What happens when I do not have any estate planning documents in place? (Part 1)

The following question is often asked to me: “If I don’t do any estate planning documents then what will happen to my assets when I pass away?" This question often arises when one becomes overwhelmed with the process of doing proper estate planning or they do not want to think about their own mortality. Sometimes these individuals pass away without doing any planning at all and any assets that do not pass automatically by operation of law (such as a named beneficiary on a life insurance contract, a surviving joint tenant on a deed, or a beneficiary by a number of other methods), will go through the probate process and be subject to some specific provisions of the California Probate Code.

This situation is generally called dying intestate and it occurs when someone passes away without providing instructions to the court in a properly executed or holographic will. Many people fail to understand that the surviving spouse may not receive all of the assets that go through the probate of the intestate estate (especially if the decedent had property that is characterized as separate property instead of community property) as separate property is treated differently than community property. This often occurs because in many marriages the husband or wife will hold certain property before marriage and instead of changing it to be community property they continue to hold it as separate property during the new marriage. Under these facts, the separate property does not pass completely to the surviving spouse. Unfortunately I have had more than one client come to me in this type of situation and there is nothing they can do to keep the property from passing directly to the children of the marriage, the children from a prior relationship, or to the decedent’s other family members. If a beneficiary is a minor as well (under the age of eighteen in California), then this can add the extra expense of a proceeding to appoint a guardian over the estate of the minor. This reason alone is why it is very important to not only have a will in place, but also to avoid the Court system entirely by doing proper trust planning.

I will be writing several posts on this topic regarding the intestate provisions of the California Probate Code. If you have questions about how your own estate would be distributed under these provisions, do not hesitate to contact me to discuss them.