Sunday, February 3, 2013

IS MY HUSBAND'S MONTHLY PENSION PAYOUT COMMUNITY PROPERTY?

QUESTION: I was widowed in 2003 by my late husband's death from cancer. I remarried in 2010, perhaps too hastily. My current husband retired in 2010 with a pension, $75k/year (just a figure for discussion). He says that money, earned before we married, though paid out now as a monthly salary essentially, is not part of the community property, and that if I want to buy anything, "I need to save my pennies." I have a business in California and own my own commercial property, unencumbered. Each one of us has the property we owned prior to marriage set up in separate trusts. We have our separate checking accounts and pay bills separately. My current income of $75k/year, earned from my business is community property, but he says the monthly/annual pension payout he receives (which to me is income) is not community property because the pension was earned prior to our marriage. When we married, I thought our joint annual income, my business income and his pension income, was community property. I might note, that when we married, my business/home were 350 miles from him (and still are), so we have never lived under the same roof. I thought by now we would be. Now that we are in the second year of marriage, he has told me that he will never move to my town, a beautiful resort town (30 minutes from my door to ski lift). He said if we want to be together under one roof, I must close my business and move "over there." My plan would be to rent out my commercial property but the income generated from that would be a quarter of his pension. Or I would have to sell my property and live off the money, while he keeps the house he owns prior to our marriage. He will never put my name on the deed but he has made it clear that when he dies I will get everything. I don't want to live as a pauper waiting for my husband to die. Is his pension payout community property? ================================================== MY RESPONSE: No. Those are tough choices that your husband gives you to make. His promise to leave everything to you when he dies is unenforceable. Even if he makes a will, he can always change it. If his pension was all earned before your 2010 marriage, i.e., if he was already retired when you married him, its payments are his separate property. Only to the extent, if any, that his pension was still being earned after your 2010 marriage, would the community have any interest in the pension payments, and that interest would be very small (if any).

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