The decision of who inherits your property (and how) can either be made by you, or can be decided by the State of California. Let’s say that you never create a will or trust. Who would inherit your money and property?
Dying Without a Valid Will (Intestacy)
If you don’t leave behind any instructions for how you want your property divided (such as with a valid will or living trust), then California law steps in so that the probate court can distribute your property to your heirs. A person who dies without a valid will is said to have died “intestate.” In these situations, California’s intestacy laws apply. These laws decide which family members will inherit by creating a hierarchy. Sometimes things get more complicated, but here are the basics:
● If You’re Survived by a Spouse or Domestic Partner
Your surviving spouse or domestic partner will receive your full share of “community property” (your shared marital property as determined by California’s community property laws). You might also have your own “separate property” (usually this is property you owned before marriage or inherited while married). Assuming that your separate property never turned into community property, then your spouse or domestic partner will get a share of those assets. He or she will either get all, half, or a third of your separate property depending on whether you have certain relatives. Those relatives (usually children) would receive the rest.
● If There’s No Spouse or Domestic Partner
If you had children (or a grandchild from a child who died), then they’ll inherit your estate. If you didn’t have any children, then the hierarchy goes from parents, to siblings, to grandparents, to aunts and uncles, to cousins, and then more distant family members. Keep in mind that once there’s someone eligible to inherit, the probate court won’t give property to anyone who’s further down on the hierarchy. For example, if you have children, your parents will not inherit anything from you under the intestacy system.
What the Intestacy Rules Leave Out
When there’s no will or trust, the rules for distributing your property ignore many things that you probably think are very important. For example:
● Strained Family Relationships - Maybe someone who you wouldn’t want to inherit from you will under California’s intestacy rules.
● Protecting Adult Children (From Themselves) - You may have a child who’s over 18, but who’s likely to seriously mismanage his or her inheritance, or lose it to creditors. To avoid this situation, you’d probably want to establish a trust that can include safeguards.
● Some People & Organizations Can Never Inherit From You - Even if you’re in a long-term relationship, your significant other won’t be eligible to inherit from you if you didn’t marry or enter into a domestic partnership. Your friends, charities, and other organizations that you may want to leave a gift for also won’t receive anything.
● Leaving Loved Ones Out, Even If They’re Related - Your family member may not get to share in the inheritance, even if you would have wanted them to. California’s intestacy system is a hierarchy. Certain relatives (like a spouse or children) are higher up on the hierarchy than others (like parents, aunts, uncles, or cousins). Under this system, your property is meant to be inherited by the relatives who are as high up on the hierarchy as possible. As soon as there’s someone who can inherit, relatives who are lower on the list are shut out.
Create Your Own Plan Instead
If you create a will or trust, then you can usually decide who gets what and how. You’ll also be able to control how much they get. For example, even if you want your children to receive most of your property, you can still make gifts to a niece, friend, or others.
After you’ve made your will and trust, watch out for pitfalls that can lead to intestacy (or partial intestacy). In part, this means making sure all your property is covered by a valid estate plan. If you get new assets after creating your will and living trust, then let us know. For the same reason, any changes to your will or living trust need to be made carefully.
We’ll advise you on your best options, so you can learn about the benefits of estate planning. Remember, avoiding probate is not your only goal. Estate planning is about taking control, while also finding the best way to minimize any taxes. Get essential help with your will and living trust by contacting San Diego Law Firm’s experienced estate planning attorneys at (619) 794-0243.
