[WSBAPT] ante-nuptial agreement : effective against creditors?

Wed Sep 2 17:06:02 PDT 2015

For IRS debts, it's also in the IRM. See, e.g. Exhibit 25.18.1-1 "Comparison of State Law Differences in Community Property States".

http://www.irs.gov/irm/part25/irm_25-018-001.html#d0e735

Washington

1. When do spouses become subject to state community property laws?

When the spouses are married and domicile in the state.

2. Does the state recognize common law marriage?

No, but it recognizes a common law marriage legally established elsewhere.

3. Does the state recognize some from of domestic partnership as an alternative to marriage?

Yes.

4. Does a domestic partnership under state law create community property rights and obligations?

Yes.

5. When does the community property regime terminate (causing subsequently acquired assets or future income to no longer be characterized as community property)?

Change of domicile, death or a separation that is intended to be permanent.

6. How is post marital income generated from separate property (e.g., rents, dividends, interest) characterized?

Separate property unless derived from a spouse's labor or community property funds. If so, an allocation must be made.

7. How does the state characterize appreciation in the value of separate property?

Separate property unless derived from a spouse's labor or community property funds. If so, allocation or reimbursement issues must be dealt with.

8. How does the state characterize property taken by spouses under a deed reflecting that the property is held in joint tenancy?

Community property unless there is a written agreement between the spouses which clearly evidences the spouses' intent to hold the property in joint tenancy rather than as CP.  Holding title in joint tenancy is not sufficient by itself to overcome CP presumption.

9. How does the state characterize property taken by spouses under a deed reflecting that the property is held in tenancy in common?

Community property unless there is clear and convincing evidence establishing the spouses' intent to hold the property in tenancy in common. Title in tenancy in common is not sufficient by itself to overcome CP presumption.

10. Does a deed taken in the name of one spouse as sole and separate property create separate property?

No. Title does not determine the character of the property. It is rebuttably presumed to be community property.

11. Does the state recognize pre or post marital property characterization agreements?

Yes.

12. What are the property characterization agreements called?

Separate property agreements.

13. Are property characterizations agreements required to be in writing?

An oral agreement will be recognized, but the claim of one will be strictly scrutinized.

14. Are property characterization agreements valid against creditors?

Not against existing creditors.

15. What property is available to satisfy a premarital federal tax obligation assessed against only one spouse?

50% of community property and all separate property of liable spouse.

16. What property is available to satisfy a post marital federal tax obligation assessed against only one spouse?

100% of community property and all separate property of liable spouse.

Amber K. Quintal |  Member

Ogden Murphy Wallace P.L.L.C.
901 Fifth Ave., Suite 3500 Seattle, WA 98164
phone: 206.447.7000  |  fax: 206.926.2879
aquintal at omwlaw.com<mailto:aquintal at omwlaw.com>  |  omwlaw.com<http://www.omwlaw.com/>

CONFIDENTIAL COMMUNICATION - This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. Section 2510, and its disclosure is strictly limited to the recipient intended by the sender.  It may contain information that is proprietary, privileged, and/or confidential.  If you are not the intended recipient, any disclosure, copying, distribution, or use of any of the contents is STRICTLY PROHIBITED.  If you have received this message in error, please notify the sender immediately and destroy the original transmission and all copies.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Doug Schafer
Sent: Wednesday, September 02, 2015 2:57 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] ante-nuptial agreement : effective against creditors?

Attached is a 1987 opinion in which the federal judge ruled that the IRS could not levy a taxpayer's wife's separate income because she and her husband had earlier orally agreed that her income would be her separate property.  Venie v. U.S. (1987 WL 61936 (E.D.Wash.))

Doug Schafer, in Tacoma.
On 9/2/2015 2:00 PM, Josh Grant wrote:
This is an estate planning type question.
W is a client whose husband's business corporation appears to be raking up a lot of business debt. This is a second marriage and they have tried to keep their finances separate, in fact the income from the business has been used for community benefit (food, electricity, vacations etc.).  W has a separate asset she wants to protect (farm land given by dad).  H&W never did a pre-nuptial agreement.  Been married 10 years+.

H&W thought a ante-nuptial  agreement might help protect W's separate asset.  H had it drawn up and W was referred to me as her  independent attorney.  This is a standard type of agreement where on schedule "A" the business corp is listed as H's, and W's is listed as her separate asset.

My thought is that basically, as long as they are married, or as long as they do not have  a separation decree, that whatever they sign between them won't help against creditors.  (just like the client who has to pay a community debt even after that debt was listed as the responsibility of the former spouse in a dissolution decree).  If I were a creditor's attorney I would ask the court to pierce the corporate veil and determine that the corp is a community asset and the debt is a community debt and go after all community property, again without regard to this agreement.

I think if ever sued, judgment would be entered against H&W and their marital community, and the separate farmland wouldn't be affected anyway.  If a creditor tried to get a judgment against W's separate property, then she could hire an attorney and get the court to enter a judgment only against the community and community property, with or without an agreement.

Anyone think a ante-nuptial agreement would be a substantial protection for W against business debts, even if H is a sole shareholder?

Josh Grant

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734

_______________________________________________

WSBAPT mailing list

WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>

http://mailman.fsr.com/mailman/listinfo/wsbapt

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20150903/7456e143/attachment.html>