California’s New Way to Transfer a Family Home After Death - AB 2016

What Families Need to Know

California recently changed the law in a significant way. Assembly Bill 2016 (AB 2016) makes it easier for some families to transfer a loved one’s primary residence after death without going through a full probate.

For people who pass away between April 1, 2025 and March 31, 2028, the law allows a family home worth up to $750,000 (based on gross value, not equity) to be transferred through a simplified court process instead of a full probate case.

That is a major increase from the previous $184,500 limit. But as with most legal changes, the details matter.

This article explains what changed, how the new process works, and when it may - or may not - be the right solution for a family.

What Did the Law Change?

Before AB 2016, very few California homes qualified for the simplified procedure because home values had risen far beyond the old limit.

Now, if:

• The person who passed away owned a primary residence in California,

• The home’s gross value is $750,000 or less, and

• At least 40 days have passed since death,

a family member (or other legal successor) may ask the court to issue an order transferring the home—without opening a full probate.

This streamlined process is called a petition to determine succession to a primary residence.

Important Limits to Understand

While the new law expands access, it also narrows the rule in an important way:

• It applies only to a primary residence.

• It does not apply to rental property, vacation homes, vacant land, or investment property (unless those properties fall under a much smaller value limit in a different statute).

If someone owned multiple properties, this simplified procedure may not cover everything.

What Counts as a “Primary Residence”?

The law does not strictly define “primary residence.” This is intentional. Many people move into assisted living, stay temporarily with family, or are hospitalized before death. The court will look at the overall circumstances to determine whether the home was truly the person’s primary residence.

Factors might include:

• Where the person usually lived

• Whether they claimed the homeowner’s property tax exemption

• The address used for mail and government records

• The reason for any temporary relocation

Owning another residence in another state does not automatically disqualify the California home.

How Is the $750,000 Limit Calculated?

This is an important detail:

• The $750,000 limit is based on the gross value of the property, not how much equity is in it.

• Mortgage debt does not reduce the value for eligibility purposes.

• If the person owned only part of the property, only their share is counted.

The value must be determined by a court-appointed probate referee. A real estate agent’s estimate is not enough.

How the Process Works

Although this avoids a full probate, it still involves court.

The steps usually include:

1. Waiting at least 40 days after death.

2. Obtaining a probate referee appraisal.

3. Filing court forms.

4. Giving formal notice to heirs.

5. Attending a court hearing.

6. Recording the court order to transfer title.

This is simpler than probate, but it is not automatic.

The Five-Business-Day Notice Rule

One of the most important parts of the new law is the notice requirement. The person filing the petition must give notice to all heirs and beneficiaries within five business days of filing the petition. If notice is not handled properly, the court can dismiss the petition or the order could later be challenged.

What About Bank Accounts and Other Property?

The law also makes it easier in some cases to transfer personal property, such as bank accounts. If the home qualifies under the new petition procedure, its value does not count toward certain limits used for transferring personal property by affidavit.

This means some families may be able to transfer:

• The home through the petition process, and

• Bank accounts or other qualifying property through a simpler affidavit.

When This Process May Not Be the Right Choice

Although AB 2016 creates a helpful option, it is not appropriate in every situation.

Significant Debts

This procedure does not include a formal system for resolving creditor claims. Heirs who receive the home may remain responsible for debts up to the value received. If there are substantial liabilities, a full probate may provide better protection.

Multiple Heirs Who May Disagree

Under this process, heirs take title directly and become co-owners. If cooperation is uncertain, probate may offer a more orderly structure for selling or dividing property.

Minor or Incapacitated Beneficiaries

If one of the heirs is a minor or lacks legal capacity, additional court procedures may complicate matters.

Anticipated Disputes

If family conflict is likely, the more structured probate process may be safer.

How Does This Compare to Creating a Trust?

Many families avoid probate by creating a revocable living trust during life.

A fairly simple trust in California typically ranges from $2,000 to $4,000, depending on the attorney and the complexity of the situation.

A trust can:

• Avoid probate entirely (if properly funded),

• Provide privacy (no public court file),

• Allow management during incapacity,

• Centralize administration under a trustee.

After death, trust administration costs can vary widely. In straightforward cases, legal fees for administration often range from approximately $3,000 to $8,000, depending on the number of beneficiaries, cooperation, and complexity.

By contrast, a petition under AB 2016 may fall into a similar overall cost range once court fees, appraisal costs, and legal fees are included.

In very simple cases, the petition may be an efficient solution. In more complex situations, a trust often provides greater flexibility and long-term protection.

When the Petition May Make Sense

This new procedure may work well when:

• The estate consists mainly of one California home under $750,000,

• There is one or two cooperative adult heirs,

• There are minimal debts,

• The family expects to sell or transfer the home without dispute,

• Incapacity planning was not a primary concern.

For example:

A parent dies owning a $625,000 home and leaves it to one adult child. There are no major debts, and the child plans to sell the home. In that case, the petition may be an efficient path.

Or:

Two siblings inherit a $700,000 home, agree to sell it, and have no conflicts. The petition may allow transfer without a full probate.

When a Trust Is Likely the Better Choice

A trust may be more appropriate when:

• There are multiple properties,

• There are several heirs with potential disagreement,

• Privacy is important,

• The home’s value may exceed the threshold in the future,

• The client wants incapacity protection,

• The estate may grow over time.

A trust is not just a transfer tool - it is a management structure.

The Bottom Line

AB 2016 creates a meaningful new option for families who inherit a California primary residence worth $750,000 or less (for deaths between April 1, 2025 and March 31, 2028).

It can reduce the burden of full probate in certain cases, but it is not automatic, and it is not a substitute for thoughtful planning.

Every family’s situation is different. The right approach depends on:

• The value and type of assets,

• The number of heirs,

• The level of cooperation,

• The presence of debts,

• Long-term planning goals.

AB 2016 expands the available options. It does not eliminate the need for individualized legal advice.

Disclaimer: This article is provided for general informational and educational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. Estate planning laws vary by state and individual circumstances matter. You should consult with a qualified attorney regarding your specific situation before taking action.