Some Unusual Advice

Posted by on Oct 3, 2023

Some Unusual Advice

Not in a million years would I have thought I’d recommend that people get legally married. But in some cases – I do.

Harry and his partner Sally lived together in a house they bought in Oakland in the 1980s, at a very low price and with a very low California property tax basis. They’d both been in bad marriages, so they vowed to never get legally married. They each owned 50% of their house as tenants in common, and each paid half the bills.

Flash forward nearly 40 years later. Sally has now died and, yes, she had a trust leaving her half of the house to Harry, which is good. The problem is that because they were not legally married, her gift to him will not be treated as an inter-spousal transfer, which is exempt from property tax reassessment. It will be treated as a friend-to-friend transfer which gives no break. The county will raise the property taxes as to the half that Harry inherits from Sally. It’s possible that the taxes will go so high that he’ll have to sell the house and find somewhere else to live. Had they gotten legally married – even late in the game when Sally was diagnosed with a terminal illness – the transfer of her half of the house to Harry would have been spared property tax reassessment. 

Marvin owns his own house outright in Pinole. For the past twenty years, Marvin’s partner Marie has lived in the house with him. Marie’s two adult children stay there sometimes, too. Marvin’s trust says that upon his death, the house will be inherited by Marie or, if she is deceased, her adult children. And Marvin has appointed Marie as the Agent for his Power of Attorney.

The problem, though, is that Marvin has developed dementia in his early 70s and has quickly declined to the point that he can no longer amend any of his legal documents. Marie and her children haven’t known what to do about this. They have not stayed on top of Marvin’s medical appointments. Marvin’s older brother Alan, who has never been that concerned with Marvin’s welfare, found out that Marvin was still driving and that he had been scammed by identity thieves. Last Christmas, Alan took Marvin on a family “vacation” and never brought him back to Marie.

Alan is now in the process of seeking a court-supervised conservatorship in order to be able to place Marvin in an assisted living facility. Alan has given Marie a 30-day notice to vacate Marvin’s house so that Alan can sell the house to pay for nursing care for Marvin. Because Marie and Marvin were not legally married, and even though Marie would get the house upon Marvin’s death, she’s not a legal spouse. She now has to fight off an eviction and file a competing petition to become conservator over Marvin. Had Marvin and Marie been married, she’d be much better able to now take care of Marvin legally. 

I am definitely not advocating that all partners who want to live together should get legally married. 

Society affords higher status to people who are legally married versus those who are not. Laws reflect that status difference. It is a legitimate choice to not conform. But it can hurt you personally and financially. 

If you’re not legally married to someone, and you think it might be in your and your partner’s best interests to get married under the laws of the State, then consider talking to a family law attorney about your best options, including making a pre-nuptial agreement in sync with your estate planning.