AB-2016: California’s New Small Estate Law Explained
Executive summary
- California’s new small estate law, AB-2016, brings several changes, amending multiple sections of the current state probate code.
- The key change from the law states that estates with a primary residence valued at $750,000 or below will now be eligible for small estate petitions and an expedited estate administration process.
- Additional changes resulting from the new law include a specific focus on primary residences, exclusions of other real property, and new filing and notification requirements for estate transfers.
- It’s a good idea to seek legal counsel to help you understand AB-2016 and the new requirements it creates so that you can avoid errors and navigate disputes as the successor of an estate.
Introduction
California passed Assembly Bill 2016 (AB-2016) in September 2024 to take effect in April 2025, and it features several new implications for the estate transfer process. Probate is a lengthy, complex process that requires submitting a will to the probate court, initiating probate, receiving the letters testamentary, notifying all of the interested parties in an estate, and having an executor guide the distribution of assets to beneficiaries.
This bill, and the changes it brings to the California Probate Code section 13100 and the small estate process, are designed to simplify the estate transfer procedures for a large number of estates and their successors. Certain estates have always been able to bypass full probate as long as they were valued at or under a certain amount or proper estate planning measures were taken before the decedent’s death to ensure that no assets needed to pass through probate. However, the new Probate Code
provisions will expand the threshold for the simplified probate process to transfer a decedent’s primary residence, providing many successors with the opportunity to avoid a lengthy legal process.
The support of an experienced probate lawyer can be valuable in helping you understand the new requirements around California small estate affidavits so that you can manage your loved one’s estate properly. This guide will give you some initial insight into AB-2016 and what it might mean for California estates in 2025 and beyond.
What Does AB-2016 Entail?
Assembly Bill 2016 (AB-2016) features multiple provisions that will significantly change the estate transfer process for small estates. The bill was approved by the governor on September 21, 2024 and will take effect on April 1, 2025.
The key actions of this bill involve repealing Section 13158 of the California Probate Code and amending the following Sections of the Probate Code related to estates:
- 13100
- 13101
- 13150
- 13151
- 13152
- 13154
The new law and its amendments to the above provisions are designed to simplify the transfer process of a decedent’s estate if their property is below a threshold of $750,000. The bill also includes provisions that will exclude real property that is not the decedent’s primary residence from being considered in the gross estate value, as well as add new filing and notification requirements for small estate petitions.
AB-2016 is a demonstration of California’s plan to modernize its estate administration policies and estate transfer laws. This bill may serve as a breath of fresh air for many middle-class Californian families with smaller-sized estates, allowing them to avoid a lengthy probate process to transfer property to their successors.
What Changes with AB-2016?
New bill AB–2016 brings several adjustments to consider in estate planning, probate, and estate administration. With amendments to several areas of the California probate code, the new bill brings about the following changes.
Increased Threshold for Small Estates
The most notable change from AB-2016 is an increase to the threshold set to designate an estate as a “small estate” to $750,000. Historically, only estates with collective real property valued under $166,250 prior to April 1, 2022, or under $184,500 after April 1, 2022, would be eligible to file for a small estate affidavit, which would allow for the transfer of property to a successor without probate.
Now, any estate with a primary residence valued at or below $750,000 can transfer that property to a successor without full probate. As a hypothetical example, if an individual named David dies and leaves behind an estate that includes his home valued at $700,000, this would fall under the new threshold for simplified distribution—David’s successors would be able to file for a small estate petition to transfer that property without awaiting probate of his will.
It’s also important to note that the dollar amount for the probate limit is set to adjust over time, as included as a provision in the law. After April 2028, this threshold will likely increase depending on inflation and market conditions.
Focus on Primary Residences
Different from the previous estate codes, AB-2016 addresses the threshold specifically for primary residences and excludes all real property under $184,500. It’s important to distinguish between both types of property:
- A primary residence is typically defined as the place where a person has a “fixed permanent home that they have the intention to return to whenever they are absent”. However, AB-2016 emphasizes that a primary residence is not just limited to the residence of the decedent at the time they died, which may lead to a broader interpretation of the term depending on the case.
- Other real property includes any property that is part of the overall estate, including land and anything attached to it, which may include land, vacation homes, investment properties, and other real estate that the decedent did not reside in full-time.
This key difference is crucial—other estate property is still tied to previous rules. For example, the primary residence, if valued under $750,000, is eligible to pass through the small estate transfer process, but the other assets if valued above the original limit of $184,500 may still be subject to full probate in order to be distributed to the relevant heirs.
To understand the change using the hypothetical case scenario above: David’s primary residence is valued at $700,000, but he also owns an additional vacation property valued at $325,000 dollars. Because David’s primary residence is below $750,000, a successor can petition to administer this property without awaiting probate of his will.
However, because his vacation property is valued above the existing $184,500 probate threshold and is not his primary residence, this property will still have to pass through the probate process to be administered.
New Requirements for Filing Petitions
AB-2016 also alters the process for filing the petition for a small estate affidavit. The amendment states that following 40 days after a decedent’s death, the successor of the decedent can file a petition in county court where the decedent’s estate is located to transfer ownership of the personal residence without procuring letters of administration or awaiting probate.
This petition should include the following information:
- Information necessary to prove that the petition filed is in the proper county, such as the death certificate of the decedent and address of the property.
- An inventory and appraisal of the property demonstrating its gross value.
- Facts that prove the property in question was the decedent’s primary residence, such as documentation that serves as proof of residence.
- Whether probate proceedings are taking place in any other jurisdictions.
- Information of each heir and devisee of the decedent, including names and addresses of anyone named as an executor of a will or interested party in a trust.
A key change to this process is that the individual filing the petition must also send a notice to each heir and successor of the decedent. The individual must provide notice to all other heirs within five business days of filing the petition with the court—this will provide more transparency to the process and give anyone the opportunity to contest the small estate process or raise any concerns.
If you are filing a petition for a small estate distribution, you should seek legal counsel in order to understand the new requirements for filing petitions and maintain compliance with the new probate code amendments.
Benefits of AB-2016
AB-2016 will make it easier to eliminate the need for a full probate for primary residences under a specific threshold. With a much higher financial threshold, this law significantly widens the scope of estates that are eligible to bypass probate administration, offering the benefits of a simplified process.
Bypassing probate allows families to enjoy a faster, less costly, and less stressful process—a significant benefit for already grieving families. Probate often involves petitioning the probate court and receiving letters of administration from the court to begin the process, which comes with longer timelines and more extensive legal fees.
Ultimately, the new law is designed to simplify the estate transfer process. For example, a middle-class family in line to inherit a $700,000 home from a deceased relative is now able to file a small estate petition to transfer ownership of the home without probate. Previously, they would have to petition the probate court and appoint an executor to distribute the estate—this creates a considerable burden, especially for smaller estates, by draining estate funds and taking considerable time from personal representatives. Additionally, if the primary asset in the estate is the residence, the additional costs of a full probate proceeding may cause uncertainty as to how those expenses will ultimately be paid.
Under the new process, they would be able to petition the court to transfer the estate property directly to successors. Instead of having to go through a lengthy probate process, families who inherit smaller estates can have ownership transferred to them in a far more efficient and convenient process.
Challenges and grey areas
As with any new law, there may be some growing pains for interested parties in an estate as they must navigate some of the following potential challenges and gray areas with little precedent.
Valuation Disputes
First, the new law may raise questions about the valuation of a primary residence and lead to potential disputes. The $750,000 limit is based on the “gross value” of the primary residence—if there are disputes about the true value of the property, it could delay the estate transfer process.
Heirs, beneficiaries, and interested parties may contest valuations, leading to disputes around whether the estate should go to probate, where parties have more options to contest the distribution of property and seek a greater share of an inheritance.
Given the potential for disputes, accurate appraisals of the property in the estate will be essential to ensure the appropriate next steps are taken. Heirs and successors should consult a professional appraiser to gather an accurate valuation of the property based on fair market value.
Threshold Timeline
Because the law is recent, there may be a gray area on who the new threshold is relevant to. AB-2016 sets specific timelines for when each threshold applies, meaning that many estates will have different thresholds that will apply to them.
The threshold will depend on the date when the decedent died:
- If a decedent died prior to April 1, 2022, the threshold for small estate probate is $166,250
- If a decedent died on or after April 1, 2022, but before March 31, 2025, the threshold is $184,500.
- If a decedent dies after March 31, 2025, the threshold will be $750,000
- If a decedent dies after April 1, 2028, the threshold will be an adjusted dollar amount published according to Section 890 of the chapter.
Understanding the relevant probate limit for your estate is crucial for guiding your next steps. If you have any questions about your estate, an attorney can help you understand what threshold applies to you and what your options are as a result.
Notification Requirements
The adjustments to current probate codes have brought forth more stringent notification requirements for individuals filing a small estate petition. AB-2016 requires that successors filing the petition notify all interested heirs and successors within five business days of filing.
The new notification requirements help ensure that no one person can take advantage of the estate and minimize inheritance disputes further down the line. However, it is possible that heightened notification requirements may lead to further disputes, as more interested parties aware of property transfers may mean more interested parties looking to contest them.
If you are a successor tasked with filing the small estate petition, consider consulting an attorney who can help with drafting the notification in compliance with the new law as well as navigating any potential probate litigation.
Limits on Broader Estate Planning
It’s important to note that the new law amending the current estate code only applies to primary residences—this means that other assets will still be subject to the original $166,250, now $184,500, limit for small estates. If an estate includes a variety of assets in addition to a primary home, this could complicate the estate administration process as some assets may still have to pass through probate.
This limit means that an individual should not assume that their whole estate will qualify for bypassing probate because their primary residence is below $750,000. Instead, they should consider steps to simplify the estate administration process prior to their death. During estate planning, individuals may consider reducing the size of their estate through methods like gifting or establishing joint ownership for specific assets. They may also consider adding their assets to a trust to minimize the need for probate.
Regardless, it’s always a good idea to consult an estate planning attorney and financial advisors who can provide tailored advice and guidance for a comprehensive estate plan based on your specific situation.
Why Legal Counsel is Crucial in Navigating These Changes
Seeking the support of legal counsel is extremely beneficial for understanding and navigating the changes brought by AB-2016 so that your estate administration process can proceed smoothly. Legal counsel is also essential for avoiding errors and navigating disputes that can arise during the transfer of estate property.
Common mistakes made during the small estate petition process may include incorrect property valuation, incomplete or improperly filed petitions, a failure to notify heirs, and more. These mistakes can lead to disputes or procedural errors that may require extensive legal fees and lengthy delays to the estate transfer process to resolve.
Given the risk of costly errors, it’s important to consult an estate and probate administration attorney who can not only help you understand and comply with the recent legal changes but also guide you through the process and next steps. Our attorneys at RMO have extensive experience in the estate administration process and are happy to provide a compassionate hand for catching errors, mediating potential disputes, and resolving conflicts.
Understand the Implications of AB-2016
Assembly Bill 2016 has important implications for California probate laws and will affect a large number of estates, allowing estates with primary residences valued at or under $750,000 to file for a small estate petition. Although the bill is designed to simplify the estate administration process for many more people, benefitting middle-class families, it will be essential to understand the new small estate thresholds, notification requirements, and additional nuances to avoid mistakes or delays in the process.
Our attorneys at RMO Lawyers have decades of experience in estate and probate administration, meaning that we understand the ins and outs of California probate code and how it applies to various estates. With the dedication, empathy, and zealous advocacy we apply to each case, we will support you in understanding how the new requirements apply to you. Then, we’ll help you navigate the petition process so you can avoid delays and act in the best interests of the estate with confidence and peace of mind.
Schedule a consultation with our attorneys at RMO to discuss your case and any questions you may have.
Glossary
Decedent – A person who has died and left behind estate property to be administered.
Successor – An individual who succeeds a decedent, such as a child or grandchild, and is in line to inherit the decedent’s property.
Probate – The court process in which the assets of an estate are gathered, accounted for, and distributed to the heirs or beneficiaries after an individual passes away, either in accordance with the deceased’s wishes if they had a will or following local intestacy laws if there was no will.
Letters of administration – Also known as letters testamentary, these are documents issued to an executor by a probate court that authorizes an executor or administrator to begin the estate administration process, either by following the will or state intestacy laws.
Small estate affidavit – A proceeding that allows estates at or under a specified value to be transferred to the decedent’s heirs without probate and with minimal court intervention.
Real property – Any property that belongs to an estate, including land and any buildings tied to it.
Primary residence – The property where an individual resides full-time as a fixed permanent home that they have the intention to return to whenever they are absent, but not limited to the decedent’s residence at the time of their death.