Married Couples and Estate Planning, Part Two in a Series.

This will be one post in a series of posts that will describe target audiences for estate planning.

There are many reasons to have estate planning in place especially if you are married and have assets outside of your marriage.

Target Audience: Married Couples who have separate property assets.

Community and Separate Property Issues:
California is a community property state.

This means that all property married couples acquire while domiciled in California is community property. Each spouse owns an equal share of all community property.

Separate property is all property owned separately by the husband or wife before marriage. It includes all property acquired separately outside of marriage, such as gifts or inheritances.

Separate property also includes money earned while domiciled in a separate property state. All property declared separate property in a valid pre- or post-nuptial agreement is also separate property.

Community property ends when either one of the spouses dies. It also ends when the decree of divorce/dissolution becomes final or when the couple separates with no intention of rejoining.

Estate planning is extremely important for married couples who have separate property assets.

Let's say that in your marriage you received an inheritance from your great-aunt ... a nice apartment building that is now titled in your name: John Smith as a married man as his sole and separate property.

This property will not go automatically to your spouse if you pass away as if it were held as a joint tenancy asset in a marriage. Whether this is a good thing does not matter -- you need to have estate planning documents in place to state who you want to get this apartment building and other separate property assets.

And if this separate property is in a Living Trust, it will avoid probate. You can have your attorney draft a separate Living Trust from the Living Trust you have with your spouse.

Also if you have separate property during a marriage -- you may very well want to keep it separate property. It is your property to begin with. It can remain yours in the case of divorce so long as you keep it separate and do not commingle or combine it with the community. That means sharing it with your spouse, using community property funds to manage or maintain the separate property and so on. Lots to watch out for. If you have doubts about commingling, please seek the advice of an attorney.

Let me end this post by asking you this: can you imagine your spouse having to open probate for a separate property asset of yours if you die first? You know the answer and the solution.