Planning ahead created peace of mind. As of April 1, 2025, California raised the estate value threshold for residents needing a trust. You no longer needed a trust if your total estate was worth under $934,500 or your primary residence was under $750,000.
Assembly Bill 2016 (AB 2016) reflects modern property values and was designed to simplify probate for many families. Still, a revocable living trust remains a practical tool to avoid court, protect your privacy, and ensure someone you trust can manage your assets if needed. Knowing how the law applied to your situation helps you make the right call.
Key Changes Under AB 2016
Before AB 2016, the state encouraged residents to create a trust if their estate exceeded $184,500 to avoid probate.
As of April 2025:
- You may still want a trust if your primary home is worth over $750,000.
- You likely don’t need a trust if your total estate is below $934,500.
These updated limits reduce unnecessary legal steps for families with modest assets, especially those who only own a home.
Why a Trust Might Still Be the Right Choice
Even if your estate fell under the new thresholds, you might still benefit from establishing a trust. Here’s why
- Avoid probate: A trust allows your estate to bypass the court system, which often saves time and money
- Protect your privacy: Unlike wills, trusts don’t go through public court records.
- Plan for incapacity: A trust allows a person you choose to manage your finances if you can’t.
- Support unique family needs: Blended families, out-of-state heirs, or multiple beneficiaries benefit from clear written directions.
Many people don’t just want to meet the legal minimum—they want to protect their family’s future.
What Trust and Estate Accounting Involves
When you set up a trust, you also take on the responsibility of managing it properly. Trust and estate accounting ensures accuracy, legal compliance, and fairness for everyone involved
Here’s what you (or your trustee) need to do
- Asset valuation: Determine how much property, cash, and investments are worth.
- Track income and expenses: Keep detailed records of all financial activity within the trust.
- File taxes: Complete and file documents like IRS Form 1041 when the trust generates income.
- Distribute assets: Follow the trust’s instructions to give each heir what they’re due.
Staying on top of these tasks helps avoid disputes and keeps the process smooth.
What Steps You Can Take Now
If you’re not sure whether you still need a trust under the new law, take these practical steps:
- Check your home’s value using recent sales or county data.
- Calculate your total estate, including savings, real estate, and other assets.
- Schedule a consultation with someone who understands AB 2016 and estate planning.
The right plan depends on your goals—not just your net worth.
Final Thought
AB 2016 raised the threshold, but it didn’t erase the value of having a plan. A trust still gives you control, streamlines the estate process, and helps your loved ones avoid unnecessary stress.
At Smith Marion and Co., we guide families through changes like this every day. We listen, explain, and help you take action confidently. We’re ready to support you if you want clarity on your estate plan.