AB 2016 and Your San Diego Primary Residence

I recently had a client, Lee, come to me absolutely distraught. Her mother had passed away leaving a beautiful home in La Jolla, appraised at $680,000. Lee believed she’d inherited it outright, avoiding probate. She’d already started making plans for renovations, only to discover a significant complication – the outdated probate rules were going to create a costly, months-long court battle. She’d assumed, incorrectly, that everything under $750,000 was automatically probate-free. What she didn’t realize was the nuance of AB 2016, and how it applies specifically to primary residences in San Diego County.

AB 2016 significantly expanded access to a simplified probate process for certain primary residences. However, it isn’t a blanket exemption. It creates a specific ‘petition’ process that requires court approval, even if the home falls below the $750,000 valuation threshold. Failing to understand this distinction can lead to substantial delays, legal fees, and potentially expose the estate to unintended liabilities. It’s a common misstep, and one I see far too often. The problem is, many folks incorrectly believe that simply owning a home below a certain value guarantees a swift, informal transfer.

As an Estate Planning Attorney and CPA with over 35 years of experience, I’ve seen firsthand how proper planning can save families immense stress and expense. The benefit of having a CPA involved in the estate planning process, specifically during real estate valuations, is invaluable. We don’t just determine a market price; we establish a defensible ‘step-up in basis’ which impacts future capital gains taxes. A conservative, well-documented valuation can drastically reduce the tax burden when the property is eventually sold, sometimes saving tens of thousands of dollars.

What does AB 2016 actually do for primary residences in California?

• Simplified Filing: AB 2016 allows eligible heirs to file a petition with the court to transfer ownership of a primary residence without full probate. This avoids the extensive inventory, appraisal, and creditor claim periods associated with traditional probate.
• Valuation Limit: The home must be valued at $750,000 or less as of the date of death to qualify for the AB 2016 process.
• Eligibility Requirements: The heir must have lived in the home as their primary residence for at least six months before the decedent’s death, or begin living there within six months of it. There are exceptions for periods of hospitalization or qualifying relocation.

How is the $750,000 valuation determined for AB 2016 purposes?

The valuation isn’t simply the Zillow estimate. It requires a formal appraisal, or, in some cases, a qualified broker price opinion. It’s this valuation that’s critical. If the appraisal pushes the value above the $750,000 limit, the estate reverts to full probate. That’s why the CPA’s expertise is so important – we ensure the valuation is accurate, defensible, and maximizes the step-up in basis. We also understand how potential improvements, deferred maintenance, and even neighborhood market conditions can impact the assessed value.

Furthermore, it’s important to understand the interplay with Proposition 19. While AB 2016 simplifies transfer, Proposition 19 dictates the property tax implications. Under Proposition 19, heirs only keep a parent’s low property tax base if they move into the home as their primary residence within one year. Critically, for 2026, the tax-free ‘basis boost’ is capped at $1,044,586 over the original taxable value; any value exceeding this adjusted cap results in a partial reassessment even if the child moves in.

This is where the planning gets complex, and why a comprehensive estate plan isn’t simply a matter of filling out forms. It requires a nuanced understanding of both probate law and tax implications. Lee, in the initial situation, was unaware of these interconnected rules and found herself facing unexpected hurdles and costs. Had she consulted with me beforehand, we could have structured her mother’s estate to avoid this entirely.

What happens if an estate doesn’t qualify for AB 2016?

• Full Probate: If the home’s value exceeds $750,000, or the eligibility requirements aren’t met, the estate will likely need to go through full probate.
• Personal Property Threshold: For deaths occurring on or after April 1, 2025, assets exceeding $208,850 generally trigger full probate. However, per Probate Code § 13050, this calculation MUST exclude all California-registered vehicles (regardless of value), boats, and up to $20,875 in unpaid salary.
• Timeline & Costs: Full probate can take 12-18 months or longer, and can involve significant legal fees, appraisal costs, and potential creditor claims.

Controlling Legal Standards Governing California Estate and Asset Transfers

• Probate & Court Procedure:
  California Courts – Wills, Estates, and Probate
  The official judicial branch guide for navigating the probate process; it provides updated 2026 checklists for determining if an estate qualifies for “Summary Probate” under the $208,850 personal property limit or the $750,000 primary residence threshold (AB 2016).
• Property Tax Reassessment (Prop 19):
  California State Board of Equalization (Prop 19)
  Access the official California State Board of Equalization website for detailed information about Proposition 19, its impact on property tax assessments, and relevant exemptions.
• Digital Asset Access (RUFADAA):
  California RUFADAA Law (Probate Code §§ 870-884)
  Access the full statutory text of the Revised Uniform Fiduciary Access to Digital Assets Act; it explains why executors are legally barred from accessing encrypted accounts, email, or crypto-wallets unless the decedent provided explicit “prior consent” in their estate plan.

How do California courts decide whether a will reflects true intent or creates ambiguity?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

To create a valid document, you must ensure the signer has legal capacity, strictly follow California will rules, and ensure you are correctly naming the testator to prevent identity disputes.

For California residents, understanding how intent, authority, and compliance interact is one of the most effective ways to protect family harmony and estate integrity. A will that anticipates probate scrutiny is far more likely to be honored as written and far less likely to become the source of unnecessary conflict.

Controlling Legal Standards Governing California Estate and Asset Transfers

• Probate & Court Procedure:
  California Courts – Wills, Estates, and Probate
  The official judicial branch guide for navigating the probate process; it provides updated 2026 checklists for determining if an estate qualifies for “Summary Probate” under the $208,850 personal property limit or the $750,000 primary residence threshold (AB 2016).
• Property Tax Reassessment (Prop 19):
  California State Board of Equalization (Prop 19)
  The definitive resource for understanding the “Parent-to-Child” reassessment exclusion; it outlines the strict one-year deadline for heirs to move into an inherited home as their primary residence to maintain the parent’s low property tax base.
• Advance Healthcare Planning:
  California Attorney General – Advance Health Care Directive
  Provides the official California statutory form and legal guidelines for appointing a health care agent; this resource emphasizes the necessity of combining a medical power of attorney with a HIPAA release to ensure doctors can communicate with family during an emergency.
• Federal Estate & Gift Tax:
  IRS Estate Tax Guidelines
  The authoritative federal portal for estate and gift tax reporting; this page reflects the 2026 “OBBBA” permanent exemption of $15 million per person, effectively replacing the previously scheduled Tax Cuts and Jobs Act (TCJA) sunset.
• Digital Asset Access (RUFADAA):
  California RUFADAA Law (Probate Code §§ 870-884)
  Access the full statutory text of the Revised Uniform Fiduciary Access to Digital Assets Act; it explains why executors are legally barred from accessing encrypted accounts, email, or crypto-wallets unless the decedent provided explicit “prior consent” in their estate plan.