A method of palette management for palette coding in a video coding system receives input data associated with a current block in a high-level picture structure and initializes a palette predictor in the high-level picture structure before a corresponding palette of a first palette-coded block in the high-level picture structure is coded. If a palette mode is selected for the current block, the method applies the palette coding to the current block using a current palette and updates the palette predictor based on the current palette to generate an updated palette predictor for a next block coded in the palette mode.