Some states, such as California, are “community property” states where married couples share an equal and undivided interest in almost everything they acquire during the marriage, except for gifts. This led to an interesting divorce case over who owned a sports car that a wife had arguably given her husband as a gift. While the couple was married, the husband bought a Porsche using $60,000 that the wife had received from the sale of her pre-marital home. The couples’ friends assumed that the car was a gift from the wife because it was purchased shortly before the husband’s birthday. When the couple divorced, the husband argued that the car was his separate property. But a California appeals court said the Porsche was “community property” because the wife never signed a document waiving her right to be reimbursed for her separate-property contribution to the purchase of the car. Because the purchase
If you’re thinking about retiring, don’t just assume that your alimony will end when you do so. You’ll want to discuss this with an attorney to make sure you know your rights, and obligations. The highest court in Massachusetts recently held that voluntary retirement doesn’t necessarily mean that the obligation to pay alimony ends – even if the person retires at or beyond the typical age of 65. In this case, a couple divorced after 32 years of marriage. Their divorce agreement required the husband to pay the wife $110,000 per year until his death or until she died or remarried. When the husband turned 65, he voluntarily retired from his law practice, dramatically reducing his income.He then tried to terminate his alimony payments, but the court wouldn’t let him. Instead, the court reduced his payments to $42,000, and said that the husband’s decision to retire was just one factor
The Tax Relief Act of 2010, passed by Congress in the waning days of the December, 2010, increased the federal estate tax exemption to $5,000,000. However, an equally significant aspect of the new law is the unification of the federal gift and estate tax exemptions. Both exemptions will now be $5,000,000 in 2011, with an adjustment for inflation thereafter. Thus, clients who utilized their $1,000,000 gift tax exemption in prior years will now be able to make up to $4,000,000 of additional tax-free gifts during 2011 and 2012. It should be noted that the gift tax exemption utilized during a client’s life will reduce the available estate tax exemption available upon death.