Spousal Set-Asides

Oakland Probate Lawyer Helping the Bereaved

Under the California Probate Code, Section 6600- 6615, provisions are made for small estates so that they do not have to go through full probate. The estate is set-aside, meaning it is provisionally passed on to a spouse or minor child. Provisionally means that the debts owed by the deceased, as well as any taxes due, still have to be paid-the estate is not free and clear. This is different than if a full probate procedure had been undertaken, where debts would be paid before funds were disbursed.

Who Is Eligible for a Set-Aside?

The following people are eligible to file for a set-aside:

  • Spouses
  • Domestic partners
  • Minor children of the deceased (with help from a guardian)

The net value of the deceased's estate cannot be more than $20,000 for this mechanism to be available. Determining value would include all assets not held in trust, but not include any liens against those assets. So, for example, a car valued at $10,000 would count for the full amount, even if $8,000 was still owed on it to a finance company.

How a Spousal Set-Aside Differs

Although the purpose of the spousal set-aside is the same-removing assets from probate-there are distinct differences from other set-asides. In particular, property that the spouse already owns may be included in the petition.

The purpose of including community property (or "quasi-community property") is to obtain the court's recognition and determination of the status of the listed assets. In other words, the spousal set-aside allows a spouse or domestic partner to get a ruling on ownership.

How Does it Compare to Full Probate?

Like other set-asides, the spousal set-aside is quicker and cheaper than full probate and a ruling will establish clear title and distinguish which property is subject to regular probate and which may be excluded. But also, like other set-asides, the spouse may be subject to any liability attached to the assets. The debts that came with the assets become the personal liability of the spouse, since the assets was judged to be community property.

The net result is that the spouse doesn't escape the encumbrances attached, as they might have if the rest of the estate paid the debts. For example, if a trust were set up to pay whatever is owed on an asset before bequeathing it to a spouse, the surviving spouse would get the asset debt-free. With a spousal set-aside, the asset is immediately transferred but comes with the liability.

Limitations to Set-Asides

As an Oakland probate lawyer, I understand that there are also limits to the liability. Furthermore, the surviving spouse will owe no more than fair market value of half the property if it is judged to be community property, no matter what the total liens and encumbrances are.

In short, while a spousal set-aside is worth pursuing to establish ownership legally, it doesn't serve as a substitute for a well-designed trust. A trust will clarify ownership as well as make provisions for liens and other debts, while still avoiding the hassle of an extended, formal probate process and potentially litigation.

For individualized help, arrange for a free consultation with an Oakland probate attorney from the Law Offices of Steven M. Simrin today. Call (510) 328-4005 to get started.

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