Does a community property override a living trust?

[carebear74]

Jurisdiction

California

My husband and I are separated but legally married. He wants to prepare a living trust stating that our home will be mine and his daughter. Is this possible or will our marriage override the will stating that he wants to include his daughter as a beneficiary?

 

[Tax Counsel]

Community property is a system of property ownership; it defines what property is community property and what is not, and with regard to community property, what rights each spouse has in that property. He may only pass to people the property or rights to property that he has. Thus, if he attempts to pass anything which is your property to someone else, including your share of community property, that will be ineffective since that's property he doesn't have.

I assume that he wants to do a revocable living trust as a will substitute. If he wants to get it right, he ought to see a California estate planning attorney so he's clear on exactly what property he may transfer by will, trust, etc at death and then discuss with the attorney what options he has and what may be the best for him. There are more ways to transfer his interest in the home other than a will or trust.

Exactly how he decides to set this up matters not only in reducing the liklihood of challenges to the planned distribution of property but also in what the tax effects will be. The difference in the amount of taxes that may result between a plan that is tax smart and one that it not can be substantial. In particular, community property provides an income tax benefit that no other system of property in the U.S. provides: when one of the spouses dies, the income tax basis for the surving spouse in the ENTIRE property is adjusted to fair market value (FMV) on the date of that spouse's death. In any other form of joint ownership, only the deceased spouse's share of the property gets that basis adjustment, e.g. only half the basis might end up with that adjustment. The basis is important because gain on the sale of the property is determined by the sales price of the property (after certain expenses of sale) less the adjusted basis in the property. Particularly for homes in many parts of CA that a couple has owned for a long period of time, the basis they have in it is likely to be very low. In that case, getting the full step up in basis in the whole property can save a lot of income tax later. This is just one tax issue that needs to be considered. There are also property tax assessment issues to think about too.

 

[zddoodah]

He wants to prepare a living trust stating that our home will be mine and his daughter.

Huh? I'm honestly not sure what he's contemplating.

I assume the home is currently titled in your and your husband's names. Correct? And he wants to create a trust of which both of you will be settlors. Correct? Who will be the trustee(s) of the trust? I assume you meant to write that both you and his daughter will be beneficiaries. I further assume that the statement that the "home will be mine" means that you'll have the right to occupy it while you're living and that, upon your death, his daughter will get the house. Correct?

Is this possible

If I'm correct about all of the above, the answer is yes.

will our marriage override the will stating that he wants to include his daughter as a beneficiary?

You're badly mixing terminology. If you transfer title of the home into a trust, the terms of your will or your husband's will won't matter. Married people routinely have trusts.

If your husband wants to hire a lawyer to create a trust, you should retain your own lawyer to review it to ensure your interests are adequately protected (both now and in the event you eventually divorce).

 

[army judge]

My husband and I are separated but legally married. He wants to prepare a living trust stating that our home will be mine and his daughter. Is this possible or will our marriage override the will stating that he wants to include his daughter as a beneficiary?

Allow me to offer you a few options to consider.

Upon further relection and study on YOUR part, you'll be able to decide how best to proceed.

I'll address the common sense aspect, before I reveal the legal particulars available to someone situated in your particular predicament.

Spousal support

Spousal support (also known as alimony) is a court ordered payment from one spouse or domestic partner to help cover the other's monthly expenses. In California, when it is between married persons, support is called spousal support. It's called domestic partner support between domestic partners.

How to get or change temporary support

There are 2 ways to get or change temporary spousal support

1. You and your spouse have a written agreement

2. You ask the judge to order support

This is the same if you want to get support or you need to change the support amount.

Who Gets Spousal Support in California?

The first thing to understand about who gets support in California is who absolutely does not get support. Under California law, alimony or spousal support cannot go to anyone who has been convicted of a recent domestic violence or sexual assault felony against their spouse or children or who has attempted to murder their spouse.
There is also presumption under the law—meaning it's not required that courts follow it but strongly recommended—that no one convicted of any misdemeanor offense of domestic violence or sexual assault against their spouse should get spousal support. This is just one of the many factors that the judge will consider in determining if spousal support is appropriate, how much it should be, and for how long it will be paid.

Factors in Spousal Support

The factors that are spelled out in California law are:

• The needs of each spouse, based on the standard of living they had during the marriage
• The earning ability of each spouse, taking into account their marketable skills, the job market for those skills, how much time and training the lower-earning spouse would need to develop those skills, and how much that spouse's earning capacity was reduced because of time taken out of the job market to care for children and the home during the marriage
• the supporting spouse's ability to pay spousal support
• the supported spouse's ability to be gainfully employed without unduly interfering with the best interest of the children
• each spouse's age and health
• each spouse's debts and assets, including their separate property
• the duration of the marriage lasted
• how much the lower-earning spouse contributed to the other's educational degree or professional license during the marriage
• whether there's documented history of domestic violence against either party or the children
• the balance of hardships for each spouse
• any other factors the judge believes should be considered, based on what's fair

Does My Spouse Have to Pay My Attorney's Fees in a California Divorce?

March 20, 2020
admin
You probably don't need this article to tell you that quality legal representation in a California divorce is not exactly cheap. When it comes to preserving your rights to obtaining property, child custody, spousal support, and child support (the latter two of which are often paid for many years), a knowledgeable and effective family law attorney on your side can be one of your best investments ever. Still, hiring an attorney can feel like a significant financial strain at a time when you are very concerned about finances.

In California, however, courts have a relatively liberal policy towards ordering a spouse with greater financial assets to pay attorney's fees to the other spouse. Such attorney's fees can be awarded at any point in the divorce process, including in a pre-trial "RFO" (Request for Order) hearing or at the trial itself. And because attorneys understand that courts will often award attorney's fees, many attorney fee awards are made voluntarily from one party to the other as part of a settlement or a pre-trial stipulation.

California Family Code section 2030 states that:
"In a proceeding for dissolution of marriage…and in any proceeding subsequent to entry of a related judgment, the court shall ensure that each party has access to legal representation, including access early in the proceedings, to preserve each party's rights by ordering, if necessary based on the income and needs assessments, one party…to pay to the other party, or to the other party's attorney, whatever amount is reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding."

What this means, again, is that a California family law court can require one party to have to pay attorney's fees to the other party or their attorney, and this award can happen at any point in the divorce process, even right after the petition for divorce is filed.

The California Family Code goes on to say that, in determining whether to make such an award, it will look at the "disparity" between the two parties in their ability to pay. This does not mean that one party has to be flat-broke to get an attorney's fees award, but rather that party needs to show that the other party has a greater ability to pay for attorney's fees and the ability to pay for legal representation for both parties. Courts have awarded attorney's fees to parties that would be considered quite wealthy in most circles based on the fact that the other party was even wealthier.

Don't expect, however, that a court will award you a blank check for attorney's fees to "go to town" on the other party. Courts do want to promote amicable and swift resolution to cases and thus do not want to incentivize unnecessarily long or intense litigation by giving a large amount of attorney's fees that are unneeded, thereby encouraging a lawyer to fight just because he has the money to do so. Instead, the court will want to see a clear explanation from your attorney of why the fees are needed and specifically what they intend to do with the funds to bring the case to a resolution.

If you are concerned about the cost of legal fees that may be involved in your divorce, you should make that clear at the outset with your family law attorney so that you can discuss options such as pursuing an attorney's fees award and the best strategy for doing so. It's important to strike the right balance between the need for you to get some control over your case against the important goal of preserving your hard earned money for your family.

A divorce is an adversarial process.

You are PARTNERS, now you've decided to break ties/bonds of the past, proceeding into the future alone.

Don't allow yourself to become beguiled by memories of the good times, which have probably diminished or disappeared; hence the reason you're now considering divorce.

Going forward, don't communicate with your SOON TO BECOME FORMER PARTNER.

That's why you hired or wish to hire an attorney.
You probably want the STBFS (soon to be former spouse) responsible for supporting the children he sired and you birthed. Of course, you want to contribute your fair share, too.

If one of you earn more money than the other, the State of California (via it's court system) will sort that for you.

Heck, you might be able to have the court order your STBFS to pay or assist you in paying your crafty attorney.

Don't cheat your children.

Don't cheat yourself, get busy hiring an attorney to make sure you get EVERYTHING you deserve, not scraps your STBFS wishes to offer.

Good luck, stay the course, keep the faith, fight the good fight, protect your children, and yourself.