0:17 thanks hello and welcome to trust some Estates weekly I'm your host Kevin bemel and we are here every Monday morning at 10 A.M Pacific Time 1 p.m eastern time to talk about all things related to trusts in Estates which you might have guessed by the name of the show as well as probate and dealing with uh your property um dealing with Estate Planning and
0:54 financial planning related to your property and also with the question of how you might enhance your business in in by working in in those areas whether you're in real estate or financial services or one a profession accounting whatever we talk about all of those issues each each show so today I'm going to talk about the issue of intestate succession that's a intestate is a fancy Latin word I
1:31 believe it essentially means when someone dies without directions as to what's what is to happen to their property so let's let's jump right into this go ahead and share my screen as I normally do and here we go okay I trust in the states where you see it and see it looks um it looks a little bit like uh you know my my desktop right with the computer and the plant so you have a plant back
2:06 here where is it there it is plants back there now okay um oops uh doesn't want to go forward okay well here we go all right so um as as is our practice uh everything in the way to wow shows deals with the three pillars of attainment and today we're going to be dealing with the Pursuits pillar the finances uh realm however a lot of estate planning deals with relationships as well and and and in it it can get very uh complex as you'll see
2:43 in a little while so oftentimes these the the Realms all kind of merge together in the various uh topics that with which we deal okay so let's let's start out with this issue of intestacy where or as I as I called it intestate succession so in test to see is when a person dies without having enforce a valid will or other binding declaration Okay so they may have they they may not have a
3:20 will but they may have a trust okay and if all their property uh that would otherwise pass through probate is transferred into the trust so then it may be that they don't need a will and when I say all of their property that needs to be transferred uh that would otherwise be transferred through probate so for example here in California if a spouse owns a car okay and and and and and dies the surviving spouse can go to the DMV and register the the
3:58 um the car in their name simply by providing a documentation to the DMV of the of the of the fact that their spouse is deceased most likely a death certificate okay so even if you didn't transfer a car into a trust you wouldn't necessarily here in California have to open up a probate just because of that one asset you can transfer that asset most likely outside of probate now I I should have given my you know normal
4:33 disclaimer I am not giving you legal advice the things I'm saying here are for educational purposes only and before you take any action you need to talk with competent professionals a lawyer an accountant perhaps both about your specific situation okay but in any event someone who dies without a will um and or some other document that is that specifies what happens to their property now that their dad has died
5:09 intestate okay now um when a will or a declaration has been made for part of a state part of an estate I should say okay the remaining estate forms the intestate estate Okay so um I had a situation where the decedent and his spouse had a trust okay and they had transferred a lot of their property into the trust but not all of it and some of the property that was left out of the trust
5:46 couldn't be passed to couldn't be passed to his spouse merely by operation of the law so we ended up having to file a probate action to deal with that intestate estate that part of his estate where there was no will or Declaration for what was supposed to be done with it okay so you can have you know you might call it sort of partial intest to see if you will um and and and and in in that is not uncommon unfortunately and if you if you
6:24 talk with estate planning attorneys they will often tell you that one of the biggest uh challenges they deal with is they will put together an estate plan for a client they'll form the trust and then the client won't transfer property to the trust or won't transfer all the property to the trust and so in the end um at least part of the purpose of the trust is defeated because now there's going to have to be a probate in addition to the trust in any event okay so part of good estate planning is
7:00 avoiding this issue of intestacy and you'll see why as we continue on why why it's you'll see as we continue on why it's a it makes sense to if at all possible and void in test to see okay so when we talk about intestate succession specifically what we're really talking about are what at least what's what here in California are called The Law of this What's called the law of dissent and distribution okay
7:35 so these are statutes which means the actual law book law and case law okay and the law of dissent and distribution decides or well it doesn't decide it's it says who is entitled to get property when when there's an intestate estate okay so it dictates it the law does so the person's Wishes the deceased person's wishes will will no longer be
8:12 taken into account once they're dead if there's no will or other declaration to go by merely saying oh you know they want this or that um does it necessarily have any uh is not necessarily binding legally Okay so um now the law of descent and distribution takes effect and and decisions about who gets the property will be made in accordance with the statutes and the case law now I'm going
8:47 to be talking about California that's the state in which I live and and practice okay these states I'm sorry these laws vary by state okay there's no federal law of dissent and distribution each state has Crea created its own and so how things work here in California could be very different than how things work in Florida or Ohio or you know South Dakota Okay so again what I'm doing here is for
9:23 educational purposes to give you an idea of how these things work okay but if if you're interested in in if you're in another state and you're interested in knowing well wait how does it work in my state so what what I would recommend you do is is just do an internet search for you know law of descent and distribution in whatever state you're in you know Arizona you know Colorado whatever it is and and you'll these days states have their statutes um online and you'll be able to find at least the statutes now you won't
9:58 necessarily find the case law and the case law describes how the statutes are applied okay so you may read a statute and say oh it looks like this um but in indeed the way it's been applied in actual cases may be different okay so um again you know unless you're very very familiar with these laws um and even then um you know you'll you'll want to get expert advice before you make decisions
10:35 about it okay so um I'm gonna look at I'm again I'm gonna look at California okay and you'll you'll notice here this is this just gives you an example so law.justia.com okay in this case we're going to codes of California um 2022 that's the most recent update um at least that I could find of a California probate coats you see California Pro probate code section that's what this symbol means 6401 okay and and and that's you'll
11:13 you'll see in a minute that's just the the particular part of the statute okay so I'm gonna um uh stop this share and we'll go to here we go this share okay and we want to go right there we go okay so this is the justia US law um website and you you can see you know it it it it it um catalogs a huge variety of laws so justia and then U.S law U.S codes and
11:48 statutes than California 2022 California code probate code division six wills and intestate succession right because there's other parts of the probate code part two intestate succession so Part One deals with Wills okay chapter one ends test State succession generally okay so and let me just uh yeah let me check Okay so I'll just go back here for a minute okay so here's here is part two chapter one
12:24 intestate succession generally you see sections 6400 through 64 14. some are very short some are longer each one of these describes part of the statutes for intestate succession generally okay and then there's there's more you know it goes on to get into specifics which which we're not going to do we we don't have the time to do that okay so I I want to give you a flavor for how complex this could be okay now California is a community property State
13:02 all right generally states are either common law states or community property States for example Alabama is a common law state it's if the state law is generally speaking are based on the common law that came out of England Great Britain okay California is a community property State it's state law is based primarily on Spanish law okay and it makes a big difference so in dealing with marital property in a
13:42 common law state okay two people get married their property is put into one pool okay it doesn't matter whether half comes from each of them or all comes from one and none comes from the other it all gets pulled together okay and then at least originally and I'm I'm not up to date on um common law states and I'm and I'm sure some in some cases these have been amended but the way it used to work under common law was if there was a divorce two-thirds of the property went to the husband one third of the property
14:18 went to the wife okay and you say wow that's really unfair well on the other hand if the husband was the one who brought all the property to the marriage the wife is going to get a third of it even though none of the property was hers originally and that way in theory she won't be destitute okay well it works out fine that way but let's go back several hundred years and let's look at a situation where you have a woman maybe let's say she's a young woman unmarried and she's living in
14:55 uh Jamaica okay and her father owned a largest state in Jamaica and he died and he left all the property to her okay so now she's got this big estate worth a lot of money right and you've got the you know third or fourth son of an English aristocrat living in England okay and the reason I picked the third or fourth son is it was not unusual in England that most if not all of the property of the
15:32 father went to the first born son and his brothers got nothing and not not to mention his sisters who got nothing okay so the the first son not only inherited the title but all the property to support it rather than letting the estate get broken up okay so if that's the case if you're the number two son you're probably going to hang around pretty close to your older brother just in case he dies because if he dies now you're number one and you're going to take his place but if you're the number three or the number four son are you
16:08 gonna hang out there hoping that you you know two or three of your brothers die probably not okay so you had a few options that were available to the son of an aristocrat one was to join the military the army or the Navy that was one option the second was to join the clergy become a priest and and oftentimes they did that a third option was to marry well okay married well meant go find a woman who had a lot of money okay and marry her so
16:46 if you can think about this scenario maybe this is in the you know 17 or even into the 1800s okay this this third or fourth son of an aristocrat goes to Jamaica meets this woman marries her okay and now all of a sudden her sole property has become their joint property okay he hangs out for a little while gets everything all kind of set up and then he divorces her and now he's got at least two-thirds of her property and by the way oftentimes they would Finagle
17:21 a way to get all of it leaving her a popper okay so the Spanish government looked at that and said no we don't want that so under community property property that's owned by a spouse prior to marriage remains their separate property okay so when they get married it that it's still their separate property now there's all kinds of issues with co-mingling there's issues of gift and inheritance and all that kind of stuff but at least in theory if the the if the husband and wife got divorced each would walk away with whatever property they
17:57 brought to the marriage and then any property accumulated during the marriage would be community property and they're each entitled to half of that okay so you can see it's a very different system all right so here in California where we have a community where we have community property okay notice here 64 6401 a as to community property this is property that was acquired during the marriage okay so it's owned 50 50 by each spouse the intestate share of the surviving spouse is the one half of community
18:34 property that belongs to the seeden under Section 100. okay so I mean right there all this like what the heck does that mean right so you have a husband and a wife let's say the husband dies didn't have a will hey didn't have any other kind of Declaration so his half of the community property is par is the intestate share um uh um I'm sorry the intestate share um goes to the surviving spouse it's the
19:12 one half of the community property that belonged to the decedent and since he died in testate that share is going to go to his surviving spouse okay now um let's let's uh okay so let's go here as to separate property the intestate share of the surviving spouse is as follows okay the entire intestate estate if the decedent did not leave any surviving issue parent brother sister or issue of a deceased brother or sister right so all of a sudden
19:48 um the the so now you have separate property this was property the husband owned before marriage he died in test date what's going to happen to that prop property okay well the surviving spouse is going to get it if the um deceased spouse had no parent brother sister or or issue meaning children children are issue is a fancy way of saying children right okay um so where the decedent leaves only one child or the issue of one deceased child
20:25 the surviving spouse is only going to get one half of the intestate estate and the child or the issue of the deceased child is going to get the other half right away we're getting it starts getting more complicated okay and you can see so let's let's go on okay where the scene leaves more than one child okay so now um okay so um the the surviving spouse is only going to get a third of the intest states uh uh estate where the student
21:00 leaves more than one child or where the decision leaves one child and the issue of one or more deceased children where the scene leaves issue of two or more deceased children you see how this is working out okay so if he has a a child who's still alive but another child died but that but but that shot but that that child had a child in other words the decedent had a grandchild okay so now his surviving spouse is going to get a third and the children and grandchildren are going to split two-thirds okay
21:35 all right now by the way this is pretty simple compared to how complicated it can get so here let's let's look at a couple of um of uh uh you know I don't want to say they're unusual circumstances but just circumstances we might not think would be an issue okay okay accept is provided for in section 64-51 relatives of the Half Blood inherit the same share they would inherit if they were of whole blood oh my gosh right would you have even thought
22:11 you know but somewhere along the line there was some issue with probably a whole blood relative challenging the right of a Half-Blood relative to get a full share and So eventually the California legislature passed a law saying Half Blood full blood doesn't matter okay let's look at another one okay relatives of the decedent conceived before the decedon's death but born thereafter inherit as if they had been born in the lifetime of the decedent isn't that interesting so
22:48 um let's say that uh um the decedent surviving spouse surviving wife was pregnant at the time the decedent died okay and the child is born okay now it's not there's not just a surviving spouse there's a surviving spouse and issue okay but even though the the child was not born before the decedent died still that child in in in utero has legal standing as an heir okay
23:27 uh and by the way I'm sure there's case law about these kind of things as to how exactly that works out all right so you can see let's just let's just look at one more I think it was 412. oh nope that's uh that's that's that weird one okay must be 13. okay here's another one a person who is related to the decedent through two lines of relationship is entitled to only a single share based on the relationship that would entitle the person to the larger share okay so maybe someone is both I don't know a a a child
24:04 and an uncle or I mean there's all kinds of weird ways that people can be related to other people especially these days right so if they have two lines of relationship to the decedent they still only get one share based on whichever one would give them the larger share they don't collect a second one okay now this is this is important because let's say for example that um you're estranged from one of your um children
24:40 okay if you die without a will your child may very well get part of your estate okay and if you're married your spouse if there's no will your spouse will may have no way of preventing that okay so this is why it's so important to make sure you don't die intestate okay let's go back to our uh go back to our our presentation here okay now we just dealt with one small
25:17 portion of the of the laws of intestate succession just some general laws Okay so as as as there's larger Estates as there's more people involved these issues can get more and more complex okay our our cousins close enough to qualify under the laws of dissent distribution um you know great grandchildren all of that gets taken into account okay and and you can see that
25:53 um there's a lot of room for disputes okay so let's say um a a let's say two of your children are disputing okay and one of them um has a child and the other does not okay and then you know you die intestate okay well both your child and your grandchild are
26:28 under the statute entitled to a share of your intestate estate okay but can you appreciate that your child May dispute the grandchild getting anything if for no other reason out of spite because your child was fighting with that child's parent so now there's a lawsuit over it okay and that's money used up and it won't necessarily defray the assets of the estate but it can cause a lot of even worse
27:03 feeling between family members when these issues aren't delineated properly okay so the best thing to do is to make sure that you have competent advice about what what's going to happen to your property after you die whether that's a will whether that's a trust whether it's both however it's going to be handled the way to avoid the best way to avoid disputes is to make sure you do not die in testing okay let's let's look at
27:40 another issue now okay is sheet okay the term is sheet applies when there's no taker of the intest state estate okay so let's say somebody dies has no spouse no children no grandchildren parents are not alive no no siblings no brothers and sisters alive no issue from brothers and sisters okay and and I you can go out several several layers okay what's going to happen is
28:17 the state of California May file an action on that what may file what's called an is sheet okay under an estate in California well since that's what we're talking about the state of California will look for Heirs of the deceased that are entitled to take over take to to receive the intestated state according to the law of dissent and distribution
28:52 once they make that search if they find no one your property will go to the State of California that's what it means for property property to a sheet to the state the state ends up with all of your property right so let's say you have a very close friend but that person is not related to you by blood or half blood or anything okay doesn't matter under the laws of under the law of dissent and distribution in an astute action that friend will not
29:27 have standing to get your property okay and they lose out and the state of California in this example is going to get the property okay now if you want your property to go to the state that's fine um but most people I think don't most people want property to go to their heirs either their family or or their friends or or to some charitable organization unless you have a will or Declaration of some sort defining that that's not what's going to happen the laws of the state in which you live are
30:03 going to determine where your property goes in the absence of a will a trust other declarations okay so if you if you know maybe um you do you want all of your property to go to um you know a a charity so Andrew Carnegie for example that some of you may recognize that name Andrew Carnegie made a huge fortune in the steel business early on in the steel business a fabulously wealthy man okay he used a
30:39 lot of his wealth to build libraries throughout the United States public libraries okay that he donated to communities cities towns whatever okay he built I I want to say 3 000 of them I could be wrong on that number okay and his children didn't exactly like Dad going around donating all this money they wanted the money okay and at the end of his life his children found out that her their father left them little or no money okay and the reason that
31:15 Carnegie gain for that is he didn't feel it was a good idea for his children to inherit a bunch of money he felt that they needed to make their money in the same way that he had okay now the reason he was able to largely or completely disinherit his children was because he had an estate plan that specifically specified what was to happen with his property after his death okay if he had not had that his children would have gotten the money okay that's
31:50 just that's just how it would have worked because um under the law of dissent distribution they were his heirs okay so let's let's just review real quickly here because oh yeah we're we're just about out of time someone who dies without a will or trust or other declaration as to what will happen to their property after they die has died with an intestate estate okay the property in that intestate estate will then be um uh distributed according to the law
32:26 of dissent and distribution for the state in which the person lived if no one is alive who qualifies as a recipient under the law of dissent and distribution the state will file an astute action and they will be they will get that property okay all of this can be avoided by doing proper estate planning so so get with your accountant get with your lawyer okay and make sure that you if you need to have these documents that you get
33:02 them prepared okay and that everything is set up properly if you do a trust property is transferred into trust Etc okay so here's how to get help all of this will appear in the show notes uh when this episode posts on our YouTube channel and then we've got you know the legal stuff exactly and we'll go ahead and stop the share here to wrap up the show so that is our show for today on on the issue of intestacy and just want to remind you tomorrow is my show business lessons from the military at 11 A.M uh
33:39 Pacific Time 2 p.m eastern time my guest is going to be uh Rabbi David Becker of the of Jewish Friends of the American Military we're going to be talking about how military people take care of each other um as as a lesson to civilian businesses and then on um Wednesday is my show people making money my guest is Brian Larkey and he is the directory I hope I said that right of Della uh Della Vina I believe it is
34:16 um direct uh um delevina direct he is a wine merchant not a retail merchant he's a he brings wine in from Italy and distributes it here in the United States and I think you will enjoy uh um hearing what Brian has to say about his entrepreneurial venture as well as other parts of his life he lives a very holistic life so please join me at 12 30 p.m Pacific Time 3 30 p.m eastern time of course mountain and Central are an
34:51 hour in um don't want to forget the so-called interior time zones and then we will pick it up next week on Monday at 10 A.M for another edition of trust and Estates weekly and before I sign off just want to encourage you to subscribe to our YouTube channel um you will that way you'll always get notified when a new uh episode posts and you won't ever miss out on them so please consider doing that and signing off as I always do Marie darling you are my bow wishing you all a great rest of
35:26 the day and looking forward to seeing you again this week