On June 30, 2014, many currently registered Washington State domestic partnerships will be automatically converted into a marriage. Congratulations! Not only will the affected domestic partners now become spouses, but the domestic partner relationship will be invalidated.
Under the Marriage Equality Act signed by Governor Gregoire in February of 2012, and ratified by voters in the November, 2012 election, the Department of Health will implement this conversion from registered domestic partnership to marriage. The only exceptions are opposite-sex and same sex domestic partnerships where one partner is age 62or older. Opposite-sex and same sex domestic partnerships where both partners are under age 62 are invalidated as of June 30, 2014. Only Washington state registered domestic partnerships will be converted, domestic partnerships from other states will not be converted.
Marriage brings with it new legal rights and responsibilities that couples need to review and discuss. Under ordinary circumstances, couples contemplating marriage would have plenty of time to discuss these relevant issues, but with the fast- approaching deadline, couples need to think about these things now. Such issues include: whether a premarital or post-marital agreement is needed so community and separate property can be defined, how does marriage impact existing beneficiary designations, and what about Wills, Powers of Attorney, or Trusts?
Community versus Separate Property
Washington is a “community property” state which means that most property acquired after a marriage is presumed to be owned by spouses as “community property.” It includes:
· all earnings of both spouses during the marriage;
· all property acquired with earnings during the marriage, and
· any property acquired with "community funds."
Property which either spouse acquired prior to marriage or by gift, or inheritance is considered “separate property.” However, many couples “commingle” community and separate property and this can lead to the possibly unintended consequence of all property being considered community. For example, one spouse inherits money from a parent and places the funds in the joint checking account or a spouse has a “separate” bank account for inherited funds, but places wages in the same account. In the event of a divorce, “community property” will be subject to a divorce settlement.
There are also different legal implications relating to testamentary dispositions on the death of one spouse. In the absence of a will, community funds may automatically pass to the other spouse even if that is not the desire. Some couples may have vastly different incomes or property holdings and want to keep some property “separate.” If there are children from prior marriages, the spouses may want some property to pass to those children. Couples may also want to contractually control some of these issues, rather than just let state law apply. It is important to identify the consequences of being married and deciding what you and your spouse want.
What is the Effective Date of Marriage?
One provision of the new law (RCW 26.60.100) makes the “effective date” of the marriage the date of the original state-registered domestic partnership. For example, if a couple registered as domestic partners on August 1, 2012 and were subsequently issued a marriage license or allowed the marriage to convert automatically on June 30, 2014, the marriage would be deemed to have occurred on August 1, 2012. As a result, circumstances arising during the period of domestic partnership may also have significant implications for the issues discussed in this article, including distribution of assets during a divorce or after one spouse’s death. This situation only amplifies the importance for the couple to address ownership of property and prepared (or updated) estate planning documents that affirmatively state how each person’s assets will be distributed.
Pre or Post-Marital Agreement
A premarital or post-marital agreement can have many uses, but generally defines what property is community versus separate and then explains how property will be treated during marriage, upon death or if there is a divorce. Such agreements encourage spouses to discuss financial interests, air any differences, and can help eliminate financial disputes that can negatively impact a marriage. Under state law, spouses are each other’s heirs, have certain survivor benefits, and are also jointly liable for debts incurred by either spouse. An agreement addresses each of these issues and avoids unintended outcomes. For example, one spouse may have significantly greater income (and retirement) and may want to designate some of those funds to a person other than his or her spouse (e.g. an aging parent or children from a previous relationship). Or maybe there is a family vacation home owned with siblings that he or she wishes to pass to siblings and not the spouse. A pre or post-marital agreement offers a couple the opportunity to fully consider how they want to define the ownership and the eventual distribution of their property.
Estate Planning Updates Needed
Same sex couples may not be aware of the estate planning advantages or the inheritance laws that come with marriage. Property passing to a surviving spouse qualifies for an estate tax marital deduction, which means there is no tax due at the death of the first spouse. However, planning is needed to ensure that there is not a taxable estate at the second death. Many same-sex couples may have Wills or Trusts that pre-date their marriage and thus do not contain the necessary provisions to take advantage of the favorable estate tax laws granted to married couples. Each spouse needs to check beneficiary designations on retirement accounts and review Wills to make certain property passes in accordance with their wishes. This is particularly important if either spouse has children from a previous relationship because, without a Will, the surviving spouse, rather than those children, will inherit the community property and a large portion of any separate property of the deceased parent.
Children
Children conceived during a marriage are presumed to be the children of that marriage. However, children that were conceived by one partner within a same sex partnership that pre-dated the effective date of marriage may be in a legal limbo in regard to the non-biological parent if a second parent adoption was not completed. If the biological parent dies, the other parent may not retain custody of the child unless the deceased parent’s Will includes a guardianship designation paragraph.
Avoiding Conversion or Confirming Marriage
Couples who do not wish to have their domestic partnership converted must take steps prior to June 30, 2014 to avoid the conversion. Couple seeking dissolution or those who have already dissolved a domestic partnership should contact the Secretary of State to show proof of dissolution so that they can be removed from the list being issued marriage licenses. Any couples who are within the 90-day waiting period for dissolution should also make certain to notify the Secretary of State of this status. Couples who are already registered domestic partners and plan to officially marry prior to June 30th need to notify the Secretary of State so that the State does not issue two licenses. Current domestic partners who fall outside the law (e.g. have a City or County registration) and will not be converted, but do wish to be married, will need to apply for a license and take the steps necessary to complete that process. If the couple’s domestic partnership is rendered void, but they wish to continue the legal commitments through contractual means, they need to create a cohabitation agreement and accompanying estate planning documents to establish the mutual rights and responsibilities.
Possible Wedlock
Finally, same sex couples need to be aware of possible “wedlock.” If a same sex couple moves to a state where same sex marriage is not recognized, then it may be impossible to obtain a divorce because: (a) divorce procedures are not available for same sex marriages in a non-recognition state and; (b) the state where the same sex marriage took place may have residency requirements in order to obtain a divorce. Similarly if a couple visited a state, like Washington, to get married and then returned to a non-recognition state (like Idaho) the home state courts will not offer divorce proceedings for a marriage that does not exist under that state’s laws.
This article merely skims the surface of the myriad of issues couples need to consider during this exciting time. Couples should celebrate the hard won victory of marriage, but take a moment and consider the legal rights and responsibilities of the marriage contract.
Kokie Adams is a Trust and Estates lawyer who can help with the issues raised in this article. If couples or individuals have questions about how the new law applies to their specific circumstances please contact her at Purcell & Adams (425-774-0444) or direct questions to the Secretary of State at corps@sos.wa.gov or 360-725-0377.
Disclaimer: This article is a publication of Purcell & Adams, PLLC (www.purcelladams.com) and is to inform clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.
Under the Marriage Equality Act signed by Governor Gregoire in February of 2012, and ratified by voters in the November, 2012 election, the Department of Health will implement this conversion from registered domestic partnership to marriage. The only exceptions are opposite-sex and same sex domestic partnerships where one partner is age 62or older. Opposite-sex and same sex domestic partnerships where both partners are under age 62 are invalidated as of June 30, 2014. Only Washington state registered domestic partnerships will be converted, domestic partnerships from other states will not be converted.
Marriage brings with it new legal rights and responsibilities that couples need to review and discuss. Under ordinary circumstances, couples contemplating marriage would have plenty of time to discuss these relevant issues, but with the fast- approaching deadline, couples need to think about these things now. Such issues include: whether a premarital or post-marital agreement is needed so community and separate property can be defined, how does marriage impact existing beneficiary designations, and what about Wills, Powers of Attorney, or Trusts?
Community versus Separate Property
Washington is a “community property” state which means that most property acquired after a marriage is presumed to be owned by spouses as “community property.” It includes:
· all earnings of both spouses during the marriage;
· all property acquired with earnings during the marriage, and
· any property acquired with "community funds."
Property which either spouse acquired prior to marriage or by gift, or inheritance is considered “separate property.” However, many couples “commingle” community and separate property and this can lead to the possibly unintended consequence of all property being considered community. For example, one spouse inherits money from a parent and places the funds in the joint checking account or a spouse has a “separate” bank account for inherited funds, but places wages in the same account. In the event of a divorce, “community property” will be subject to a divorce settlement.
There are also different legal implications relating to testamentary dispositions on the death of one spouse. In the absence of a will, community funds may automatically pass to the other spouse even if that is not the desire. Some couples may have vastly different incomes or property holdings and want to keep some property “separate.” If there are children from prior marriages, the spouses may want some property to pass to those children. Couples may also want to contractually control some of these issues, rather than just let state law apply. It is important to identify the consequences of being married and deciding what you and your spouse want.
What is the Effective Date of Marriage?
One provision of the new law (RCW 26.60.100) makes the “effective date” of the marriage the date of the original state-registered domestic partnership. For example, if a couple registered as domestic partners on August 1, 2012 and were subsequently issued a marriage license or allowed the marriage to convert automatically on June 30, 2014, the marriage would be deemed to have occurred on August 1, 2012. As a result, circumstances arising during the period of domestic partnership may also have significant implications for the issues discussed in this article, including distribution of assets during a divorce or after one spouse’s death. This situation only amplifies the importance for the couple to address ownership of property and prepared (or updated) estate planning documents that affirmatively state how each person’s assets will be distributed.
Pre or Post-Marital Agreement
A premarital or post-marital agreement can have many uses, but generally defines what property is community versus separate and then explains how property will be treated during marriage, upon death or if there is a divorce. Such agreements encourage spouses to discuss financial interests, air any differences, and can help eliminate financial disputes that can negatively impact a marriage. Under state law, spouses are each other’s heirs, have certain survivor benefits, and are also jointly liable for debts incurred by either spouse. An agreement addresses each of these issues and avoids unintended outcomes. For example, one spouse may have significantly greater income (and retirement) and may want to designate some of those funds to a person other than his or her spouse (e.g. an aging parent or children from a previous relationship). Or maybe there is a family vacation home owned with siblings that he or she wishes to pass to siblings and not the spouse. A pre or post-marital agreement offers a couple the opportunity to fully consider how they want to define the ownership and the eventual distribution of their property.
Estate Planning Updates Needed
Same sex couples may not be aware of the estate planning advantages or the inheritance laws that come with marriage. Property passing to a surviving spouse qualifies for an estate tax marital deduction, which means there is no tax due at the death of the first spouse. However, planning is needed to ensure that there is not a taxable estate at the second death. Many same-sex couples may have Wills or Trusts that pre-date their marriage and thus do not contain the necessary provisions to take advantage of the favorable estate tax laws granted to married couples. Each spouse needs to check beneficiary designations on retirement accounts and review Wills to make certain property passes in accordance with their wishes. This is particularly important if either spouse has children from a previous relationship because, without a Will, the surviving spouse, rather than those children, will inherit the community property and a large portion of any separate property of the deceased parent.
Children
Children conceived during a marriage are presumed to be the children of that marriage. However, children that were conceived by one partner within a same sex partnership that pre-dated the effective date of marriage may be in a legal limbo in regard to the non-biological parent if a second parent adoption was not completed. If the biological parent dies, the other parent may not retain custody of the child unless the deceased parent’s Will includes a guardianship designation paragraph.
Avoiding Conversion or Confirming Marriage
Couples who do not wish to have their domestic partnership converted must take steps prior to June 30, 2014 to avoid the conversion. Couple seeking dissolution or those who have already dissolved a domestic partnership should contact the Secretary of State to show proof of dissolution so that they can be removed from the list being issued marriage licenses. Any couples who are within the 90-day waiting period for dissolution should also make certain to notify the Secretary of State of this status. Couples who are already registered domestic partners and plan to officially marry prior to June 30th need to notify the Secretary of State so that the State does not issue two licenses. Current domestic partners who fall outside the law (e.g. have a City or County registration) and will not be converted, but do wish to be married, will need to apply for a license and take the steps necessary to complete that process. If the couple’s domestic partnership is rendered void, but they wish to continue the legal commitments through contractual means, they need to create a cohabitation agreement and accompanying estate planning documents to establish the mutual rights and responsibilities.
Possible Wedlock
Finally, same sex couples need to be aware of possible “wedlock.” If a same sex couple moves to a state where same sex marriage is not recognized, then it may be impossible to obtain a divorce because: (a) divorce procedures are not available for same sex marriages in a non-recognition state and; (b) the state where the same sex marriage took place may have residency requirements in order to obtain a divorce. Similarly if a couple visited a state, like Washington, to get married and then returned to a non-recognition state (like Idaho) the home state courts will not offer divorce proceedings for a marriage that does not exist under that state’s laws.
This article merely skims the surface of the myriad of issues couples need to consider during this exciting time. Couples should celebrate the hard won victory of marriage, but take a moment and consider the legal rights and responsibilities of the marriage contract.
Kokie Adams is a Trust and Estates lawyer who can help with the issues raised in this article. If couples or individuals have questions about how the new law applies to their specific circumstances please contact her at Purcell & Adams (425-774-0444) or direct questions to the Secretary of State at corps@sos.wa.gov or 360-725-0377.
Disclaimer: This article is a publication of Purcell & Adams, PLLC (www.purcelladams.com) and is to inform clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.
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