Assembly Bill 2016 (AB 2016), enacted in late 2024, is set to take effect on April 1, 2025. This new law amends California’s Probate Code, aiming to streamline the probate process and simplify the transfer of certain estates. Estates containing a primary residence worth $750,000, or less, and personal property (cars, bank accounts, investments) worth $200,000 (stay tuned for the exact amount), or less, will benefit from AB 2016.
Key Provisions of AB 2016:
- Increased Small Estate Threshold: AB 2016 raises the exemption limit for small estates, allowing estates valued under $200,000 (we will soon know what the ‘adjusted for inflation’ amount is) to use a Small Estate Affidavit to administer the assets, without the need for a formal probate.
- Simplified Transfer of Primary Residence: AB 2016 welcomes a streamlined process for transferring a decedent’s primary residence worth $750,000, or less. Successors can file a petition in the superior court without obtaining letters of administration or awaiting probate.
- Notification Requirements: AB 2016 mandates that successors provide notice of the transfer petition to all heirs and beneficiaries.
The Future of Living Trusts and Estate Planning:
Most of coastal Orange County contains real properties that exceed $750,000 in value. The properties will need to be placed in Living Trusts in order to avoid probate administration. Special conditions for inheritance, such as providing financial support for minor children, will still require a Living Trust. While AB 2016 aims to make estate administration more accessible and less costly for California residents, it will not replace a carefully crafted estate plan that includes a Living Trust.