Any assets a trust doesn't include can be subject to the instructions in the will, meaning a will can override a trust if the trust does not specifically include certain assets. Assets not in the trust must pass through probate.
In fact, beneficiary designations take precedence over wills and trusts in most cases, making them virtually probate-proof. Having beneficiaries on your account circumvents the probate process and helps ensure that assets can be transferred to heirs without delay.
Disadvantages of community property with a right of survivorship: If a spouse dies having willed a property titled as community property with a right of survivorship to someone other than their spouse, their gift may be deemed invalid.
Generally, the right of survivorship will take precedence over a Last Will and Testament if the jointly-owned property is distributed wrongfully in someone's estate plans. Therefore, you shouldn't list any property in your Will that you and another person(s) jointly own with the right of survivorship.
The reason is that almost all joint accounts have what's called the "right of survivorship," which means that when one owner dies, the survivor automatically owns all the money in the account. A provision in a will or living trust can't override that.
California courts recognize that survivorship rights in joint bank accounts may be challenged if clear and convincing evidence demonstrating the original account holder had contrary intentions than what was assumed in its creation.
The right to survivorship refers to the legal principle that upon the death of a joint owner, the remaining owner(s) automatically inherit the deceased owner's share of property or assets without having to pass through probate. Here's how it works.
App. 5th 730, the Court of Appeal clarified that the intent of the person who established the account is paramount such that the surviving account holder's presumed right of survivorship can be overcome by just about any sort of admissible evidence, as long as it is clear and convincing.
Problems With Joint Ownership
By jointly owning property, you may find yourself party to a lawsuit if your co-owner is sued or the asset could be lost to a creditor of your co-owner. If your co-owner becomes incapacitated, you could find yourself “owning” the property with the co-owner's guardian or the courts.
The ability of a beneficiary to withdraw money from a trust depends on the trust's specific terms. Some trusts allow beneficiaries to receive regular distributions or access funds under certain conditions, such as reaching a specific age or achieving a milestone.
This means that an executor can override a beneficiary's wishes if those wishes contradict the expressed terms of the will, do not comply with applicable laws, and the executor acts in the best interest of the estate and its beneficiaries.
Summary. A revocable trust becomes irrevocable upon the death of the grantor. This change in status means that the terms of the trust cannot be modified, and it becomes a separate entity requiring an Employer Identification Number (EIN) for tax purposes.
Who can void a trust? Under California Probate Code §17200, a trustee or beneficiary of a trust may petition the court to determine the existence of the trust. This means that any potential, current, or previous beneficiary can file a petition to void a trust, as can a trustee or co-trustee.
According to California probate law, a trust often supersedes a will if a person has created both instruments. That means the trusts can serve the same purpose but with additional benefits such as enhanced privacy, asset protection, and the ability to circumvent probate.
Establishing legal trusts: Though usually related to estate planning, trusts legally shift ownership of assets whenever you decide. This can help protect your assets from the government, as you will not own certain assets anymore.
Disadvantages. The most obvious disadvantage is that individuals can't pass or will their ownership stake to their heirs. Those who want to own property but don't want to give survivorship to the other owner(s) shouldn't consider this kind of agreement.
A valid right of survivorship always overrides a Will. This is because a property that has a right of survivorship passes automatically to the surviving owner, and legally so. Thus, the property legally cannot be included as a part of the deceased owner's estate.
This is what the right of survivorship means. The survivors split the interests. Eventually, when all but the final joint tenant dies, the last person standing will have total rights to the property. He or she can then pass that property on to his or her children or anyone else.
A survivorship clause makes sure that your Will – and not someone else's – runs the show. Without a survivorship clause, property left to a beneficiary who dies in a “common tragedy” with you (i.e. a car accident) could pass under that beneficiary's Will, rather than yours.
What assets pass via the Right of Survivorship? Most cash assets will pass automatically via the right of survivorship. The most common/obvious one being a joint bank account. Some jointly owned land will also pass automatically to surviving joint owners (see below).
The most common scenario of this is in a marriage; a surviving spouse has the right of survivorship in a community property state even if they were not included in the title of the property. States that currently practice community property law include: Arizona. California.
This isn't permanent, and joint tenancy with right of survivorship can be canceled or changed if all owners agree, if one sells their share in the property or if all owners die at the same time.
If a sibling looks to contest a claim that an account was joint with rights of survivorship, they must show it was established solely “for the convenience” of the depositor. A joint account established to assist with bill paying, check writing and managing financial affairs is usually for convenience purposes.