Separated Spouses, what happens when one unexpectedly passes away?

Dear Len & Rosie,

My husband died unexpectedly. We were separated but not legally separated. We have filed joint income tax returns since 1968. I have his original will signed and dated in 1976 naming me the executor and beneficiary. I covered him for health care benefits under my job for almost ten years until I retired. I didn't think the will needed to be probated. 

Our two daughters and I are in agreement that we will evenly split any assets even though the will states they would inherit only if I was deceased. It’s the right thing to do for my daughters. He rented a condo but the title of our house remains in both our names. I'm concerned I may need legal advise at some point. Any advice you can give would be deeply appreciate. I am 68 and feeling overwhelmed.

Pam

Dear Pam,

The fact that you were separated from your husband has no effect on the outcome.  You are his surviving spouse, even if he had filed for divorce or legal separation. His estate passes entirely to you because you are named as the beneficiary of his will.

What has to be done depends on how his assets are titled and what they are worth.  For example, the home is apparently in joint tenancy with you, so there's no probate needed for that. All you have to do with the home is execute an Affidavit of Death of Joint Tenant and provide it to the County Recorder together with a couple of property tax forms. Do not be concerned about your property tax. The transfer from your husband to you will not trigger a property tax reassessment under Proposition 13.

As for your husband's accounts, what has to happen depends on how each of them are titled and how much they are worth. If his accounts have joint owners or pay on death beneficiaries, then the accounts pass to them. If the accounts are titled solely in his name, you can collect them 40 days or more after his death using small estate declarations under Probate Code section 13101. If they are worth more than that, in total, you’ll have to either file for probate or file a Spousal Property Petition.

You are being very generous to your daughters, but understand that we cannot recommend to you that your transfer your husband’s half of your home to him now. Doing so would make part of your home subject to the claims of your daughters’ creditors. Adding children to the title of your home is almost always a bad idea.

You, or you and your daughters, should sit down with a trusts and estates attorney to review everything and figure out precisely what to do. If there is no probate (it doesn’t sound like your husband has much money) then it will be simple and inexpensive. After that, you should consider your own estate plan. You should probably create a revocable trust to avoid probate.

Len & Rosie
 

How to provide for your child after you re-marry

Dear Len & Rosie,

I divorced my first husband fourteen years ago. I have one child from this marriage, my daughter, who is now sixteen years old. Eight years ago, I married a second time. My second husband has been the primary earner during our marriage. Most of what we own was paid for by him, not me. If I were to die before him, what claim would my daughter have against assets my husband and I have accumulated?

Terri

Dear Terri,

What do you suppose would happen if you died first, and everything you and your husband owned was titled in joint tenancy, except for your retirement accounts and insurance policies, and you named each other as beneficiaries for those? The answer is that your husband would own everything, and he wouldn’t be under any legal obligation to leave any of it to your daughter upon his death. And by the time he dies he may not like her very much. Already your daughter, his once precocious 8-year-old step-child, has transmogrified into a rebellious 16-year-old.

You have the right to dispose of your separate property and your half of the community property as you wish upon your death. You don’t have to leave it to your husband, even if he paid for it all out of his earnings. His earnings during your marriage are community property and half owned by you, unless you signed a valid prenuptial agreement that says otherwise.

So how do you do it? One way is to make sure that you and your husband do not own anything in joint tenancy. You can divide up your accounts, and sign a deed severing the joint tenancy to your home. Then you can make a will that leaves your assets to your daughter upon your death. You could also provide in a will that your half of the property be held for the benefit of your husband until his death in a trust designed to insure that your daughter will wind up inheriting your assets on the surviving spouse’s death.

But that could easily backfire. Imagine your husband’s perspective. He paid for most of what you own, and you’re taking half of it away from him? There’s another word for doing just that: Divorce. Marriages have broken up over this sort of estate planning.

There’s a better way. You and your husband can sit down and have a discussion and come up with a deal. The two of you can enter into a binding agreement to devise property - a contract to make a will. You can promise to leave everything to one another, or almost everything, and also promise that on the survivor’s death your daughter will get it all, or at least her fair share if your husband has children of his own he wants to protect.

Len & Rosie