My boyfriend and I are registered domestic partners. He is a widower, and I am a widow. Shortly after we meet he made out a living trust leaving everything to his son and two grandchildren. We live in his home which is part of the trust. If he dies do I get thrown out on the street? Do I have any recourse? I give him money every month which he deposits into his banking account. I am afraid
that if he dies, I will be homeless.
Carmen
Dear Carmen,
In general, the only rights you have with respect to your domestic partner's estate are those created by contract. In 1976, in the famous "Marvin v. Marvin" case, the California Supreme Court held that agreements for support between unmarried couples were valid, enforceable contracts. That means if your partner promise to provide for you for your lifetime in return for your companionship and support, then you can hold him to his word.
But that's easier said than done. An agreement for support should be in writing, because if your partner dies before you, his son and grandchildren aren't going to want to give you anything. In their eyes, you won't be the woman who loved and supported him in his declining years. To them you're just a gold-digger. Marvin agreements are also difficult to prove. In 1976, Michelle Marvin won the right to sue Lee Marvin for support, but in the end she still lost because she was unable to prove an agreement for support actually existed.
There is another way you may have a claim against part of your partner's assets upon his death. Last July, new changes to the way estates without wills are distributed. Domestic partners registered with the California Secretary of State are by default entitled to a share of their deceased partner's separate property just like a surviving spouse (usually one-third or one-half of the separate property). Unfortunately, this law probably does not apply to you, because your partner likely signed a pour-over will when he created his trust, and this would certainly not apply to any assets held within your partner's trust.
What you really need to do is to discuss your concerns with your partner, and try to get him to see the need behind making some provision for you upon his death. It could be a simple as a house trust allowing you to live in his home until your death, with you paying all of the expenses. It would not be too difficult to create an estate plan for your partner that provides for you while protecting the inheritance of his descendents.
Len & Rosie
Dear Len & Rosie,
My wife and I are both in our 50's. We are in the middle of buying a new home, and we plan to retire in a few years. We do not have a trust, and our wills are fifteen years old and out-of-date. Our net worth is now about $1.65 million. How should we hold title to our new home? We don't think we should want our two children on the title at this time.
Dan
Dear Dan,
You have good instincts. It is almost always a bad idea to add your children to the title of your home. If your children are on title and you ever want to sell your home or borrow against it, you'll have to ask them, hat in hand, to sign your home back to you. They may refuse. Even worse, if one of your children goes bankrupt, gets sued, or owes back child support, you may wind up with liens on your home of which you can be sure your children will not help you remove.
Sometimes it is useful to transfer property to children, or into irrevocable trusts in a child's name as trustee, especially if you are on Medi-Cal benefits or will likely need long term nursing home care. But it is important to understand that giving your home away means giving up control of your most important asset. This is not something to be undertaken lightly, and should be done only when you are willing to allow your children to make the decisions.
You and your wife should probably title your new home as "husband and wife, as community property with right of survivorship." This will allow your home to avoid probate and benefit from a full step-up in cost basis on the first death of you or your wife. But that will not avoid probate on the surviving spouse's death. You need a trust to do that.
If the total value of the surviving spouse's estate is worth the $1.65 million that the two of you own total, a lucky trusts and estates attorney is going to earn a probate fee of $29,500. Probate fees are set by statute and are based on the gross value of the decedent's estate (before loans and expenses are subtracted). And most of the time, the estate's attorney will also earn "extraordinary" fees, for doing "extra" work such as getting a court order authorizing the sale of your home during the probate. Creating a trust now will be more expensive than making new wills. But since assets held in trust avoid probate, your children will save both time and money after you and your wife pass away.
Len & Rosie
Dear Len & Rosie,
My husband is a beneficiary of his mother's trust. He will not receive his share outright. Instead, she is leaving him his share in a trust that continues until his death. Then, the trust goes to our children, leaving me nothing. I have been with my husband for 38 years and some of my husbands siblings have been married as many as four times. I don't understand why she is treating me this way. Is this legal?
Louise
Dear Louise,
A fundamental rule of law is that blood is thicker than water. Most of the time, parents do not make any provision in their wills or trusts for their sons and daughters-in-law. There are, of course, happy exceptions to this rule and one would hope that your mother-in-law would reward your 38 years of fidelity by cutting you in for a share if your husband dies. But that's her decision to make.
There are many reasons why your mother-in-law wouldn't want to leave assets to your husband outright. Depending on how wealthy she is, and how wealthy you and your husband are, it may make sense to leave assets in a trust that will pay out to the grandchildren so that her assets will not be hit with an estate tax double-whammy - being subject to estate tax both on her death and on her son's death.
Or maybe your mother-in-law doesn't want to look down from heaven and see a son or daughter-in-law driving a Lexus that she bought and paid for. Keep in mind two things. First, your mother-in-law does have the right to do what she wants with her assets. She doesn't have to leave anything to an in-law, despite the length of your marriage. The bottom line is that your mother-in-law doesn't have to be fair about it. Second, if your mother-in-law were to die without a will or trust, and your husband was already deceased, then your husband's share would pass to his children by default. You would still get nothing.
Maybe your mother-in-law is treating you the same as her other in-laws because she does not want to be perceived as unfair. We do not recommend that you outright ask her to cut you in for your husband's share. That could make her angry enough to disinherit your husband outright. If your husband agrees with you, what he ought to do is to speak to his mother about his concerns for your financial security after his death, and maybe he'll be able to convince his mother to let you benefit from the income earned by the trust until your death, after which everything would still to go her grandchildren.
Len & Rosie
Dear Len & Rosie,
I was nineteen years old in 1940 when we married. After more than 64 years of marriage I woke up one morning and my husband was gone. He had died peacefully, they said, in his sleep. It is still hard trying to go on without him. But an insurance company has made my life a living hell. Seven years ago we bought an annuity with $80,000 of our savings hoping for a better return than our bank accounts. But when I notified the insurance company of my husband's passing they said I no longer have any rights under our contract. They said IRC section 72(s) mandates that the beneficiaries we had named are now the owners of the annuity. The IRS representatives say they have nothing to do with this kind of annuity. I appealed to the California Insurance Commissioner. They said that the insurance company properly responded to my complaint and that the commission would do nothing further. I need to get my $80,000 plus interest back as was our intent to do before my husband passed away. Can you help me?
Virginia
Dear Virginia,
The federal statute the insurance company cited has to do with the requirements that annuities must meet in order to qualify for tax-deferred status. All it really means is that if the annuity was already making payments to your husband, then it can continue to do so on the same schedule. If the annuity was deferred (not making payments) then it must be distributed within five years, unless the surviving spouse was named as the annuity's designated beneficiary.
Clearly, your problem is that the annuity was in your husband's name alone, and for some reason he named someone other than you as beneficiary. The insurance company is saying that the annuity must be paid out to the beneficiaries named by your husband. They may be half right.
If the annuity was purchased with community property, and if you did not sign a spousal waiver on the annuity beneficiary forms, then half of the annuity belongs to you. You may have to sue the insurance company and the beneficiaries to get it, but you should win. However, your husband's half of the annuity will still pass to his designated beneficiaries unless they agree to turn it over to you.
On the other hand, if the annuity was purchased with your husband's separate property, assuming he had any after 57 years of marriage, or if you signed off on his choice of beneficiaries when the annuity was purchased, then there is little you can do. Your only option at this point would be to sue the insurance agent who sold you and your husband the annuity for negligence on the theory that he or she didn't fill out the beneficiary forms the way the two of you wanted. The chances of winning such a case are not so good.
You should sit down with a lawyer and review the annuity contract. If you do have a right to half of the annuity you need to get a letter in to the insurance company as soon as possible, because it will be a lot harder to get your share of the money from the beneficiaries once they get their hands on it.
Len & Rosie
Dear Len & Rosie,
I have just discovered that my husband put our three properties into a revocable trust. In December, 2002, he put them into a trust and now only his name appears on title. Does this mean I am no longer a joint tenant? Does this mean upon death or divorce I would not have a claim to the properties? I suspect he is leaving everything to his daughter from a previous marriage. He and I have been married for 18 years. I am upset and do not want to confront him until I know what this all means.
Sue
Dear Sue,
The deeds that you acquired are the "current vesting deeds" to each of your properties. These deeds are simply the last recorded deeds in the chain of title to each property. While the deeds now say that the properties are in your husband's trust, this does not mean that you no longer own any interest in these properties. You need to dig deeper.
If the properties were titled in joint tenancy before your husband signed and recorded the deeds, then only his half of each property was transferred to his trust. You should still be on title to half of each property. but the joint tenancy was severed by your husband. If your husband dies before you, his half of each property passes in the manner provided by his trust. If you die before your husband, then your half of each property passes in the manner provided by your own will or trust. If you do not have one, get one.
You and your husband have a classic blended family. It is easy to understand that he wants to protect his son's inheritance. If you were to inherit everything upon your husband's death, it isn't unthinkable that you would disinherit his son and leave it all to members of your own family. You need to talk to your husband about this. It would be very smart for you to acknowledge that his son ought to inherit his half of the properties, at least after the surviving spouse's death.
You also need to come to terms with your husband over what will happen to your home when one of you dies. The last thing you should want is to have to move after your husband's death because his son wants to sell the home. Hopefully, you can convince your husband to leave you his half of your home, or at least a right to live in until your death, in return for you doing the same for him in your own estate plan.
Len & Rosie
Dear Len & Rosie,
I have been married for more than two years. My parents have died recently, and I have inherited their home. I want to remodel the house with money that I had saved up prior to getting married. If I do any remodeling work with my own money, does the house become community property? What can I do to make sure that it doesn't? Also, if I put more money into the accounts that I had prior to marriage, do those accounts become community property?
Gina
Dear Gina,
The basic rule of marital property is simple. Everything either you or your husband acquire during your marriage as a result of your labor is community property owned equally by both of you. And naturally, everything you acquire with community property is community property. Your separate property consists of everything you owned prior to your wedding, and anything you may receive as a gift or inheritance.
So the home is yours, and yours alone. But you can change that, either on purpose or by mistake. It is perfectly OK for you to take your separate property savings and remodel your home. That's using separate property to improve separate property, so there's no harm in doing that.
What you have to be careful about is mixing up community property with separate property. Your paycheck is community property, and so is his. If you deposit your paycheck into the accounts that hold your separate property savings, then you have commingled assets. Doing so does change your separate property inheritance into community property half owned by your husband. What it does mean is that if you and your husband were to get divorced, the burden of proof would be on you to show what portion of the commingled funds is 100% yours.
If you use community property to remodel your home, the home will still remain your separate property. Mostly. If you divorce, your husband will have a community property claim against part of the property, roughly corresponding to the community property used to fix up the home.
So be careful. Keep your separate property separate. Keep anything you owned prior to your marriage and your inheritance within accounts that are completely segregated from anything you and your husband own and you should be safe.
Len & Rosie
Dear Len & Rosie,
My mother is a very healthy 79-year-old who plans on getting married this summer. Her husband to be is also in good health. He has told her that he will put his house into trust for his children when he passes away but she will be able to live there until her death. He does not want her to contribute any money into the up keep of the house. Is there anything my mother needs to do before getting married to protect her assets and make sure she will always have a home to live in? His children like her and said she can live there until she wants to leave. I'm concerned that they may change their minds after their father is gone.
Karen
Dear Karen:
A first marriage is usually all "yours, mine, and ours" in which a couple pledges their fate together for better or worse. But this is a second marriage, and no matter how well your mother gets along with her future step-children today, if her new husband dies first, your mother will be the only thing standing between them and their inheritance.
Your mother and her fiancee should consider entering into a prenuptial agreement. It isn't wrong for your mother to trust her husband's children, but it's best to play it safe. A prenup shouldn't be needed to protect your mother's separate property. Everything she brings into the marriage will remain her sole and separate property if she does not commingle her assets with those owned by her new husband. And since both of them are retired, there should be no community property to speak of.
So why a prenup? One can guarantee your mother's right to reside in her husband's home after his death. If he breaches the agreement and dies first after having failed to provide your mother with a life tenancy, house trust, or right of occupancy, she can sue his estate or trust, or even his children, to enforce her rights under a prenuptual agreement.
If they decide to enter into a prenup, they each need their own separate and independent attorneys. These days, a perfectly valid prenup can be thrown out by the court if each party did not have their own attorney to advise them as to what rights they gave up by signing it.
In addition to the prenup, both your mother and her fiancee should update their wills and trusts after the wedding. A surviving spouse is automatically cut in for a share of the dead spouse's trusts and probate estates, unless the estate plan is amended to take the new spouse into account and spell out exactly what the new husband or wife (or registered domestic partner) should or should not inherit. Alternatively, your mother and her fiancee can amend their estate plans now in "contemplation of marriage" to identify what inheritance rights they will have with respect to one another.
The point here is that both of your families will be better off if your mother and her fiancee enter into this new marriage with a plan, instead of leaving everything to chance and hoping for the best.
Len & Rosie
Dear Len & Rosie,
Can I leave my property to my adult son and leave out my husband? Could my husband change this after my death? I am afraid that if I leave it to my husband he will disinherit my son and give everything to this children.
Becky
Dear Becky,
You are dealing with a problem common in "blended" families; second marriages with one or both spouses having children from prior relationships. On one hand, you and your husband are likely to want to provide for one another, especially if you have been married for a very long time. On the other hand, you don't want to look down from heaven to see your step-daughter driving a Lexus paid for with your money while your son gets nothing.
There are several ways to accomplishing your goal of protecting your son's inheritance. You can create your own estate plan, either a will or a trust, that leaves all of your assets, or a portion of them, directly to your son upon your death, whether or not your husband is still alive. You can even leave your son your half of the community property. If you decide to do this, it is important that you understand that everything you own in joint tenancy or in community property with right of survivorship with your husband will go to him if you die first. If you have any jointly held property, you need to transfer your half to your trust, or you need to sever the joint tenancies so your half will pass through probate to your son under the terms of your will.
If you want to provide for your husband too, your estate plan can hold your assets in trust for the benefit of your husband for his lifetime, passing them on to your son only upon your husband's death. Your son can be the trustee of this trust, which will put him in a good position to protect his inheritance after your death.`
Another alternative is for you and your husband to enter into a binding agreement about how all of your assets, and his, will be divided upon your deaths. You can make a "contract to devise property" under which you promise to leave everything to one another, and also promise to leave half to his children and half to your son upon the death of the survivor between you.
Keep in mind that if you create your own trust and put your assets into it, chances are your husband is going to find out. Do not try to keep this a secret. You will be better off if you discuss your concerns with your husband and agree to create an estate plan that works for your entire family.
Len & Rosie
Dear Len & Rosie,
My mother-in-law wants to quitclaim her house to my husband, but she doesn't want my name placed on the deed. I guess she is afraid that in a divorce I would take half of the house. We have two young children and another house in both my husband's and my name so I'm not really bothered by this development. Should I be? Should I request that my children be put on the deed? Is this possible?
Mary
Dear Mary,
You should not be upset by this. Blood is thicker than water, as they say, and remember that the home is your mother-in-law's property, and she has the right to do with it as she pleases. The overwhelming majority of parents giving property to their children do not cut their children's spouses in for a share.
By default, anything you or your husband acquire during your marriage is community property. The principal exception to this rule is that gifts and inheritances are separate property. If your mother-in-law turns her home over to your husband, it will belong to him and him alone. Once your husband owns the home, he can transmute it into community property. Whether or not to do this is his choice and you should respect whatever decision he makes, just as you would want him to respect the decisions you make with regards to your own inheritance.
The children should not be put on the deed to the home, mostly because it would make the home subject to reassessment under Proposition 13. Transfers of property between grandparents and grandchildren can avoid a property tax reassessment, but only if the intervening parents (you and your husband) are already deceased.
The only thing about this plan that may not be such a good idea is that it is probably a bad idea for your mother-in-law to give her home away while she is still alive. She will lose control of her home. The step-up in cost basis that would otherwise happen on her death will also be lost, so your husband would have to pay a great deal of capital gains tax if he were to ever sell the family home. But if he were to inherit the home after his mother's death, the cost basis would be the property's date-of-death value and your husband could sell the home upon his mother's death and pay no capital gains tax.
Here's the best part: When you tell this to your mother-in-law, she'll see you as a loyal wife trying to safe her husband money instead of a greedy daughter-in-law trying to get her mitts on what's not hers. Before your mother-in-law signs over her home, both she and your husband should understand all of the tax consequences to doing so.
Len & Rosie
Dear Len & Rosie,
I recently married a man twenty-four years my senior. My husband is very active and healthy. If something was to happen to my husband and he does not have a will, am I protected as his wife with his assets are not in joint tenancy? He thinks he doesn't have to make a will, because California is a community property state. He has seven grown children. My concern is that without a will his children may take action against me after my husband's death. What are my rights as his wife if he passes without a will?
Alessandra
Dear Alessandra,
As a rule you should review and update your estate plan when there is a significant change in your family situation, such as a marriage, divorce, birth or death in the family. This rule suffers from perpetual bad timing. It is difficult to deal with the paperwork at times like these, because there is always something "more important" to deal with. But it has to be done.
California is a community property state, but everything your husband owned prior to his marriage with you is his separate property, including his pension if he's retired. If he dies before you without a will, you'll inherit the community property, but there won't be much of that. You will also inherit one-third of your husband's separate property, because he has more than one child, with the other two-thirds being divided among his surviving children and the living descendents of his children who die before him.
His estate would also have to be probated in the courts. Normally this is a disadvantage, but the silver lining behind this cloud is that you should be able to get family support payments during the probate. Of course these payments would end when the probate is finished, so this is not a permanent solution.
Your husband should not rely on the default provisions of intestate succession. He should create a will or a trust that spells out how he wants to provide for you and his children upon his death. Do not forget that he has a legitimate interest in protecting the family legacy of his seven children. He may not want to leave everything to you outright. But he should at least provide you with the right to reside in your home for a reasonable time after his death, perhaps even
