Changing laws and legislative reforms: How California's AB 2016 impacts inheritance for small estates

As of April 1, 2025, a significant change in California's probate law has taken effect with the passing of Assembly Bill 2016 (AB 2016). This change brings much-needed relief to California heirs and beneficiaries of small estates. AB 2016 positively affects Estates with modest primary residence homes because it offers small estate beneficiaries access to simplified probate procedures.


As a California estate planning attorney, I've closely followed the development of AB 2016. Here's what you need to know about how this law is reshaping inheritance for small estate beneficiaries across the state.


Key highlights of AB 2016


1. Higher value cap for small estate real property


Prior to AB 2016, real property valued above $184,500 typically required a full probate proceeding. Under the new law, a decedent's primary residence valued up to $750,000 may now qualify for a simplified probate petition, even if the estate has not been formally administered.


Change is the only constant in life, and this change reflects the reality of California's real estate market, where the median home price often exceeds $750,000. AB 2016 allows many middle-class families to skip the lengthy and expensive full probate process.


2. Streamlined court petition process


AB 2016 modifies the existing process under Probate Code §§ 13150-13154 by allowing heirs to petition the court for a direct transfer of the decedent's home without formal probate. 


The requirements include: (1) A 40-day waiting period after the date of death; (2) A real estate appraisal to confirm the home's value; (3) Notice to interested parties at least 15 days before the hearing; and (4) A court hearing and order authorizing the property transfer.


Once the court grants the petition, title can be transferred directly to the beneficiaries without further probate administration. This will result in a much faster turnaround time for Administration and reduce court costs for the Estate and beneficiaries.


3. Combined asset consideration


Arguably, one of the most important features of AB 2016 is that it allows estates to combine both real and personal property in the simplified procedure. Meaning, as long as the real property (primary residence) does not exceed $750,000; and the personal property does not exceed $184,500. This means qualifying estates valued up to $934,500 may avoid full probate entirely. This is also a huge savings to California beneficiaries who are under the new thresholds for probate. Prior to AB 2016, an Estate with combined assets were assessed at the $184,500 threshold. Now, the combined consideration allows the Estate and beneficiaries to save on Attorney's fees, court costs and most importantly - time!


Implications for California beneficiaries 


The passage of AB 2016 is a win for California families. Overall, it will provide legal monetary savings by avoiding formal probate. Families can save thousands of dollars in legal fees, court filing costs and other probate-related expenses. Additionally, beneficiaries will be able to receive their inheritance faster. This is because beneficiaries can receive title to property and settle affairs more quickly under the streamlined court process. Last, but certainly not least, beneficiaries will have more access to simple probate procedures. The new higher threshold means many working families with modest primary residences and personal property are now eligible for cheaper and faster probate relief than was previously unavailable.


Estate planning still matters


While AB 2016 offers a wonderful shortcut for qualifying Estates, it doesn't replace the need for comprehensive estate planning i.e., a Trust. Remember, there are limitations to AB 2016. The law applies only to the decedent's primary residence. Investment properties, vacation homes, or commercial real estate are excluded. Additionally, the property must remain under court supervision, so AB 2016 is not automatic and it is not private. Unfortunately, if beneficiaries are in conflict, or if there is uncertainty about heirs, a full-blown probate may still be needed. 


In conclusion, AB 2016 does not override the power of a Trust. A living trust continues to provide the greatest level of control, privacy and efficiency. With a properly funded trust, families can: (1) avoid probate entirely for all types of property, not just a primary residence, (2) estate matters remain private, since trusts are not part of the public record, (3) plan for incapacity, with successor trustees ready to step in, and (4) customize distributions, protect minors or special needs heirs and reduce risk of disputes. 


California's AB 2016 represents a meaningful step toward modernizing probate procedures and making estate transfers more accessible. By raising the small estate limit for primary residences, the state has eased the burden on families navigating inheritance after loss.


Jennifer A. Nakamura is an estate attorney at J. Nakamura Law, APC.