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Estate of Wilson - 183 Cal. App. 3d 67, 227 Cal. Rptr. 794 (1986)

Rule:

The respective interests of a husband and wife in community property during continuance of the marriage relation are present, existing and equal interests. Cal. Civ. Code § 5105. Each spouse has a vested undivided one-half interest in the community property. Death of a spouse only dissolves the community; it does not affect the character of the property acquired or rights vested before the spouse's death. 

Facts:

Billy W. Bowens, a son of the decedent, and Mildred Tolliver, mother of two minor children of decedent, appeal from an order that  awarded Ruth Wilson, decedent's widow, half the funds in three separate "Totten trusts" created by decedent, Milburn Warren Wilson, in favor of his three children. Bowens and Tolliver contend Wilson is not entitled to any part of the disputed trust accounts because decedent had the right to make a testamentary disposition of one-half of the entire community property taken as a whole, rather than merely one-half of each community property asset. 

Issue:

Did the trial court err in awarding decedent’s widow half the funds in three separate Totten trusts created by decedent in favor of his three children?

Answer:

No

Conclusion:

The court held that when a spouse deposited community property funds in a bank account in his name as trustee for a third person, upon that spouse's death only half of the community property in the account was transmitted to the third person. The other half, being the surviving spouse's share of community property, passed to the spouse, even though he or she was already receiving more than half of the total community property. Since each Totten trust was an individual community property asset in which the decedent had only one-half undivided interest at the time he died, he could pass on to third parties only his half of that asset -- half of the funds in each account. The court reasoned that, although the practical effect of that rule limited the ability to make testamentary dispositions of community property through Totten trusts, individuals possessed virtually unlimited ability to dispose of their share of the community assets at death by will. The trial court's judgment was affirmed.

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