Many married couples believe that an estate plan is not necessary because when they pass, everything will automatically go to their spouse.
Not necessarily.
Community property
For married couples, property is classified as either community property or separate property.
Generally, community property is defined as all property acquired during the marriage, except for gifts and inheritances. Separate property is property acquired by one spouse before the marriage, or received during the marriage as a gift or inheritance. There are of course, exceptions to this definition, which is why this is a common area of confusion and why seeking an estate planning attorney is essential.
When one spouse passes away, the surviving spouse will inherit all community property.
But this may not be automatic.
Without an estate plan in place, we may need to go to court to confirm the property is community property and to transfer the asset to the surviving spouse.
For example, a spouse has a checking account in just their name. All the money in the checking account was wages earned during the marriage. There is no dispute that the money in that account is community property. And while the surviving spouse may be entitled to that property as community property, it's not automatic. Depending upon the amount in the checking account, the surviving spouse may need to file a petition in the Probate Court to get the money in the checking account transferred to them.
Another common problem area is real estate. If title is held as "Husband and Wife" or "Husband and Wife as Community Property" without specifying "with right of survivorship," the surviving spouse may need to go to Probate Court to get a court order transferring the remaining 50% of the real estate to them. Title does not automatically transfer upon the recording of an affidavit of death. The surviving spouse will need a court order.
Unfortunately, these problems are very common and most people don't know they exist.
Fixing these problems after a spouse passes away is much more expensive than if the couple came to us together and planned ahead.
Planning together as a couple
Another assumption is estate planning is not needed because property is owned in joint tenancy. Yes, a couple may not need to go to probate after the first death. But without further planning, probate will be necessary upon the second death. By planning now while both spouses are alive, the couple can plan together. This is essential for blended families or younger couples where there is a possibility of a subsequent marriage.
Planning needs to occur before something happens to you or your spouse.
By planning early, you avoid future conflict regarding decisions about how their property should be handled. We can also include protective language to protect the kids, or even the surviving spouse.
Estate planning is essentially life planning. We want to ensure that you are not surprised with additional barriers you didn't know existed. We help identify problem areas and work to address those problems so your plan and what you want is actually what happens.