Estate tax repeal may require surviving spouses to sue their own trusts to get their rightful share

This article in the Wall Street Journal highlights one of the unintended consequences of Congress' failure to pass a new estate tax law. In California, where estate planning using trusts is very common, most couples have some form of estate tax planning built into their trusts. Even for couples who never had any realistic chance of being subject to the estate tax it is common to find some form of estate tax planning either because the couple's attorney inserted the language as a matter of caution or because a trust mill put it in as part of their boilerplate language.

Surviving spouses are entitled to control their own separate property and one half of the community property they shared with their late spouse. The title to the couple's property does not always make clear what is separate property and what is community property. A surviving spouse, particularly in a second or later marriage, will want to retain control over their share of the marital property. This is property they can use to support themselves and can be left to anyone they choose when they die.

A surviving spouse who believes their trust with their late spouse has "overfunded" the decedent's trust by putting community property into the decedent's trust (i.e. the B trust, credit shelter trust, bypass trust, etc.) will have to file a spousal property petition in the probate court. This is a form of trust litigation. This probate court petition alleges the property was community proprety while the deceased spouse was still alive and half of it therefore rightfully belongs to the surviving spouse. These petitions most often turn on being able to trace the chain of title in order to prove how title was held before the property was titled in the name of the trust.


The Grossman Law Firm, A.P.C. are San Diego, California probate lawyers.  We help probate estates in San Diego County, California.  We appear in the San Diego probate court for probate cases that come San Diego County south of Escondido.  We appear in the North County San Diego/Vista probate court for probate cases that come from Escondido all the way north to Fallbrook, California.  If you  would like more information on probate and trust administration then order our free book The Insider's Guide to California Probate and Trust Administration as well as our free DVD Probate a Will or Administer a Trust After the Death of a Loved One.