Understanding the Testamentary Effects of Community Property Rules

Due to a lot of people moving to Florida, the state has community property rules that are important in legal decisions. In 1992, the Florida probate laws were changed to include a version of the Uniform Disposition of Community Property Rights at Death Act. This act affects what happens to a person’s property after they die. However, it doesn’t do as much as people might expect. There are also other rules in Florida that protect a spouse’s share of community property. It’s important for lawyers to know about how state and federal laws about community property interact. Some states have different rules for how property is divided in a marriage. These include California, Texas, Louisiana, and a few others. There is a law that says if you move to a different state, you will still be treated as if you were in a community property state unless you say otherwise. This is because the community property rules are seen as fairer than the rules in other states. The act covers personal property that was acquired or became community property in another state. If a couple moves to Florida from a community property state and buys new stuff, all of the new stuff is considered community property. The same rule applies to real estate in Florida. Before 2003, the act didn’t apply to homestead property, but it was changed so that the surviving spouse can inherit part or all of the homestead property. When a married person dies, the property they owned with their spouse may not all go to the surviving spouse. The law splits the property in half, with one half going to the surviving spouse and the other half subject to being passed on according to the deceased person’s wishes or the laws of inheritance. This means that even if something was only in the name of the surviving spouse, it might still have to be shared with the deceased person’s family. If someone dies and their property is in their spouse’s name, the personal representative or a beneficiary of the deceased person can take legal action to make sure the property is properly transferred. The personal representative doesn’t have to look for this property unless someone asks them to within three months of the person’s death. If the property was in the deceased person’s name when they died, the spouse can ask the probate court to transfer their share. The personal representative doesn’t have to look for this property unless the spouse asks them to within three months of the person’s death. The law is unclear about when a claim can be made regarding community property rights after someone dies. It seems like a spouse or beneficiary can still claim property rights even after the three-month deadline, but it’s not clear how long after. If someone buys property or lends money, they are protected if they didn’t know about the community property rules. The law doesn’t give people new rights to property, but it helps them prove that they already have a right to it. It’s a good reminder for lawyers that community property rules are important in estate planning. In Florida, there is a case called Quintana v. Ordono that dealt with how property is divided when someone dies. In this case, the court decided that property acquired during a marriage is considered community property, and the spouse is entitled to half of it, even if the person who died lived in a different country. This case has been used in other cases to make similar decisions. So, even though there are new laws about this, the court still follows the old case law when it comes to dividing property after someone dies. In some cases, federal laws like ERISA and the tax code can override community property laws. This means that when it comes to things like retirement plans and IRAs, the federal rules can be more important than the state rules. For example, in one case, the U.S. Supreme Court said that a wife could get the money from her husband’s retirement plan, even though his children from a previous marriage thought they should get some of it under the state’s community property law. In another case, the Tax Court decided that a wife wouldn’t have to pay taxes on money her husband took out of their IRA, even though the state’s community property law said she should. So, when it comes to federal rules and community property, the federal rules usually win. If you have a life insurance policy and you live in a community property state, it means that the rules about who owns the policy and who gets the money when someone dies might be different. In some cases, the noninsured spouse might have to include half of the value of the policy in their estate for estate tax purposes when they die. And if the insured spouse dies first, the noninsured spouse might only get half of the money from the policy unless there’s evidence that the insured spouse wanted them to have it all. These rules are based on the laws of the state where you live, so it’s important to understand how they work. When dealing with life insurance and estate planning in community property states, it’s important to be careful. If a life insurance policy is considered community property, it can lead to complications if one spouse dies. Make sure to work with a lawyer to set up a trust for the life insurance policy and to make sure the policy is not considered community property. It’s also important for both spouses to agree on how the policy will be handled in case of death. In community property states, it’s best to keep assets as community property to take advantage of tax benefits and avoid complications. Splitting assets into separate property can result in losing certain benefits. When one spouse is not a U.S. citizen, there are limits on how much they can receive as a gift from their spouse each year. This can make it difficult to split their estates. However, if they have community property assets, the splitting has already been done and the limitation does not apply to those assets.

When one spouse dies, their share of community property included in their estate also affects the survivor’s half. This can be a big benefit for couples. It’s important for lawyers to bring up this issue with their clients and take the necessary steps to continue or end the community property in affected assets.

This issue comes up not only for couples moving from certain U.S. states, but also for immigrants from civil law countries like Spain, France, and Colombia. Estate planning for these individuals needs to consider the laws of their former home and how to handle their property and estate planning documents.

1 Community property-like jurisdictions include, for example, Spain, France, Germany, Venezuela, Colombia, and Brazil.

The writer is a lawyer specializing in wills and trusts, tax, and real estate law. “To teach members about doing their duty and helping the public, to make the justice system better, and to advance the study of law.” – From the Rules Regulating The Florida Bar.

Source: https://www.floridabar.org/the-florida-bar-journal/understanding-the-testamentary-effects-of-community-property-rules/