In a common-law state
, military retirement pay is typically treated as the separate property of the spouse who served in the military.
The majority ruling concludes that PMAs represent federal requirements and, therefore, common-law state
tort claims are requirements that are "different from, or in addition to" PMA mandates.
Thus, from 1930 until 1948, when Congress authorized the now-familiar joint tax return, the tax liability of a married couple in a community property state differed significantly from that of a married couple in a common-law state
whenever only one spouse had taxable income.
Exceptions exist in many community property states for separate property owned before the marriage, received by gift, inherited during the marriage, or acquired while living in a common-law state
Example 2--Common-law state
: X is married to Y; they live in a common-law state
and each is 50 years old.
Typically, a taxpayer in a common-law state
holds property with a spouse as a joint tenant.
Generally, community property acquired while a couple resides in a community-property state retains its character as community property should the couple move to a common-law state
In a common-law state
, rights to pension benefits or receivables attributable to the labor of one former spouse could be 'equitably distributed" without tax consequence to that spouse, with the other former spouse receiving cash or other assets.
Moreover, as a result of the Earl decision, couples in common-law states
had no way to replicate this intra-spousal income-shifting.
Chapters cover contrasts between the estates of persons in community-property jurisdictions and those in common-law states
, and restraints on the transfer of wealth.
The Administration's proposal would eliminate the (apparent potential) inconsistent treatment among decedents in community property and common-law states
, by disallowing the stepped-up basis for property that never passed from a decedent to a surviving spouse in community property states.
Most of the Supreme Court justices of antebellum Louisiana were trained in common-law states
, but Louisiana slave law continued to be influenced by formal codes inherited from the French and Spanish colonial periods.