Estate planning decisions often privilege family, and for obvious reasons: for most Americans, a well-considered estate plan can leave a surviving spouse, a child, or a caretaker with the resources they need to continue building their future. However, every estate is unique, and many Californians elect to leave assets to unrelated heirs.
Under state law, most adults are presumed to have the legal capacity to make informed decisions about their estate assets. While bequeathing an item, collection, or other possession to a friend can be as simple as writing or reconfiguring the terms of a will, inheritance decisions must always be made carefully in accordance with the Golden State’s probate code. Any mistake—no matter how minor—could have far-reaching consequences, which may culminate in unexpected outcomes.
California’s Community Property Laws
Every state has its own probate code. California, unlike many states, has community property laws. Under California’s legal system, every asset acquired during the course of a marriage is considered community property. When a marriage ends, whether through divorce or death, each surviving spouse is accorded exactly one-half of the remaining estate assets.
While California’s community property laws afford married couples a certain measure of asset protection, those laws can jeopardize estate plans that do not account for local law. Under most circumstances, the probate court will determine how community property can be divided.
Even if you have named a child, sibling, or friend as a beneficiary, the court cannot neglect California’s community property laws and may order that the surviving spouse share in a marital asset that’s bequeathed to a third party.
Leaving an Inheritance to Friends in a California Will
California’s community property laws provide surviving spouses with certain rights. Unless the married couple made an early decision to forfeit or otherwise limit these rights, they cannot be overridden by the provisions of a will.
However, Golden State residents can still make inheritance-related decisions about community property, inherited possessions, and separate property.
California’s community property laws mandate that, in the absence of any existing agreement between spouses, each partner receives a 50% share in acquired community property upon the dissolution of the marriage. Community property could include:
- An automobile or recreational vehicle that was purchased with marital income
- A family home that is titled to a married couple and was bought, in whole or in part, with community property income
- A financial account that was established after marriage
- A financial account that was established before marriage but has become inextricably “mixed” with community property income and assets
While community property laws can make it difficult to transfer a home, vehicle, or bank account to a trusted friend, a testator can still bequeath gifts from their share in jointly-owned assets.
Inherited possessions, including accounts, trust funds, and other assets bequeathed in a will, are typically considered a form of separate property to which the surviving spouse is not entitled to a co-equal share.
Community property states do not curtail estate-related decisions involving a testator’s separate property. Under the California Probate Code, separate property customarily could include:
- Assets owned before marriage, such as a real property, motor vehicle, or an art collection
- Gifts bequeathed solely to the testator, whether for their birthday, a work promotion, or another event
Most married Californians retain some separate property, irrespective of their age and the duration of their marriage. However, over time, it can become increasingly more difficult to differentiate between what should be categorized as separate property and what should be considered community property.
Avoiding California Probate
California law does not limit or otherwise restrict how residents distribute estate assets, provided they do not infringe on a surviving spouse’s entitlement to one-half of the remaining community property. You can bequeath gifts to a friend, charity, or another unrelated party through:
- A last will and testament
- An insurance policy
- An individual retirement savings account
- A revocable living trust
However, estate plans only work as intended when they comply with state filing requirements and the California Probate Code. If a will is not properly executed, or a revocable living trust abrogates state law, the estate could be placed into intestacy.
During intestate proceedings, a California probate court will distribute inheritances in accordance with a strict legal formula—one that privileges close living relatives and will not make exceptions for a lifelong friend, a preferred charity, or treasured pet.
The Law Firm of Kavesh, Minor & Otis, Inc. for Your Estate Planning and Probate Needs
If you need to create an estate plan, update your current plan, or handle the estate of someone who’s died, The Law Firm of Kavesh, Minor & Otis, Inc. is here to help. We only handle estate planning and post-death administration, and together, our attorneys have more than 70 years of combined experience in these fields.
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