Same-Sex Couples Opting Out of California Domestic Partners Law

Amid great fanfare last year, California enacted one of the strongest domestic partners laws in the country. Only Vermont and Massachusetts offered more protection to gay couples. Now comes word in the form of this story in the San Francisco Chronicle that many of the couples the law purported to help are now choosing to avoid its coverage.

The main problem appears to be the junction between state law and federal law, and the uncertainty caused by conflicts between the two. Some of the couples who have stayed together but have opted out of the statutes coverage say they’re concerned about the burden of community debt, the possible of public benefits, and the uncertainty about what happens if they leave California.

The article cites one example: one partner in a domestic partnership might have his or her assets become subject to payment of the other’s medical debts – a result that could wipe out the entire net worth of an otherwise financially secure person. And no one knows how the state domestic partners law and the federal estate and gift tax fit together, so there’s no graceful way to do estate planning between domestic partners.

The article quotes a woman whose partner agreed with her to opt out of the new statute’s coverage while they could do so easily – and while they agreed on how to do it.

“I read the letter and said, ‘Great. We don’t have the benefits if we travel to another state, it doesn’t give you federal tax benefits, and she ends up owing my debt and I end up owing hers. What benefits are we getting here?’ “

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