There is a strong public policy on the part of the state of California to have surviving spouses cared for by the estate of the deceased spouse. This has resulted in various laws that “rewrite” estate plans and related documents to provide for the surviving spouse if the documents are not created with care and precision to avoid that very effort. This article shall discuss both the law and methods to maintain estate planning which limits what goes to the surviving spouse. The reader should first read our article on Wills and Trusts , Prenuptial Agreements and Why Use The Revocable Intervivos Trust. The thrust of this article is how to achieve your own estate plan despite the efforts of the State of California to provide otherwise.
Basic Law :
California Probate Code Sections 21610, 21611 and 21612 (the "Omitted Spouse Statutes") were created with the legislative intent to guard against the omission of a surviving spouse by reason of oversight, accident, mistake or unexpected change of condition. (Estate of Katleman (1993) 13 Cal.App.3, 151, 65.) Historically, the Omitted Spouse Statutes were intended to provide a safety net for a surviving spouse who was unintentionally disinherited after years of marriage and dependence on the working spouse. Today, such laws are a continuing source of estate and trust litigation.
Probate Code Section 21610 provides testamentary benefits to a surviving spouse who has not been accounted for in the distribution of an estate. Specifically, Probate Code Section 21610 states that:
"Except as provided in Section 21611, if a decedent fails to provide in a testamentary instrument for the decedent's surviving spouse who married the decedent after the execution of all of the decedent's testamentary instruments, the omitted spouse shall receive a share in the decedent's estate,consisting of the following property in said estate:
The one-half of the community property that belongs to the decedent under Section 100.
(a) The one-half of the quasi-community property that belongs to the decedent under Section 101.
(b) A share of the separate property of the decedent equal in value to that which the spouse would have received if the decedent had died without having executed a testamentary instrument, but in no event is the share to be more than one-half the value of the separate property in the estate . " [emphasis added]
Section 21611 provides three (3) specific exceptions to the Omitted Spouse Statute. Section 21611 states in germane portion as follows:
"The spouse shall not receive a share of the estate under Section 21610 if any of the following is established:
(a)The decedent's failure to provide for the spouse in the decedent's testamentary instruments was intentional and that intention appears from the testamentary instrument .
(b) The decedent provided for the spouse by transfer outside of the estate passing by the decedent's testamentary instruments and the intention that the transfer be in lieu of a provision in said instruments is shown by statements of the decedent or from the amount of the transfer or by other evidence.
(c) The spouse made a valid agreement waiving the right to share in the decedent's estate . " [emphasis added].
The Omitted Spouse protections are eliminated by appropriate drafting of the various instruments necessary to achieve estate planning or prenuptial agreements.
A properly drafted and executed prenuptial agreement signed by informed parties may qualify for the exception listed in Section 21611(c) because it could serve as a waiver of the spouse's right to share in the decedent's estate.Clear wording is vital since deference is commonly given by the courts to a surviving spouse in regards to testamentary instruments that purportedly divest a surviving spouse of a testamentary benefit.
California Family Code Section 1615 provides, in part, that a premarital agreement is not enforceable if the partyagainst whom enforcement is sought proves any of the following:
"(a) (1) That party did not execute the agreement voluntarily.
(a) (2) The agreement was unconscionable when it was executed and, before execution of the agreement, all of the following applied to that party:
(A) That party was not provided a fair, reasonable, and full
disclosure of the property or financial obligations of the other party.
(B) That party did not voluntarily and expressly waive,in writing, any right to disclosure of the propertyor financial obligations of the other party beyond the disclosure provided.
(C) That party did not have, or reasonably could not have had, an adequate knowledgeof the property or financial obligations of the other party."
Courts have the authority to invalidate a premarital agreement. A court will take into consideration whether a premarital agreement was executed under undue duress, fraud, or undue influence by parties that have the capacity to understand the agreement and who have either been assisted by counsel or knowingly and expressly waived the right to counsel.
Wills and Trusts can also be superseded by the Court if express provisions are not included referring to the omitted spouse and either providing for him or her in some manner or specifically indicating that he or she is not to be an heir. (Note this does not eliminate the surviving spouse’s right to existing community property which cannot be eliminated without that spouse’s consent.)
If the prenuptial agreement is determined to be invalid or fails to even address inheritance rights and the deceased spouse has failed to amend his or her estate planning instruments after marriage to either provide for the surviving spouse and/or intentionally disinheriting the surviving spouse (Section 21611(a)) or fails to provide for the surviving spouse in some other fashion whose intention is to be in lieu of a provision for him or her in the will or trust (Section 21611(b)), the surviving spouse will be entitled to pursue an omitted spouse claim. And, under California law, if the surviving spouse was determined to be an omitted spouse, he or she would be entitled to the entirety of their community and quasi-community propertyin addition to a one-half or one-third share of the deceased spouse’s separate property, depending on whether or not he had surviving children and the number of said children. All such assets would pass to the surviving spouse prior to any distribution to the beneficiaries of the will or trust.
This is easily avoided by correct reference in the various documents to the surviving spouse and appropriarte estate planning.
As discussed in our article The Will In the Drawer and Other Disasters, and How the Handwritten Will Had My Father Singing in Court , creation of estate planning and prenuptial documents is often an emotional effort and one too often delayed or avoided. Increasingly common are those who seek to do their own drafting or use forms found in stores or on line and who fail to understand that while the drafting is easy before the death, the work is cast in stone once the person dies and at that point any errors or omissions can have catastrophic effect. A carelessly phrased clause or a failure to alter the plan if certain events occur (marriage, divorce, birth) can alter the estate plan without the drafter even knowing.
The law is neither complex nor difficult to understand in most instances. But it must be learned and the documents prepared accordingly if unintended consequences are to be avoided.