Have you updated your estate documents?

Tom died in his sleep with a Will he’d created three decades ago, dividing everything equally among his four children, who are now adults. When he made the Will, he was recently divorced from the children’s mother and had some rural land that wasn’t worth enough to worry about probate. But the times changed and life experiences intervened.


Wills and registered domestic partner status


After his divorce, Tom made a lifestyle change, came out as a gay man and met the man with whom he lived for the remainder of his life. Tom had taken advantage of domestic partner legislation to protect his partner but had not created an estate planning to reflect this. Tom failed to change his Will to reflect this relationship or leave his partner any of his property.


Probate Code’s default rule recognizes a registered partner as a spouse


When Tom died, his children and partner learned that because Tom hadn’t mentioned him in his old Will, he is eligible for a large portion of his estate. Under the California Probate Code, which governs how estates are administered, an “omitted” spouse or registered domestic partner is entitled to all of Tom’s community property, everything he acquired from the date of registration forward, as well as, in this case, one-third of all his separate property, which is everything he owned before the date of registration.


The lesson is that if Tom had made an estate plan including his partner, he would have treated him like any other spouse and given him most everything–the Probate Code’s default rule.


Second-guessing the intentions of the deceased


If Tom had made a Trust providing for his partner, he might very well have elected to leave everything to him, not his kids. Or not. He could have chosen to leave him only a small portion of his estate and the lion’s share to his kids. We’ll never know what Tom’s true intentions were because he waited too long to revise his estate plan.


Property appreciation means that a Will needs to be updated


Thirty years after he made that original Will, Tom’s recently paid-off house and the land and his other assets had appreciated to a value of hundreds of thousands of dollars. His Will alone does nothing to prevent probate in California, which is required if a decedent owned $100,000 worth of property.


A proper estate plan is necessary to avoid probate


Given the size of Tom’s estate, his children and his partner will receive their respective shares only after a lengthy and expensive court proceeding, all of which could have been avoided if Tom had made a trust to hold title to his property.


The moral of this story? A big chunk of Tom’s inheritance will be spent on probate costs.