Example 2--Common-law state: X is married to Y; they live in a common-law state
and each is 50 years old.
* Joint tenants: If D and K lived in a common-law state
and owned the property as joint tenants or tenants by the entirety, only half of the residence would receive a new basis; thus, K's new basis would be $200,000 (($300,000 x 0.5) + ($100,000 x 0.5)).
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.
In a common-law state
, military retirement pay is typically treated as the separate property of the spouse who served in the military.
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.
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
. Moreover, even if the taxpayer is residing in a common-law state
, the acquisition of assets traceable to community-property assets will be considered community property assets.
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.
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
. Some community property states, such as California, allow residents to bypass the community property rules by titling property in a common-law form, such as joint tenants or tenants by the entirety.
Under the Administration proposal, community property would be treated less generously than nonjointly held property in common-law states
when the property was owned by the first spouse to die.
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.
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.
Moreover, as a result of the Earl decision, couples in common-law states
had no way to replicate this intra-spousal income-shifting.