The New Petition to Determine Succession to a Decedent’s Primary Residence.

Under new legislation (AB 2016), for decedents dying after March 31, 2025, the successors in interest to the decedent’s primary residence, if it has an appraised date of death value under $750,000, may use a new special court petition to determine succession to a decedent’s primary residence and so avoid a full-fledged probate administration. Strangely, the decedent’s primary residence does not have to be the decedent’s residence at time of death and the key term “primary residence” is undefined.

However, this only applies if the remainder of the decedent’s estate — excluding any non-probate assets that pass automatically to death beneficiaries (e.g., joint tenancy and death beneficiary accounts) — does not exceed the probate threshold (presently $184,500 in total gross value). When it applies, the successors in interest to the decedent’s estate can use this special petition to take title to the primary residence as co-owners, and would also use the separate affidavit procedure to take title to the decedent’s personal property and other items, including bank accounts (without death beneficiaries).

Presently, the existing petition to determine succession to real and personal property of a decedent with a small estate applies only if the total gross value of the decedent’s real and personal property (altogether) held in the decedent’s name individually does not exceed the current $184,500 threshold for a probate. Again, the foregoing does not include assets held in a living trust, in joint tenancy, or a transfer on death assets (such as, “TOD” deeds) which each avoid probate.

Moreover, the current petition can include succession to both real and personal property and is not limited to the decedent’s “primary residence” and can include other non-primary real property. However, as the value of most California real property well exceeds the $184,500 probate threshold the current petition has very limited application. It typically applies to vacant lots or lots associated with manufactured homes. The new petition replaces the old petition entirely.

Nevertheless, a probate is still required if the decedent’s other assets exceeds the threshold for probate (presently $184,500) even if the decedent’s primary residence is under $750,000. This typically happens because the decedent also owns other real property (e.g., rentals) and/or financial assets (without pay on death or transfer on death beneficiaries).

When a probate applies, the special petition to determine succession to a decedent’s primary residence is not permissible, unless the court appointed personal representative consents to such a petition.

Also, now that the petition to determine succession to real property in a small estate is narrowly applicable only to the decedent’s primary residence alone, what happens if the decedent’s small estate also includes real property (e.g., an undeveloped lot)? The affidavit procedure for real property of small value only applies if the gross value of such real property is under $61,500.

The new laws abolish the existing petition to determine succession to real property in a small estate. Thus, when the current petition is replaced, probates may be required for small estates where the value of the decedent’s other real property (besides the primary residence) exceeds $61,500 even if such real property is part of a small estate. Clearly some follow up legislation is needed.

When there are multiple successors in interest to the decedent’s primary residence they will each have to sign as a petitioner, the same as now. If the petition is granted, the successors in interest will then co-own the primary residence. Thus, to sell the residence they will all have to agree. Otherwise, as co-owners they will want a tenants in common agreement that allocates the shared use and responsibilities associated with co-ownership.

The new law does not end the need for living trusts or transfer on death deeds. One advantage of using a living trust, or transfer on death deed, is that it does not require a court petition. Also, with a trust, one person (the trustee) is in control and the primary residence can be sold, distributed, or held in further trust as provided in the trust. Also, a trust provides for contingency planning in the event of unforeseen circumstances. None of which is achieved by reliance on the new law.

The foregoing discussion is not legal advice. Anyone confronting such estate planning issues should consult with a qualified attorney. Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.