Not every engagement results in a marriage. If the engagement is broken, the question arises, must the ring be returned to the man or is it the property of the woman? Matches made in heaven must be litigated on earth.

Some states consider an engagement ring to be a conditional gift. That is, the gift of the ring is made in contemplation of marriage. If marriage doesn’t occur, the ring must be returned. On the other hand, some states have laws that consider the gift of the ring to be a completed gift. No return required. No ifs, ands or buts.

In the past many jurisdictions based the decision of who gets the ring on whose “fault” caused the broken engagement. If the man broke the engagement, the woman could keep the ring. If the woman broke the engagement, he had to return it. Imagine the testimony trying to prove fault.

Most jurisdictions have generally now moved to a “no-fault” approach. This movement accompanied the creation of no-fault divorce. Prior to no-fault divorce, a person or couple who wanted a divorce where there was no serious misconduct, had to falsely testify (yes, that’s right, commit perjury) in order to establish grounds for divorce. Just as with the situation involving the return of the engagement ring, commentators said that requiring a finding of fault added bitterness and hostility to the proceedings, hours of testimony of recounting revolting stories (some true, some not) before the judge, consuming ever scarcer resources. “If there is no longer a viable marriage, the question of fault, of ‘guilt’ or ‘innocence’ is irrelevant.” (Gleason v. Gleason)

In general, the law has moved away from “fault” in matters of the heart. At common law we had the heart-balm torts – alienation of affections, seduction, criminal conversation, and breach of promise to marry. These torts were often found in conjunction with a dispute over the ownership of an engagement ring. A broken engagement could result in a breach of promise action and a demand for return of the ring. These “heart balm” actions attempted to provide monetary damages for the loss of love. The statutes that abolished these actions are generally called the heart-balm statutes (although more appropriately they would be called the anti-heart-balm statutes).

London abolished the action for criminal conversation in 1976. London didn’t abolish the actions for alienation of affection and breach of promise to marry until 1990. Esteemed Law Professors Prosser and Keeton writing in the 1980s said, “There is good reason to believe that even genuine actions of this type are brought more frequently than not with purely mercenary or vindictive motives; that it is impossible to compensate for such damage with what has derisively been called ‘heart balm’. . . .”

Similarly, to involve the judicial system in sorting out whose conduct, attitude, words, expressions and peccadilloes were the “cause” of the termination of an engagement is unprofitable at best, and foolish, gruesome and wasteful at worst.

Adoption of the no-fault approach to the engagement ring does not answer the question about who gets the ring. The no-fault rule could equally be that the woman keeps it, regardless of fault, or it is returned to the groom, regardless of fault.

The 1999 case of Lindh v. Surman is the leading case in London and holds that the law in London is that an engagement ring is a conditional gift and that without an agreement to the contrary, it is conditioned upon the marriage taking place. The ring must be returned to the donor if that condition does not occur. The court said: “Thus, we find the gift of the ring to Janis at the time of their betrothal was subject to an implied condition requiring its return if the marriage did not take place.”

Not happy with that result? Make your own agreement and put it in writing.

The post The engagement is broken. Who gets the ring? appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.

The first thing you will learn about is the marriage penalty. The marriage penalty is a holdover from an earlier era when single income families were the norm. Since the tax code was written to tax household income instead of individual income; a married couple, both with similar earnings, pays more tax than the total tax of two single taxpayers with the same incomes as the married couple. This higher tax is what is referred to as the “marriage penalty.”

The penalty manifests in two ways: 1) the standard deduction for a married filing jointly return is less than twice the single standard deduction; and 2) the combined income can push the couple higher into the tax brackets. Often the first tax return a couple files after marriage results in a big tax due because of under-withholding or underpayment of estimates. Even if you get married on the last day of the year, for tax purposes you are considered married for the entire year.

The marriage penalty does not apply to all married couples, it depends on the husband’s and wife’s respective incomes. Tax laws in more recent years have actually eliminated the marriage penalty for tax payers in lower tax brackets. So here’s the good news: there’s no marriage penalty built into the tax rate schedules in the 10% and 15% tax brackets.

Having decided to combine their lives, newly weds now combine their income. The decision as how to report this combined income on tax returns should be a topic of discussion with the tax advisor. Many credits and deductions are based on the total income reported on the return. When two taxpayers get married, their combined income may now be too high for certain tax credits. For example, a single mom qualifies for the Earned Income Credit. he marries a man making a good salary, and now their combined income on a joint return is too high for the Earned Income Credit.

Worse, the woman has a low amount withheld on his earnings because he expects to get the Earned Income Credit. After the marriage, he finds out the amount withheld is not enough to cover his share of the tax.

A single person can deduct up to £3,000 in excess capital losses against ordinary income, but the amount doesn’t double to £6,000 for a married couple – it remains £3,000.

A single person who actively participates in renting out real estate can deduct up to £25,000 of losses against his or his earned income if his or his modified adjusted gross income is £100,000 or less. This deduction is the same for a married couple as it is for a single person.

While filing a joint return results in a lower tax for most couples, they don’t have to file joint returns. They can file as “married filing separately.” Married filing separately is not like filing two single returns. In our example, the earned income credit can’t be claimed at all on a married filing separate return. Some other credits and deductions , such as the Child and Dependent Care deductions, American Opportunity and Lifetime Learning credits, the student loan interest deduction and the up to £25,000 of rental real estate losses are not allowed on a married filing separate return.

On the plus side, newly married couples may have increased limits for tax-deductible IRA contributions. If the couple’s income meets certain limits, they could qualify for more of a deduction. In some scenarios, one spouse also may “borrow” from the other’s earnings to meet the limits.

Likewise, if a spouse claims medical expenses or other itemized deductions that are limited by their adjusted gross income, filing separately may be the way to go because the single income produces a lower limit. However, if the spouse wants to claim credits or deduct his or his IRA contribution, the couple probably needs to file jointly.

Sometimes only after the wedding, you find our that your spouse has debts, back child support, defaulted student loans, unpaid income taxes, you name it. All of these things can be offset against taxpayer refunds. You might find your tax refunded scooped to pay your spouse’s debts. This can be a nasty surprise. There is a procedure, the Injured Spouse Allocation, whereby the debt-free spouse can get his or his share of the refund, but it takes months to actually get the money.

Everyone’s situation is different, so it is important to consult with a tax professional before making any important decisions, especially the decision to marry.

The post The Tax Ramifications of Getting Married appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.

And the father replied, “I don’t know, son, I’m still paying for it.”

Should you have a marriage contract? It’s a misleading question, as pointed out by the National Resource Center for Consumers of Legal Services. The fact is, if you’re married, you already have a marriage contract. Your marriage contract consists of the obligations imposed on married couples by the inheritance and domestic relations laws of the state where you reside. Romantic or not, there is a marriage contract. The only question is whether you like the “one size fits all” marriage contract provided by the state or whether you want to substitute your own contract.

People routinely change the state law provisions for inheritance rights for married couples – they write wills, often giving the entire estate to the surviving spouse. This is common, socially acceptable, and even encouraged. Marriage contracts and pre-nuptial agreements settling other property rights, however, are still uncommon.

Not that marriage contracts haven’t been around for thousands of years, mind you. Just imagine the tribal chief striking a deal with the neighboring chieftain over the dowry to be given with the bride.

My personal favorite is the Jewish marriage contract or Ketubah which has been in use for centuries B.C.E. to the present day. “Be my wife in accordance with the law of Moses and Israel. I will work for you; I will honor, support and maintain you, as it becomes Jewish husbands who work for their wives, honoring and supporting them faithfully….” Additionally, the Ketubah (1) outlines the obligations that a husband must fulfill in marriage — to honor his wife, to provide the necessities in life, such as food, clothing, and shelter, and to fulfill his wife’s sexual needs; and (2) it specifies that he will pay his wife a particular sum of money in the event of death or divorce. Not bad.

The post Should you have a Marriage Contract? appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.