Simplifying Estate Settlements: What California's AB 2016 Means for Heirs and Beneficiaries

Probate is a costly and time-consuming court proceeding, but can be partially avoided by using a small estate affidavit. This alternative allows for estate heirs and beneficiaries in California to use an affidavit to request a transfer of property. In the past few years, California law has allowed for estates with a total value of less than $184,500 to go through the small estate process rather than a full estate administration in probate.

The recently passed Assembly Bill 2016 will increase this threshold to $750,000 for the decedent’s primary residence while maintaining the $184,500 threshold for personal property. In this blog article, we will analyze how this changes the small estate procedure in California probate and how it can impact the probate bond requirements for heirs.

What is a Small Estate Affidavit in California?

CA Prob Code § 13100 allows for any person with a legal right to inherit personal property, such as vehicles or financial accounts, to transfer the property to themselves without having to go to court by using a small estate affidavit. This is available for both personal property and real estate. The heir(s) must sign and deliver this affidavit to the company or financial institution that holds the property, and they can then have the property legally transferred to their name. This process significantly reduces the costs and time required to settle an estate compared to full probate. Certain requirements must be met to use this procedure, which are all listed below:

• Value Threshold: The estate’s value must not exceed the defined threshold:
  • For deaths occurring on or after April 1, 2022, the estate must be valued at $184,500 or less.
  • Starting April 1, 2025, the threshold will increase to $750,000 for real property (primary residences) while remaining at $184,500 for personal property.
• Time Since Death: At least 40 days must have passed since the decedent’s death.
• No Formal Probate: A small estate affidavit cannot be filed if a formal probate case has already been initiated. In such cases, approval from the personal representative is required before filing the affidavit.

To prepare a small estate affidavit, the heir must include a 1) certified copy of the death certificate, 2) proof of the decedent’s ownership of that asset, and 3) proof of the heir’s identity. The affidavit should only include probate assets. If you are looking to utilize a small estate affidavit in California, it is strongly recommended to consult an attorney or your local court's Self-Help Center.

Assembly Bill 2016 Increases the Threshold for Real Estate

The California legislature and Governor Gavin Newsom recently passed and approved Assembly Bill 2016, an update to existing probate law designed to recognize the rising property values of real estate in California. This amendment increases the threshold for real estate transfers outside of probate to $750,000 for primary residences. Known as AB 2016, the law aims to make estate transfers more accessible to Californians while minimizing the expenses of settling a loved one's estate.

Under this updated law, heirs can transfer a decedent’s primary residence valued at $750,000 or less using the Petition to Determine Succession to Real Property (Form DE-305). Personal property transfers remain subject to the $184,500 limit and require a separate affidavit. This petition may only be used for the primary residence of the decedent and requires petitioners to notify all intestate heirs or beneficiaries entitled to the asset.

How Will This Impact California Probate?

Most probate cases in California involve a piece of real estate that the decedent owned, as other personal property is often transferred outside of probate with a named beneficiary. By allowing transfers of real estate up to $750,000, many families will be able to avoid probate altogether by using these small estate affidavits. Eliminating a probate proceeding cuts out multiple expenses, including attorney retainer fees, court filing costs, and the premium fee for a probate bond. However, this petition will not be available for every decedent’s estate and comes with legal repercussions if not done properly. 

Primary residences valued at over $1 million or real estate that is not a primary residence will still require a full probate proceeding and petitioners will often need to obtain a probate bond in these situations. The court may require the petitioner to post a probate bond if the transfer is contested, as outlined in CA Probate Code § 13102. Additionally, CA Prob Code § 13109 requires that any transferee will be just as responsible for any debts on the property as the decedent would have had if still living.

While AB 2016 improves estate transfer accessibility, navigating the legal complexities requires careful attention. Heirs are strongly advised to consult with legal professionals to understand the small estate affidavit process fully and avoid potential complications.

Do I Still Need a Probate Bond?

Probate bonds provide a financial guarantee to all interested parties in the estate by ensuring that the administrator or executor will fulfill their fiduciary duty faithfully. When petitioning to obtain Letters of Administration in a full probate proceeding, the administrator or executor will likely need a probate bond before they have the authority to manage the estate. However, most small estate affidavits for personal property transfers or real property transfers will not need a probate bond.

The judge of the superior court will issue a court order if they determine one is necessary, and this typically only comes up in contested proceedings. Contact our probate experts at (855) 470-0877 or [email protected] if you need assistance in determining your bond requirement.

How Do I Obtain a Probate Bond?

Going through the probate process? Don’t fret. We are experts in probate bonds and have expedited the bonding process to make obtaining probate bonds easy and efficient. Click below to get your bond today. Have any questions? Give us a call at (855) 470-0877 to speak to one of our probate bond experts.

The information provided on this blog is for general informational purposes only. It is not intended to be legal advice and should not be construed as such. Consult with a qualified legal professional if you are seeking assistance with a probate or estate matter.