Community Property Question

[jyl]

Who is familiar with California law concerning a surviving spouse's interest in the couple's house purchased during the marriage, and if/how the deceased spouse can (before death) place the house's title in a living trust so that no interest in the house will go to the surviving spouse?

And who knows a good and not crazily expensive attorney in the SF Bay Area? This is sort of a combination of trust law and community property law.

As I am not dead, you may surmise the question does not concern me directly.

[KFC911]

Originally Posted by jyl

....

As I am not dead, you may surmise the question does not concern me directly.

I dunno....yer one of the sharpest guys here, have a pretty good background, known for planning ahead...and covering all the bases

[stomachmonkey]

Is the spouses name on the Title?

[Steve Carlton]

Years ago, a friend with reasonable experience in these matters very highly recommended Scott Haislet.

G. Scott Haislet

[Don Ro]

Originally Posted by stomachmonkey

Is the spouses name on the Title?

Same question.

[ossiblue]

We need some clarification/details about the situation. Is this a Revocable Living Trust? Is it a trust for only the deceased spouse? Is it a joint trust for the married couple?

California law establishes community property rights to a spouse if the asset is acquired during marriage. Even if the house does not have both names on the title, it is community property and the surviving spouse has claim to half of its value, not necessarily half of the ownership. It's possible the house was only in the name of one spouse, but that does not negate community property rights if it was purchased during the marriage. The single owner can pass the title of the house on to whomever he pleases, but the spouse is entitled to be compensated for half of its value.

Living trusts are essentially management agreements for one's assets. How those assets are managed and distributed upon death are part of the trust document. Still, the trust only deals with the assets of the party(s) who created it. If the house was in the name of only one spouse and that spouse died without a trust, the surviving spouse would still have claim to half its value as community property. Placing the house in a trust would not change that.

Yes, contacting a lawyer familiar with California community property law and trust agreements would be highly recommended.

[jamesnmlaw]

Applying the law is a lot like the smell of the crotch of an old person: just Depends.
On the title (deed) doesn't usually matter in community property (but, it depends).
In CA, if the married couple lived apart, intending to divorce, then the community might have been broken (depends again).
Was the 'domicile' in question located in CA?
Did the spouses enter into a contract breaking the community specifically in regard to the real property?
The law is black and white. Applying the law creates a big grey area between the black and white. The grey area is why God invented lawyers.
Your friend needs a good CA real estate and probate attorney. Gonna cost big bucks, more than likely.
Probable outcome: dead spouse created the trust for his sole & separate stuff and any potential interest he may have in the community (like, if the wife died first). His death breaks the community. The trust may only have any interest in his stuff, not the stuff from the community. That all goes to surviving spouse.
NB - I am not licensed in CA so I don't know doodly squat about community property law applied in CA. This information is not legal advice.
Your mileage may vary.

[stomachmonkey]

Originally Posted by ossiblue

We need some clarification/details about the situation. Is this a Revocable Living Trust? Is it a trust for only the deceased spouse? Is it a joint trust for the married couple?

California law establishes community property rights to a spouse if the asset is acquired during marriage. Even if the house does not have both names on the title, it is community property and the surviving spouse has claim to half of its value, not necessarily half of the ownership. It's possible the house was only in the name of one spouse, but that does not negate community property rights if it was purchased during the marriage. The single owner can pass the title of the house on to whomever he pleases, but the spouse is entitled to be compensated for half of its value.

Living trusts are essentially management agreements for one's assets. How those assets are managed and distributed upon death are part of the trust document. Still, the trust only deals with the assets of the party(s) who created it. If the house was in the name of only one spouse and that spouse died without a trust, the surviving spouse would still have claim to half its value as community property. Placing the house in a trust would not change that.

Yes, contacting a lawyer familiar with California community property law and trust agreements would be highly recommended.

All of which makes perfect sense and frankly is as it should be.

[mreid]

I would urge two things:

1. Do not relay on any state community property or estate laws to decide probate. Work with an estate planning attorney to set up the appropriate estate plan. My fil just went through this and a proper estate plan will create the outcome you desire, even if you’re not around.

2. Take forum advice as worth what you paid for it. Perhaps a steer in the right direction towards a good attorney is worthwhile, but use all other advice as simply input to be considered.

[dan88911]

I done business with this firm.

[dan88911]

Home

Oops!..there it is.

[jyl]

My understanding
- X and Y were married 1989
- During the marriage, Y worked outside the home, X stayed at home
- Y purchased their primary house before the marriage (jointly with siblings), as well as a second house e used as a rental (unclear if rental house was purchased with siblings)
- During the marriage, Y bought out the siblings' interest in the primary house
- During the marriage, Y made mortgage payments on the primary house and on the rental house. Payments made from Y's separate bank account. Unclear what the source of funds was, believed to be Y's wages.
- No written pre or post nuptial agreements signed by X
- Unknown if were alleged oral agreements
- Both houses believed to be held by Y's living trust.
- Believed that trust makes Y's child C (who is not X's child) the beneficiary, with X claimed to have no interest.
- X is beneficiary of Y's pension.
- X is bipolar and, while probably legally competent, has limited grasp of legal matters.
- Y died.
- X has been instructed by C to leave the house and not take any of Y's personal property (photos, books, etc)
-X just received 120 day notice of period to contest trust.

[jyl]

My understanding
- X and Y were married 1989
- During the marriage, Y worked outside the home, X stayed at home
- Y purchased their primary house before the marriage (jointly with siblings), as well as a second house e used as a rental (unclear if rental house was purchased with siblings)
- During the marriage, Y bought out the siblings' interest in the primary house
- During the marriage, Y made mortgage payments on the primary house and on the rental house. Payments made from Y's separate bank account. Unclear what the source of funds was, believed to be Y's wages.
- No written pre or post nuptial agreements signed by X, according to X (but unclear if X would understand such a document, X does not know what the word pre-nuptial means)
- Unknown if were alleged oral agreements
- X recalls signing loan documents for a refinancing of one of the house
- Both houses believed to be held by Y's living trust.
- Believed that trust makes Y's child C (who is not X's child) the beneficiary, with X claimed to have no interest.
- X is beneficiary of Y's pension.
- X is bipolar and 82 y/o, and, while not declared legally incompetent, has limited grasp of legal matters.
- Y died recently
- X has been instructed by C to leave the house and not take any of Y's personal property (photos, books, etc)
- X just received 120 day notice of period to contest trust.

[dan88911]

My understanding beneficiaries named on pensions etc,
take president over anything else including alleged oral agreements.

People some times forget to change beneficiary forums and yrs. later they pass away. And their heirs lose out.

You may want to consult an estate attorney that specializes in this kind of stuff.

[ossiblue]

Originally Posted by jyl

My understanding
- X and Y were married 1989
- During the marriage, Y worked outside the home, X stayed at home
- Y purchased their primary house before the marriage (jointly with siblings), as well as a second house e used as a rental (unclear if rental house was purchased with siblings)
- During the marriage, Y bought out the siblings' interest in the primary house
- During the marriage, Y made mortgage payments on the primary house and on the rental house. Payments made from Y's separate bank account. Unclear what the source of funds was, believed to be Y's wages.
- No written pre or post nuptial agreements signed by X, according to X (but unclear if X would understand such a document, X does not know what the word pre-nuptial means)
- Unknown if were alleged oral agreements
- X recalls signing loan documents for a refinancing of one of the house
- Both houses believed to be held by Y's living trust.
- Believed that trust makes Y's child C (who is not X's child) the beneficiary, with X claimed to have no interest.
- X is beneficiary of Y's pension.
- X is bipolar and 82 y/o, and, while not declared legally incompetent, has limited grasp of legal matters.
- Y died recently
- X has been instructed by C to leave the house and not take any of Y's personal property (photos, books, etc)
- X just received 120 day notice of period to contest trust.

Given the above, consultation with an attorney should be done, asap.

As a lay person, I see a potential claim by X when Y bought out the siblings' interest in the primary house, during the marriage. That establishes acquisition of an asset, at least a portion of an asset, during the marriage and that portion should be community property. Still, that does not give X any right to live in the house or claim to title, it only gives X claim to a portion of its value, which X can demand from the trust.

Time to lawyer up.

[vash]

Tenancy in common vs community property?

Chit! We just signed out RLT and Will; yesterday! No more ambiguity.

[matthewb0051]

Originally Posted by ossiblue

Given the above, consultation with an attorney should be done, asap.

As a lay person, I see a potential claim by X when Y bought out the siblings' interest in the primary house, during the marriage. That establishes acquisition of an asset, at least a portion of an asset, during the marriage and that portion should be community property. Still, that does not give X any right to live in the house or claim to title, it only gives X claim to a portion of its value, which X can demand from the trust.

Time to lawyer up.

The new 'facts' vary substantially from the original scenario. I concur with this analysis. Y's asset initially and possibly separate property IF it were kept separate during the marriage. However, when his salary was used during marriage to acquire the entirety of the asset the separate(ness) of the asset may be lost OR at least potentially a portion of it.

Dang, this is the kind of question you would get on the bar exam. Sadistic SOBs that write those test.

The thing about the pension is a red herring and likely has nothing to do with the house issue.

Just my issue spotting and certainly not intended or offered as legal advice.

I suspect this will not be easy or cheap but will certainly require legal expertise.