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California Estate Planning & Community Property: What You Need To Know

California's community property law generally attributes 50% of the assets acquired and income earned during a marriage to each partner. This has a direct and different effect on estate planning in California than it does in other states whose laws call for equitable distribution under common law. It can be a confusing area of the law, so we've boiled it down to what you need to know - with help from an expert in this area.

California Attorney Vincent J. Russo

In a recent interview, Vincent J. Russo, a California attorney whose practice consists of estate planning and probate litigation, told us that California's community property law is different than other states' laws that follow the common law doctrine of equitable distribution. He explained:

If I had a house in California and I was married to somebody, only half of that house is mine. The other half belongs to my wife, so if I am going to dispose of that to a third party besides my wife, such as giving it to my children, then they don't get the whole house. They only get part of it because of my wife's community property interest in that house. That being said, frequently what you see in California is what's called marital bypass trusts. What happens is that spouse A passes away before spouse B and spouse B lives on the remainder of what is in the trust.

Russo says that one of the things that he frequently does is requires spouses to sign off on it with a proper estate plan to make sure that the surviving spouse is adequately taken care of in the interim until that person passes away.

Moving to California?

We asked Russo whether he would advise someone who was moving to California from a non-community property state to have a new will created to make sure that their interests are protected. Here's what he told us:

I would. However, the state of California will acknowledge an out of state will. Even so, I would probably say it's a good idea as you are starting a new life, the property is going to change, other things are going to change, so you might as well revise it to comply with the California law. It's not mandatory, though.

The main reasons that I tell people to draft a will, a trust or some type of estate planning type of documents are when they got married, when they have children, when they are buying a house and have never had one before, when they are starting to accumulate assets, when they have a special needs child or something along those lines. They would be all good candidates for estate planning.

Estate planning, which includes wills, trusts, health care directives and probate issues, is a complicated area of the law. If you would like to speak with an experienced California estate planning attorney about your situation, please click here.

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