Being fair to all your children

Dear Len & Rosie,

We have a home, fully paid for, in Sonoma. Both our adult children live in other towns with their families. Both our children were raised in Sonoma and they already foresee the desire to return to Sonoma for their own retirement years. Is there a way to divide the property between them in such a manner as to prevent misunderstandings, hurt feelings, division between them as they attempt to use the one property?

Alan

Dear Alan,

It would be nice to pass your home to your children, especially as they can inherit it without a reassessment under Proposition 13. They can receive the home from you and pay the same property taxes you’ve enjoyed under Prop. 13.

But the devil is in the details. What you are asking for can be difficult to pull off. We are reminded of Solomon offering to cut a baby in half to resolve a custody dispute. If you leave the home to both children, there are plenty of opportunities for conflict.

It’s not so likely that they’ll want to live together after a lifetime of living independently without you telling them to split up and go to their rooms when they argue. If you leave the home to both children, but only one lives there with his or her spouse, then your other child will not receive any actual benefit from what is likely to be the largest portion of their inheritance. If both children want the home and they don’t want to own it together, then there are some things you can do.

You could pick a favorite and leave the home to only one child. Your trust could allocate the home to the share of one child, while leaving the other child cash or other investments. If the home is worth more than half, then the child receiving the home could have the option to buy out your other child, so each of them gets an equal share. You can specify an appraiser, such as the California Probate Referee, to avoid potential disputes concerning the value of the home upon your deaths.

If you don’t want to play favorites, you can offer the home to the child willing to pay the most money, specifying as a minimum price the date of death value as established by an appraisal. If you think that it will be contentious, then you may want a third party trustee such as a professional fiduciary so that neither child will be in a position of power over the other. You could even specify that a neutral trustee shall put the property up for sale on the open market if your children can’t close a deal within a certain time, say six months after your deaths. If either child still wants to buy it, then he or she will have to be the highest bidder.

Despite all this, the very first thing you should do is to talk to your two children. You may not actually have a problem. While they may want to move back to Sonoma, they may not want to live in your home at all.

Len & Rosie

Life Partner Passed... Now What?

Dear Len & Rosie,

I lost my life partner two weeks ago. He was 78. I am 65. We lived together for three years but we weren’t married and didn’t register as domestic partners. He had a trust created in 2010 that leaves everything to his daughter. I want to know if I have any legal rights and can share the trust with his daughter. He owned a valuable home and many investments.

Jennifer

Dear Jennifer,

We are sorry to say that you really don't have any rights here. If you were married, or if you had registered as domestic partners with the California Secretary of State, then you would be entitled to all of the community property, if any, and half of the separate property, assuming he had only the one daughter.

In your case, since you weren’t married and you were not registered domestic partners, the only way you can inherit is if he had amended his trust to leave something to you. There’s no such thing as common law marriage in California. Living with someone, even for decades, doesn’t give you the rights of a spouse.

The only potential claim you may have is if he had promised to leave you something in return for your care and companionship. This is called a contract to make a will, or a contract to devise property. However, even if he made such promises to you, these cases are difficult to prove, because your testimony would necessarily be self-serving and would be painted as such by the daughter’s attorney. You would need other witnesses or, better yet, documentary evidence to prove your case. Don’t get your hopes up.

Unless you have some very good facts showing that he owes you an inheritance, your best bet is to cooperate with his daughter. If you are on good terms with her, she may be generous enough to recognize the closeness of your relationship with her father and make some provision for you. Don’t hesitate to ask for what you need, but don’t expect her to give you part of the home. If she gives you more than a few months to move out, you will be luckier than most.

So what’s the lesson here? In any long term committed relationship, it’s a good idea to talk to your partner about what you each of you will need upon the other’s death. Clearly, hardly anyone ever does this when they are young, but new couples of retirement age need to face the prospect of one of them dying, because sooner or later it’s going to happen. If you had this discussion with your partner, then maybe he would have updated his estate plan to provide for you. 

Len & Rosie