Howard and Wendy are married. Howard and Wendy own the following assets: (A) (B) (C) (D) (E) (F) (G) Greenacres, worth $400,000, which they own in true joint tenancy; Howard has $2,000 worth of miscellaneous tangible personal property which he acquired before they were married; Howard has $10,000 from earnings acquired during the marriage in a CD in his name alone; Howard inherited $400,000 in Amgen stock after he married Wendy; Wendy has $15,000 worth of miscellaneous tangible personal property which she acquired before they were married; Wendy has $100,000 from earnings acquired during the marriage in a checking account in her name alone; Wendy inherited $100,000 in IBM stock after she married Howard. 1 Assume Howard dies intestate, survived by his father, Fred. Twenty years later, Wendy dies intestate, survived by her mom, Mia. How will their assets be distributed? Howard dies intestate. First issue is who gets his property? Depends whether property is non-probate or probate. a. The default rule is that property falls in probate unless affirmative steps are taken to opt out. As far as Greenacres is concerned, that property is in Joint Tenancy. Joint Tenancy is one of the affirmative ways to opt out of probate. Because in joint tenancy each party owns in whole and in half, and because of the right of survivorship when one party dies their rights are extinguished, therefore joint tenancy property does not go through probate. Greenacres does not go through probate and based on the right of survivorship Howard’s interest is extinguished so now Wendy owns it outright. b. Is this separate property or community property. In a community property state separate is that which is acquired before marriage. All this property goes into probate. c. In a community property state, any earnings from either spouse during the marriage are community property. This is community property. At death we treat each spouse as owning half and half. Wendy gets her half outright, his half goes into probate. d. Is this property separate or community? We know that community property is earnings acquired during the marriage. Inheritance is not earnings so it is separate property. All this $400K of stock goes into probate. e. Howard has no interest because separate to Wendy. f. This is community property, at death it is split 50/50. Wendy owns her half outright, Howard’s half goes into probate. ($50,000) g. Separate to Wendy, Howard has no interest. Then pay off the creditors, then the questions becomes, who takes it? With respect to the community property assets, the wife takes 100% of the decedent’s half. With respect to the separate property Wendy takes 50% because Howard is survived by parent. The other 50% goes down the list and all ends up with Fred. 20 years later Wendy dies. Issue is who gets her stuff? Depends on non-probate or probate. Wendy does not have any non-probate property. Probate property: a. Greenacres at $400,000 b. $1,000 of Howard’s tangible personal property c. $5,000 of Howard’s community property CD d. $200,000 of Amgen Stock from Howard e. f. $50,000 from checking c. $5,000 was her own e. 15,000 of her personal property f. $50,000 of her own from checking g. $100,000 of her personal IBM Surviving spouse? No Surviving Issue? No Is there a predeceased spouse? Yes. Does anything apply to recapture? Personal – No, Real – No Surviving parent? Yes. Mia takes all of it. 2. Assume Howard dies intestate, survived by his father, Fred. Ten years later, Wendy dies intestate, survived by her mom, Mia. How will their assets be distributed? Howard dies, what is the issue? The first part is the exact same as #1. Ten years later Wendy dies intestate. The same until get to the distribution. No surviving spouse, no surviving issue, then recapture doctrine. No qualifying personal property. What about real property? Re-capture all property that second spouse received as a result of first spouse’s death. Does joint tenancy qualify? This is an equitable doctrine so the one side of the family doesn’t end up with all the property. Based on that logic we focus on the fact that they own it in shares more than the fact that they own it in whole. Therefore we recapture $200,000 of Greenacre and give it to Fred. We recapture all of the qualifying property that she received by virtue of his death. The other half, her half, goes to Mia. With regard to the second spouse to die, the recapture doctrine only applies to their probate intestate property. Doesn’t matter what kind of property it was with regard to the first spouse to die. 3. Assume Howard dies intestate, survived by his father, Fred. Three years later, Wendy dies intestate, survived by her mom, Mia. How will their assets be distributed? Howard dies, the first part is the same. When Wendy dies, all the same until we get to recapture. What is qualifying property? Real property qualifies so recapture half of Greenacres. Personal property must be within 5 years, written record of ownership, aggregate of $10,000. We are within the 5 years. Look at the personal property she got from him and see what has a paper trail. $1000 of tangible personal property, probably no written record of ownership so this is out. $5,000 CD probably has a written record of ownership. $200 K of Amgen stock has written record $50K cash in checking account has written record. Total it up and it is 255K so recapture all of this qualifying property. It goes to Issue, then parent, then issue of parent. In this case it goes to Howard. Everything else goes to Mia. 4. Assume Howard dies intestate, survived by his father, Fred. Three days later, Wendy dies intestate, survived by her mom, Mia. How will their assets be distributed? Here Wendy dies 3 days later. So we are looking at the term surviving spouse. Historically surviving spouse was one who survived by a millisecond. Here, when Howard dies the first possible taker is the surviving spouse. To be a surviving spouse you must meet a two step analysis, 1) did the person actually survive, if yes then 2) did they legally survive. For this we need to know the type of property and look at the written instrument if there is one. As far as Greenacre is concerned it is Non-Probate property, so to qualify as a surviving spouse must be clear and convincing evidence that she survived by a millisecond. In this case yes, so she gets Greenacre. What about his probate-intestate property? To be a surviving spouse must have clear and convincing evidence that she survived by 120 hours. In this case no, so then goes next to issue, none of that, then next to parent. All his intestate property goes to his dad. When Wendy dies she has no surviving spouse, no surviving issue, then go to the recapture doctrine. For recapture doctrine we look at actual death by a millisecond. Does she have a predeceased spouse? Yes, get Greenacre back. 5. Assume Howard and Wendy die in a plane crash. Both bodies are burned beyond recognition. How will their assets be distributed? For purposes of distributing Howard’s property we say Wendy did not actually survive him so legally we treat her as pre-deceased. Same for distributing Wendy’s property, Howard is treated as pre-deceased. How does that work with respect to joint-tenancy? By operation of law, in the true simultaneous death situation we turn the joint tenancy into tenancy in common. 6. Assume Howard has one child, Chris, from a previous relationship. Chris predeceases Howard but is survived by two children, Andy and Betty. How will Howard's estate be distributed if he dies intestate, survived by Wendy, Fred, Andy and Betty? With respect to Greenacre, Wendy still gets it. With respect to community property, Wendy takes 100% of his half. With respect to the separate property we look at how many children he has. Here he has one qualifying child. So Wendy takes 50% of the separate property. 7. Assume Howard and Wendy are married. They have no children but Wendy has one child from a previous relationship, Gigi. How will Howard's estate be distributed if he dies intestate, survived by Wendy, Fred and Gigi? Does Gigi qualify as a child for Howard? No, as a general rule we look at blood descendants. 8. Assume Howard and Wendy lived together but were never married. They have a child, Zack. How will Howard's estate be distributed if he dies intestate, survived by Wendy, Fred and Zack? This problem puts the word spouse under the microscope. Domestic partner you have to register. For spouse, CA does not recognize common-law marriage. What if Gerri leaves Wendel and they never get divorced. Wendel meets Lulu and marries her. Then after Wendel marries Lulu, Gerri dies. Under family law you can not be married to two people. Technically Wendel’s marriage to Lulu is not valid. There is a putative marriage, when you go through the ceremony but the wedding is invalid due to a technical reason. The putative marriage doctrine says that if you went through a marriage ceremony and thought it was valid, then if you acted in good faith you get the benefits of marriage. Don’t really need to know about overlapping spouses. What if Gerri leave Wendel, and they are separated for 20 years. She files divorce papers and the proceedings are about to end and then Wendel dies. Does she qualify as a surviving spouse? Yes, until the divorce is entered as final you are a spouse for purpose of inheritance.
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