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News Updated Date : |
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November 27th, 2009 01:01am |
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Yes. The nature of your assets and how you
hold title to those assets is a critical factor in the estate planning process. Before you
take title (or change title) to an asset, you should understand the
tax and other consequences of any proposed change. Your estate planning lawyer will be able to
advise you.
- Community property and separate
property. If you are married or a registered domestic partner,
assets earned by either you or your spouse or domestic partner
while married or in the partnership and while a resident of
California are community property. (Note: Earned income in domestic
partnerships, however, may not be treated as community property for
federal income tax purposes.)
As a married individual or registered domestic partner, you
may continue to own certain separate property as
well—property which you owned prior to the marriage or
domestic partnership. A gift or inheritance received during the
marriage or partnership would be considered separate property as
well.
Separate property can be converted to community property (and
vice versa) by a written agreement (it must conform with California law) signed by both
spouses.
However, taking such a step can have significant tax and
other consequences. Make sure that you understand such consequences
before making any such change.
- Tenants-in-common. If you own property as tenants in common and
one co-tenant (co-owner) dies, that co-tenant’s interest in
the property would pass to the beneficiary named in his or her
will. This would apply to co-tenants who are married or in a
domestic partnership as well as to those who are single.
- Joint tenancy with right of survivorship. Co-owners (married or
not) of a property can also hold title as joint tenants with right
of survivorship. If one tenant were to die in such a situation, the
property would simply pass to the surviving joint tenant without
being affected by the deceased person’s will.
- Community property with right of survivorship. If you are
married or in a registered domestic partnership, you and your
spouse or partner could also hold title to property as community
property with right of survivorship.
Then, if your spouse or domestic partner were to die, the
property would pass to you without being affected by the deceased
person’s will.
Married couples and registered domestic partners also have
the option of jointly holding title to property as community
property. In such a situation, if one spouse or partner were to
die, his or her interest would be distributed according to the
instructions in his or her will.
California State Bar
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