Last week, I blogged that a common refrain that we hear from people when we encourage them to consider estate planning is “But I don’t need an estate plan.” This post addresses the second of three of the most common refrains that we hear.
I don’t need an estate plan because I want everything to go to my spouse.
Many married (or registered domestic partner) couples believe that they don’t need an estate plan because each spouse or partner wants everything to go to the other. This is true for community property. However, if either spouse owns any separate property, the separate property will be divided between the surviving spouse and other relatives. Separate property generally includes anything owned prior to marriage and anything acquired during marriage by gift or inheritance, and titling a separate property asset jointly or commingling it with community property will not convert it to community property. Many married couples will have at least some separate property, and if the surviving spouse and his or her in-laws do not get along, it could lead to disputes. Additionally, if you have children, half to two-thirds of the separate property will go to your children, depending on the number of children. If the children are minors, a court proceeding may be needed to distribute the assets to a guardian of the estate for the child or into a blocked account until the child turns 18 (even if the child has a surviving parent). Even if a large sum of money is involved, there is no way to prevent the child from accessing the entire account at age 18.