Probate Newsletter

Having presided in San Francisco Superior Court’s Probate Department, I can safely say this complex and critical area of law rarely changes in significant ways. 

That is -- until recently – with the amendment of a series of probate statutes (and the repeal of one) meant to offer a new definition of a small estate more in line with the reality of California’s pricey real estate. This bill represents a sea change in California probate law, one that may not affect Bay Area property transfers given their extraordinarily high values, but will impact a slough of estates throughout the state.

AB 2016 amends several probate statutes and repeals one. The new laws are in effect as of January 1, 2025 but pertain to deaths occurring after April 1, 2025.

Background. California has historically offered a simplified court procedure/petition for “small estates” to help avoid a full probate. But the definition of a small estate ($184,500 or below) was and has been severely inadequate in light of the ever-increasing cost of California real estate. AB 2016 is meant to make things easier for heirs so that the transfer the typically largest asset—the family home—can be without the hassle and cost of formal probate. (Before April 1, 2022, estates valued over $166,250 required full probate administration. This threshold then increased to $184,500 for deaths occurring on or after April 1, 2022).

3 Key Changes.

1. A New Monetary Cap for Real Estate within a “Small Estate”

Instead of a $184,500 small estate cap (meant to cover both real estate and personal property), the new laws implement a much higher one of $750,000 with respect to just real estate. So, a decedent’s primary residence valued up to $750,000 may now qualify for a simplified probate petition.  The new set of laws will allow many middle-class families to skip a generally lengthy and possibly expensive full probate process. 

The caveat is AB 2016’s $750,000 threshold applies exclusively to real property that served as the decedent’s primary residence in California at the time of death. Other assets such as bank accounts, investments, or personal property are not counted under this new limit. For such personal property, only if it is valued at or under the $184,500 threshold, will it qualify for small estate administration. 

So, for example, if your estate includes a $650,000 primary residence and $200,000 in cash or stocks -- only the residence qualifies for the simplified petition process under the new laws. The other assets would still need to fall under the $184,500 limit to avoid probate.

2. Real and Personal Property Caps Considered Together

Estates valued up to $934,500 may avoid full probate entirely under the new law. This is because of one of the most important features of the new laws that allows estates to combine both real and personal property in the simplified procedure. This means the estate qualifies for a simplified procedure as long as the real property (primary residence) does not exceed a $750K value and personal property does not exceed $184,500.

 Prior to AB 2016, an estate’s combined assets were assessed at the $184,500 threshold of the death occurred after April 1, 2022. Now, the combined caps and increased real estate cap allow the estate and beneficiaries to save costs and fees.

3. Shorter, Faster Court Procedure

AB 2016 modifies existing process under Probate Code Sections 13150-13154 by allowing heirs to petition the court for a direct transfer of the decedent’s home without formal probate. The new law requires:

· a 40-day waiting period after the date of death;

· a real estate appraisal to confirm home’s value; 

· a court hearing and order authorizing the property transfer and

· notice to interested parties at least 15 days before the hearing.

Once the Court grants the petition, title can be transferred directly to the beneficiaries without further probate administration. 

The key result? A much improved and quicker turnaround time and correlated reduction in costs.

Heirs qualifying under the new small estate laws can be eligible for something not usually associated with probate court – less expensive and faster relief than before.