Who Are Your Heirs as Defined in California Law and Why Does It Matter (Part 1 of 3)?

If you live in California, then your heirs are defined by California law.  Your heirs are the people who will receive your assets after your death if you haven’t specified that while you were alive through a trust, will, etc.  Here and in the next two posts we will discuss distribution of your assets at death in that situation.  This is the first post in a three-post series.

If you die without specifying the people who will receive your assets after your death, then you are said to be “intestate”.

The word “intestate” technically means “without a will”.  There are many ways to specify the people to receive your assets after your death.  I have already discussed these options in prior posts of this blog.  We will discuss them in the third post of this series and in a later blog post.

First we will discuss who your heirs are.  They will receive your assets if you die without having specified the people to receive your assets after your death.

Your Heirs Are Your Closest Living Relatives

Your heirs are your spouse, children, grandchildren, parents, siblings, nieces and nephews, grandparents and so on, and in essentially that order. There are special rules that apply to spouses. Those rules depend largely on the characterization of the assets and the order in which the spouses die.

All of this discussion about marital assets in California applies to spouses of a married couple and also applies to the domestic partners of a registered domestic partnership. Trying to keep things simple, in this blog post I will use language regarding married couples and not registered domestic partnerships. All of that language applies to both.

A Brief Summary of Marital Asset Types in California

Special rules apply to transfers of assets to a spouse at death. These rules depend on whether the assets are:

1. Community property;
2. Quasi-community property; or
3. Separate property.

Essentially, community property are all assets acquired by either spouse during marriage and while living in California. (“Acquired” implies gained through personal efforts.) Employment income of either or both spouses is a perfect example of community property.

There are two exceptions to this.  First, assets received by gift or inheritance are the separate property of the receiving spouse (and not community property of both spouses).  Second, the income or assets generated by separate property assets also are the separate property of the spouse who owns the separate property asset.  That’s true even if received during marriage while living in California.

Likewise, quasi-community property are all assets acquired by either spouse during marriage while not living in California that would have been community property had the spouse who acquired the assets been domiciled in California at the time.  Community property and quasi-community property are treated exactly the same according to California law.

Because of that, in this blog post I will use language regarding community property and not regarding quasi-community property. All of that language applies to both.
Finally, separate property are all other assets.  The following are examples of separate property of the spouses of a married couple living in California:

1. All assets acquired by either spouse prior to marriage;
2. All assets received by either spouse during marriage by gift or inheritance;
3. The income or assets generated by separate property.

Everything else is either community property or quasi-community property.

Your Special Heir: Your Spouse Survives You

If you’re married at death, then your spouse is your primary heir. And again, the same applies to the domestic partners of a registered domestic partnership.  Here’s how it works:
Each spouse essentially owns half of each community property asset. At the death of the first spouse to die (the “deceased spouse”), the spouse still living (the “surviving spouse”) keeps her half of each community property asset. That part is simple.

What happens to the deceased spouse’s separate property and his half of the community property? It depends on the other relatives of the deceased spouse living at his death:

1. Deceased spouse died with no living children, grandchildren, parents, siblings, or nieces or nephews: In this case, the surviving spouse also receives all of the deceased spouse’s half of all community property and all of the deceased spouse’s separate property.
2. Deceased spouse died (a) with only one living child; (b) with no living child, and with children or grandchildren of only one deceased child; or (c) with one or more living parents, siblings, or nieces or nephews: In this case, the surviving spouse receives half of the deceased spouse’s half of all community property and half of the deceased spouse’s separate property.
3. Deceased spouse dies (a) with two or more living children; (b) with only one living child and with children or grandchildren of one or more deceased children; or (c) with living children or grandchildren of two or more deceased children:  In this case, the surviving spouse receives one-third of the deceased spouse’s half of all community property and one-third of the deceased spouse’s separate property.

Get Help from an Experienced Trusts and Estates Attorney

Planning ahead for transfer of assets after your death can be very complicated.  There are many factors to consider, including who you want to receive the assets.  Also consider how easy you want to make things for your relatives after you die.  If you don’t do this correctly, then you may create confusion and even conflict among relatives after your death.

Hiring an attorney experienced with California transfers of assets after death is critical for obtaining the results that you need.  In addition, the advice and guidance of an attorney experienced with transfers of assets after death is invaluable in these cases.

At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients with estate planning and transfers of assets after death in California.  Contact Meinzer Law Firm, P.C., in Torrance to assist you with your California estate planning or transfers of assets after death.

The next post will discuss your heirs when you are widowed at death.