Community property in trust.

Existing law establishes procedures for the creation, modification, and termination of a trust, and regulates the administration of trusts by trustees on behalf of beneficiaries. Under existing law, upon the death of a person who is married or in a registered domestic partnership, 12 of the community property and quasi-community property belongs to the surviving spouse, unless the spouses have agreed in writing to divide the property in another manner. Existing law authorizes a decedent's surviving spouse to require the transferee of quasi-community property in which the surviving spouse had an expectancy at the time of transfer to restore to the decedent's estate 12 of the property if the transferee retains the property or, if not, 12 of its proceeds or, if none, 12 of its value at the time of transfer, provided outlined requirements are met. This bill would clarify that a spouse may establish a trust and fund that trust by transferring to it that spouse's 12 of the community real property, community personal property, and quasi-community personal property for the purpose of disposing of that spouse's 12 on that spouse's death. The bill would specify that a spouse's interest in community property that is transferred to the trust remains community property, unless both spouses agree otherwise in writing.