Protection Against Disinheritance

Protection Against Disinheritance

In the previous section, we studied how the intestacy statutes allocated shares to surviving spouses and descendants mostly found in common law states. Now, we will look at how these protection devices are treated in community property jurisdictions.

Protection of the Spouse

In a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and sometime Alaska), a husband and wife are considered co-owners of all property acquired during the marriage. For example:

Bruce and Donna lived in Idaho when they married three years ago. Bruce is an executive at a local department store and earns $75,000 per year. Donna is an advertising executive and earns $85,000 per year. After the wedding, they purchased a home for $225,000 and furnishings for $30,000. In addition, they bought an SUV for $32,000 and invested $10,000 in the stock market. Since Bruce and Donna live in a community property state, each owns half of the other’s salary and their home, furnishings, SUV and stock portfolio.

Conversely, property acquired by gift or inheritance and any property acquired prior to the marriage would be considered separate property. For example:

Bruce and Donna lived in Idaho when they married three years ago. Bruce is an executive at a local department store and earns $75,000 per year. Donna is an advertising executive and earns $85,000 per year. After the wedding, they moved into the home Donna had purchased five years ago for $225,000. To update the look, they purchased furnishings for $30,000. In addition, Donna kept an older Honda Accord she had purchased while in college and Bruce kept his old sports car. They invested $10,000 in the stock market. Since Bruce and Donna live in a community property state, each owns half of the other’s salary and any property acquired after the marriage, namely the furnishings and stock portfolio. Since Donna had acquired the home and her Honda before the marriage, those items are considered her separate property. Also, Bruce’s sports car is his separate property.

In all community property states, if a decedent is not survived by any descendants, that person’s one-half interest in the community property will pass to the surviving spouse. The surviving spouse already owns the other half of the community assets. See Jones v. State, 5 S.W.2d 973 (Tex. 1928). Afterwards, the surviving spouse will own the entire community asset. For example:

Bruce and Donna lived in Idaho when they married three years ago. Bruce is an executive at a local department store and earns $75,000 per year. Donna is an advertising executive and earns $85,000 per year. After the wedding, they purchased a home for $225,000 and furnishings for $30,000. In addition, they bought an SUV for $32,000 and invested $10,000 in the stock market. Donna dies intestate. Bruce will now inherit Donna’s one-half interest in the home, furnishings, SUV and stock portfolio and become the sole owner of all these assets.

Property labeled as separate property would be distributed under the intestacy statutes. The distribution order is similar to how property is distributed under the intestacy statutes in common law jurisdictions. For example:

Bruce and Donna lived in Idaho when they married three years ago. Bruce is an executive at a local department store and earns $75,000 per year. Donna is an advertising executive and earns $85,000 per year. After the wedding, they moved into the home Donna had purchased five years ago for $225,000. To update the look, they purchased furnishings for $30,000. In addition, Donna kept an older Honda Accord she had purchased while in college and Bruce kept his old sports car. They invested $10,000 in the stock market. Donna dies intestate. Bruce will now inherit Donna’s one-half interest in the furnishings and the stock portfolio and become the sole owner of those assets. Since the home and Donna’s car were her separate property, they would be distributed as per the intestacy statute. As the surviving spouse, Bruce would also inherit both those items.

If the decedent is also survived by descendants, there are a couple of different ways the community property could be distributed. In several states, the surviving spouse takes all the community assets, even if the deceased is survived by children from an earlier marriage. See Original UPC § 2-102A; Cal. Prob. Code § 6401(2). For example:

Esther and Chris have been married for 15 years and live in California. They have 14-year-old twin daughters, Alicia and Abigail. Chris has been married twice before. His first marriage produced another child, his 22-year-old son Eric. Esther and Chris own a primary residence and furnishings in a San Francisco suburb. Chris dies intestate. Since they lived in a community property state when he died, each was considered a co-owner of the family residence and its contents—community property. At Chris’s death, Esther will inherit Chris’s one-half interest in the home and furnishings, although he is survived by a child from an earlier marriage.

In other states, the surviving spouse takes the entire estate only if the children are also the surviving spouse’s children. If not, part of the decedent’s one-half interest in the community property passes to his children from a previous marriage. The surviving spouse is only entitled to keep her one-half interest in the property. See UPC § 2-102A; Ariz. Rev. Code § 14-2101. For example:

Esther and Chris have been married for 15 years and live in Arizona. They have 14-year-old twin daughters, Alicia and Abigail. Chris has been married twice before. His first marriage produced another child, his 22-year-old son Eric. Esther and Chris own a primary residence and furnishings in a Phoenix suburb. Chris dies intestate. Since they lived in a community property state when he died, each was considered a co-owner of the family residence and its contents—community property. At Chris’s death, his son, Eric will inherit his intestacy share of Chris’s one-half interest in the home and furnishings. Esther is only entitled to keep her one-half interest in this property plus her intestacy share of the rest.

Protection of Children

Although testators are free to voluntarily disinherit their children, there are some safeguards in place to prevent unintentional disinheritance. Many statutes have pretermitted (omitted) heir provisions, which give children unintentionally omitted from a will an intestate share. This omission usually happens when a child is born or adopted after execution of the will. See e.g., Crump’s Estate v. Freeman, 614 P.2d 1096 (Okl. 1980). See also UPC § 2-302. For example:

Craig executed a will in 1974 and provided that his designated beneficiaries, who included his grandchildren, Felix and Oscar, were to inherit his shares of IBM stock. In 1980, his only daughter, Anita, had another child, Alice. Craig never updated his will and died in 2000. Anita predeceased Craig. Alice’s claim as a pretermitted heir would probably be successful and she too would be entitled to a share of the IBM stock, along with her brothers. The will gave no indication that Craig intended to disinherit Alice, since it was silent as to his intentions toward her.

Gifts to Charity

At common law, laws commonly known as Mortmain statutes, limited the power of a testator to make testamentary gifts to a church. Today, these statutes have been expanded to include any charity. The purpose of such statutes is to protect the family of a decedent from disinheritance by death-bed gifts to charity.

Today, only three states still recognize these statutes, since in other jurisdictions they have been found to be an unconstitutional violation of the Equal Protection Clause. See In re Estate of Cavill, 329 A.2d 503 (Pa. 1974); Estate of French, 365 A.2d 621 (D.C. 1976); Shriners’ Hospital for Crippled Children v. Zrillic, 563 S.2d 64 (Fla. 1990).

Other Protections

Upon a testator’s untimely death, it is not uncommon for an estate to be burdened by debts. As such, many states provide for other protections, such as family allowance, homestead and exempt properties to give the family a minimum shield from creditors’ claims.

Homestead statutes allow the passing of residences to be free from creditors’ claims. These rules usually apply to the family home, and usually only during the minority of children living in the home. A family allowance allows for a certain amount for support of the surviving spouse and children during the administration process. Lastly, exempt property provisions usually allow specified chattels, such as clothing, furniture and personal effects, to pass to the family from the decedent, not subject to creditors’ claims.