Legal Question in Wills and Trusts in California

Re: Revise of the living trust

Her husband is not entitled to any part of her inheritance, unless she comingles it with community property assets or spends any time managing the money.

Re: Revise of the living trust

There is nothing you need to do. When your daughter inherits property from your family trust, it will be her sole separate property whether she is married or not. If she chooses to commingle the funds with her spouse, then it can become community property. But for now, it will be hers alone. You do not need to make any changes to your living trust.

Re: Revise of the living trust

It's not possible to give you an exact answer without actually reading the trust document. If your trust is what's typically drafted in California, then your daughter will receive what you have given her as separate property, not community property. This means that the money (or property) will be hers alone, to use and dispose of as she chooses.

If your daughter receives all of the money and property immediately as her own, she may deliberately (or accidentally) commingle it with her marital property and her husband's property so that it loses its separate property status. Depending on the circumstances of her personality, lifestyle, etc., it is also possible that she may spend the money quickly.

If your daughter's personal and professional life is such that she has large debts, or might be subject to a big court judgment (perhaps she is a doctor, and is concerned about big malpractice awards?), then you should also consider whether or not the property might be subject to attack by creditors.

If you are especially concerned about protecting the assets you have accumulated for your family, or if the value of money and property involved is especially large, or if you have specific concerns about your situation or your daughter's situation, it is possible to use advanced planning techniques to make it more difficult for your property to become available to creditors of your daughter or her husband in the event of a divorce.

The techniques used to gain protection are not free - setting things up for greater protection means more time in drafting the trust, more administrative expenses and taxes after you pass away, and reduced flexibility for your daughter when she wants to use the money.

Please feel free to contact my office if you would like to have me take a look at your existing trust and discuss the facts of your particular situation.