Intestate Succession and California

Intestate Succession and California

Testators with assets subject to California jurisdiction have several options available to protect their assets and distribute funds to identified heirs. Such options vary from simple wills to complex trusts. The subject of this article concerns what happens when an individual fails, for whatever reason, to utilize such options. More specifically, this article discusses the distribution of assets in California when an individual dies without a will. In other words the article deals with intestate succession in California.

Applicable Law as to succession in California

California probate courts apply the California Probate Code to matters subject to their jurisdiction. Accordingly, a foreign citizen who dies without a will owning assets subject to California jurisdiction could face the application of California’s intestate succession laws to their estate. Assets such as real property and bank accounts could be characterized as having a California situs. Heirs may find that the Estate is subject to laws that may differ substantively from the laws of their home country.  

Intestacy Rules under California Law

The California Probate Code contains the applicable laws that determine who inherits by intestate succession. The determination as to who inherits under Probate Code §§ 6400-6414 turns primarily on whether the individual dies with or without a spouse and/or children. A flow chart describing the most common scenarios is included below:

Die Leaving

Distribution

Spouse with no children[1] or siblings[2]

Spouse inherits entire estate.

Spouse and children

Spouse inherits all community property and share of separate property (depending on how many children).

Children with no spouse, parents and/or siblings

Children inherit everything in equal shares.

Parents and no children and/or siblings

Parents inherit the entire estate.

Spouse and parents and no children

Spouse inherits all community property and ½ of separate property. Parents inherit ½ of separate property.

Spouse and siblings and no children

Spouse inherits all community property and ½ of separate property. Siblings inherit ½ of separate property.

Siblings and no children and/or parents

Siblings inherit the entire estate

Parents and no children and/or siblings

Parents inherit the entire estate

Community Property in California and Intestate Succession

As indicated above, community property laws affect California’s intestate succession law. Assets acquired during marriage are typically held as community property. Separate property generally includes assets acquired before marriage and/or assets acquired during marriage through inheritance and/or gift. Such rules dramatically impact intestacy rules. Specifically, community property laws typically result in the spouse inheriting all community property by operation of law, similar to assets held in joint tenancy.

Scope of the Intestacy Rules in California

The laws discussed above concern intestate succession. Under California law, many assets are not subject to intestate succession. Assets transferred to a trust are not subject to probate and/or intestate succession and assets held as payable on death and/or as joint tenancy are not subject to intestate succession. Further, many retirement vehicles are not subject to intestate succession including assets held in IRAs and 401(k)’s. Life insurance proceeds, which are commonly used to transfer wealth, are also generally immune from probate and/or intestate succession.

Recommentation

California’s intestate succession laws can be mistaken for being uncomplicated and straightforward. However, even a simple analysis of the issue requires the practitioner to examine a variety of issues beyond whether the individual died without a will. Further analysis is required to determine how the assets were held. Many practitioners will also find themselves delving into factual inquiries concerning community property and estate planning vehicles, which may alter the final analysis significantly.


[1] Children legally adopted inherit in the same manner as biological children. Foster children and stepchildren must provide evidence that: (1) A lifelong relationship existed and began while the child was a minor and (2) the child would have been adopted if it were possible.

[2] Half siblings (e.g. those with different mother or father) inherit as if they had both parents in common. 

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