Pass your assets in the way that suits you and your loved ones
You want to make sure that your hard-earned assets go to the people you feel should have them — the family members and loved ones who mean so much to you. Here at the Law Office of Heath L. Baker, we help our clients manage their assets in the right way, ensuring maximum benefit for those special people you leave behind when you’re gone.
Read on to learn more, or reach out to our team to discuss your needs and set up your consultation.
What Happens to Your Assets When You’re Gone?
How you pass your assets when you’re gone depends on the provisions you make when you’re still alive. Let’s take a look at wills, trusts, and what happens if these provisions are not in place. Hopefully you learned quickly that “passing” your assets to the next generation is going to be costly; but setting up an agreement with yourself (a trust) to change title and ownership during your lifetime, so the next generation can use and enjoy your assets without additional time and money can be a pleasant going-away gift to them.
Passing Your Assets without a Will
Your will is a legal document that ensures you pass your assets in the way you want. This means all your funds, property, and other assets are distributed among those you have specifically named in your will. You may name your spouse, family members, close friends, or other loved ones in this document.
But what happens if you do not have a will? Your assets still need to go somewhere, so what will happen to them? Different states have their own rules that govern this. Here in California, there are very specific protocols that govern the next steps and who the Court will award your assets to..
If You Pass Away with No Will and Have No Family
If you die without a will and you don’t have any family, your property will “escheat.” This is a legal terminology that means your assets are taken into the state’s coffers — in other words, all your assets will go to the State of California.
However, this seldom happens in practice because of the way the law in California distributes property to any remaining relatives. In most cases, there will be family members to pass the assets to. According to California Probate Code Section 6400, “Any part of the estate of a decedent not effectively disposed of by will passes to the decedent’s heirs as prescribed in this part.”
If You Pass Away with No Will but Have Surviving Family
If you die with no will but you do have surviving family members, such as a spouse or children, your assets will be passed to these heirs under California state law.
The Probate Court will award between 66% and 75% of all the property to the surviving spouse, leaving the remaining amount to be divided among your children. A will and trust canprotect your property and hold it temporarily until it is time to pass those assets on to the people you have specifically named. This approach will also keep your distribution of assets closer to 50% rather than 25% of everything you have earned.
Irrevocable Trusts and Estates
An irrevocable trust is exactly what it sounds like — it is a trust that cannot be revoked or removed. This irrevocable trust allows you to keep your assets in place, even after your death. The beneficiary will receive the use of the assets but never “own” them, providing a layer of protection from future creditors or any instances of bankruptcy your children may encounter.
The trust also ensures that your property is protected from future divorce cases or court judgments. Your property can be handed out to those you specifically name in trust documentation after you have gone.
If You Pass Away with a Will but Only Name Your Spouse
If you name your spouse on your will but do not name your children, then everything is left to your spouse after you have gone. From here, your combined estates are passed equally to all children from both sides of the family.
Your named spouse will be able to change the distributions once the assets pass to them. This means they will be able to disinherit your children if there is no protection in place to prevent this within the will. A will cannot protect your children, only a trust can do that.
Passing Your Assets — Key Terms to Bear in Mind
There are lots of different examples of legal terminology associated with passing your estate. These can be a little confusing if you are not familiar with them, so we’ve provided a few key definitions and examples to keep in mind.
This is the time for which your heirs go on living after you have gone. To inherit under California’s intestate succession statutes, a person must outlive you by 120 hours. If you and your brother are in a car accident and he dies a few hours after you do, his estate would not receive any of your property (Cal. Prob. Code § 6403).
These are relatives who share only part of a family connection, like a half-brother or half-sister. “Half” relatives inherit as if they were “whole.” That is, your sister with whom you share a father, but not a mother, has the same right to your property as she would if you had both parents in common (Cal. Prob. Code § 6406).
These are relatives conceived before you passed away but were born after your death. Posthumous relatives inherit as if they had been born while you were alive (Cal. Prob. Code § 6407).
Relatives entitled to an intestate share of your property will inherit whether or not they are citizens or legally in the United States (Cal. Prob. Code § 6411).
This is a rule relating to any portion of the inheritance you gave to one of your heirs while you were still alive. If you gave a relative a gift during your lifetime, this gift is deducted from the relative’s share only if you made a writing at the time, indicating that, or the relative admits this in writing.
This rule relates to intentional killing, with regard to passing your estate. Someone who “feloniously and intentionally” kills you will not receive a share of your property (Cal. Prob. Code § 250).
Book Your Consultation Today
If you want to learn more about the best way to pass your assets or about any other aspect of estate planning and family law, reach out to our team today and book your consultation. While divorce and custody consultations are limited in time and free, potential estate planning clients will find they receive an education in planning and the consultation fee is applied to any plan that the client and Office agree upon.