Beginning April 1, 2025, California will implement a new law that may allow certain heirs to inherit a deceased loved one’s home without going through the formal probate process. This new statute provides a simplified and cost-effective alternative for transferring ownership of a primary residence—but only under specific conditions.

What Is the Purpose of This New Law?

California’s probate courts are currently overwhelmed with filings, and the traditional probate process is often time-consuming, expensive, and emotionally draining for grieving families. This law was designed to reduce the burden on both the courts and the families by offering a faster method of transfer when the estate is relatively simple—specifically, when it involves a primary residence valued under $750,000 and no trust or will was created.

What Are the Requirements?

To qualify for this streamlined transfer procedure, two key conditions must be met:

  1. The property must have been the primary residence of the decedent at the time of death.
  2. The property’s fair market value must be less than $750,000, regardless of any outstanding mortgage.

Let’s break that down with some examples:

  • ✅ A $700,000 home where the deceased resided qualifies for the simplified process.
  • ❌ A $1 million home, even with a $500,000 mortgage, does not qualify—because the market value exceeds the cap.
  • ❌ A $600,000 income-producing rental property does not qualify—because it was not the decedent’s primary residence.

Why a Trust Is Still the Best Option

Although this new law offers relief in specific scenarios, establishing a trust and will remains the most effective way to control what happens to your assets. A trust allows you to:

  • Choose exactly who inherits your property
  • Avoid probate for all types of assets—not just your primary residence
  • Minimize disputes among family members
  • Protect your estate from unnecessary costs and delays

A Word of Caution: Medi-Cal Recovery

One important and unresolved issue is how Medi-Cal recovery will interact with this new process. If the decedent received Medi-Cal benefits and was over the age of 55, the California Department of Health Care Services (DHCS) may file a recovery claim against the estate. It is still unclear whether this simplified transfer procedure will protect against such claims, or if the state may attempt to recoup benefits by placing a lien on the property.

Until this issue is clarified, we advise caution when relying solely on this new method, especially in situations involving Medi-Cal recipients.

What Should You Do Now?

If a loved one has passed away and you have not yet opened a probate case, contact our office to explore your options. We can assess whether your situation qualifies for the new streamlined transfer process or whether a trust or probate proceeding is necessary.

We’re here to help you make the most informed and cost-effective decision for your family and your future.

Need Help Navigating This New Law?
Call our office today for a free consultation and find out whether you qualify for the new simplified home transfer process.