Estate Planning and Dissolution: The Right of Survivorship and Severing the Knot
If you are contemplating divorce or already involved in a dissolution proceeding in California, one important consideration from an estate planning perspective is what to do about property held in joint tenancy or community property with right of survivorship. When one spouse dies, 100% of the property transfers to the surviving spouse by operation of law. The statutory presumption that the right of survivorship in a joint tenancy is severed as to the decedent’s interest only applies to a former spouse after the marital status is terminated. This means that even though you are separated from your spouse, have filed for divorce and most likely do not want your estranged spouse to receive any of your property if you were to die, your spouse will be entitled to receive your 50% interest in any property held in joint tenancy or community property with the right of survivorship unless you take affirmative steps to sever the right of survivorship.
Should I sever the right of survivorship?
You have to weigh the benefits and risks when you decide whether to immediately sever joint tenancy property, or to terminate the survivorship component of community property with right of survivorship. The severance will ensure that your 50% interest can go to the individuals designated in your will or revocable trust if your death occurs before the judgment terminating marital status. But if your spouse should die before the dissolution is final, then you will not be entitled to 100% of the property through the right of survivorship but only a 50% share.
How do I sever the right of survivorship?
Each spouse can take unilateral action to eliminate the right of survivorship to property but advance notice is required if the dissolution action has started. The automatic temporary restraining orders (ATROS) require notice of the change to be filed and served on the other spouse before it takes effect. The severance may be implemented in any of several ways specified in the California Civil Code, including by a spouse’s unilateral written declaration.
Because most individuals will not want the other spouse to receive any interest in their share of the community property or separate property when a dissolution or legal separation is being contemplated or has started, it is highly recommended to consult with an estate planning attorney. You will likely want to designate a different fiduciary than your spouse and change beneficiary designations. Each individual estate planning situation requires an independent analysis of the specific facts and circumstances involved. The legal information in this blog is not intended as legal advice but only general information and should not be used as a substitute for consultation with an attorney. [Disclaimer]
Our estate planning team at Naimish & Lewis can advise you on the impacts of dissolution and legal separation and assist you in creating or revising your estate plan according to your intentions. To schedule an initial consultation with an attorney at our firm, please contact us.