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The Heirs' Property Problem
Chelsea N. Olsen, October 17, 2024
"Heirs' property" is not an intuitive phrase. I think we all understand the property part well enough.
Your house? Property.
Your cellphone? Property.
Your cat? Well, he's property too.
But what exactly do lawyers mean when they say "heir"? “Heir" is defined at Section 44 of the California Probate Code as "any person, including the surviving spouse, who is entitled to take property of the decedent by intestate succession under this code."
Intestate succession refers to the passage of property from a deceased person to those persons entitled to the property upon the death of the owner. Entitlement arises by mechanism of law. The law is Section 6400 - 6455 of the California Probate Code. The intestate succession rules determine the who, what, when, where, and why the decedent's property passes.
The intestacy rules begin with the surviving spouse, including marriage and registered domestic partnership. From there, heirs are identified by degrees of kinship, with each degree identified as vertical or horizontal. Your heirs only come into existence when you pass away and survivorship requires that they are living at the time.
After the spouse, the next important category of heirs is the "issue." Issue refers to children, but it also refers to the children of those children; the word "issue" is a more precise way of referring to lineal descendants. By referring to "issue," the code can designate generations of children, grandchildren, and great-grandchildren as heirs at once.
Generally speaking, heirship flows, in order of entitlement, from spouse, to issue, then to parents, then to parents' issue, then to grandparents, issue of grandparents, and so on and so forth. The resulting family tree is called the "table of consanguinity." Consanguinity refers to shared blood, so spouses are decidedly absent.
People with alternative family structures will find another group of people decidedly absent: chosen family. Because of this system, if you are an unmarried only child with no children and you pass away after both of your parents, it may be more likely that the state of California comes into ownership of your property instead of your loved ones.
The thought may also cause alarm for people who do not have particularly strong family ties, such as those who never knew one or both of their birth parents, or those who were outright disowned by their blood relatives who only experienced love and care with a non-spousal partner or a few close friends.
Before the incorporation of registered domestic partnerships into the Family Code definition of spouse and the subsequent legalization of gay marriage, queer couples with no estate plan in place had little recourse when one partner died.
Heirs' property is an issue of the other extreme, equally unreflected by the consanguinity table to the right. Whereas in the prior example, a person may die with no heirs at law, other people die and leave ten kids and a spouse with no estate plan explaining how the courts should divide interests in the five acre homestead the family was raised on.
TABLE OF CONSANGUINITY
Assuming sole ownership in the property at death, the probate court must apply the intestacy rules. The surviving spouse is entitled to the full 50% undivided community property interest plus one-half of the remaining 50%. The 25% leftover is divided in ten equal parts between each child.
The resulting percentages of interest might be visualized (or physically divided in an unlikely partition) as the square lot in the left-hand image. If the example with ten children seems like an unlikely exaggeration, that's because it basically is.
The problem with heirs' property does not generally arise at the first level of division; in this scenario, the family could just combine their interests in one member such as by gifting the entire parcel to their mother, or anything they could agree to sell the whole - assuming the entire family is on the same page. If the family is not on the same page, the issue of heirs' property is two fold.
It magnifies at each generation.
Part Two - Coming Soon
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