Do Your Own Will If Spouse Wills Not

Question: In one of your recent replies to a woman who said her husband didn’t have a will you said that, should the man die, intestate (without a will), the state would split up his assets by formula, which would follow the law of succession in the Probate Code.

Could you elaborate on this as my husband absolutely refuses to write a will. I am in my late 50s and we have only one daughter, 20 and unmarried. Would she and I share equally, or would his parents and brothers and sisters also receive a portion? Also, what percent would the state be paid for dividing his property? If there were a will that I didn’t know about, which left everything to someone else, would it be valid?--K. L.

Answer: The community property status prevailing in California is pretty good protection for you, actually, according to Dr. Emily Card, a Los Angeles-based financial consultant specializing in women’s credit affairs.

Community property takes the position that property acquired during the marriage by either, or both, parties belongs to them jointly. The only exceptions to this, Card added, is property that you (or he) acquired separately before your marriage or through an inheritance received by either of you during the marriage.

What this means is that when he dies half the community property is already yours, and the other half is also yours because of the community property status. Anything that he might own separately (either because of having owned it individually before your marriage or that he acquired after marriage through inheritance) will, if he dies intestate, be split 50/50 between you and your daughter.

Card, who while affiliated with both USC and Harvard University, was instrumental in achieving passage of the Equal Credit Opportunity Act by Congress in 1974, does have a couple of suggestions for you, though: Draw up your own will to protect your daughter’s interests and, at the same time, set some money away, separately, in your own name. If the estate is big enough it could get snarled up in probate court and the assets could get frozen and you might find yourself stretched for cash. With funds set aside in your own name--ideally, enough to tide you over for a year--you won’t have this fear. The amount that the state skims for dividing the estate of someone dying intestate is set by law, Card said, but it’s not a horrendous percentage.

Knowing how your husband feels about wills, generally, it strikes both of us as highly unlikely that there is an earlier will about which you are uninformed. If there is, however, it’s a bridge that will have to be crossed, legally, when you get to it. But it doesn’t sound like a real threat.

Q: My 65-year-old husband owes $25,000 in credit cards and has no assets. I had my own home when we married and, since then, have bought a car and have purchased tax-free annuities through my job. When I retire next year I hope the annuities, plus my retirement fund, will provide me with a modest income.

I fear, though, that if he dies, his creditors will take over my hard-earned annuities to satisfy his debts. Is there some way I can protect myself from this fiscal disaster? He doesn’t seem to be concerned at all.--T. S.

A: The grasshopper and the ant, revisited. It would come as quite a shock to those credit-card companies who issued him this plastic to learn that he has no assets. We go back, again, to Emily Card with her many years coping with women’s credit problems, and she admits that this is a touchy matter. Your home, she assumes, would be safe from the creditors because your ownership of it predates your marriage and, therefore, isn’t a part of your community property. But the car and the annuities acquired since then could be vulnerable. It’s serious enough, she believes, that it would be worthwhile for you to consult with a lawyer and explore the possibility of setting up a so-called “spendthrift” trust which, in effect, would separate your funds from the community property and would prevent creditors from getting their hands on them. But there’s a nagging question in her mind that this may, or may not, be possible as far as annuities are concerned. It’s going to require a little legal research.

Meanwhile, of course, some concentrated nagging on your part to convince your husband that he should clean up his act and wipe out those debts seems to be in order.