce it routinely.

A retrospective appraisal (also called a date-of-death or historical appraisal) works like this: the appraiser inspects the home today, researches comparable sales from the months around your spouse’s death, and issues a formal opinion of value effective as of that past date. The IRS accepts retrospective appraisals as standard practice for estates, even years after a death.

A few practical notes for Northern Virginia families:

  • Cost and timing: typically a few hundred dollars and one to two weeks. It’s the document that protects your stepped-up basis if the IRS ever asks, so it earns its fee many times over.
  • Order it before you sell, not after. Your CPA needs the date-of-death value to report the sale correctly.
  • Back it up: the county’s real estate assessment for the year of death (Fairfax, Loudoun, Arlington, Alexandria, and Prince William all publish these online), photos of the home’s condition at the time, and receipts for improvements all help. They supplement a licensed appraisal; they don’t replace it.
  • Local data runs deep. The MLS keeps years of comparable-sales history for every Northern Virginia neighborhood, so appraisers here can reconstruct a defensible date-of-death value even five or more years back. David can refer you to local appraisers who do retrospective work regularly.

Does the Type of Trust Change the Tax Answer?

Yes, quite a bit. “The house is in a trust” can mean three different things in Virginia, and the tax treatment follows the structure.

1. Joint revocable living trust (the most common setup)

You and your spouse created one trust together and deeded the home into it. At the first death, the deceased spouse’s share gets the step-up (the half step-up described above), the trust keeps going, and you can sell as surviving trustee with no probate. If you keep living in the home, it stays your primary residence for the §121 exclusion.

2. The home was in your spouse’s separate trust

If your late spouse’s individual trust owned the whole house, the entire property may step up to date-of-death value, not just half. That can erase virtually all the built-in gain if you sell reasonably soon. The trust’s terms control what happens next (the house may pass to you outright or stay in trust), so read the document with an attorney before listing.

3. Bypass or credit-shelter (“A-B”) trust

Plenty of older Virginia estate plans, drafted back when the federal exemption was small, split into two trusts at the first death and move some or all of the house into an irrevocable “bypass” trust. Be careful here. Assets in a bypass trust generally get no second step-up at the surviving spouse’s death, and a home owned by an irrevocable trust may not qualify for the §121 exclusion at all, depending on how the trust is taxed. If your documents mention an “A trust and B trust,” a “marital trust and family trust,” or a “credit shelter trust,” talk to a Virginia estate attorney before you decide anything about the house. With today’s $15 million exemption, many of these older structures create tax cost without any offsetting benefit, and attorneys can often restructure them.

Not sure which setup you have? Pull the most recent deed from your county’s circuit court land records and read the first pages of the trust, or bring both to a consultation. David can point you to experienced Northern Virginia estate attorneys. See also our page for the probate and estate attorneys we work alongside.

Should You Sell Within the 2-Year Window or Stay?

The window is an incentive, not a command. Here’s the honest framework:

The case for selling within 2 years:

  • The $500,000 exclusion instead of $250,000. On a large gain that’s worth roughly $50,000 to $75,000 in combined federal and Virginia tax.
  • Your stepped-up basis is freshest now. The longer you hold, the more post-death appreciation piles on top of it, and only $250,000 of that will be sheltered later.

The case for waiting:

  • Your gain may already be under $250,000. The step-up makes that true for many families, and if it’s true for you, the window doesn’t change your tax bill at all. No tax reason to rush.
  • You may never sell. If you stay in the home for the rest of your life, your heirs get a fresh step-up at your death and the two-year window never mattered.
  • Grief has its own timeline. No tax break is worth selling a home before you and your family are ready. The goal is simply to know the math early, ideally within the first year, so whatever you decide is a decision and not a surprise.

A middle path that works well: get the retrospective appraisal and a one-hour CPA consultation done in the first year. It costs a few hundred dollars, commits you to nothing, and turns the two-year question into an informed choice. If you do sell and want to stay local in a smaller place, our downsizing guide covers that next chapter.

Are the Rules Different in Fairfax, Loudoun, Arlington, Alexandria, or Prince William?

The tax rules are identical everywhere in Virginia. The paperwork is local. No county or city charges its own capital gains, estate, or inheritance tax. What changes from one jurisdiction to the next is where you verify the deed and where you pull supporting evidence of value:

  • Fairfax County: confirm the deed through the Fairfax Circuit Court land records (searchable online), and pull the Department of Tax Administration’s assessment for the year of death as supporting evidence. Longtime-owned homes here often carry several hundred thousand dollars of appreciation, which is exactly when the two-year window matters most.
  • Loudoun County: Loudoun Circuit Court land records confirm trust title, and the county’s annual assessments are online. Loudoun’s rapid appreciation over the past two decades makes date-of-death documentation especially valuable.
  • Arlington County: Arlington Circuit Court land records, with assessments published annually online. Arlington’s steady market gives appraisers plenty of clean retrospective comparables.
  • City of Alexandria: Alexandria is an independent city with its own Circuit Court land records, separate from Fairfax County. City assessments are online.
  • Prince William County: Prince William Circuit Court land records, county assessments online. Homes in Woodbridge, Manassas, and Gainesville bought in the 1990s and 2000s frequently show the kind of gains where the $500,000-versus-$250,000 difference decides the outcome.

David sells trust-held and inherited homes in all five jurisdictions and can tell you, street by street, what your home would bring today versus what it was worth on any past date. That comparison is the starting point for every timing decision.

One more wrinkle worth knowing: if some of your spouse’s assets were never titled to the trust, those items may need to go through the court process before the estate can fully close. If the property sits in Fairfax County, my guide How Long Does Probate Take in Fairfax County? lays out that timeline, the qualification steps, and the deadlines personal representatives face.

Frequently Asked Questions

Can I sell our house right after my spouse dies if it’s in a trust?

Yes. If the home is titled in the trust and you are the surviving or successor trustee, Virginia law (Va. Code §64.2-778) and the trust document give you authority to sell with no probate and no waiting period. The title company will require a Certification of Trust and a certified death certificate.

How long do I have to sell to keep the $500,000 capital gains exclusion?

Two years from the date of your spouse’s death, under IRC §121(b)(4). The sale must close within that window, you must be unmarried on the closing date, and the two of you must have met the ownership and use tests before the death. After two years, the exclusion drops to $250,000.

What is a step-up in basis and how does it work for a widow in Virginia?

Under IRC §1014, the portion of the home included in your spouse’s estate resets its cost basis to fair market value on the date of death. Because Virginia is a common-law state, a jointly owned home typically gets a half step-up: the deceased spouse’s half steps up and the survivor’s half keeps its original basis. If the home was entirely in the deceased spouse’s estate or separate trust, the full home may step up.

Nobody got an appraisal when my spouse died. Is the step-up lost?

No. A licensed appraiser can perform a retrospective (date-of-death) appraisal at any time, even years later, using comparable sales from around the date of death. The IRS accepts retrospective appraisals as standard practice. Order it before you sell so your CPA can report the sale correctly.

Does Virginia have an estate tax or inheritance tax?

No. Virginia repealed both, effective for deaths after July 1, 2007. The federal estate tax exemption is $15 million per person in 2026, so most Northern Virginia estates owe no estate tax. The main tax question for a surviving spouse selling a home is capital gains, which the step-up and the §121 exclusion usually reduce to zero for a timely sale.

Do I pay capital gains tax if I sell the house more than 2 years after my spouse’s death?

Possibly, but only on gain above $250,000 measured from your stepped-up basis. Many surviving spouses still owe little or nothing. Gains between $250,000 and $500,000 are only sheltered if you sell within the two-year window. A CPA can run your exact numbers in under an hour.

What if the house went into a bypass or credit-shelter trust when my spouse died?

Older “A-B” estate plans can move some or all of the home into an irrevocable bypass trust at the first death. That can cost you the §121 exclusion and eliminate the second step-up at your own death. If your trust splits in two, see a Virginia estate attorney before making any decision about the home. These older structures can often be restructured.

Who signs the listing agreement and deed when a surviving spouse sells a trust-held home?

You sign in your capacity as trustee, for example “Jane Doe, Trustee of the Doe Family Trust dated March 15, 2018,” not as an individual. The title company needs a Certification of Trust (Va. Code §64.2-804), which an estate attorney or the title company can prepare.

Talk It Through Before You Decide Anything

If you’ve lost your spouse and the house is on your mind, whether you’re ready to sell or just want to understand the clock, David Mount can walk you through the timing math, refer you to a retrospective appraiser and a CPA, and tell you exactly what your home is worth today, at no cost or obligation. David is a Certified Probate Real Estate Specialist (CPRES), is well-versed in the procedures under Title 64.2 of the Code of Virginia that govern trust-held home sales, and serves surviving spouses across Fairfax County, Loudoun County, Arlington, Alexandria, Prince William County, and Falls Church.

Call 571-946-8418 or email david.mount@thereduxgroup.com for a confidential, no-pressure conversation.

For the broader picture, read capital gains and inheritance tax in Virginia: what home sellers pay.

Related Resources

Share

WORK WITH DAVID

    David Mount