HOW INTESTATE SUCCESSION WORKS IN CALIFORNIA

HOW INTESTATE SUCCESSION WORKS IN CALIFORNIA

How Intestate Succession Works in California

When someone neglects to draft a will, trust or any type of estate plan before they die, then the laws of intestate succession come into play and govern how the decedent’s assets would be distributed to any relatives. Basically, intestate succession means the government gets to control how the fruits of your labor are distributed to any surviving spouse, children, and other relatives.  

What Exactly is Involved with Intestate Succession?

In California, intestate succession sets forth the order in which spouses, children, and other loved ones could be eligible to inherit the assets of a loved one who passed away without leaving a will or any estate plan. For example, if a married individual who resides in California passes away without a will or estate plan, then state law dictates that any “community” property (i.e., assets acquired during the marriage) would be distributed to the surviving spouse. If the decedent also had “separate” property (i.e., any property not acquired during the marriage) then 50 percent would be distributed to the surviving spouse if the married couple had one child. The other 50 percent would go directly to the decedent’s child. The situation gets more complicated when the married couple had multiple children. In this scenario, the surviving spouse would receive one-third of the decedent’s separate property while the children would receive the other two-thirds of the separate property.

As you can see, the distribution of assets through intestate succession can get complicated. Even worse, your loved ones have recourse if they disagree with the distribution since the process is controlled by the state.

Intestate Succession Hierarchy

The specific hierarchy defining who gets what when someone dies without a will is set forth in California Probate Code § 6400-6455. Here is an overview of the statutory hierarchy for intestate succession in California:

  • If the decedent did not have a will or trust and was married with no children, then all assets would be distributed to the surviving spouse.
  • If the decedent created no will or trust and was not married but had children, then all assets would be distributed to the decedent’s children.
  • If there is more than one child, then assets are shared equally amongst the living children of the decedent. If a child predeceased the decedent, then any children of the predeceased child would receive their share.
  • If the decedent left no will or trust and was married with children, then the decedent’s community property assets would be distributed to the surviving spouse. The separate property of the decedent would be distributed to the surviving spouse and the children with 50 percent going to each if there is only child. If there are multiple children, then one-third of the separate property would go to the surviving spouse and two-thirds would go to the children.
  • If the decedent left no will or trust and has no spouse or children, then any assets would go to the decedent’s kin or heirs based on the closest relationship (e.g., parents, siblings, cousins, and so forth).
  • If the decedent left no will or trust and has no heirs or kin, then all assets would “escheat” (i.e., transfer) to the state. Yes, you read that correctly – the state gets to enjoy the fruits of your labor and keep your assets.

Eligible Property for Inheritance Under Intestate Succession

It is important to highlight the fact that intestate succession laws do not impact all property owned by a decedent. In fact, intestate succession only applies to property that would have passed through a decedent’s will.  This means it is typically reserved to assets the decedent owned exclusively in their name.

To put it another way, there are other important, and valuable, assets that would not be subject to intestate succession, including:

  • Any property you transferred to a living trust
  • The proceeds of a life insurance policy
  • Any savings you have in an IRA, 401(k), or other retirement account
  • Any securities held in a transfer-on-death account
  • Any funds held within payable-on-death bank accounts

The assets listed above will pass to the surviving co-owner or to a named beneficiary identified when creating a particular account (e.g., you will need to provide a named beneficiary when purchasing a life insurance policy).

Why You Should Create an Estate Plan

It is fairly common for people to neglect creating an estate plan since they do not want to confront answering uncomfortable and challenging questions like, “What happens to my assets and my loved ones when I die?” Nevertheless, putting off the creation of an estate plan means you are comfortable giving the proverbial keys to your kingdom to the government. Passing away without a will in California could even mean your assets would be distributed contrary to your wishes, since the distribution is governed by state statute.

Another important reason to take action and create an estate plan is to minimize the cost, delays, and significant loss of privacy that is inherent with intestate succession and the broader probate process. Let’s examine the common concerns with probate in more depth:

  • Lack of privacy and risk of public scrutiny – Any member of the public is able to access information from a probate court. For example, relatives and creditors could gain access to your probate records.
  • Significant expense – Probate fees can be significant, even for a relatively simply probate. In fact, attorney’s fees and court expenses may possibly take up to 4 percent of the total value of an estate.
  • Time delays – The average uncontested probate could take one year or longer to complete. The delays are typically associated with having to get approval from the probate court on important issues.

Ready to Take Action and Create an Estate Plan to Protect Your Assets and Your Loved Ones? Contact The Geller Firm Today

Going through intestate succession is typically not a welcome experience for the loved ones of a decedent. Why? Because they have virtually no control or input when assets are distributed via intestate succession. It also leaves a lingering question of whether the decedent’s wishes and preferences were respected or outright dismissed during the process. Do not let this happen to you. Take action by contacting an experienced and knowledgeable San Francisco estate planning attorney with The Geller Firm. Our law firm is ready and able to tailor an estate plan that meets your individual needs and objectives. Our trust and estate planning law firm is located in the San Francisco Bay Area and are proud to provide legal services in Lafayette, Orinda, Moraga, and Contra Costa County, along with San Francisco, San Jose, Oakland, and Pleasanton. Contact us today to schedule an appointment.