QUESTION: My husband owes as much as $30,000 on charge cards, all of which are solely in his name. He has no business sense, no savings and pays only a nominal sum for household expenses--maybe $300 a month. We own no property in common. But my fear is that if something happens to him, his creditors will come after me and I could lose my home. He claims that I wouldn't be forced to pay his bills, but I think otherwise. Is my concern legitimate?--T. S.
ANSWER: Since you live in California, a community property state, the answer depends upon when you bought the house and under what conditions.
Under the California Civil Code, the separate property of the wife is not liable for debts incurred by the husband before or during their marriage unless his debts were incurred for such "necessities of life" as food and shelter. The couple's community property, however, can be legally tapped for debts accumulated by either spouse.
The house is considered your separate property in California if you bought it before your marriage or if you have an agreement with your husband specifying that the house is your property alone.
If you have no such agreement and the house was acquired with money you earned after you were married, the house is considered community property and it would be fair game for the debt collectors. That is true, says Los Angeles attorney L. Andrew Gifford, even if your husband contributed none of his earnings toward the purchase.
If you're unsure, you might consider enlisting the help of an attorney to declare a homestead on the house, which can protect the equity in the house to a limited extent.
Residents of other states who share this concern should check the wording of their state laws since property settlement matters vary from state to state.
Q: While restoring an old house I bought recently, I happened upon some old lithographs. I showed them to a curator at a community museum where I do volunteer work, and the museum has agreed to accept the collection. What kind of documentation do I have to give the Internal Revenue Service to get at least a small charitable deduction? I have no idea how much they're worth.--F. P.
A: Normally, the IRS requires a written appraisal for charitable gifts of property only if the taxpayer claims that the value exceeds $5,000. But because you have no way of knowing the original sales price, or even whether the lithographs were ever sold, your best bet would be to hire an appraiser and include his written report with your tax return when you claim the deduction.
You won't get hit up for a penalty for failing to properly document the value of your contribution. But the IRS has the right to disallow the deduction, as it has been doing with vigor in recent years as part of a crackdown on abuses of charity deductions.
To reduce your chances of a nasty IRS dispute, the agency suggests that you provide it with a statement detailing the appraiser's qualifications, the value he assigns to the lithographs, an explanation of how he arrived at that figure, the date of the appraisal, the appraiser's signature and an explanation of any restrictions on the use or disposition of the artwork.
How much weight the IRS gives a property appraisal depends in part on the appraiser's competence and knowledge of the market for the property he is appraising.
It would behoove you to get the appraisal and declare the deduction for this tax year. If you don't itemize deductions, you will no longer be able to deduct charitable contributions once the sweeping tax reform legislation that was approved by tax conferees last weekend becomes law.
Even if you do itemize, charitable giving will be less attractive, for tax purposes, under the new tax bill. The tax advantage of donations declines proportionately with the proposed drop in the top tax rate to 28% from the current 50%.