Posts Tagged ‘marriage’

Ward Seeks Court Permission to Marry His Girlfriend

JUNE 2, 2014 VOLUME 21 NUMBER 20

We have written before — earlier this year, in fact — about whether individuals who are under guardianship have the ability to get married. When this question comes up (and it should be said that it is rare) it usually is in a context like that of our January story about “Cynthia Madsen” — an older family member, usually a parent, gets married (often to a caregiver) and that marriage is challenged after the fact. Sometimes, though, the story can play out in a different direction.

Matt Obregon (that’s not his real name) is a 27-year-old living in Minnesota. His parents have been appointed as guardian of Matt’s person, because he lacks capacity to make his own decisions about medical care and living arrangements. Matt has diagnoses of bipolar disorder and severe attention deficit hyperactivity disorder.

Matt lives in a group home, where he has responsibility for his own general housekeeping duties but is mostly free to come and go as he pleases. He takes several medicines, and the group home staff manages his medication regimen. The court that appointed his parents as guardian specifically gave them authority to give or withhold approval of any contract Matt enters into other than one for “necessaries” (i.e. — food, shelter, medical care and the like).

When Matt was about 23 he began dating Eliza, a young woman who is in a day program for individuals with special needs. Eliza has a young child (not Matt’s), and Matt and Eliza spend a lot of time together. Matt sleeps over at Eliza’s residence about once a month, and they get together about twice a week.

After a couple years of dating, Matt and Eliza decided they wanted to get married. Matt’s parents (remember that they are his guardians) did not think it was in Matt’s best interest to marry Eliza, and so they withheld approval.

The way this story would play out for most of the contested marriage scenarios we see would have been for Matt and Eliza to get married anyway, though they might have to go to a different county, or even a different state, in order to get a license, since Matt has a guardian. Matt’s parents would then have to decide whether to seek to annul the marriage, or initiate a divorce proceeding as his guardian, or simply let the marriage stand. But that’s not the way this story played out.

Instead, Matt filed a petition with the guardianship court, asking permission to marry Eliza. He argued that even though he had a guardian, he had the capacity to understand the nature of a marriage and the responsibilities that he would be taking on. His guardians disagreed, insisting that Matt’s limitations made it impossible for him to consent to the marriage.

Note that the issue before the guardianship court was not whether it would be in Matt’s best interests to allow him to marry. Instead, it was whether he had the necessary level of capacity to enter into a marriage agreement. Both parties agreed that a ward under guardianship can marry if he or she has capacity; their only disagreement was about whether Matt had the capacity.

Matt’s parents testified in the subsequent court proceeding, telling the judge about several recent incidents indicating Matt’s limitations. In one, he had shot out windows at a cabin using a BB gun. In another, he had grabbed the wheel of the group home van while residents were on an outing. The court also considered letters, apparently from one of Matt’s doctors, saying he suffered from a variety of conditions and had an IQ of 71. According to Matt’s mother, his functional ability is about that of a seven-year-old.

At the end of the hearing the guardianship judge ruled that Matt did not have the requisite mental capacity to “make or communicate responsible decisions regarding his person, including the ability to enter into a marriage contract.” Matt’s request to marry Eliza was denied.

The Minnesota Court of Appeals next considered Matt’s request, and it disagreed with the guardianship judge. According to the appellate court, the question is not whether Matt’s mental state differs from the accepted norms — the inquiry should focus on whether Matt has the capacity to understand marriage and to choose a spouse. The findings of the guardianship court should have been focused not on his diagnosis or his behaviors, but on whether he can comprehend the nature of the marital relationship, the obligations he would be taking on, and the benefits he might obtain from marrying.

A marriage contract is indeed a contract, noted the appellate court. But it is a different kind of agreement than a commercial contract (to buy a car, say, or to rent an apartment). Because marriage is a fundamental right, and because wards should be permitted — and even encouraged — to exercise as much personal autonomy as possible, any restriction on the ability to get married should be sharply limited.

Does this mean that Matt and Eliza can now get married? Not yet. The Court of Appeals sent Matt’s request for what’s called a “declaratory judgment” back to the probate judge for further hearings and a final decision. The next hearing, though, must focus narrowly on Matt’s capacity to get married, not on his diagnosis and behaviors. And one other thing: the burden of proving that he does not understand the nature of marriage rests on his guardians — it is not his burden to affirmatively show that he has capacity, even though he does have a general guardian. Guardianship of O’Brien, May 27, 2014.

Would the same standard apply in an Arizona guardianship court? It’s not clear — there is not much case law, and no clear statutory authority. But the Minnesota decision does reflect modern thinking about personal autonomy and self-determination for people under guardianship, and it seems likely that it would be persuasive (but not controlling) in a similar Arizona proceeding.

Same-Sex Married Couples Should Pay Attention to Income Taxes

MARCH 10, 2014 VOLUME 21 NUMBER 10

Income tax filing season is upon us, and so it’s an appropriate time to turn our attention to what’s new (or little-known) in the income tax world. We’re particularly interested, of course, in income tax issues that affect our clients, who usually are more interested in estate and gift taxes than income taxes. But there’s one subset of our clientele that really does need to focus on new income tax rules: same-sex married couples.

What’s new this year, of course, is that the U.S. Supreme Court has struck down a key part of the federal Defense of Marriage Act (DOMA). That federal law had said that even if a state chose to recognize same-sex marriages, the federal government would not accept that state recognition. After the Supreme Court ruling in United States v. Windsor on June 26, 2013, that principle was reversed. Later interpretations by the Internal Revenue Service (along with other agencies of the government) have expanded that reversal.

In the wake of the Windsor decision, the executive branch of the federal government has adopted a new approach to determining the validity and effect of same-sex marriages. The short version: if the marriage was recognized as valid where and when it was solemnized, it will be valid for federal (including income tax) purposes. That has been referred to as the “place of celebration” rule. It is sometimes called the “state of celebration” rule, but it is not limited to states — a marriage valid in a foreign country will work, too. Like, for one example, that of Edith Windsor and Thea Spyer, who were married in Ontario, Canada, in 2007, but lived in New York.

We still see a lot of confusion about the effect of the new IRS rules, though. Our gay and lesbian clients often believe that they are not married because Arizona does not (yet) recognize the validity of their marriage. Sometimes same-sex couples were married years ago and have since drifted apart — believing, perhaps, that they did not need to do anything to end a marriage that their home state stubbornly refuses to acknowledge. The new rules will require a rethinking of those relationships.

Here’s the bottom line for same-sex married couples: if you were legally married in another state or country, you need to file your federal income taxes this year (and for future years) as if you were married — because you are. That may mean that some couples actually pay more in total income tax — the well-known “marriage penalty” in the federal tax code will now apply to same-sex couples in the same way that it has long applied to opposite-sex couples. But it is not optional — a married couple, regardless of gender, can not decide to simply file as two single individuals regardless of what Arizona thinks of the validity of their marriage.

Does that mean that married couples who are no longer together need to file a joint income tax return? Yes — or they have to file as “married, filing separately.” Does that mean separated — but still married — couples have to communicate with each other, and share financial information? No, but if they file separately they are likely to pay more total tax, and it makes sense to talk through the options with a qualified income tax preparer.

Arizona also has a state income tax, of course, and it still refuses to recognize those same sex marriages. Since your state income tax filing starts with your federal tax return, a “married filing jointly” federal return is bound to confuse the state tax folks. So they have come up with their own form to make adjustments: it is called Arizona Schedule S and it is available on the Arizona Department of Revenue website. There are instructions for the Schedule S, and a version for 2012 taxes as well as 2013. (It could be worse: some states are requiring same-sex couples to prepare a federal return as if they were unmarried, just to attach it to their state tax return.)

Why is there a 2012 version of Arizona’s Schedule S? That leads to another point worth considering: if you were married before 2013, you may be eligible to (but you are not required to) amend your federal income tax return to file as a married couple. If you do, you will need to amend your Arizona tax return as well. You clearly have the right to amend your 2012 return, and you may be eligible to amend for 2011 as well — but note that if you amend for 2011 you will also need to amend for 2012 at the same time. Amendment rules are confusing, but the IRS has attempted to make them understandable on their generally excellent website.

There are other tax-related issues concerning same-sex marriages, and more opportunities for federal and state tax law to diverge.One we saw in our office this month: a surviving partner visited with us after the death of her long-time partner. She never mentioned that they had been married, thinking (as she later told us) that the marriage was not valid in Arizona. But when it came time to look at her partner’s Individual Retirement Account (IRA), it made a difference — even in Arizona. As a surviving spouse she had the ability to simply roll over her spouse’s IRA and continue to defer withdrawals until she reaches 70 1/2. If they had not been married she would have been required to begin withdrawals immediately, and faster. The lesson: don’t assume that Arizona’s failure to recognize your marriage means that it has no effect.

Most of the other changes, however, are considerably more arcane; the requirement that same-sex married couples file their federal returns as married (whether separately or jointly) is not arcane, and will have a big impact on those pioneers who got married in another state or country. Ask for advice, and share your marital status with your lawyer and your tax preparer.

Court Annuls Marriage After Death of “Spouse”

JANUARY 20, 2014 VOLUME 21 NUMBER 3

Cynthia Madsen (not her real name) was, according to her doctor, already showing signs of dementia in 2007. In fact, her doctor wrote that she was not able to manage her own financial affairs. By mid-2009, her condition had worsened; her doctor wrote that she could not make decisions in her own best interests, and that her children should seek a guardianship because there was danger that someone might try to take advantage of her.

No guardianship or conservatorship proceeding was initiated, though — Cynthia continued to live at home with the assistance of a caregiver and a live-in friend named Patrick. In 2011 — almost two years after her doctor reported that Cynthia could make no decisions on her own — Patrick asked Cynthia’s minister to officiate as he and Cynthia got married. The minister refused, saying he did not believe Cynthia was competent to make such a life decision.

Things began to accelerate a few months later. Cynthia was admitted to the hospital . Cynthia’s daughter filed a guardianship and conservatorship proceeding. In the course of that proceeding, a court-appointed investigator interviewed Cynthia and wrote that she was incapacitated; the investigator recommended that a full guardian and conservator should be appointed. The next day, Patrick and Cynthia were married. Two days after that, Cynthia’s daughter was appointed as her temporary guardian and conservator, and moved her to a care facility.

As guardian and conservator, Cynthia’s daughter filed a petition to dissolve the marriage or, in the alternative, to annul it. The difference is important — dissolution of the marriage (what most of us still refer to as “divorce,” though the terminology changed decades ago) recognizes that the married couple are unhappy in the marriage, or that at least one of them believes the marriage is irretrievably broken. Annulment, on the other hand, recognizes that the marriage was never valid in the first place.

While the dissolution/annulment case was pending, Cynthia died. The divorce court promptly dismissed the dissolution part of the petition — a divorce can not be granted after the death of one spouse, since the marriage is, in a sense, dissolved by the death. But the annulment proceeding continued. Ultimately, the court ruled that Cynthia was incompetent to enter into a marriage contract, and so the marriage never was effective. The annulment was granted.

The Arizona Court of Appeals upheld the annulment. It is irrelevant, ruled the judges, that Patrick claimed that neither he nor Cynthia was unhappy in the marriage. It is irrelevant that Cynthia died while the case was pending. In this case, there was clear evidence that Cynthia did not understand the nature and significance of the marriage ceremony, and the trial judge’s determination that there was no effective marriage was allowed to stand. Savittieri v. Williams, January 2, 2014.

At Elder Law Issues we have written about this question before. In October of last year we reported on a Wisconsin case in which an annulment proceeding was allowed to continue after the death of the incompetent “spouse.” At the time we noted that we had not seen Arizona cases with the same facts, but we predicted that the result would likely be the same in Arizona. The Savittieri case shows that we predicted correctly.

It is worth noting that the result in this new Arizona case did not depend on the fact that a guardian and conservator was appointed almost immediately after the “marriage” ceremony. The fact of guardianship and conservatorship, by themselves, would probably not be enough to invalidate the marriage. As we have previously noted (this time citing a Missouri case with illustrative facts), the question is not whether a guardian or conservator was, or could be, appointed — it is whether the person understood the nature of the marriage and had mental capacity to enter into the marital contract itself. Cynthia did not — the guardianship and conservatorship were based on that incapacity, but did not necessarily prove it.

This is Huge: Feds Publish New Rules on Gay Marriage

SEPTEMBER 2, 2013 VOLUME 20 NUMBER 33

Just a few weeks ago we wrote about some of the uncertainties facing legally married same-sex couples living in states (like Arizona) that refuse to recognize the validity of their marriages. If a legally-married couple moves to Arizona, we wondered, would their ability to receive some of the tax benefits available to married couples change just because their new state did not recognize or approve of their marriage? We suggested that same-sex couples ought to be aware of the problem, but assume that they should be able to enjoy the same benefits (and burdens, for that matter) available to their married heterosexual friends.

Well, the United States government weighed in on the subject this week, and the positions taken by two different federal agencies made it clear that a valid marriage is a valid marriage — at least in the federal government’s eyes. The result? Same-sex couples still need to pay extra attention to their estate planning choices, but their choices will be much more palatable.

On August 29, 2013, the Internal Revenue Service released Revenue Ruling 2013-17. Its bottom line: if you are legally married, even though your current state of domicile does not recognize it, you will be treated as married for all tax purposes. Period. Income tax, estate tax, gift tax — it makes no difference. You are married.

In our earlier newsletter we talked about a couple, married in Massachusetts, who had moved to Arizona. Could they file their federal income taxes as “married, filing jointly”? Could they list one another as beneficiary on their IRA or 401(k) accounts, relying on the ability of a spouse to roll those benefits over into a new IRA? Would they get the benefit of a full step-up in basis for income tax purposes, just like other married couples holding community property? It was not clear a week ago. Today it is clear. The answer in each case is “yes” — though perhaps a qualified “yes” in one or two of those cases.

Why a qualified yes? Mostly because community property titling is a special case. Yes, there are federal income tax benefits for married couples titling their assets as community property — but the availability of that option is governed by state property law. Arizona is one of the handful of states recognizing community property designations at all, and it limits the option to couples it thinks are married. If a same-sex couple, legally married in another state, attempts to title, say, real estate as community property (or community property with right of survivorship), will Arizona recognize that title?

We are not sure, and so suggest that the safe approach is to create a trust (probably a joint, revocable trust), provide that all the assets in the trust are held as community property, and title most assets to that trust. That does mean that same-sex couples will end up paying somewhat more for their estate planning than their married heterosexual friends — but they will get the same result at a relatively modest cost.

The other notable change on the federal level involves long-term care arrangements for Medicare recipients. It is far less expansive than the big IRA announcement, but reflects the same general approach: married same-sex couples are to be accorded the same benefits as married heterosexual couples, at least on the federal level.

An August 29, 2013, announcement from the Department of Health and Human Services affects Medicare Advantage beneficiaries. It is not very far-reaching, but it is nonetheless important. In cases where one spouse is already admitted to a skilled nursing facility (what most of us call a “nursing home”), when the second spouse requires placement he or she must be permitted to choose the same facility. In other words, Medicare Advantage plans must have rules supporting spouses’ ability to stay together. And those policies must apply to same-sex married couples, too — even if their marriages are not recognized in the state where they live.

Why is this modest change important? Because, like the IRS declaration, it indicates that the federal government will be extending protections to validly married same-sex couples regardless of their state of residence.

Legal rights and responsibilities are evolving quickly for same-sex marriage. The first few states permitting same-sex marriages debated whether to even permit out-0f-state couples to marry. In the next wave of legal developments, it seemed clear that couples living in Arizona probably would not benefit from traveling to, say, Canada or Iowa to get married, only to return to Arizona and have their marriages all but invalidated. This week’s announcements make it clear that a committed same-sex couple should seriously consider whether they want to get married in a friendlier jurisdiction, even if they intend to return to Arizona to live.

The federal pronouncements also make it that much more difficult for states like Arizona to continue to resist the pressure to change. If a legally married same-sex couple, living in Arizona, wants to get divorced, do they have access to the Arizona court system? The current legal thinking in Arizona is that they might be able to seek annulment of their marriage (which, in Arizona’s legal view, never validly existed), but not a divorce (or dissolution).

Consider, for instance, the dilemma facing Phoenix-area resident Anne Armstrong (not her real name) earlier this year. She and her partner Roberta Reynolds had been married in California, but Anne wished to end the marriage. She filed a petition for annulment of the marriage in the Arizona Superior Court in Phoenix. Roberta did not respond, but the Judge Eartha K. Washington nonetheless refused to annul the marriage. Because same-sex marriages are invalid in Arizona, ruled the judge, there was nothing she could do to help Anne end her California marriage.

The Arizona Court of Appeals reversed that decision and sent the case back to the judge for further proceedings to annul the marriage and divide the couple’s property. Atwood v. Riviotta, May 16, 2013. While Anne’s legal problems were addressed, the decision left two huge issues unresolved: (1) what about same-sex married couples who don’t want to end their marriages, and (2) why should the legal process for ending same-sex marriages be different in the first place? Furthermore, the Court of Appeals resolution was by an unpublished decision, meaning it could not even be cited as precedent for other, similar cases as they arise.

What about resolution of child custody issues, or property divisions? What about bigamy laws, or other societal norms affecting married couples? If a couple is permitted to file income tax returns as married under federal law, why should it be different for state income tax returns? The pressure on Arizona (and other resistant states) is intense: it is time for our legal system to deal with changes sweeping across the country, and the federal government’s pronouncements this week will add to that pressure.

How To Revoke Your Revocable Living Trust, Will or Power of Attorney

AUGUST 8, 2011 VOLUME 18 NUMBER 29
Last March we told you a good story about revocation of a living trust, though we cautioned you not to use the same method. A year before that we told you about another colorful character and how he revoked his will. Both of those court cases made us scratch our heads about the behavior of the individuals, but it occurs to us that we might never have told you what you should do to revoke your will or trust. Let us take care of that oversight now.

Please remember that we only practice law in Arizona. What works here might not work, or might not work exactly the same way, elsewhere. Your best bet is always to talk with a competent local attorney about how (and whether) to revoke a will or trust — or, for that matter, a power of attorney or other planning document you might have signed. With that caveat, here are some thoughts on how it might be done:

Revoking a will

The usual way to revoke a will is to sign a new one. It is very uncommon for an individual to want or need to revoke a will without making new arrangements for disposition of his or her property. Somewhere in your will — probably in the first paragraph or two — there is probably language that says something like “I hereby revoke all other prior wills I have signed.” That’s all it takes.

It is also possible to revoke a will by physically destroying the original document. Actually, Arizona law says you can do this by committing a “revocatory act” on the document. That can include burning, tearing, or other physical acts of destruction on the will or on a part of it. There are two keys here: you must intend to destroy the will, and you must do it yourself (though it is permitted to instruct someone else to do it in your presence). It is not an effective approach to call up your brother on the telephone, ask him to go down to the basement where the will is located, tear it up and report back to you — it must be done in your “conscious presence.”

Another way to revoke your will is more subtle: you can misplace it. If after your death no one can find your original will, and it is apparent that it was once in your possession, the law presumes that you must have destroyed it. That is only a presumption — we might be able to overcome it by showing, for instance, that you told everyone your will was completed and in a safe place shortly before your death. Obviously, a better choice is to keep track of your original will, and tell your heirs and family where to find it.

Another way to “revoke” your will: get married, or divorced, or have children. Actually, these life changes do not really revoke your will under Arizona law, but they can effectively rewrite your will — and in some circumstances can change your entire estate plan. There is a presumption in either case that you just didn’t get around to making appropriate changes in your will. Once again, you can overcome that presumption by taking appropriate action. There is a high likelihood that the law’s presumption will not be accurate as applied in your facts, so after marriage, divorce or birth of a child you should get together with a lawyer to make sure your estate plan is in order.

Revoking a trust

When a client asks about revoking a revocable living trust, our first question is not about “how” but “why.” There are very few disadvantages to having a revocable living trust — the two primary problems are the cost of setting one up and the difficulty of transferring assets to the trust. If you have already incurred both the cost and the difficulty of funding, it probably does not make sense to revoke the trust. Instead, let us talk with you about revising the trust to remove whatever provisions trouble you. Is it just that you don’t want your former girlfriend’s name to appear in the document? OK — we can probably “restate” the trust, which will involve replacing the entire trust document with a new one without the offending name.

For whatever reason, perhaps you just want to revoke your revocable living trust. After all, “revocable” is in the name, right? How do you do it?

First, you look at the trust document. Does it tell you how to revoke it? Perhaps it requires a written revocation, and maybe even it calls for the signature of the trustee (these are common but not universal requirements). If the trust tells you how to do it, follow the trust’s instructions.

Is it enough to tear up the trust? No, not under Arizona law. How about misplacing the trust document? No, a missing trust does not create a presumption of revocation in the way that a missing will would do.

How about getting married or divorced, or having children? This one involves a little more nuance. Your trust might take care of the children part — a well-drafted trust will usually make provision for the later birth (or death) of a child, or even a grandchild. Sometimes that provision is by one of the legal shorthand terms “by right of representation,” “per stirpes” or even “per capita.”

Marriage may not be covered in the trust document or Arizona’s default law. Divorce is covered by the same default statute as we described above for wills — but with the added wrinkle that if your trust is a joint trust between you and your spouse, it is a little harder to figure out what happens in individual circumstances. The message here: if you have any of these big life changes (marriage, divorce, birth or death of a child or other beneficiary) get in to your lawyer’s office as quickly as you can to make the appropriate changes to your revocable living trust.

Powers of attorney

How do you revoke your power of attorney? If you have never shared the document with the named agent or anyone else, you can revoke it by simply tearing it up and throwing it away. If you have shared it, you should write a separate letter to everyone who has seen it indicating that you are revoking the power. Make sure any new power of attorney you sign deals with the older one(s): it may not be enough to just rely on the most recent document, since they don’t automatically revoke older powers of attorney in the same way that wills do.

Keeping track of power of attorney documents and formally revoking older ones is important for another reason. Unlike trusts and wills, revoked powers of attorney are still valid to the extent that your agent acts without knowledge of the revocation. Save everyone a lot of heartache, expense and confusion by having an attorney prepare your new powers of attorney and properly revoke older versions.

One final note: you can see that the effect of having older, revoked documents around can be serious and can vary between the different types of documents. Help us keep your estate plan straight, and your life uncluttered. We know that you paid good money for those old documents, and that it is hard to throw them away. Just do it. If we prepare your new estate plan, we will offer to help you revoke and destroy the old documents (and all those drafts and copies we lawyers sent you), and we’ll volunteer our shredder to make it discreet and effective.

Late-Life Marriage Leads To Property Dispute in Divorce

MARCH 15, 2010  VOLUME 17, NUMBER 9

Older individuals often get married, of course, and sometimes face legal issues as a result of separation or divorce. The legal problems associated with the end of a late-life marriage are not necessarily different from those faced by younger divorcing couples. A recent Arizona Court of Appeals decision addresses one difference that often occurs.

When Norman and Judy Flower married he was 76 and she was 55. She had a son from a former marriage, and each of them owned a home. Mr. Flower promptly transferred his home into joint ownership with his new wife; Mrs. Flower’s son was already on the title to her home, and she did not add Mr. Flower.

The couple lived together in Mr. Flower’s home for six months, while they fixed up Mrs. Flower’s residence. They took out a line of credit secured by Mr. Flower’s home and spent a total of at least $32,000 on Mrs. Flower’s home. They accumulated a total of $61,000 of debt during the marriage. After the work was done on Mrs. Flower’s home they moved into it, and her son moved into the jointly-owned home that had originally belonged to Mr. Flower.

A year after the marriage, Mr. Flower decided that his wife had been interested in him only for financial reasons and he filed a petition seeking an annulment. Mrs. Flower responded by asking for a divorce, and insisted that she was entitled to a half interest in what had been Mr. Flower’s home, all of her own (now improved) home, and no obligation to repay any of the costs of improvements to her home.

Arizona law, like that of many jurisdictions, assumes that the property division in a divorce proceeding will usually be roughly equal. The legal term, however, requires that it be “equitable,” and in rare cases that can mean something other than an equal division. The trial judge decided this was such a case.

Although the trial court denied Mr. Flower’s request for an annulment, it did grant the couple a divorce. The judge also returned Mr. Flower’s residence to him, although it required him to pay the majority of the debt the couple had accumulated. Mrs. Flower was awarded her home without any claim for the improvements made during the marriage, and she was ordered to pay $16,000 of the couple’s debts. Mrs. Flower appealed.

The Court of Appeals affirmed the unequal division of property and debts. Given the unusual facts of this case, ruled the appellate judges, the usual requirement of “substantially equal” division need not be applied. The appellate court noted that though Mr. Flower received his home, he was also required to pay most of the community’s debt incurred during a relatively brief marriage. Flower v. Flower, February 25, 2010.

Arizona, of course, is a “community property” state. Does that mean that the result in a state that did not apply community property rules would be different? Perhaps, but not necessarily. Most states apply some version of Arizona’s requirement that property division be “equitable” and assume that usually means “equal.” While Mr. and Mrs. Flowers did initially transfer his residence into “community property with right of survivorship,” the result in Arizona would not have been different if they had transferred it to “joint tenancy with right of survivorship.”

Is the result in the Flower case unusual based on unusual facts? Not really. The same day that the Arizona Court of Appeals decided the Flower property division issues, it also handled another, similar case. Retirees Carolyn and Lowell Inboden (the opinion does not give their ages) had married and purchased a vacant lot as joint tenants, but using $90,000 of Mrs. Inboden’s separate money from before the marriage. They then built a home on the lot, using $67,000 of her money, $46,500 of his, and a lot of sweat (they acted as their own general contractors).

When Mr. and Mrs. Inboden divorced a little less than two years after the marriage (and just a few months after the house was completed), the trial judge awarded her about three-quarters of the value of the home to reimburse her for her disproportionate contribution to its purchase and construction. The Court of Appeals reversed that result and returned it for further consideration.

In the case of the Inbodens’ property division, the appellate court was clear that the final result might well be an unequal division. The basis for any deviation, however, must be based on “equitable” principles, and not on a simple calculation to reimburse each spouse for their contribution of property that was previously separate. There is a presumption, difficult to overcome, that changes of title or transfers of assets are intended to be gifts, and those gifts can not be reversed if the marriage later falters. Inboden v. Inboden, February 25, 2010.

Why are these divorce issues “elder law” concerns? They are not, really — except that when older couples marry they are more likely to have property that they bring into the marriage, and less likely to have minor children. Consequently, if their later-in-life marriages fail they are perhaps more likely to present complicated property division issues and less likely to focus on child custody and support problems.

Of course, divorce is not the only venue for property division concerns. Even the popular press has begun to consider the possibility that later-in-life marriages might create property disputes between surviving spouses and children from prior marriages or relationships.

DPOA Used To Transfer Property; Court Reverses Act

DECEMBER 4, 1995 VOLUME 3, NUMBER 23

Many elders have been advised to execute Durable Powers of Attorney, both for financial and health-care decisions. The use of such powers (DPOAs, in lawyers’ shorthand) has become widespread. The opportunity for abuse has also grown.

Massachusetts resident Frank Gagnon, 85, gave a power of attorney to his daughter Joan Coombs in late 1990. Three months later he apparently reconsidered his decision and revoked the DPOA, though he did not tell his daughter he had done so.

Within a year Mr. Gagnon had found a buyer for a piece of property he owned in New Hampshire. He signed a sales contract for $750,000 and informed his family (including his daughter) of what he considered his good fortune.

Ms. Coombs did not agree. To prevent the sale of the property, and without discussing the matter with her father, she created a trust for her father’s benefit, naming herself as Trustee. Using her DPOA, she transferred the New Hampshire property into the trust’s name.

Mr. Gagnon demanded that his daughter terminate the trust and return the property to him. She refused, and Mr. Gagnon filed an action against her. At trial, the Court ruled that, since Ms. Coombs did not actually know her power of attorney had been revoked, the transfer would stand.

The Massachusetts Court of Appeals reversed the trial court’s finding. The higher court noted that Ms. Coombs had a fiduciary duty to her father, which was inconsistent with her actions in encumbering his property.

Furthermore, said the Court of Appeals, her DPOA was effectively revoked when she learned that her father had sold the New Hampshire property. She was ordered to return the property to her father. Gagnon v. Coombs, Mass. App. Ct., August 23, 1995).

Why Seniors May Be Slow To Marry

Most people who deal regularly with the elderly know that older couples often live together without getting married.Some may not realize how many legal encouragements there are for such a practice. A few of the common reasons for couples to remain unmarried:

  • Income Taxes. Married couples (and not just the elderly) pay a marriage “penalty tax”; two wage earners filing as single individuals pay less in income taxes than they would as a married couple.
  • Social Security Benefits. Upon death of a spouse who received higher benefits, the survivor’s Social Security payments will be increased to the same level. Upon remarriage, the higher benefits are returned to the lower level.
  • Social Security Taxes. A married couple pays taxes when the total Social Security benefit exceeds $32,000. The same couple can earn $25,000 each before paying any taxes if they remain unmarried.
  • Home Sales. If one member of a prospective couple has used the one-time over-55 tax exclusion for the gain from sale of a home, marriage will cause the other party to lose his or her exclusion.
  • Medicaid Eligibility. Marriage may expose the healthy spouse’s separate assets to long-term care costs for the other spouse in the event of nursing home placement.

And those are just the federal rules discouraging marriage.

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