BASEBALL AND PRENUPS

Baseball is in the air -- Opening Day is almost here -- and the Cardinals will win the Series without Pujols. Okay, I was daydreaming.

In baseball, everyone knows that three strikes and you are out. This case emphasizes that Life often works the same way.

Strike 1 -- You file a joint tax return with your husband.

Strike 2 -- Husband Dies.

Strike 3 -- You signed a prenuptial agreement and Husband left all of his property to someone else.

In baseball, if the catcher drops the ball on the third strike, you can run to first base and avoid the out if you arrive before the ball. That almost never happens. In this case, the widow was trying to outrun the catcher's throw. She lost.

Because the couple filed a joint tax return, the IRS made the refund check payable to both Husband and Wife. When the executor asked the widow to endorse the check so it could be deposited into the Estate account. She said no, "the funds are all mine."

The court of appeals, acting as umpire, called the widow "Out." Specially, the Court held that the proper way to determine ownership of the refund was to look at who earned the income. The wife did not earn any income reflected on the return. As all of the income was attributable to husband, the Court held that 100% of the refund belonged to the Estate.

Arguably, the wife should be entitled to the amount by which the deductions or credits attributable to wife reduced the amount of income payable by the husband. But, it does not appear that the wife made that argument.

THE MORAL OF THE STORY:

Don't argue balls and strikes with the Umpire
Never sign a prenuptial agreement unless you really really intend to give up all of your claims to all of your spouse's assets.

See The Estate of Noel C. Hunt, III, H. Wayne Grant, Executor v. Trisha L. Jolley Hunt