California Wills vs. Trusts
Estate planning in California can be straightforward with the right guidance. For California residents weighing the pros and cons of wills versus trusts, recognizing their distinct advantages and limitations is crucial for minimizing family complications, reducing costs, and avoiding unnecessary delays. This detailed overview examines California’s specific estate planning regulations and provides direction to help ensure your assets are distributed according to your intentions.
Table of Contents
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California Will Requirements
A California Last Will and Testament should include:
- Age and Capacity: Testator must be of “sound mind” and at least 18 years old
- Format: Must be in writing
- Signature: Must be signed by the testator
- Witnesses: Must be signed by at least two competent adult witnesses who understand that the document is a will
Disinterested Witnesses
The witnesses to a California will should be “disinterested,” meaning they have no financial interest in the testator’s estate or in the will itself. While a will with interested witnesses isn’t automatically invalidated in California, bequests to a witnessing party are presumed to have resulted from undue influence. If the witness receives more than they would have under intestate succession, the bequest may be voidable.
Formalities
An original will that meets all formal requirements under California law is presumed valid unless evidence to the contrary is introduced. To be admissible in probate, the will must be an original document—a photocopy generally will not suffice, though it may sometimes serve as evidence of a decedent’s intent if the original is missing or has technical flaws.
While notarization of wills is common in California, it is not formally required for validity.
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Amendment, Revision, and Revocation of California Wills
Codicils
Modifications to an existing California will can be accomplished by executing a codicil, which is a separately executed document supplementing or revising terms of a will that has already been signed and witnessed. In California, codicils must meet all the same formalities required for an original will.
Revocation
California wills can be revoked through:
- Intentional destruction of the document with intent to revoke
- Executing a new will that clearly states its intention to revoke prior wills
Automatic Revocation by Divorce
If a testator divorces after executing a will, California law assumes that any bequests made to the ex-spouse were automatically revoked by the divorce unless the will specifically states that its terms are not affected by a subsequent divorce.
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Holographic and Oral Wills
Holographic Wills
California recognizes holographic wills (handwritten wills) as valid as long as the document is signed by the testator and all relevant provisions are clearly written in handwriting that is demonstrably the testator’s own. Notably, witness signatures are not required for holographic wills in California.
While valid, holographic wills do not benefit from the presumption of authenticity that attaches to formal wills meeting all statutory requirements, making them more vulnerable to challenges during probate.
Oral Wills
California law does not recognize oral (nuncupative) wills. All valid wills in California must be in writing.
California Trust Requirements
California trusts can be created for any purpose that is not illegal or contrary to the state’s public policy. There are two general categories: Revocable vs. Irrevocable Trusts.
Requirements for a Valid California Trust
To create a valid trust in California, the following elements are required:
- A settlor must manifest an intent to create a trust (such as by drafting and signing a “declaration of trust”)
- Property must be owned by the trust
- A trust beneficiary must be named (or the trustee must be granted the authority to select beneficiaries)
- A trustee must be declared, appointed, or implied by transfer of property to the person as trustee
California differs from some states in that it does not impose the same formalities on the creation of trusts serving as “will substitutes” as are required for standard wills.
Written vs. Oral Trusts
In California, a written, signed document creating a trust is only technically required if the trust involves real estate. However, the vast majority of trusts are formed via a written instrument to avoid ambiguity, miscommunication, and disputes over validity.
For an “oral trust” to be valid in California, its existence and terms must be established through clear and convincing evidence, which can be extremely difficult to prove after the settlor’s death.
Special Considerations
Community Property
California is a “community property” state, which means a married individual’s assets often include a significant amount of marital property jointly owned by the couple. Upon the death of a married person, their interest in property qualifying as marital property automatically transfers to the surviving spouse.
California also recognizes a distinct form of joint ownership called “community property with right of survivorship” that allows married couples and domestic partners to bypass probate entirely for jointly held assets.
Community Property Form
To simplify and speed up the probate process, California permits direct transfer to a surviving spouse of marital property owned by a married decedent through the use of a “Community Property Form” published by the state government. This form can be used if:
- A married decedent died intestate (without a will), or
- The surviving spouse is the only beneficiary named in the decedent’s will
Streamlined Probate
California offers simplified probate procedures for smaller estates:
Small Estate Procedure
Eligibility:
- Estates valued at $150,000 or less
Process:
- Instead of full administration, small estate assets are distributed based on affidavits of heirs and personal-representative acknowledgement
- This can significantly reduce the cost and time required for administration
- No court hearing is typically necessary
California Statutory Will
The “California Statutory Will” is a form published by the California legislature as a simple template for creating a valid will. If completed, executed, and witnessed correctly, this fill-in-the-blank form is considered valid and admissible in probate.
The Statutory Will can be useful for testators with small, simple estates with little need for customization, but may not be appropriate for more complex situations or larger estates.
TOD Deeds and Vehicle Titles
California recognizes Transfer-on-Death (TOD) designations on both real estate deeds and motor vehicle titles. Ownership of property with a TOD designation automatically transfers to the named beneficiary upon the owner’s death, avoiding the need for probate.
- For real estate: A properly recorded “Revocable Transfer on Death Deed” can transfer property to beneficiaries without probate
- For vehicles: The California DMV allows for transfer-on-death beneficiary designations on vehicle registrations
Need help creating the right estate plan for your California family?
Our estate planning specialists can help you navigate California’s unique laws and create a personalized strategy.
Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Immediate (living trusts) or at death |
| Probate Process | Required | Avoided if trust is properly funded |
| Privacy | Public record | Private |
| Challenges | Easier to contest | Harder to contest |
| Cost to Create | Lower upfront cost | Higher upfront cost |
| Ongoing Administration | None until death | Requires funding and management |
| Protection During Incapacity | Requires separate power of attorney | Trustee manages assets |
| Community Property Handling | Subject to community property laws | Can address community property issues |
When It Takes Effect
Wills: After death
Trusts: Immediate (living trusts) or at death
Probate Process
Wills: Required
Trusts: Avoided if properly funded
Privacy
Wills: Public record
Trusts: Private
Challenges
Wills: Easier to contest
Trusts: Harder to contest
Cost to Create
Wills: Lower upfront cost
Trusts: Higher upfront cost
Ongoing Administration
Wills: None until death
Trusts: Requires funding and management
Protection During Incapacity
Wills: Requires separate power of attorney
Trusts: Trustee manages assets
Community Property Handling
Wills: Subject to community property laws
Trusts: Can address community property issues
Frequently Asked Questions
Do I need a lawyer to create a will in California?
While not legally required, consulting with an attorney is highly recommended, especially for complex estates. California’s community property laws and specific requirements for valid wills make professional guidance valuable for ensuring your will accomplishes your goals.
What happens if I die without a will in California?
If you die without a will in California (intestate), your assets will be distributed according to California’s intestacy laws. Your spouse will receive all community property and a portion of your separate property, with the remainder going to your children or other relatives according to a statutory formula.
Are handwritten wills valid in California?
Yes, California recognizes holographic (handwritten) wills as valid if the material provisions are in the testator’s handwriting and the will is signed by the testator. Witness signatures are not required for holographic wills, though they may be more vulnerable to challenges in probate.
How does California’s community property law affect my estate plan?
As a community property state, all assets acquired during marriage (except gifts and inheritances) are considered jointly owned by both spouses. Upon death, a person can only dispose of their separate property and their half of the community property through their will or trust. The surviving spouse automatically retains their half of community property.
What’s the advantage of a living trust in California?
Living trusts are particularly valuable in California due to the state’s potentially lengthy and expensive probate process. Assets properly transferred to a living trust avoid probate entirely, which can save significant time and money, especially for estates with real property or substantial assets.
What is California’s small estate procedure?
California offers a simplified procedure for estates valued at $150,000 or less (excluding certain assets). This allows heirs to collect assets using affidavits rather than going through formal probate, significantly reducing time and expense.
Can I use Transfer-on-Death deeds in California?
Yes, California allows Transfer-on-Death (TOD) designations for both real estate and vehicles. These designations allow property to pass directly to named beneficiaries without going through probate, providing a simple alternative for transferring specific assets.
What is the California Statutory Will?
The California Statutory Will is a pre-printed form created by the state legislature that allows residents to create a basic will by filling in blanks. While convenient for simple estates, it offers limited flexibility and may not address complex situations or larger estates adequately.
Conclusion
Creating a will or trust in California does not have to be difficult or intimidating. However, California’s unique community property laws and specific estate planning considerations add complexity that requires careful attention. Certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can result in unforeseen consequences if not properly addressed.
Given California’s potentially lengthy and expensive probate process, many residents find that a comprehensive estate plan including both a will and trust provides the best protection for their assets and loved ones. Whenever any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with California’s specific laws.
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