Friday, September 23, 2022

Legally hiding your assets TB Ketubot 79

There are all sorts of reasons why a person may want to hide his assets. For example, the cost of a nursing home is exorbitant and could eat up a person’s entire estate leaving nothing for the inheritance. To hide assets and let Medicare and or Medicaid help foot the nursing home’s bill, a person can transfer his estate to his child and thus protected his child’s inheritance from the nursing home. If I’m not mistaken, this transfer has to be in effect at least five years before admittance to the nursing home otherwise the nursing home can go after the estate.

Today’s daf TB Ketubot 79 shows the correct procedure how a woman may hide her nikhsay makug (נִכְסֵי מְלוֹג) assets from her husband and reclaim her property in the event of her marriage termination either by husband’s death or divorce. The topic is introduced with a story.

The Gemara relates: There was a certain woman who was about to remarry after she was divorced or widowed, who sought to distance the rights to her property from her future husband. She therefore wrote a document stipulating that her property be given as a gift to her daughter before marriage. Ultimately, the daughter was married and then divorced. She wanted her daughter to return the property, and her daughter claimed that it was given to her as a gift. The mother came before Rav Naḥman for judgment. Rav Naḥman tore the document, accepting her claim that she did not intend to transfer ownership of her property.

Rav Anan went before Mar Ukva, the Exilarch, and said to him: Let the Master observe Naḥman the farmer, how he tears people’s documents. Rav Anan was upset that Rav Naḥman destroyed a legitimate document. Mar Ukva said to him: Tell me, please, what was the actual incident?

“Rav Anan said to Mar Ukva: This and that transpired; i.e., he apprised him of all the details. Mar Ukva said to him: Are you saying it was a document of evasion? This is what Rav Ḥanilai bar Idi said that Shmuel said: I am an authority who issues rulings and have issued the following directive: If a document of evasion comes to my hand, I will tear it, as it is clear that it was not intended for the actual transfer of property but merely to distance it from someone else.” (Sefaria.org translation)

Shmuel is saying that when examining a document of evasion, a person needs to look at the intent of the document and not just what’s written therein. One should not think that the mother’s intent was really to gift the estate to her daughter because “Rav Naḥman replied: Even so, where her interests clash with those of her daughter, her own interests are preferable to her, and therefore she did not intend to waive her rights.” (Sefaria.org translation) Interesting, Rashi comments that the woman testifies in front of witnesses that this document is a document of evasion so her husband cannot use the nikhsay makug.

The Gemara provides the correct language for this document. “She writes to him in the document that the gift is granted from today and the gift is in effect only while I still wish to give it. In that case, if the one to whom she gave the gift comes to take possession of it, she can say that she no longer wants to give the gift and can thereby invalidate the document….the ruling that the document of evasion is void, is in a case where the document was written about all of the property, as clearly a person does not give away all his property as a gift and leave himself with nothing.” (Sefaria.org translation)

Today I suggest you consult a lawyer when you want to hide assets. You really need to protect yourself for all contingencies. I heard a terrible story that an elderly man transferred his entire estate to his daughter assuming that she would use the estate for his benefit as well as protect his daughter’s inheritance if he needs to go into a nursing home. Unfortunately the daughter died before her father. Of course, her husband inherited everything the daughter owned. Then son-in-law took the money and ran and basically abandoned his father-in-law leaving the father penniless.

 

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