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Dividing a house among heirs - CA

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alaw

Guest
California

I am making a will.
Can I bequeath my share of a house among more than one heir?

If I try, does this force the house to be sold with the money divided among the heirs?
 


divgradcurl

Senior Member
Can I bequeath my share of a house among more than one heir?
Probably, but not in every case. How do you hold title to the house, and with whom do you share the title?

If I try, does this force the house to be sold with the money divided among the heirs?
No, it does not force a sale -- but if any one heir wants money instead of the house, and the other heirs refuse to by his or her part out, he could force a partition sale to get his share out of the house. So, while it does not force a sale, it does make a sale more likely.
 
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alaw

Guest
California

Thanks for the quick reply divgradcurl!

My name is the only one on the deed.
The house is paid up.

But I understand that CA has a "community property" law.
Now, I have to admit that I do not know the implications of that. I am just assuming that it means that, should I die, my wife automatically gets possession of 50% of the house, and I can distribute my half as I see fit.

I'd appreciate it if you could clear that point up too.
 
A

alaw

Guest
p.s. I bought the house after I got married.
It is our residence.
 

divgradcurl

Senior Member
But I understand that CA has a "community property" law.
That's correct.

My name is the only one on the deed.

p.s. I bought the house after I got married.
It is our residence.
Well, here's the question -- how did you PAY for the house? That is, what monies did you use to purchase the house?
 
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A

alaw

Guest
All the money came from selling a house which my wife bought after she was divorced, but before we got married.

The reason only my name is on the deed is this.
At first, we bought the new house with a 2nd mortgage on the old one.
Later, we sold the old old and paid off the mortgage.
The person representing us in getting the loan for the new house, said that we probably couldn't qualify if my wife's name was on the deed, as she might be a bad credit risk.
 

divgradcurl

Senior Member
All the money came from selling a house which my wife bought after she was divorced, but before we got married.

The reason only my name is on the deed is this.
At first, we bought the new house with a 2nd mortgage on the old one.
Later, we sold the old old and paid off the mortgage.
The person representing us in getting the loan for the new house, said that we probably couldn't qualify if my wife's name was on the deed, as she might be a bad credit risk.
Well, this complicates things a bit. The house you currently own was "acquired during marriage," so the presumption is that it is community property. However, the house was purchased with your wife's separate property -- money that came from an asset acquired outside of the marriage -- so that would lend a court to find that the presumption is overcome, and that the house is the wife's separate property.

However, there are a line of cases in California that basically say that if the title to property is held in such a way so that the "intent" to keep the property as a separate property asset is not clear, then is is assumed to be community property. Basically, her using separate property to pay for something titled in your name during the marriage would very likely be seen as community property.

All that said:

If you die intestate, the spouse gets ALL of the community property.

By will, you can change this. If you want to have the least amount of trouble later on, know that with respect to community property, each spouse owns an undivided 1/2 interest -- you can will away your 1/2, but if you don't do it right, the surviving spouse may be able to undo you will, at least in part.

In order to make your will essentially untouchable, you must will 1/2 of YOUR 1/2 of the community property (in other words, 1/4) to your spouse; the other 1/4 you can will away to whomever. You can do whatever you want with your separate property.

If you will away MORE than 1/4 of the community property, then your wife can choose to take her "elective share" and thereby get her 1/2 of your 1/2 anyway. So, it's best just to leave your spouse the correct share in the first place.

But -- and here's the big but -- it is still not 100% certain exactly HOW a court might rule on the status of the house. There is a good chance that a court would find it to be community property -- but she also has a fair argument that the house, regardless of the name on the title, should really be her separate property, or that the house is community property but her half of the estate should be "reimbursed" for the separate property she put into the purchase of the house. It probably wouldn't be a bad idea to sit down with a lawyer and try and figure out how best to work things out -- maybe changing the title to the house to "community property" would be enough to clear up that issue -- if your mortgage broker and spouse would be willing!
 
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divgradcurl

Senior Member
One last thing -- since I didn't answer your question above -- you can will away the 1/4 share in the community property to whomever you want. If you will it to one or more people, then they will hold title to the house along with your wife as tenants in common. If they wanted out, and the wife was unwilling to buy them out, they could force the sale of the house, called a "partition" sale. However, such a sale is not required -- if she were willing to buy out their share, or if they are willing to simply hold on to their share, there is no requirement that the house be sold. Just the nature of the title will change.
 

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