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May 25, 2012
Zuckerberg's Wedding Brings Estate Planning Issues
In the past week, Mark Zuckerberg, the founder of Facebook, married his longtime girlfriend Priscilla Chan. While the wedding was small, the money and property that Chan married into is not. It is likely that more money was spend on financial planning for their marriage than the actual marriage itself, considering the two large legal factors that will play into their finances as a couple:
- The first legal issue is that California is a Community Property state, which means that any money earned in the course of the marriage belongs to the both Zuckerberg and Chan. However, any money or property that one of the spouses earned before the marriage and any inheritance received in the either in the course of or before the marriage is considered to be separate property. Each spouse owns a one-half share in all community property. For Zuckerberg and Chan, this means that Chan is not entitled to any money produced from his?Facebook stock because the couple married after the Zuckerberg received the initial public offering for his company. However, Chan is entitled to one-half the difference between the initial public offering and any money produced from an increase in the stock's value.
- There are also certain tax advantages to the marriage. Reportedly, Zuckerberg has already taken advantage of the gift tax, by making $ 37 million in gifts to his unborn children. Furthermore, Zuckerberg can take advantage of the fact that California does not have an estate tax, and he can also take advantage of the unlimited martial deduction, which provides him the opportunity to avoid taxes on property that he gives or receives from Chan.?
See Deborah L. Jones, Mark Zuckerberg Ties the Knot, But It Isn't All Love and Roses, Forbes, Mary 20, 2012.
Special thanks to?Joel Dobris?(Professor of Law, UC Davis School of Law) for bringing this article to my attention.
May 25, 2012 in Current Events, Estate Planning - Generally | Permalink
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