In California, when someone creates a will or trust and later gets married without updating those documents, the surviving spouse may still have a legal right to inherit. This right is granted under California’s omitted spouse laws, which essentially “force” an amendment to the estate plan, entitling the surviving spouse to a share of the estate, even if they’re not named.
However, there are important exceptions to this rule. One of the most significant is known as the Gift in Lieu Exception.
What Is the Gift in Lieu Exception?
The Gift in Lieu Exception applies when the decedent (the person who passed away) made a gift to their spouse outside the terms of the trust or will—and intended that gift to take the place of any inheritance under the estate plan.
To qualify for this exception, two elements must be satisfied:
-
A Gift Outside the Trust or Will
The decedent must have made a transfer or gift to the surviving spouse outside of the estate planning documents. This could include bank accounts, real property, life insurance, or other valuable assets.
-
Intent to Substitute the Gift for an Inheritance
There must be some evidence that the decedent intended this gift to replace an inheritance under the trust or will. This intent can be shown in several ways:
- A written statement (e.g., an email, letter, or even a text message)
- The substantial nature or size of the gift
- Other contextual evidence supporting the decedent’s intentions
Written Evidence: The Strongest Proof
If the decedent left a written statement explicitly stating that a gift was intended in lieu of providing for the spouse in the trust or will, that is typically the strongest evidence. While such clear documentation is rare, when it exists, it can conclusively establish the exception and defeat an omitted spouse claim.
What If There’s No Writing?
In most cases, there is no direct written statement. Instead, courts will examine the size and significance of the gift. But how much is enough?
There’s no fixed dollar amount that qualifies. California courts have found that even relatively modest gifts—such as 10% of the total estate—may be sufficient, depending on the circumstances. Factors the court may consider include:
- The total value of the estate
- The financial needs and lifestyle of the spouse
- The nature of the relationship between the decedent and the spouse
Because this analysis is fact-specific, it’s important to consult a skilled trust litigation attorney to determine whether the Gift in Lieu Exception may apply in a given case.
Final Thoughts
The omitted spouse statute can dramatically alter the distribution of an estate. But the law also recognizes that not every omission is accidental. If a decedent made a meaningful gift to their spouse during life and intended it to replace an inheritance, the Gift in Lieu Exception may provide a way to uphold their original estate plan.
If you’re facing an omitted spouse issue, or planning your estate after marriage, professional guidance is essential. A well-documented intent today can prevent confusion and litigation tomorrow.
Contact Albertson & Davidson, LLP to see if you qualify for a free consultation with our experienced probate litigation attorneys. We hope you can gain valuable info on how to approach a free consultation as a trust beneficiary.
