If There’s No Will, the Way Is Complex

A young father recently told me that he didn’t need a will because if anything happened to him, his wife would inherit everything.

He wasn’t entirely right. His wife would inherit all of the couple’s community property, but under California law, his wife and young son would share 50-50 in any separate property he owned. If he had more than one child, one-third of the separate property would go to his spouse, and two-thirds would be divided among all his children (and to the children’s children in proportional shares if any of the children do not survive the parent).

Separate Property

If the husband has no separate property, and he dies without a will--called intestate--yes, his wife will inherit everything. She already owns one-half of the community property, and without a will, state law says she inherits the other half. But if the husband has separate property, the intestate rules require a portion of it be allocated to his children, or if they’re not alive, then their children. These same rules apply to the wife.

What is separate property? It is most everything that is not community property, so perhaps it is best to first understand community property.

California is one of the few states with community property rules. If you are married and reside in California, all of the real estate you buy in the state and anything else you acquire with funds you earn while you are married is considered community property. Each spouse owns what lawyers call an undivided half-interest in it. Another way of saying this is that you each have a one-half ownership interest in all of the property.

On the other hand, if you owned property before the marriage, and kept it separate--didn’t commingle it in with joint funds--it remains separate property, which you can leave in your will to anyone you choose. And all of the income from the separate property, if kept apart, remains separate.

The important thing to keep in mind here, amid all of this legal jargon, is that your spouse owns one-half interest in the community property, and if you die without a will, your spouse also inherits the other half.

In any case, there are tax advantages to leaving all of your property to your spouse. It is a tax-free exchange. It is also simpler for a spouse to actually get his or her hands on the property. California has a simplified Spousal Property Petition, which allows the spouse to receive his or her inheritance quickly without going through probate, although a court hearing is still required.

Even more important, without a will, a parent has no say in determining who will be the guardian of the children or in charge of their children’s finances.

A will allows a person to suggest who should be named as the guardian of his or her children. Technically, it is only a suggestion. After a person’s death, a court will make the final decision about a child’s guardian, but usually the judge will select the person recommended in the will, unless there is some compelling reason to pick a replacement.

Need Written Agreement

For example, a divorced parent with legal custody cannot provide that custody will be given to someone other than a surviving ex-spouse, unless the ex agrees in writing to such an arrangement.

In addition, if a minor inherits more than $2,500, a guardian must be appointed to be in charge of that financial estate. It does not have to be the same person who is the child’s guardian--it can be someone else, perhaps a financial consultant or neighborly accountant. This selection is not merely a suggestion; the person can be appointed in the will.

Klein cannot answer mail personally but will respond in this column to questions of general interest about the law. Write to Jeffrey S. Klein, Legal VIEW, The Times, Times Mirror Square, Los Angeles 90053.