Legal Question in Wills and Trusts in California

question about real property title and transfer after death with estate. Party x buys house 50 years ago. Party x marries y 5 years later. 25 years later x and y set up a living trust with the house title in the name of the trust. 12 years later later x dies. x leaves z 50% of the house in the decedents by pass trust. The title is still in the name of the x and y family trust. 8 years later y and z are living together and considering marriage. Y leaves their 50% of the house to z. The property tax is low because it's still in the name of the x and y trust from long ago and y still lives in the house as it has been their home. The title was not changed to reflect the 50% left to z because it was thought a property transfer would be a current value and a high tax. The property is still in the x and y trust from original ownership and thus low property tax. If y and z get married can the 50% of property still owned by y in the trust then be devised to z as a spouse and the property tax still
be keep low instead of a property transfer at a higher value and property tax. If y and z do not marry and the 50% is devised to z who then has to transfer everything from the title of the trust to their own name, can it just be from the trust directly or do they have to say it was 50% from 1st decedents will and 50% from 2nd decedent.
In brief, one party buys a house, then marries and the property is put a family trust. Party who bought the house dies and leaves 50% to spouse and 50 % to other (for by pass). Surviving spouse still lives in the house and leaves their 50% to the same other. All along it has remained titled in the original family trust until the 2nd original spouse dies.
Any help would be appreciated

Asked on 10/23/10, 3:26 pm

2 Answers from Attorneys

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Your question is rather convoluted and a bit hard to follow, but if I understand you, x and y deeded into a trust. Then x died, then y died, each with a will purporting to bequeath the house. If that is correct, the wills are of no effect as to the property in question. Once the property was put in the trust, the trust documents govern as to who the successor beneficiaries are and when and to whom the trust property can be granted and the trust wound up. By placing the property in the trust the testators lost testmentary power over the property unless and until they elected to deed it out of the trust. If they never did that and then died, the property is in the trust and governed by the trust not the wills. Now bear in mind this is all based on general law and my guess as to the meaning of your fact outline. A review of the wills and the trust documents would be required to be certain of an answer to your question.

Answered on 10/28/10, 4:28 pm

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