California’s 2026 Probate Threshold Changes: Real Property Up to $750,000 Can Now Bypass Probate

Published: March 2026 | Author: Riefkohl Law
Category: Probate Law, Real Estate, Estate Planning

California has historically maintained one of the most expensive and time-consuming probate systems in the United States. Attorney and executor fees are set by statute, calculated as a percentage of the estate's gross value — not net value — which means fees are calculated before deducting debts, mortgages, or liens. For a $1 million estate, statutory fees alone can exceed $46,000 before accounting for any extraordinary fees the court may approve.

For 2026, California has substantially raised the thresholds that allow families to avoid formal probate. The most significant change: heirs can now bypass probate for estates containing real property valued under $750,000, up from the previous threshold of just $61,500. In a state where the median home price exceeds $700,000, this is a meaningful shift.

What Changed

Two threshold increases took effect for 2026. The small estate affidavit limit for non-real estate assets increased to $208,850, up from $184,500 in 2025. More importantly, heirs can now use the expedited small estate process if the estate's real property is valued under $750,000, provided that the accompanying cash accounts remain under the $208,850 threshold.

The old $61,500 real property threshold was effectively meaningless in modern California. Even the most modest condominiums in the state routinely exceeded that figure. The result was that virtually every California family that owned any real property — regardless of how modest — was forced into formal probate. The new $750,000 threshold changes this calculus for a significant segment of the population.Trust Administration Gets Easier Too

California also passed AB 565, which repealed and recast Probate Code Section 15804. This reform addresses a longstanding procedural bottleneck in trust administration.

Previously, when a trust modification required notice to contingent beneficiaries — such as unborn grandchildren or unascertained class members — fiduciaries were frequently required to petition the court to appoint a Guardian ad Litem (GAL) to represent those interests. GAL appointments are expensive, time-consuming, and add layers of complexity to what might otherwise be a straightforward trust modification.

AB 565 introduces robust "class representation" mechanisms. Living members of certain beneficiary classes can now legally represent and bind unborn or unascertained class members. The statute specifies who can bind whom, eliminating the procedural hurdle of GAL appointments and providing fiduciaries with a statutory shield from future claims by contingent beneficiaries.

For families administering multi-generational trusts in California, this reform may save thousands of dollars and months of delay in routine trust modifications.

Medi-Cal Asset Limits Are Back

One development that cuts in the opposite direction: as of January 1, 2026, California's Medi-Cal program reinstated strict asset limits for long-term care eligibility, reverting to the rules that were in place in 2023. During the pandemic-era relaxation, Medi-Cal had effectively suspended asset testing for many categories of care.

The reinstatement forces elder law practitioners to resurrect asset protection trust strategies to shield family wealth from state recovery efforts. For families with aging parents who may need long-term care, the timing of asset transfers and the structure of protective trusts becomes critical again.The Limits of These Reforms

The threshold increases are welcome, but they don't address the fundamental problem with California probate: the system itself. Statutory fees are calculated on gross estate value. Court proceedings are public. The process is slow. And for any estate above the new thresholds — which still includes the majority of California homeowners — full formal probate remains the default.

Consider a family that owns a home worth $800,000 with a $400,000 mortgage. The net equity is $400,000, but California's statutory probate fees are calculated on the gross value of $800,000. The fees alone could exceed $38,000. The new thresholds don't help this family at all.

Why Trusts Remain Essential in California

For California residents, a properly funded revocable living trust remains the single most effective tool for avoiding the state's probate system. Assets held in trust pass directly to beneficiaries without any court involvement. There are no statutory fees based on gross value. The process is private, and it is typically completed in weeks rather than months or years.

The key word is "funded." A trust that exists on paper but doesn't actually hold your assets provides no probate avoidance benefit. Your home, bank accounts, investment accounts, and other significant assets must be retitled in the name of the trust. For real property, this requires recording a new deed. For financial accounts, it requires updating the account's ownership or beneficiary designations.

Every year, California families discover too late that their loved one had a trust but never transferred their home into it. The result: full probate, statutory fees, and exactly the process the trust was designed to avoid.

What You Should Do Now

If you own real property in California valued under $750,000, the new threshold may allow your heirs to avoid formal probate — but only if the rest of the estate also falls within the limits. Don't rely on a threshold that your property may soon exceed as values continue to rise.

For most California families, the right answer is still a funded revocable living trust. If you already have a trust, verify that your home and major accounts are actually titled in the trust's name. If you have aging parents in California, the reinstatement of Medi-Cal asset limits makes a conversation about asset protection trusts more urgent than it's been in years.

Need help with California estate planning or trust administration? Contact Riefkohl Law — serving clients in Puerto Rico and across the United States.

riefkohllaw.com | hans.riefkohl@riefkohllaw.com

This article is provided for educational and informational purposes only. It should not be construed as legal advice. Consult with a qualified attorney regarding your specific situation.