Does community property extend to businesses or only to real estate? Can a spouse own 50% of a business as community property, and bequeath to anyone other than surviving spouse?
Community property ownership can extend to most forms of property, including real estate, business interests, bank accounts, brokerage accounts, stock, bond, mutual funds, automobile, even furnishings of a house or rental property.
Yes, you may bequeath your share of any asset owned as community property to someone other than the surviving spouse. However, if you are contemplating doing this, you should seek the assistance of a qualified estate planning attorney to make sure it is done properly. You will not be able to bequeath your community property interest in a retirement plan that is your spouse's name, even though you do have that interest.
Please remember to mark what you believe to be the best answer to your question. This answer is provided by estate planning attorney Robert P. Bergman, with offices in San Jose, California. Mr. Bergman is a Certified Specialist in Estate Planning, Trust and Probate Law (State Bar of California Board of Legal Specialization), and has been practicing since 1980. This answer does not create an attorney-client relationship, and is only intended to provide general legal advice within the limits of the question asked. If you wish to create an attorney-client relationship for specific legal advice, it will be necessary to enter into an engagement for legal services. More general legal information about wills, living trusts, and estate planning can be found at Mr. Bergman's main website at www.lawbob.com, or his information website at www.lawbob.net. Mr. Bergman also offers free living trust seminars and wealth preservation seminars at his offices in San Jose. For those unable to attend a live seminar, an online living trust seminar may be viewed or downloaded at www.freelivingtrustseminar.com.
The previous answer is correct. You can certainly bequeath your 50% of community property to whomever you choose.
Sometimes, it can be difficult to establish exactly what portion of a business (or other asset) is community property - particularly if the business was started by one spouse prior to marriage, or some portion of separate property funds were used to start the business by one of the spouses.
In addition, when it comes to a business, you want to consider whether the 3rd party you are contemplating leaving your 50% community property interest to would be a good business partner with your spouse and whether that 3rd party is even interested in inheriting a portion of a business. You should definitely consult with a qualified estate planning attorney who can help guide you and your spouse through all of the considerations.
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