Quasi-community property in California refers to assets that would have been considered community property if a married couple had been residing in California when the property was acquired, affecting estate distribution for couples who relocated to California from other states.
California's Community Property System
California is one of several states with community property laws, where each spouse receives a co-equal, fifty-percent share in most assets acquired during marriage. However, couples who relocate to California face an additional estate planning consideration: quasi-community property.
Three Types of Property in California
California law broadly recognizes three forms of property:
1. Separate Property
Separate property includes all property owned by a California resident before marriage, as well as all property acquired by gift, bequest, or inheritance.
2. Community Property
Community property encompasses all property acquired by a couple during marriage. Under most circumstances, each spouse is accorded an equal share in community property assets.
3. Quasi-Community Property
Unlike some other community property states, California recognizes quasi-community property, which includes all assets that would have been considered community property if the married couple had been residing in California at the time of the property's acquisition.
How Quasi-Community Property Affects Estate Planning
Quasi-community property becomes particularly important in several situations:
- Couples who moved to California from common law states
- Military families with assets acquired in multiple states
- Business owners who relocated their operations to California
- Retirees who moved to California later in life
Distribution in Intestate Succession
Under the California Probate Code, quasi-community property is distributed as community property for purposes of intestate succession—with some minor differences.
When a spouse dies with quasi-community property, one-half of the deceased spouse's quasi-community property passes to the surviving spouse, who retains their existing 50% share in the quasi-community property.
Key Distribution Rules:
- The surviving spouse receives 100% of the quasi-community property
- This applies whether or not the deceased spouse had a will
- Children and other heirs typically have no claim to quasi-community property
- The property receives a "stepped-up basis" for tax purposes
Estate Planning Implications
Understanding quasi-community property is crucial for effective estate planning:
Will and Trust Planning
- Properly identify which assets are quasi-community property
- Consider the impact on intended distributions to children
- Plan for potential tax consequences
- Address surviving spouse's increased property ownership
Tax Considerations
- Stepped-up basis advantages for capital gains tax
- Impact on estate tax planning
- Coordination with federal estate tax exemptions
Professional Estate Planning Guidance
Quasi-community property rules can significantly affect your estate plan, particularly if you've relocated to California from another state. These complex laws require careful analysis and strategic planning to ensure your assets are distributed according to your wishes.
Our experienced team at Kavesh, Minor & Otis helps couples throughout Southern California navigate community property and quasi-community property issues. We provide comprehensive estate planning services that account for California's unique property laws and ensure your plan achieves your intended goals.
Whether you need a living trust, updated will, or comprehensive estate plan review, contact us today to protect your family's financial future under California law.
