San Antonio Express-News
May 20, 2003

Limits on CPSA

copyright 2003, Paul Premack

Your goal of leaving your estate to your wife in the easiest most understandable way is very commendable. But deciding not to have a Will is not the right track to accomplish that goal. If you were to die without a Will, the likelihood is that she will face a confusing supervised probate instead of streamlined independent probate.

Having a Will is the best starting point. In it, you can name your wife as your sole heir, and you can simplify the probate process that she may be exposed to. To do this, your Will should provide for an Independent Executor, waive the Executor’s bond, and end with a self-proving affidavit. All of these simplify the probate process to the point that she should be able to handle it with minimal assistance from a probate attorney.

To use the method I wrote about a few years ago to avoid probate altogether, you can create a Community Property Survivorship Agreement (CPSA). This is not part of your Will; it is a separate legal agreement. A CPSA is a contract between you and your wife, so it must be written, signed before a notary, and filed with the county clerk. In it, you agree that when either of you dies, the survivor becomes owner of all community property, without reference to a Will and without the need for probate.

If you can use a CPSA to accomplish avoid probate, why have I recommended that you make a Will? Because a CPSA has several built-in limitations. First, it cannot contain any contingency plans. If both you and your wife die in a common accident, there is no survivor to take advantage of the CPSA. The only place to name alternate heirs is in your Will.

Second, the CPSA cannot cover any separate property that you or she may own. Since you have been married 53 years, it is likely that the vast majority of your holdings are already community property. But if either of you has acquired any holdings due to a gift from someone else, or due to an inheritance, that holding is separate property. To pass that separate property on to your spouse requires that you either 1) convert it to community property by special written agreement, or 2) pass it under the terms of your Will.

Third, a CPSA is not a good idea if your estate is exposed to federal estate taxes (this year that includes any estate above $1 million). When your holdings fall into that bracket, estate planning (like a Will with a credit shelter trust) can reduce or eliminate estate taxes and simplify probate.

If none of those exceptions apply to you, then a CPSA is an excellent tool to use. You can obtain one by calling your estate-planning or elder law attorney. You can also obtain one by visiting the forms page of my website at www.Premack.com/forms.htm.