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Financial Planning / Tax Strategies
|Subject: Re: inheritance tax w/wife not on title||Date: 10/12/2001 1:20 PM|
|Author: cookc2||Number: 54552 of 125434|
Here's a block quote from the Houston Chronicle that might help explain Texas law a little better. It comes from Columnist Ronald Lipman, an attorney. This portion was run on October 1 of this year.
Q. It looks like my husband and I will be getting divorced after eight years of marriage.
My question involves the house my husband purchased before we got married.
Much of the money we earned while married went into paying the mortgage and fixing up the house. Now my husband is claiming the house is all his, and he also thinks he doesn't owe me anything for the money we spent paying for it.
Is he right?
A. Yes and no. It is true that your husband owns the house as his separate property, given that he owned it before your marriage.
However, because you and your husband used money earned during your marriage to pay the mortgage and make improvements, you have what is now called a claim for economic contribution.
This law became effective on Sept. 1, 2001. Essentially, the amount you spent reducing the debt and paying for improvements on the property, as well as a portion of the increase in value, is treated like it is community property of the marriage.
When you get divorced, a judge can award you all or a portion of this community property claim. Unfortunately for you, your claim for economic contribution does not include expenses for ordinary maintenance and repair, taxes, casualty insurance or interest on the loan.
Calculating the exact amount of the claim is complicated and depends on the particular facts of your situation.
You should be sure to hire a lawyer to represent your best interests in the divorce and be sure he or she is familiar with the new law.
If you also spent a considerable amount of time and effort maintaining, improving or managing the home, you may also have a separate claim for reimbursement for those efforts -- although it would not enter into the calculation of your claim for economic contribution.
Ronald Lipman is an attorney with the Houston law firm of Lipman & Associates. He is board certified in estate planning and probate law by the Texas Board of Legal Specialization.
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