California is a community property state. This means everything you earn or acquire during your marriage belongs to each spouse equally. Attempts to put more assets than are rightfully yours into a trust will not override the community property law.
You and your spouse are entitled to give your share of the property to whomever you choose. Many couples leave their share of the community property to their spouse after they pass. For spouses that do not create an estate plan, California will grant the deceased spouse’s share of the property to the surviving spouse. However, it doesn’t have to be this way.
If you create an estate plan that includes your share of marital community property, the beneficiaries will acquire these assets upon your passing. Sometimes, however, issues can arise from this action.
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All property a couple acquires during their marriage (except gifts and inheritances) is community property. Sometimes the determination of community property can get confusing. For example, if a spouse purchases a home using funds acquired before the marriage, that home may not be community property. This can complicate matters if the spouse who did not purchase the home attempts to add it their portion to a trust. If the spouse who did not purchase the home passes away with their portion in a trust, it could cause an unnecessary legal battle to decide who owns the portion of the estate.
Trusts and community property can become complicated. If you are thinking of adding any piece of your community property to a trust, consult with our wills & trusts lawyers.
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