Wills and Living Wills

questions & answers

Question: How should we be holding title to our home if we want our children, from prior marriages, to inherit our respective portions of community property? Currently it is CPWROS. I know this is wrong as my daughter will get nothing if I pass first.

Answer:

The way title to real property is held in Arizona can have a dramatic impact on how the property will pass upon the death of the title holder.  Arizona law recognizes four types of legal title to real property when it is owned by two or more persons: Tenants in Common, Joint Tenancy with Right of Survivorship, Community Property, and Community Property with Right of Survivorship.  A.R.S. 33-431. http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/33/00431.htm&Title=33&DocType=ARS   The nature of the title will determine who will receive one owner’s interest in the property should that owner die. 

When property is owned by multiple people as tenants in common, each owner has a share in the property that will pass to his or her own heirs upon death.  In a Joint Tenancy with Right of Survivorship, if one of the owners dies, his or her share will pass equally to each of the other Joint Tenants, regardless of who would otherwise inherit the deceased owner’s estate.

Community Property and Community Property with Right of Survivorship create their own distinct issues related to probate and intestacy laws because they involve the marital relationship.  All property acquired during a marriage, with some exceptions, is considered the community property of both the husband and wife under Arizona law.  A.R.S. 25-211. http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/25/00211.htm&Title=25&DocType=ARS   This includes real property, such as a family home.  Under Arizona’s intestacy laws, if Husband dies without a will disposing of his property, then the Wife’s share of Husband’s estate will be determined, in part, by whether the Husband had any children and vice versa.  If Husband’s only children are also Wife’s children, then Wife receives the entire estate.  If Husband had children which were not also Wife’s children, then Wife receives half of Husband’s separate property.  The other half of Husband’s separate property and his one-half interest in the community property will pass to Husband’s heirs.  A.R.S. 14-2102.  http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/14/02102.htm&Title=14&DocType=ARS

Community Property with Right of Survivorship is an estate planning tool that attempts to avoid probate issues by automatically transferring the deceased spouse’s one-half interest in the property to the surviving spouse.  This is similar to Joint Tenancy with Right of Survivorship. A.R.S. 33-431. http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/33/00431.htm&Title=33&DocType=ARS   If Husband and Wife hold property as Community Property with Right of Survivorship and one dies, then the survivor automatically receives the other’s interest, regardless of who else may inherit the deceased’s estate. 

Because of the complexity of probate laws, it can be very difficult, even perilous, for a person to develop an estate plan without professional legal assistance.  The language used in deeds for real property controls who owns what interest and impacts who receives that interest upon the holder’s death.  It is very important and beneficial to consult a licensed attorney to ensure that property passes to the intended recipient.