Thousands of California families will benefit from a recent change in state law that makes the probate process simpler, quicker and less expensive for heirs and beneficiaries of relatively modest estates. But for most families, a well-designed estate plan, with a carefully crafted trust, is still the better option.
With the passage of Assembly Bill 2016 on April 1, a decedent’s primary residence with a value of up to $750,000 now qualifies for a simplified probate process. Previously the threshold had been $184,500 for all assets (including real property if the death occurred between April 1, 2022, and before April 1, 2025). An estate with a value above that required a full probate process.
Given the sharp rise in California home prices in recent years, the limit prior to AB 2016 had excluded the large majority of lower- and middle-income families in the state, for many of whom their home was their largest asset.
AB 2016 allows heirs to petition the probate court for a direct transfer of the decedent’s home without having to go through the full, formal probate process.
The new law imposes several requirements:
- The death must have occurred on or after April 1, 2025.
- The home must have been the decedent’s primary residence (not commercial property, a vacation home, raw land or other real estate), located within California.
- Heirs must wait at least 40 days after the death to begin the process, to allow time to gather documents.
- The person(s) seeking transfer of the property must have the legal right to inherit.
- The value of the primary residence must not exceed $750,000, with the estate including up to an additional $184,500 in personal property. The value of the residence at the time of the decedent’s death will typically be established by an appraisal performed by a probate referee.
The heir(s) will then file a Petition to Determine Succession to Real Property with the probate court in the county where the decedent resided. This legal document will include the decedent’s name and date of death; whether they died with or without a will; the names, addresses and relationships of all heirs or beneficiaries; a description, inventory and appraisal of the property; and a request that the court determine who will inherit the property.
AB 2016 requires delivery of a notice of the petition to every beneficiary and heir, including intestate heirs (those who will inherit when there is no will) at least 15 days before the probate court hearing.
If the court determines that everything is in order – the values of the home and other assets are below the thresholds, all heirs have been given notice, and there are no objections or other complications – it will issue an order determining who inherits the property. This order transfers title to the residence to the heirs, who can file it with the county recorder, thus taking ownership without the cost and delay of a full probate proceeding.
While AB 2016 provides a much-needed update to the state’s probate laws, it is not a panacea.
The petition is a public record, so the family’s situation will be visible to all.
The requirement that all heirs be notified increases the chance that some may object to the proceedings or to the division of assets.
If heirs disagree about what to do with the home after they receive ownership, there is nothing in the law to help resolve such disputes.
An estate plan that includes a well-drafted living trust will avoid the probate process entirely, not only for your primary home in California but for any real estate you may own anywhere and of any type, as well as for other assets and investments you may hold.
A trust provides privacy; it is not filed with the court, so it does not become a record visible to the public and to family members who are not beneficiaries.
Unlike AB 2016, which makes all beneficiaries equal owners of the property, a trust allows you to distribute your assets to your heirs as you see fit, including when they will receive their share, protecting it against divorce, etc.
Probate law only becomes relevant to you and your family upon your death. A trust enables you to name a successor trustee who can manage your affairs if you become incapacitated before your death, carrying out your instructions to pay bills, protect the trust’s assets, and act in the best interests of the beneficiaries.
So, even with AB 2016 on the books, a living trust still provides a much wider range of advantages and benefits for most families.
By Lynda I. Chung