Many of the assets owned by a decedent, or a decedent’s entire estate, may pass to beneficiaries or heirs without going through probate. For example, property that passes to a surviving spouse is subject to probate administration only at the election of the surviving spouse. Joint tenancy property does not have to be probated. Certain contracts may determine who receives a deceased person’s assets on death.
Property Passing to Surviving Spouse
When a married person dies in California, one-half of the community property belongs to the deceased spouse and the other one-half belongs to the surviving spouse. [Prob. Code, § 100, subd. (a)] The one-half that belongs to the deceased spouse may be transferred by will [Prob. Code, § 6101, subd. (b)] or, if a person dies without a will, his or her one-half of the community property will pass to the surviving spouse under the laws of intestate succession [see Prob. Code, § 6401 as amended by Stats.2002].
Property that passes from the deceased spouse to the surviving spouse, whether the property is separate property or community property, and regardless of whether it passes by will or under the laws of intestate succession, may be transferred to or set aside to the surviving spouse without a full probate administration, but to perfect title a spousal petition is often required and should be filed with the court promptly. [Prob. Code, § 13500].
However, the surviving spouse may elect to subject all or part of the property to probate administration. [Prob. Code, § 13502]. One situation in which a surviving spouse might elect to subject community property to probate administration is where the deceased spouse left community debts and the survivor wants his or her half of the community to be subject to the creditor’s claims provisions found in Prob. Code, §§ 9000 et seq. If the surviving spouse receives property from a deceased spouse without going through a full probate administration (including succession through a spousal petition), the surviving spouse will be personally liable for the debts of the deceased spouse. [Prob. Code, § 13550; Kircher v. Kircher, 189 Cal. App. 4th 1105, 117 Cal. Rptr. 3d 254 (1st Dist. 2010), review denied, (Feb. 16, 2011).
Joint Tenancy
A joint tenancy is an interest owned by two or more persons in equal shares, by a title created by a will or transfer when it is expressly declared to be a joint tenancy. [CC § 683]. This theory can be described as two persons owning an undivided whole of an asset rather than two persons owning individual fractional interests.
When one joint tenant dies, his or her interest in the joint tenancy passes by operation of law to the surviving joint tenant or tenants. [Estate of Dow (1947) 82 Cal.App.2d 675, 186 P.2d 977]. Thus, a joint tenancy interest does not pass by the deceased joint tenant’s will and is not subject to probate. [Estate of Petersen (1994) 28 Cal.App.4th 1742, 34 Cal.Rptr.2d 449; Goldberg v. Goldberg (1963) 217 Cal.App.2d 623, 32 Cal.Rptr. 93].
When the joint tenants happened to be married to one another, It will sometimes be difficult to determine if an asset is joint tenancy or community property. Joint tenancy and community property cannot exist in the same property at the same time. [Tomaier v. Tomaier (1944) 23 Cal.2d 754, 758, 146 P.2d 905; Siberell v. Siberell (1932) 214 Cal. 767, 7 P.2d 1003] The provision in Fam C § 2581 that property acquired by the parties in joint form during marriage, including joint tenancy property, is presumed to be community property, only applies for purposes of division of property and dissolution of marriage; it does not apply in the case of death of a party.
Sometimes the marriage of a husband and wife has been dissolved, but title to their property remains in joint tenancy. The court may have rendered a “status-only” judgment which has terminated the marriage but not adjudicated property issues. Such a judgment does not automatically sever a joint tenancy. [Estate of Layton (1996) 44 Cal.App.4th 1337, 52 Cal.Rptr.2d 251]. If the court has reserved jurisdiction to decide property issues, the court may divide the property between the parties even after one of them has died. In that case, the property is deemed to be divided “upon the dissolution of the marriage” and the rules applicable to division of property on dissolution of marriage apply. [In re Marriage of Hilke (1992) 4 Cal.4th 215, 14 Cal.Rptr.2d 371, 841 P.2d 891]. For purposes of division of property on dissolution of marriage, property acquired by the parties during marriage in joint form, whether held as tenants in common, joint tenants, or tenancy by the entirety is presumed to be community property. [Fam C § 2581].
The parties may also agree to terminate the joint tenancy by oral or written agreement in the dissolution proceedings. [In re Marriage of Allen, above; Estate of Seibert (1990) 226 Cal.App.3d 338, 276 Cal.Rptr. 508] If both spouses die before the property issues are adjudicated, Fam C § 2581 does not apply, and the property will be treated as joint tenancy property, thereby passing to the surviving spouse, then disposed of by the survivor. [Estate of Layton (1996) 44 Cal.App.4th 1337, 52 Cal.Rptr.2d 251]
Revocable Transfer on Death Deed
A “Revocable transfer on death deed” is an instrument created pursuant to Probate Code §5614 that does all of the following:
(1) Makes a donative transfer of real property to a named beneficiary.
(2) Operates on the transferor’s death.
(3) Remains revocable until the transferor’s death.
Often the Revocable transfer on death deed is executed in a form instrument also called a “revocable TOD deed.”
So long as an owner of real property has the capacity to contract that person can execute a revocable transfer on death deed of the property.[Prob. C. § 5620]. To be enforceable, the instrument requires that the transferor sign and date the deed and acknowledges the deed before a notary public.[Prob. C. § 5624]. The transfer on on death deed must be recorded within 60 days after the date of execution. [Prob. C. § 5626]. The transferor must identify the beneficiary by name in a revocable transfer on death deed.[Prob. C. § 5622].
Contracts with Designated Payable on Death Beneficiaries
The Probate Code specifically validates provisions for nonprobate transfers on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, condensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or other written instrument of a similar nature when such instrument designates in writing a payable on death beneficiary.
Specifically included in such contractual rights able to be transferred by valid designation are [Prob C § 5000(b)]:
(1) A written provision that money or other benefits due to, controlled by, or owned by a decedent before death are to be paid at the decedent’s death to a person designated either in the instrument or a separate writing;
(2) A written provision that money due or to become due under the instrument will cease to be payable in the event of the death of the promisee or the promisor before payment or demand; and
(3) A written provision that any property controlled by or owned by the decedent before death that is the subject of the instrument shall pass to a person whom the decedent designates either in the instrument or in a separate writing.
Thus, contract rights as described in Prob C § 5000 and rights under instruments similar to those included in Prob C § 5000 are not disposed of by the will of the contracting party and are not subject to probate administration, but go without administration to the named beneficiary.
