I'm sorry about your father's death.
The whole purpose of Probate Code section 13100 (the small estates procedure) is to avoid having to open a probate. You are correct that the limit as of 1/1/2012 for using the small estates procedure is $150,000. See: http://leginfo.ca.gov/cgi-bin/displaycode?section=prob&group=13001-14000&file=13100-13116
Unless you open a formal probate, I believe you will have considerable difficulty opening an estate account - if you try, the bank will most likely ask you for copies of "letters testamentary", which you can only get in a formal probate proceeding. Therefore, your only choices are a joint account or for each of you to open a separate account.
One disadvantage to using a joint account is that if either you or your sister were to die before you finished settling your father's estate, the survivor would automatically become the sole owner of the joint account - meaning that if you passed away before things were settled, your family would not be legally entitled to any money remaining in that account and if your sister passed away before things were settled, her family would not be legally entitled to the money remaining in the joint account.
But if you're not concerned about the possibility of your respective families losing the money in the joint account, it is probably the simplest solution for a small estate.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
I need more information to answer this completely, but several things stand out. First, you should research whether the inheritance from his mother is really an asset of the estate. There is probably a survivorship requirement. Second, the threshold for avoiding probate is under $ 100,000, not $ 150,000. You are correct that you do not include a retirement account that passes by beneficiary designation. Third, as a general matter I recommend opening a separate bank account so that you can account for assets in and expenses out.
You should check with a local attorney and provide all the facts before making a decision about this case. Good luck.
If you and sister are beneficiaries of retirement, then it's not in estate or available to creditors. Same with joint tenancy property. If gma survived your father her 50k is out too.
A joint account would do just keep separate. Check retirement. There are. Benefits to leaving it in inherited Ira.
Requirement accounts can be transferred to the beneficiaries directly either in a lump sum (all taxable income) or by rolling-over the portion of the account to which the beneficiary is entitled ( a beneficiary IRA) with no taxable consequences. The $50,000 future pay out can probably be transferred directly to you and your sister and won't need a probate or administration. It can be handled if need be by an declaration of herisip under Probate Code Section 13101. Since there are no monies to deposit under the facts that you have provided, an additional account would not appear to be necessary.
The answer to the above question is not intended to offer legal advice and you should always check with an attorney of your choosing prior to taking any actions.