Question

Sarah and David recently got married. Please use the following information to identify which amount is community property.

1. David received an inheritance of $50,000 after the marriage.

2. Sarah had a 401(k) valued at $75,000 prior to the marriage.

3. David opened an IRA and deposited $5,000 6 months after the marriage and put the account in his name.

Question 6 options:

$130,000

$120,000

$5,000

$0

Answer 1

1. Any property which is inherited by the person is his/her seperate property and does not form a part of community property. However if it is included in community property voluntarily then it shall be included in it. Hence assuming the same it is included

2. Any contribution made earlier to 401(k) shall be a part of community property. However only 9 STATES of US consider this as a community property. Hence it shall be included in community property. $75,000

3. Any IRA contribution shall also be considered as a part of community property hence $5,000 ahall also form a part.

Hence the correct answer is (a) ie $130,000 [$50,000+$75,000+$5,000]

In case assumption in 1 not followed, answer shall be $80,000 which is not mentioned in the answer.