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How living in California could impact your estate planning

On Behalf of | Jul 5, 2023 | Estate Planning |

Living in California, and particularly in Southern California, is a unique experience, with the weather, beaches, traffic and show business influence. What you might not realize is that a fairly unique California law can impact your estate plan, probate and trust administration.

California is one of just nine states with community property laws. The issue of community and/or separate property is most commonly associated with divorce, specifically property division between spouses, but also applies to probate matters as well. If you live in California — or just own assets here — it could have a big impact on how your assets will be distributed after you pass away.

Community property and estate planning

When a California couple gets divorced, each spouse is entitled to half of the couple’s community property (with some exceptions) and a spouse may be entitled to some of the other spouse’s separate property (things that belong to one spouse only).

When one spouse dies, unless a will or trust states otherwise, the surviving spouse generally is entitled to 50 percent of the deceased spouse’s assets. There are also income tax implications that don’t apply to property owned in marital property states.

Estate planning that fits your life

Like many Americans, you and your spouse may have lived in several states during your marriage. You might have lived in California your entire life, or maybe you moved here a few years ago after living in one or more non-community property states. Couples who acquired real estate, investments and other assets across multiple states need an estate plan that factors in how the spouses acquired the assets and how different states handle probate and inheritance. If not addressed, complications could arise that delay distribution of the assets or there may be unintended tax consequences.

These are all issues that are best addressed with an experienced probate and estate planning attorney.