In California, a probate homestead allows a surviving spouse and children to remain in the deceased spouses home after he or she pass away. It may also have the effect of superseding the deceased spouse's wish to have his or her home be distributed to a non-family member upon death.

This could be invoked by a surviving spouse or children if the deceased spouse willed the home to another person to their exclusion. Although this may ultimately frustrate the deceased spouse's wishes, it may be used by a surviving spouse and minor children to protect the home from creditors, the beneficiaries of the deceased spouse's Will or his or her heirs at law.

Waivers

Like a family allowance, it's possible to obtain a waiver from a spouse of his or her right to request a probate homestead. In addition, provisions in your Will or Trust of your intent to leave the home to someone other than your surviving spouse may help prevent the court from ordering a probate homestead for the benefit of your surviving spouse.

Often, it is best to deal with waivers prior to, or at the beginning stages of marriage, as that is when future spouses are most amenable to such agreements. Once spouses have been married for a while, a request for a waiver may raise suspicions in cause partners to lose faith in one another.

The vast majority of clients we encounter never have concerns about a probate homestead. However, where the strength of a marriage has weakened, or where the parties are contemplating distributing property in a non-traditional way (i.e., leaving property for the benefit of someone other than the surviving spouse or children), it would be wise to consider the possibility of a probate homestead.

If a deceased spouse's estate is worth less than $20,000, it may be set aside and distributed to the surviving spouse and/or minor children. The relevant law is California Probate Code Sections 6600 to 6615. The purpose is to provide assets to a surving spouse and minor children, even contrary to what a Will may say.

To make use of the small estate set aside law, however, the "net estate" cannot exceed $20,000.

What is the "net estate" and how do you calculate it?

A "net estate" is the value of the assets includable in the estate minus any liens or encumbrances on the assets. For example, if the only asset of the estate is a parcel of land worth $100,000, and it has a mortgage of $90,000, then the net estate would be $10,000.

The estate does not include non-probate assets such as life insurance, retirement accounts, joint tenant accounts, assets subject to a probate homestead, and real estate outside of California.

Because of the relatively small amount of the small estate set aside, it usually doesn't have a significant impact on a deceased spouse's Will. However, a court has discretion in allowing for a small estate set aside.

Thus, if you want to leave your estate to someone other than your surviving spouse or children:

1. Make it clear in the Will
2. Request that the disposition not be affected by the small estate set aside laws, and
3. Clearly indicate assets have been provided for the surviving spouse and/or children outside of the probate estate.