Late in 2003, Governor Gray Davis signed the groundbreaking legislation known as AB 205, the Domestic Partner Rights and Responsibilities Act of 2003. When this new law went into effect on January 1, 2005, same sex partners who had registered with the state of California as registered domestic partners (“RDPs”) became vested with essentially all of the same rights and obligations that married persons have under California law.
It’s not unusual for people’s eyes to glaze over when the topic of retirement plans comes up. But this is one time when you might want to pay attention because the Pension Protection Act of 2006 (the Act) includes provisions that really are great news for same-sex partners and other unmarried persons. The first important modification is that a non-spouse may now be the designated beneficiary for an eligible retirement plan. The second change is that an employee who designates a non-spouse beneficiary may now tap into the employee’s retirement funds in certain “hardship” situations to help the beneficiary. Each of these provisions is discussed in more detail below. However, in recognition of those glazed looks, some basic information about pension plans will probably be helpful.
Quirks undermine premise of equality in California’s domestic partner law.
From The Recorder, August 20, 2007.
In March 2003, DLKLawGroup client Thom Anderson lost Mac, his partner of 27 years. As the surviving joint tenant, Thom took ownership of Mac’s half interest in the home they had shared for the last 24 of those years. What Thom did not know was that because he and Mac were not a married couple, this transfer constituted a change of ownership under California law, a situation that triggers a reassessment of the property. The reassessed value of the home was over $150,000 more than the base year value in 2002, and Thom’s tax bill jumped more than 50%. The increase was so great that Thom, who lives on a fixed retirement income, has been struggling to pay the taxes and keep his home.
SB 559, authored by Senator Christine Kehoe (D-San Diego) and sponsored by Equality California (EQCA), addresses this issue by allowing individuals like Thom to seek a reassessment that would restore the property to its prior appraised value. The bill specifically excludes transfers of property between RDPs that occurred between January 1, 2000 and January 1, 2006 from the definition of change of ownership. Individuals who have been party to such a transfer would be allowed to make an application for reassessment until June 30, 2009, and assessors would be required to reverse any prior reassessments and restore the appraised value accordingly. The former appraisal value will serve as the base year value for taxes going forward.