We moved from a community property state to Utah and my spouse died, now what?

Amy and John were married in California.   While living in California, they opened a bank account and deposited community property funds into the account. After several years, the couple then moved to Utah. The California account remained open. While living in Utah, John dies and leaves half of the funds in the account to his best friend Jane. Amy does not want Jane to receive half of the account and believes that all of the funds held in the California account should pass to her. Who receives the funds in the California account?

Since Utah is not a community property state, only property that is titled in the deceased’s persons name can be passed to another person by a will. Therefore, if the account had been created in Utah, and at John’s death the account was titled to Amy, then John could not give Jane half of the account upon his death. He would have no right to dispose of any of the funds from the account in his will. Instead, the entire account would be transferred to Amy.

However, California is a community property state. While John and Amy may have been living in Utah when John died, Utah allows property held in a community property state to be distributed according to the community property standards.[1] Under the community property standards, a spouse is entitled to dispose of one half of any community property obtained during the marriage, regardless of who the property is titled to. Therefore, in the example stated above, John would be able to pass one half of the account to Jane if he wished to do so. After John’s death, Amy would own one half of the funds in the account and Jane would owe the other half. It is important to note, however, that if John did not execute a will before his death, the entire account would pass to Amy.

[1] Utah Code § 75-2b-102

Michael Hepworth

Michael Hepworth

Managing Attorney at Hepworth & Associates
Michael is the Managing Attorney of Hepworth & Associates, LLC.
Michael Hepworth

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