Community Property with Right of Survivorship
DATE: November 29, 2000
SUBJECT: Community Property with Right of Survivorship
Starting July 1, 2001, there will be a new way of holding title in California. Assembly Bill 2913 (Ch. 645) adds Section 682.1 to the Civil Code. This new code sections provides that title may be held by a husband and wife "as community property with right of survivorship". All of the existing methods of holding title will continue to be valid.
This bill was sponsored by the Beverly Hills Bar Association at the urging of probate and estate planning attorneys. The goal was to establish the right of survivorship benefit while also ensuring that the surviving spouse receives the favorable tax status of community property under federal tax law. This act seeks to avoid the practice of getting a probate court decree that joint tenancy property was in fact community property.
There is one provision of the statute that does not make any sense. The deed establishing title "may be accepted in writing on the face of the document by a statement signed or initialed by the grantees". I have no idea what this is all about. Since the statute says that the deed "may" contain such an acceptance, I assume that it also "may not" be accepted in such manner. You may ignore this statutory provision.
DO NOT vest title as community property with right of survivorship, or rely on the right of survivorship, as to any deed dated prior to July 1, 2001. The statute is very clear that it only applies to "instruments created on or after that date".
Click on the link at the end of this paragraph for an Affidavit of Death for use by the surviving spouse to establish title after the death. This is similar to the form used for joint tenancy. ( HTML Word )
Since the legislation is short and self-explanatory, it is set forth below in its entirety:
California Civil Code
682.1. (a) Community property of a husband and wife, when expressly declared in the transfer document to be community property with right of survivorship, and which may be accepted in writing on the face of the document by a statement signed or initialed by the grantees, shall, upon the death of one of the spouses, pass to the survivor, without administration, pursuant to the terms of the instrument, subject to the same procedures, as property held in joint tenancy. Prior to the death of either spouse, the right of survivorship may be terminated pursuant to the same procedures by which a joint tenancy may be severed. Part I (commencing with Section 5000) of Division 5 of the Probate Code and Chapter 2 (commencing with Section 13540), Chapter 3 (commencing with Section 13550) and Chapter 3.5 (commencing with Section 13560) of Part 2 of Division 8 of the Probate Code apply to this property.
(b) This section does not apply to a joint account in a financial institution to which Part 2 (commencing with Section 5100) of Division 5 of the Probate Code applies.
(c) This section shall become operative on July 1, 2001, and shall apply to instruments created on or after that date.