Most physicians and healthcare practice owners we meet know they “should” do estate planning. They also tell us it is the one thing they keep moving to next quarter. Here is the line that usually changes the conversation: if you do not have an estate plan, you already have one. The State of California wrote it for you, and it is almost certainly not the plan you would choose.

When a Californian dies without a valid will and trust, the state's intestate-succession rules (California Probate Code §§ 6400 et seq.) decide who gets what. Those rules are blunt. They do not know that your spouse already has plenty of her own, that your adult child has a substance-abuse history, that you and your spouse have been separated for three years but never finalized the divorce, or that the practice you spent two decades building cannot legally be inherited by your spouse if she is not licensed to practice medicine. They simply apply formulas.

A quick tour of the default rules

For a married Californian, community property — generally what was earned during the marriage — passes entirely to the surviving spouse. Separate property — what you brought into the marriage, inherited, or received as a gift — is split based on whether you have children and how many. Married with one child: separate property is split 50/50 between spouse and child. Married with two or more children: spouse takes one-third and children share two-thirds. Unmarried with children: the estate goes to your children in equal shares. No spouse and no children: the law walks up and out the family tree — parents, then siblings, then nieces and nephews, then cousins.

A few traps people are surprised to learn about. The estranged-but-not-divorced spouse you have not spoken to in five years is still your spouse for inheritance purposes. The long-term unmarried partner — the person who is, in every meaningful sense, your family — is a legal stranger. The minor child you intended to leave well-cared-for receives their share outright at age 18, with no trust, no trustee, and no guardrails. And nothing in intestacy names a guardian for that child; the court does.

For a healthcare practice owner, the stakes are higher than for a typical Californian. Your professional medical corporation cannot legally be owned by a non-physician — meaning your spouse and adult children almost certainly cannot inherit and hold it. Real estate held in your individual name cannot be transferred by California's small-estate procedure; it requires probate. Investment and retirement accounts pass according to beneficiary designations you may not have updated in fifteen years — or, if no beneficiary was named, through probate.

In the next four posts we will walk through what actually happens to a practice owner's estate when the default rules kick in. We will look at the cost and the public spectacle of probate. We will look at what is unique and dangerous about owning a medical practice in California. We will show you, side by side, what changes when you replace the default with a designed plan. And we will explain why estate planning works best as an ongoing relationship rather than a one-time stack of documents.

For now, the simplest takeaway is this. If you have not written your plan, the State of California has written one for you. You can keep it — or you can replace it.

West Coast Health Law can help you replace California's costly default estate plan.  We can help you avoid probate and keep the assets in your families' hands.  West Coast Health Law offers a FREE consultation which you may schedule by clicking the button on our website.