What happens to assets if a will is invalid

I recently spoke with a client, Milt, who was devastated. He’d painstakingly crafted a codicil to his Trust, intending to leave a specific vintage car to his grandson. He thought he’d followed all the rules, signed it, witnessed it…but the witnessing was improper under California law. The codicil was invalid. Now, that car, and a significant portion of his estate, will be distributed according to a pre-2010 version of his Trust – a distribution he hadn’t intended for over a decade. The cost? A fractured family and a beloved heirloom going to someone who doesn’t appreciate it.

What Determines Asset Distribution When a Will is Deemed Invalid?

When a will is found invalid – whether due to improper execution, lack of testamentary capacity, undue influence, or fraud – California law dictates that the estate will be distributed according to the rules of intestacy. Intestacy means dying without a valid will. It’s a surprisingly common scenario, and the outcome can be far from what the deceased intended.

How Does Intestacy Work in California?

California’s intestate succession laws follow a strict hierarchy. First, the law looks to surviving spouses and children. If there’s a surviving spouse and children, the spouse generally receives the first $208,850 (as of 2025) plus one-half of the remaining property. The children divide the other half equally. The specifics, however, change dramatically based on the number of children, whether those children are from a prior marriage, and whether a surviving spouse is not the parent of those children. This is where things can get incredibly complex, and often, contentious.

What About Assets Held in Trust?

Milt’s situation highlights a crucial point: a will only governs assets that are not already titled in a trust or that lack beneficiary designations. Assets like retirement accounts, life insurance policies, and real property held in a properly funded Revocable Living Trust pass directly to the beneficiaries named in those documents, bypassing probate altogether. An invalid will has no effect on those assets. This is why, after 35+ years of practice as both an Estate Planning Attorney and a CPA, I consistently emphasize the importance of a comprehensive estate plan that incorporates trust-based strategies. The CPA side allows me to appreciate the step-up in basis available for assets held in Trust, minimizing potential capital gains taxes for your heirs. Proper valuation is also crucial, and my accounting background provides significant benefit in this area.

Can an Invalid Will Be “Saved” Through a Legal Doctrine?

Sometimes, even a flawed will can be partially or fully salvaged. California law allows for what’s called “substantial compliance.” If a will substantially complies with the legal requirements for execution, a court may excuse minor technical errors. However, this is not a guaranteed fix, and the burden of proof lies with the person seeking to validate the will. Moreover, even if the court finds substantial compliance, issues like a lack of testamentary capacity or undue influence will still invalidate the document.

What if the Estate Includes Real Estate?

Dealing with real estate adds another layer of complexity. If the invalid will attempted to direct the transfer of a home, and the value of that home exceeds the limits for a simpler transfer process, the estate will likely be subject to probate court proceedings. As of April 1, 2025, AB 2016 provides a streamlined procedure – a “Petition” for succession – for primary residences valued up to $750,000. However, the estate’s total non-real estate assets generally cannot exceed $208,850 to qualify. Be aware, the Small Estate Affidavit is strictly for real property under $69,625, such as timeshares or vacant land, and is a different process entirely.

What About Digital Assets and Bank Accounts?

In today’s world, digital assets and bank accounts are significant components of most estates. Without specific RUFADAA language (Probate Code § 870) in your Trust or Will, service providers like Coinbase and Google can legally deny your executor access to your digital assets. Similarly, if combined ‘probate assets’ (excluding the AB 2016 residence) exceed $208,850 (the threshold effective April 1, 2025), they are subject to formal probate; a Will alone does not allow you to bypass this limit.

What If My Client Had a High Net Worth Estate?

For larger estates, the stakes are even higher. Fortunately, the 2026 ‘Sunset’ was averted by the OBBBA, which permanently increased the Federal Estate Tax Exemption to $15 million per person effective Jan 1, 2026. However, even with a high exemption, a poorly planned estate can result in unnecessary taxes and administrative burdens.

Protecting Your Assets and Intentions

The lesson from Milt’s story is clear: a carefully drafted and properly executed estate plan is essential. Don’t delay. It’s not just about avoiding probate; it’s about ensuring your wishes are honored and your loved ones are protected.

What does a California probate court look for when interpreting testamentary intent?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

Resources for Asset Management & Transfer

• Property Tax Reassessment: California State Board of Equalization (Prop 19)
  This page details the “Base Year Value Transfer” rules. It explains that heirs can only avoid a property tax reassessment if the inherited home becomes their primary residence and the Homeowners’ Exemption is filed within one year of the date of death.
• Real Estate Probate (AB 2016): California Probate Code § 13151 (Petition for Succession)
  The specific statute for the AB 2016 process. It outlines the requirements for using a court-approved “Petition” (not an affidavit) to transfer a primary residence worth $750,000 or less (gross value) for deaths occurring after April 1, 2025.
• Small Estate Affidavit: California Probate Code § 13100 (Personal Property)
  Access the statutory language for the “Small Estate Affidavit.” This procedure is strictly for Personal Property (cash, stocks, vehicles) and is limited to estates with a total value of $208,850 or less (effective April 1, 2025).
• Federal Estate Tax Exemption: IRS Estate Tax Guidelines
  The authoritative federal resource for estate valuation. It reflects the 2026 exemption increase to $15 million per person, which is critical for high-net-worth asset planning and determining if an IRS Form 706 is required.
• Unclaimed Assets: California State Controller – Unclaimed Property
  The primary portal for executors and heirs to search for “lost” assets—such as forgotten bank accounts, uncashed dividends, and insurance benefits—that have been remitted to the State of California for safekeeping.
• Business/LLC Compliance: FinCEN – Beneficial Ownership Information (BOI)
  The official portal for corporate transparency reporting. Most domestic and foreign entities (LLCs, Corps) must file a report. Executors must verify compliance, as failure to update control information within 30 days of death can result in federal civil penalties.