Appraisals for Spousal Petitions

Emily just received notice her husband, David, passed away unexpectedly. They had a comfortable estate – a modest home, some retirement accounts, and a vintage car he cherished. Emily believed she was well-prepared, having assisted David in creating a simple estate plan years ago. However, she discovered a crucial error: the primary residence wasn’t formally titled in both their names as joint tenants with right of survivorship. Now, she’s facing a probate process she thought she’d avoided, with legal fees and delays potentially exceeding $30,000.

As an Estate Planning Attorney and CPA with over 35 years of experience here in Escondido, California, I frequently see situations like Emily’s. The good news is, California offers several streamlined options to avoid full probate, especially for spouses. But navigating these requires precision. Today, we’ll address a common question that arises: do spousal petitions – specifically the Petition for Succession under AB 2016 or the Spousal Property Petition under Probate Code § 13650 – require a formal appraisal of the assets being transferred?

Do I Need an Appraisal When Using a Spousal Property Petition?

The short answer is generally no, you typically do not need a formal appraisal when utilizing the Spousal Property Petition (Probate Code § 13650). This is one of its key advantages. This petition allows the transfer of unlimited assets to a surviving spouse, assuming those assets are characterized as community property or quasi-community property. The court focuses on verifying the community or quasi-community character of the assets, not necessarily establishing their current fair market value. However, this doesn’t mean valuation is irrelevant. If there’s a dispute among heirs regarding the characterization of property – for example, if someone claims a separate property contribution was made – the court may require evidence, which could include an appraisal, to resolve the issue.

What About the AB 2016 Petition for Succession – Do I Need an Appraisal Then?

The AB 2016 procedure, officially known as the Petition for Succession (Probate Code § 13151), is different. It allows for the transfer of a primary residence valued up to $750,000, along with personal property up to $166,250, without full probate. Here, an appraisal isn’t always required up front, but it’s highly advisable, and often indirectly necessary. While the statute doesn’t explicitly mandate a formal appraisal, the court will likely scrutinize the declared value, especially if it appears unusually high or low compared to comparable properties. The court wants to ensure the value aligns with California property tax rules, preventing undervaluation to reduce property taxes. A recent, professional appraisal provides strong evidence of good faith and can expedite the process.

What If the Estate Includes Assets Outside of the Home, Like Stocks or Business Interests?

Even when utilizing the AB 2016 Petition for Succession, remember the $166,250 limit on personal property. If the total value of personal property exceeds that threshold, or if there are assets left outside of the trust that aren’t covered by the petition, you may need to consider other methods for transferring those assets. This is where the Small Estate Affidavit (Probate Code § 13100) comes in. For deaths occurring on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit has increased to $208,850. This procedure allows successors to collect personal property without court involvement. However, this total MUST NOT include assets held in joint tenancy, trust, or those with named beneficiaries (POD/TOD), but MUST include the value of any real property unless that property is handled via a separate summary procedure.

What’s the CPA Advantage When Dealing with Spousal Petitions and Asset Valuation?

As a CPA as well as an attorney, I bring a unique perspective to estate planning. Beyond the legal mechanics of the petitions, understanding the tax implications is crucial. Accurately valuing assets – even for a spousal petition where a formal appraisal isn’t always required – is essential for establishing a correct “step-up in basis” for inherited assets. This means the surviving spouse inherits the assets at their fair market value on the date of death, potentially minimizing capital gains taxes when those assets are eventually sold. A professional appraisal, prepared by a qualified appraiser I regularly work with, offers the strongest support for this valuation with the IRS.

What if Assets Weren’t Properly Titled or Beneficiary Designations Were Outdated?

Let’s say David had a brokerage account he intended to pass directly to Emily, but he never updated the beneficiary designation. Or perhaps a piece of vacant land wasn’t retitled into the living trust. In these cases, a Heggstad Petition (Probate Code § 850) can be used to confirm the asset should be considered part of the trust, even though the paperwork wasn’t completed during David’s lifetime. For real property interests valued at less than $69,625 (the 2025/2026 adjusted limit), successors can file an Affidavit for Real Property of Small Value (Probate Code § 13200) with the Court Clerk and record a certified copy with the County Recorder, completely bypassing the need for a hearing.

Strong: Understanding the nuances of California probate law and the available streamlined procedures can save your loved ones significant time, expense, and stress.
Strong: Properly titling assets and keeping beneficiary designations updated are essential first steps.
Strong: When in doubt, a consultation with an experienced Estate Planning Attorney and CPA can provide peace of mind and ensure your wishes are carried out effectively.

What failures trigger contested proceedings and court intervention in California probate administration?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

To initiate the case correctly, you must connect the filing steps through probate petition process, confirm the location using jurisdiction and venue issues, and ensure no interested parties are missed by strictly following notice of petition rules.

A stable probate administration outcome usually follows from clarity, consistency, and readiness for court review, especially when multiple stakeholders and competing interpretations are involved. When documentation supports enforcement and timelines are respected, families are less likely to face preventable escalation.

Verified Authority on California Probate Alternatives

• Personal Property Affidavit ($208,850 Limit): California Probate Code § 13100 (Small Estate Affidavit)
  For deaths on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit has increased to $208,850. This procedure allows successors to collect cash, stocks, and personal items without court involvement. Warning: This total MUST NOT include assets held in joint tenancy, trust, or those with named beneficiaries (POD/TOD), but MUST include the value of real property unless handled via a separate summary procedure.
• Primary Residence Succession (AB 2016): California Probate Code § 13151 (Petition for Succession)
  You must distinguish between the Affidavit for Real Property of Small Value (strictly for property <$69,625) and AB 2016. Under AB 2016, a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ rather than full probate. This is a court-filed Petition requiring a Judge’s Order, though it is significantly faster than full administration.
• Spousal Property Petition (Unlimited): California Probate Code § 13650 (Spousal Transfers)
  This powerful alternative allows for the transfer of unlimited assets to a surviving spouse or domestic partner without full probate administration, regardless of the estate’s value. It is strictly for assets passing to a spouse and requires the property be characterized as community property or quasi-community property.
• Trust Assets & The “Heggstad” Petition: California Probate Code § 850 (Heggstad Petition)
  If a decedent intended an asset to be in their trust (e.g., listed on Schedule A) but failed to retitle it (the “Oops” factor), a Section 850 Petition can obtain a court order confirming the asset as trust property. This “cures” the title defect and avoids opening a full probate estate for that single asset.
• Vacant Land & Timeshares: California Probate Code § 13200 (Real Property of Small Value)
  For real property interests valued at less than $69,625 (the 2025/2026 adjusted limit), successors can file an Affidavit for Real Property of Small Value with the Court Clerk and record a certified copy with the County Recorder. This completely bypasses the need for a hearing or judge’s order.
• Vehicle & Vessel Transfers (DMV): DMV Form REG 5 (Affidavit for Transfer Without Probate)
  Vehicles and vessels may be transferred outside of probate using the Affidavit for Transfer Without Probate (REG 5). Critically, the value of the vehicle is excluded from the $208,850 small estate calculation, meaning a high-value car does not disqualify an estate from using summary procedures.
• Digital Asset Access (RUFADAA): California Probate Code § 870 (RUFADAA)
  Even in summary administration, digital assets can be locked. Without specific RUFADAA language (Probate Code § 870) in your Will or Trust, service providers like Coinbase and Google can legally deny successors access to digital wallets and accounts, forcing a full probate just to retrieve them.