At Clark Allison LLP, we’re committed to keeping you informed about the latest developments in California estate planning law. One of the most significant changes on the horizon is Assembly Bill 2016 (AB 2016), signed into law in 2024 and set to take effect on April 1, 2025. This legislation shakes up the probate process for “small estates,” offering a simplified path for transferring a decedent’s primary residence. But what does this mean for you and your family? Is it a replacement for a living trust? Let’s break it down step by step, explore the petition process, and explain why—despite this new law—a living trust remains your best defense against the probate quagmire.
What Is AB 2016, and Why Does It Matter?
California’s probate process has long been a thorn in the side of families trying to settle an estate. It’s time-consuming, expensive, and public—three things most of us would rather avoid when passing assets to our loved ones. Historically, the state has offered simplified procedures for “small estates” to bypass full probate, but the thresholds were woefully outdated, especially given California’s skyrocketing property values. Enter AB 2016, a law designed to modernize these rules and make life easier for heirs.
Effective April 1, 2025, AB 2016 raises the probate threshold for real property—specifically a decedent’s "primary residence"—to $750,000. That’s a massive leap from the current limit of $184,500 (adjusted for inflation as of April 1, 2022). The goal? To help more Californians transfer their largest asset—the family home—without the hassle and cost of formal probate. This change reflects the reality of today’s housing market, where the average home price in California hovers around $750,000.
But here’s the catch: AB 2016 isn’t a free-for-all. It applies only to the decedent’s primary residence, and it comes with new requirements that could complicate things for some successors. Plus, it doesn’t eliminate the need for thoughtful estate planning. Let’s dive into the details.
Does the Increased Probate Threshold Apply to All Assets?
No, and this is a critical point to understand. AB 2016’s $750,000 threshold applies exclusively to real property that served as the decedent’s primary residence at the time of death. Other assets—like bank accounts, investments, or personal property—don’t get a free pass under this new limit. For those, the existing “small estate affidavit” process remains in place, with a threshold of $184,500 (subject to periodic inflation adjustments).
In other words, if your estate includes a $600,000 primary residence and $200,000 in cash or stocks, only the residence qualifies for the simplified petition process under AB 2016. The other assets would still need to fall under the $184,500 limit to avoid probate—or you’d need another strategy, like a living trust (more on that later). This distinction makes AB 2016 a targeted fix, not a cure-all for probate avoidance.
How Does the Petition Process Work Under AB 2016?
So, how do you take advantage of this new law? AB 2016 modifies the existing “Petition to Determine Succession to Real Property” process under California Probate Code Sections 13150-13152. If your loved one passes away on or after April 1, 2025, and their primary residence is valued at $750,000 or less, here’s how it works, step by step:
- Wait 40 Days After Death
You can’t file the petition right away. California law requires a 40-day waiting period after the decedent’s passing. This gives time to gather necessary documents and ensure no surprises (like a hidden will) pop up.
2. Verify Eligibility
Confirm that the property in question was the decedent’s primary residence and that its gross value doesn’t exceed $750,000. You’ll need an appraisal—typically done by a probate referee—to establish the value as of the date of death.
3. Prepare the Petition
Draft a Petition to Determine Succession to Real Property. This legal document includes:
- A property description (address, legal description, etc.).
- The decedent’s name, date of death, and whether they died with or without a will.
- The names, addresses, and relationships of all heirs, beneficiaries, or devisees (people named in a will).
- An inventory and appraisal of the property, attached to the petition.
- A statement requesting the court to determine who inherits the property.
4. Notify All Interested Parties
Here’s where AB 2016 adds a twist. Unlike the current law, you must now deliver notice of the petition to every intestate heir (those who inherit if there’s no will), beneficiary, and devisee named in the petition. This step increases transparency but could spark disputes if heirs disagree on the property’s fate. You’ll need to serve this notice at least 15 days before the court hearing.
5. File with the Probate Court
Submit the petition to the Probate Court in the county where the decedent resided or where the property is located (if they lived out of state). Include the appraisal and proof of notice to all parties.
6. Attend a Hearing
The court schedules a hearing to review the petition. If everything checks out—no objections, proper notice given, value under $750,000—the judge issues an order determining who inherits the property. This order acts like a title transfer, allowing the heirs to take ownership without full probate.
7. Record the Order
Once you have the court’s order, record it with the county recorder’s office to update the property’s title. Done.
This process is faster and cheaper than formal probate, which can drag on for a year or more and eat up 4-5% of the estate’s value in fees. But it’s not foolproof—disputes among heirs or sloppy paperwork can still derail it.
Why a Living Trust Still Reigns Supreme
AB 2016 is a welcome update, but it’s not a silver bullet. At Clark Allison LLP, we’ve seen firsthand how a well-crafted living trust outshines even the best probate shortcuts. Here’s why a living trust remains your best defense against probate, even with the new law:
Total Probate Avoidance
A living trust sidesteps probate entirely—not just for your primary residence, but for all assets titled in the trust’s name (real estate, bank accounts, investments, etc.). No $750,000 cap, no 40-day wait, no court hearing. Your successor trustee distributes assets privately and efficiently, often within a few months - with no court interference.
Control and Flexibility
With AB 2016, all beneficiaries end up on the property title together. Great if you’ve got one heir, but what if you have three kids who can’t agree on whether to sell or keep the house? A living trust lets you appoint a trustee (sibling, adult child, best friend) to manage or sell the property, avoiding family feuds. Plus, you can set terms—like staggered distributions or divorce protection provisions—that a petition can’t touch.
Incapacity Planning
If you become incapacitated, AB 2016 does nothing for you—it only kicks in after death. A living trust, however, names a successor trustee to manage your affairs seamlessly, avoiding the nightmare of a court-appointed conservatorship.
Privacy
The petition process is public; anyone can peek at the court file. A living trust keeps your estate details confidential, shielding your family from prying eyes.
No Notice Headaches
AB 2016’s new notice requirement could invite challenges from disgruntled heirs. A living trust avoids this mess—no notifications, no court battles (unless someone contests the trust itself, which is rare with proper planning).
If you set up a well-written living trust, keep it up-to-date, and you transfer your probatable assets to it, then when you pass away, the trust administration can be smooth and easy without court interference.
Yes, setting up a living trust takes effort—you need to fund it by retitling assets, and there’s an upfront cost. But the peace of mind and savings in time, money, and stress far outweigh the initial investment. AB 2016 helps, but it’s a Band-Aid; a living trust is the full cure.
At Clark Allison LLP, we’re here to help you navigate these changes. Whether you’re considering a living trust or updating an existing plan, give us a call. Let’s ensure your legacy passes smoothly to those you love—without the courts getting in the way.