Today TaxMama® hears from Someone Privately with a romantic story. “My client was deeply in love with a woman who was dying of cancer. To demonstrate their love, they got married in July of 2011. She died in February 2012. The problem? She had a lot of tax debt, spanning several years. How do we handle the tax returns without making him liable for all her debts?”
The reason I bring this up today is, we live in a romantic society with lots of lovely illusions about love. All day, in our office, we listen to the Beatles on KRTH101, singing things like, “All We Need is Love” and “Money Can’t Buy Me Love.”
My friends, while that all sounds utterly wonderful, marriage isn’t just about starry-eyed love. It must also be about reality. There are long-term consequences to marriage.
In this marriage, if the lovely, fragile lady had really loved her new husband, she would have protected him. She should have insisted on signing a post-nuptial agreement keeping their assets and debts separated – since California is a community property state.
Fortunately for tax purposes, in this case, they were not married very long. He can avoid having his 2011 refund grabbed by IRS and the State of California by filing an Injured Spouse form, Form 8379, with the tax return. And in 2012, he can either file as Single (which he was at the end of the year), or Married, which is legally permissible, since they were married during the year. He can take advantage of whichever option works best for him.
Since she had no assets at all, (even the funeral was paid for from a policy he had from his job) he will be able to avoid paying her tax debts. But he will have a fight on his hands.
Please, please, please, before you get married, be fair to the one you love. Do have the Unromantic Financial Discussion before Marriage. It will protect your marriage – and your relationship in the long run.
And remember, you can find answers to all kinds of questions about the realities of marriage and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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