2025 California Probate Laws for Property Under $750,000

Understanding the 2025 California Probate Law Changes

When a loved one passes away in California, families often face an unexpected battle that has nothing to do with grief, the costly, time-consuming maze of probate court. For years, hardworking property owners have watched their family’s inheritance diminish through legal fees and court costs, particularly hitting family businesses and modest estates the hardest.

AB 2016 California represents a groundbreaking shift in how the state handles property transfers after death. This legislation has quietly revolutionized estate planning by raising the small estate threshold to $750,000 for primary residences—nearly doubling the previous limit. This new threshold applies to deaths occurring on or after April 1, 2025. What most legal commentaries overlook is how this change specifically benefits family-owned construction companies, agricultural properties, and service businesses that typically operate with significant assets but limited liquid capital.

The new threshold doesn’t just save money, it preserves legacies. For primary residences valued under $750,000, families can now use simplified procedures that bypass much of the traditional probate process, potentially saving months of delays and thousands in legal expenses. This protection is particularly vital for properties where value is tied to business operations rather than speculative market rates.

Throughout this guide, we’ll explore these new protections in detail, explaining exactly how AB 2016 California creates pathways for families to transfer hard-earned assets with minimal court intervention—something previous generations of California property owners could only dream about.

The Evolution of California Probate Laws

California’s probate system has long been criticized for failing to keep pace with the state’s soaring property values. While the median home price in California approached $800,000 in 2024, the probate thresholds remained stubbornly low, forcing modest family estates through an expensive, time-consuming court process. The gap between economic reality and legal procedure has been particularly devastating for agricultural families and small business owners whose wealth exists primarily in land and equipment rather than liquid assets.

Historical Context of California Probate Thresholds

For decades, California’s probate thresholds inched up incrementally while property values skyrocketed. Before April 1, 2022, estates valued over $166,250 required full probate administration. This threshold then increased to $184,500 for deaths occurring on or after April 1, 2022. Despite these adjustments, the thresholds remained far below California’s soaring property values, with median home prices nearly doubling in many regions. The disconnect meant that even modest homes required extensive court proceedings to transfer ownership after death.

Key Changes Introduced by AB 2016

AB 2016 California fundamentally reimagines small estate administration by recognizing the unique position of the family home in estate planning. Building on the April 1, 2022 increase in small estate thresholds from $166,250 to $184,500, this legislation creates a separate category for a decedent’s personal residence, allowing simplified procedures for primary residences valued up to $750,000 for deaths occurring on or after April 1, 2025. This revolutionary approach acknowledges what families have long understood: a home represents more than just financial value, it embodies family heritage and stability.

According to the California Legislative Information website, this expansion brings small estate thresholds significantly closer to California’s median home prices for the first time in state history. Even more significantly, the amended code maintains provisions tying the threshold to inflation, ensuring this reform remains relevant as property values continue to climb.

What many analyses overlook is how this change affects multi-generational family businesses. Construction company owners, landscapers, and farmers, whose wealth often exists primarily in real estate and equipment, gain particular protection under these new provisions, allowing business continuity without liquidating assets to pay for probate costs, provided their primary residence is valued under $750,000.

Comparison: Old vs. New Probate Requirements

The practical impact of the new law is substantial:

Feature	Pre-2025 Requirements	2025 Requirements under AB 2016 (for deaths after April 1, 2025)
Small Estate Threshold	$166,250 before April 1, 2022; $184,500 after April 1, 2022	Up to $750,000 for personal residence plus $184,500 for other assets
Residence Qualification	No separate category for homes	Primary residence must be worth less than $750,000
Procedure Type	Formal court-supervised administration with creditor protection	Simplified court administration with no creditor protection
Professional Fees	Statutory percentage of estate value	Potentially significant savings through simplified procedures
Timeline	9-18+ months (average)	2-6 months (average)
Court Appearances	Multiple required hearings	Minimal or no court appearances for qualifying estates

When combined with the existing Probate Code section 13100 threshold of $184,500 for personal property (which increased from $166,250 for deaths occurring on or after April 1, 2022), families can now potentially transfer nearly $1 million in assets through simplified procedures, a threshold that actually reflects California’s true cost of living and property values, assuming the primary residence is valued at less than $750,000.

Perhaps most significant for working families: the section 13151 procedure is not subject to statutory fee requirements, potentially saving tens of thousands in legal costs for modest estates. This reform acknowledges that probate fees should be proportional to the complexity of the estate rather than simply extracting a percentage of family wealth.

The Step-by-Step Probate Process for Estates Under $750,000

The new California probate laws create a streamlined pathway for transferring property that few families fully understand. While most legal resources offer vague overviews, this section provides concrete guidance specifically designed for family business owners and property holders navigating these procedures for the first time.

A. Initial Assessment: Determining if Your Estate Qualifies

The first critical step is accurately determining if your loved one’s estate qualifies for simplified procedures. Under the new laws, qualification hinges on these key factors:

The primary residence must be valued at less than $750,000
The death must have occurred on or after April 1, 2025
The property must be located within California state lines
At least 40 days must have passed since the person’s death
The person seeking transfer must be legally entitled to inherit (either through will or intestate succession)

What many advisors fail to mention: business properties used primarily for agricultural or commercial purposes qualify differently than residential properties. For farming families or construction business owners, special valuation methods may apply that can help keep the property value under the critical $750,000 threshold.

B. Understanding the Valuation Process

One of the most crucial aspects of the simplified probate process is establishing that the primary residence is worth less than $750,000. This valuation process requires careful attention:

Market conditions can significantly impact property values
Location-specific factors affect valuation in different regions of California
Improvements and renovations may increase the assessed value
Deferred maintenance and property condition issues may decrease value
Specialized-use properties (like farms or workshops) require different valuation approaches

For families operating businesses on residential property, understanding how business-related modifications impact residential valuation can be particularly important. Many properties that initially appear to exceed the $750,000 threshold may actually qualify when properly assessed using appropriate valuation methods.

C. Filing the Petition to Determine Succession to Real Property

The petition process involves several precise steps:

Complete the Petition to Determine Succession (Form DE-310) with complete property description
Include documentation confirming the primary residence is valued below $750,000
Submit the petition to the probate court in the county where the property is located
Pay the required filing fee (typically $435-$480 depending on county)
Receive a hearing date (usually 4-8 weeks after filing)
Prepare for potential questions regarding property valuation

For family businesses, this petition must accurately describe business assets tied to the property—the equipment, infrastructure improvements, and operational structures, an aspect many general guides overlook.

D. Property Appraisal Process with Probate Referees

The property appraisal phase is where many simplified probates encounter delays:

The court appoints a probate referee to determine fair market value
The referee conducts an independent assessment (often without physically visiting the property)
Values are determined based on comparable sales and standard formulas
Business-use properties may require specialized valuation methods
Documentation must clearly establish that the primary residence is worth less than $750,000

A strategy rarely discussed: providing comprehensive documentation of deferred maintenance, structural issues, or specialized use limitations can significantly impact valuation—potentially keeping properties under the critical $750,000 threshold.

E. Notification Requirements for Heirs and Creditors

California law requires specific notifications:

All legal heirs must receive formal notice of the petition (even those not inheriting)
Known creditors must be formally notified
Public notice must be published in an approved newspaper

For Spanish-speaking families, ensuring legal notices are understood by all potential heirs is crucial to preventing later challenges.

F. Timeline Expectations Under the New Procedures

While traditional probate often takes 9-18 months, the simplified process for primary residences worth less than $750,000 follows a more predictable timeline:

Initial filing to hearing date: 30-90 days
Appraisal completion: 2-6 weeks
Court order issuance: 1-3 weeks after hearing
Recording deed transfer: 1-3 weeks after court order

Total expected timeline: 2-6 months for uncomplicated cases, a dramatic improvement over traditional probate timelines.

Potential Pitfalls and Why An Attorney Should Help

The simplified probate process under California’s new laws creates valuable opportunities for families, but it also presents unique challenges that can derail an otherwise straightforward transfer. These obstacles are particularly relevant for family business owners and property holders unfamiliar with the legal intricacies of estate transfers.

A. Common Mistakes During Property Valuation

Property valuation forms the cornerstone of qualifying for the simplified process, yet it’s where many families inadvertently sabotage their case:

Failure to consider functional obsolescence: Older properties used for business purposes often have layouts, systems, or features that reduce market value but aren’t apparent in standard appraisals
Overlooking deferred maintenance: Documenting needed repairs with contractor estimates can significantly impact valuation
Missing business-specific devaluations: Equipment installations, specialized modifications, or environmental considerations that might lower property value are frequently omitted from appraisal evidence
Incorrect comparable property selection: Probate referees often use standard residential comparables for unique properties like farms, workshops, or mixed-use buildings
Failure to properly document the primary residence value: Not providing sufficient evidence that the home is worth less than $750,000

Proper documentation with photographs, expert assessments, and detailed written explanations of value-reducing factors can make the difference between qualifying for simplified procedures or facing full probate.

B. Tax Implications Overlooked by Many Families

The tax consequences of property transfers through simplified probate can create unexpected financial burdens:

Property tax reassessments: While Proposition 19 provides some protections for inherited family homes valued under $750,000, business properties face different rules that can trigger substantial reassessments
Basis step-up complications: Mistakes in establishing the proper stepped-up tax basis can create capital gains tax liabilities when properties are eventually sold
Business entity ramifications: Properties held within family business entities may trigger different tax consequences than individually owned properties

According to the California State Board of Equalization, property tax reassessments following inheritance can increase annual carrying costs by thousands of dollars, a detail many families discover too late.

C. Creditor Claim Challenges

The streamlined process creates unique vulnerabilities around creditor claims:

Shortened creditor claim periods: While intended as a benefit, shortened periods create situations where legitimate creditors can later challenge property transfers
Incomplete creditor identification: Business-related creditors, particularly vendors with informal arrangements, may be overlooked in notifications
Medical expense complications: For deceased persons with Medi-Cal coverage, the state’s recovery rights may not be properly addressed
Disputed debt handling: The simplified process offers limited mechanisms for resolving disputed debts

Creditor claims left unaddressed can resurface months or years later, potentially clouding the title and creating financial liability for inheritors.

D. Family Disagreement Management

Even seemingly harmonious families frequently encounter conflicts during property transfers:

Unrecorded verbal agreements: Promises made by the deceased regarding property distribution that weren’t documented in legal instruments
Contribution-based claims: Family members who contributed to property maintenance, taxes, or improvements may expect compensation
Business continuity disputes: Disagreements about whether to continue, sell, or modify family businesses operating on inherited property
Cultural expectations vs. legal requirements: Traditional family arrangements that conflict with California’s inheritance laws
Disputes over property valuation: Disagreements about whether the primary residence is actually worth less than $750,000

These disagreements can transform a simple administrative process into contested litigation if not addressed preemptively.

E. Handling Complex Assets (Businesses, Multiple Properties)

The simplified process becomes exponentially more complicated with business assets:

Equipment valuation challenges: Determining fair market value for specialized equipment or fixtures
Customer/client list considerations: How to value and transfer intangible business assets
Operational continuity planning: Ensuring licenses, permits, and contracts transfer appropriately
Multiple property coordination: Synchronizing transfers when properties span different counties or involve different ownership structures
Mixed-use property complications: When the primary residence worth less than $750,000 also contains business operations

For construction companies, landscaping businesses, or agricultural operations, these complexities often require specialized legal knowledge beyond standard probate guidance.

Professional legal assistance provides protection against these pitfalls while often paying for itself through tax savings, proper creditor management, and prevention of costly disputes that commonly arise in seemingly straightforward cases.

Alternative Estate Planning Strategies Beyond Small Estate Procedures

While California’s new probate laws offer significant relief for estates with primary residences worth less than $750,000, savvy property owners should consider additional strategies that present even greater protection and control. These approaches are particularly valuable for family business owners and those with specialized assets like construction equipment, agricultural land, or service-oriented businesses.

A. Living Trusts as Probate-Avoidance Tools

Living trusts remain the gold standard for comprehensive estate planning, offering advantages that simplified probate procedures cannot match:

Business continuity protection: Unlike probate, which can freeze business operations during administration, trusts allow seamless transition of operational control
Flexibility for specialized assets: Trusts can include detailed instructions for managing equipment, client relationships, and business goodwill
Multi-generational planning: Particularly valuable for agricultural properties, trusts can establish successive management across generations
Value-threshold protection: Trusts work regardless of whether the primary residence exceeds the $750,000 threshold

What many advisors overlook: industry-specific trust provisions can preserve valuable business relationships during transition. For construction company owners, provisions maintaining bonding capacity and contract fulfillment can preserve business value that might otherwise be lost during probate.

According to the American Bar Association, properly structured trusts can reduce administrative costs by 50-70% compared to even simplified probate procedures while providing substantially more control over asset distribution.

B. Transfer on Death Deeds for Real Property

California’s Transfer on Death Deed (TODD) option provides a simple, cost-effective alternative for real property transfers:

Simplicity advantage: Requires only proper execution and recording during lifetime
Revocability benefit: Can be changed or canceled until death without beneficiary consent
Cost-effectiveness: Typically costs less than $100 to prepare and record
Threshold independence: Works for primary residences regardless of whether they exceed the $750,000 value limit

A rarely discussed advantage for Spanish-speaking property owners: TODD forms are available in Spanish through many county recorder offices, reducing potential language barriers and misunderstandings about property transfer intentions.

C. Joint Tenancy Advantages and Disadvantages

Joint tenancy with right of survivorship offers immediate transfer upon death but comes with unique considerations:

Business liability exposure: Adding family members to business property titles may expose assets to their personal creditors
Property tax reassessment triggers: Unlike other transfer methods, adding joint tenants may trigger immediate property tax reassessments
Control limitations: Joint tenants have immediate ownership rights, potentially complicating business operations
Value threshold irrelevance: Transfers happen automatically regardless of whether the primary residence is worth more or less than $750,000

For family businesses, a critical but seldom discussed alternative is entity-based ownership with transfer provisions, which can grant survivorship benefits without the liability and control disadvantages of joint tenancy.

D. Beneficiary Designations for Non-Probate Transfers

Strategic use of beneficiary designations extends beyond traditional financial accounts:

Business insurance policies: Directing business continuation insurance to specific successors
Equipment financing payoffs: Insurance designated to clear equipment loans for next-generation owners
Operational accounts: Ensuring working capital remains accessible for business continuity
Supplemental transfer methods: Can work alongside small estate procedures for primary residences worth less than $750,000

For contractors and service business owners, properly structured beneficiary designations can ensure equipment remains operational without interruption—a crucial factor in maintaining business value during transition.

E. Strategic Gifting During Lifetime

Systematic lifetime gifting offers both tax and practical advantages:

Business interest transfers: Gradual transfer of business ownership interests
Operational training opportunity: Hands-on transition of knowledge alongside asset transfers
Tax-advantaged wealth transfer: Annual gift tax exclusions ($18,000 per recipient in 2025)
Reduced probate estate: Systematic reduction of probate-subject assets
Value threshold management: Can help keep primary residence value below the critical $750,000 threshold

A strategy particularly effective for farming families: structured equipment gifting programs that transfer operational assets while providing mentorship in equipment use, potentially qualifying for additional agricultural tax incentives.

The most effective estate plans typically combine several of these strategies, creating layered protection that addresses both probate avoidance and business continuity concerns. While the new simplified probate process makes valuable protection available for primary residences worth less than $750,000, these complementary strategies offer comprehensive security for family legacies.

Frequently Asked Questions About New California Probate Laws

What are the new probate thresholds in California for 2025?

In 2025, California’s probate thresholds include two key components: a $750,000 threshold for primary residences (applicable for deaths occurring on or after April 1, 2025) and a $184,500 threshold for other assets (which increased from $166,250 for deaths occurring after April 1, 2022). These thresholds determine which estates can use simplified probate procedures. When combined, these thresholds allow estates with nearly $1 million in total assets to potentially avoid full probate administration, provided the primary residence is worth less than $750,000 and the death occurred after April 1, 2025.

How do I know if my family home qualifies for simplified probate in California?

To qualify for simplified probate under the new laws, your family home must meet several criteria: 1) It must be the decedent’s primary residence, 2) It must be valued at less than $750,000, 3) At least 40 days must have passed since the person’s death, and 4) The property must be located in California. The valuation is typically conducted by a court-appointed probate referee who will determine the fair market value based on comparable properties and other factors.

Does AB 2016 apply to all properties in California?

No, AB 2016 does not apply to all properties. The simplified procedures apply specifically to a decedent’s primary residence valued under $750,000. Other real property, such as vacation homes, rental properties, or commercial buildings, would not qualify under this specific provision. However, these other properties might qualify under different provisions if their value falls below other applicable thresholds.

How long does the simplified probate process take in California?

Under the new procedures for primary residences worth less than $750,000, the simplified probate process typically takes 2-4 months from start to finish for uncomplicated cases. This timeline includes approximately 30-60 days from initial filing to hearing date, 2-4 weeks for appraisal completion, 1-2 weeks for court order issuance after the hearing, and 1-2 weeks for recording the deed transfer. This represents a significant improvement over traditional probate, which often takes 9-18 months.

Can I handle a simplified probate without an attorney in California?

Technically, yes, you can handle a simplified probate without an attorney in California. The court provides the necessary forms, and the process is designed to be more accessible than full probate administration. However, even with simplified procedures, potential pitfalls exist, particularly regarding property valuation, tax implications, creditor claims, and family disagreements. Many families find that professional guidance helps prevent costly mistakes and ensures the process goes smoothly, especially when business assets are involved.

What happens if my property value is right at the $750,000 threshold?

If your property value is close to the $750,000 threshold, the official appraisal by the probate referee becomes crucial. Property values can fluctuate based on market conditions, property condition, and other factors. If the official appraisal comes in even slightly above $750,000, the estate would not qualify for the simplified process under AB 2016. In borderline cases, providing documentation of deferred maintenance, structural issues, or other value-reducing factors can be important. Some families choose to obtain a preliminary appraisal before filing to assess whether the property is likely to qualify.

How does the new California probate law affect property taxes?

The new probate threshold does not directly change property tax reassessment rules. Under Proposition 19, inherited family homes may receive some property tax protections if certain conditions are met, including that the heir uses the property as their primary residence. However, business properties and non-primary residences typically face different reassessment rules. The simplified probate process may make the transfer more efficient, but it doesn’t alter the underlying property tax rules. Consulting with a property tax specialist is advisable to understand the specific implications for your situation.

What happens to the mortgage on a home that goes through simplified probate?

When a home with a mortgage goes through simplified probate, the mortgage generally remains attached to the property. The new owner(s) will either need to continue making the mortgage payments, refinance the loan in their own name(s), or sell the property to pay off the debt. Most mortgages contain a “due on sale” clause that technically allows the lender to demand full payment when ownership transfers, but in practice, many lenders will work with inheritors, especially family members who continue making regular payments. Communication with the mortgage lender early in the process is advisable.

Can creditors still make claims against estates using simplified probate?

Yes, creditors can still make claims against estates going through simplified probate. While the process is simplified, it doesn’t eliminate creditor rights. However, the claim period is typically shorter than in full probate. Creditors must be properly notified, and the simplified process provides less formal mechanisms for resolving disputed debts. This is one reason why consulting with an attorney is often beneficial, as unaddressed creditor claims can resurface later and potentially cloud the property title.

How does the simplified probate process affect small business owners in California?

For small business owners in California, the simplified probate process creates both opportunities and challenges. If the business owner’s primary residence is worth less than $750,000, it can be transferred more efficiently. However, business assets require special consideration. Equipment, client lists, contracts, and business goodwill all need proper handling during the transition. The simplified process has fewer formal protections for resolving business-related complications, making professional guidance particularly valuable for business-owning families. Additionally, proper business succession planning through living trusts or other methods may offer better protection for business continuity than relying solely on simplified probate procedures.

What alternatives should I consider instead of relying on simplified probate?

While the simplified probate process offers significant advantages for qualifying estates, several alternatives may provide even better protection and control. Living trusts remain the gold standard, offering comprehensive asset protection, privacy, and business continuity regardless of property values. Transfer on Death Deeds presents a simple option specifically for real property. Joint tenancy grants immediate transfer upon death but comes with potential liability and control issues. Strategic lifetime gifting can reduce the probate estate while providing tax advantages. For business owners especially, a comprehensive estate plan typically combines several of these strategies to address both probate avoidance and business continuity concerns.

What documents are needed for the simplified probate process in California?

While specific documentation requirements vary by county, the simplified probate process typically requires: 1) A certified copy of the death certificate, 2) The Petition to Determine Succession to Real Property (Judicial Council Form DE-310), 3) Property ownership documentation such as deeds or title documents, 4) Evidence supporting the property’s value being less than $750,000, 5) A copy of the will if one exists, and 6) Affidavits establishing the right to inherit if passing by intestate succession. All documents generally need to be in English, though translation services may be available through the courts.

Can Spanish-speaking families get assistance with the new probate procedures?

Yes, Spanish-speaking families can access assistance with California’s probate procedures. Many county courts offer Spanish-language services, including interpreters for hearings and translated informational materials. The California Courts Self-Help Center shares resources in Spanish, and many probate attorneys offer bilingual services. For agricultural workers and small business owners, some industry associations also provide multilingual guidance on estate matters. These resources can help ensure that language barriers don’t prevent families from benefiting from the new simplified procedures for properties valued below $750,000.

Protecting Your Family’s Legacy

The new California probate laws for properties under $750,000 offer valuable opportunities, but navigating them successfully requires careful planning and execution. The emotional strain of losing a loved one is difficult enough without the added stress of complex legal procedures, potential family conflicts, and the fear that assets built over a lifetime might be diminished through unnecessary costs or disputes.

Many families discover too late that simple mistakes in the probate process can lead to devastating consequences: homes lost to creditor claims, businesses unable to continue operations, or siblings locked in painful legal battles that destroy relationships forever. The simplified process, while helpful, still contains pitfalls that can trap the unwary.

A properly funded living trust remains the gold standard for most California families, particularly those with business interests or multiple properties. The investment in comprehensive estate planning typically pays for itself many times over—not just in financial terms, but in preserving family harmony during an already difficult time.

Don’t leave your family’s future to chance. Schedule a free discovery call with an experienced estate planning attorney who understands the unique challenges facing California’s property owners and small business operators. During this consultation, you’ll gain clarity on the best approach for your specific situation, whether that involves utilizing the new simplified probate procedures or implementing more comprehensive protection through trusts and other planning tools.

The peace of mind that comes from knowing your legacy is secure is truly priceless. Take action today to ensure your family’s prosperity continues for generations to come.

New 2025 California Probate Laws for Property under $750,000

Table of Contents