Same-Sex Couples to Gain New Rights, Liabilities in California

California doesn’t have gay marriage, but it’s about to get a financial facsimile.

Starting Jan. 1, many unmarried couples will be able to qualify for some of the same benefits as married couples, including the right to inherit property without a will and legal standing to sue on a partner’s behalf. The law applies to same-sex couples, as well as unmarried male-female couples as long as at least one of the partners is 62 or older.

“For us, this is great,” said Jenny Pizer, a Los Angeles attorney who has had a 20-year relationship with attorney Doreena Wong. They’ve largely handled their finances as a married couple but had none of the legal protections that state law provides to traditional families.

But with benefits come responsibilities. Couples who sign up for partnership status under the Domestic Partner Rights and Responsibilities Act also have potential liabilities. If one partner dies with debts, for example, the other partner will be responsible for paying them.

Frederick Hertz, an Oakland attorney who runs the website SameSexLaw.com, said he and his partner had kept their finances separate. They have no intention of mixing them, he said, because neither one wants to retain a financial tie if the relationship were to end.

Supporters of the domestic partners legislation anticipated a varied reaction. Although the bill passed the California Legislature two years ago, implementation was delayed until Jan. 1, 2005, to give domestic partners time to consider the implications of the new law.

“When people get married, they think about all the possible legal and financial ramifications. But when they became domestic partners, they didn’t because there weren’t many ramifications,” said Assemblywoman Jackie Goldberg (D-Los Angeles), who sponsored the measure. “That’s about to change.

“In the short run, that’s causing a lot of confusion,” she added. “In the long run, I think people are going to realize this was long overdue.”

Is partnership status right for you? The following may help you decide.

Question: What does the law do?

Answer: It creates a parallel between marriage and domestic partnership in state law. Because California is a community property state, that means that registered domestic partners will be able to inherit their partner’s assets -- and be liable for their debts -- in the absence of a will. If two partners split up, each will also be entitled to the same benefits and detriments of divorcing married couples.

That means a court would have to formally dissolve the partnership, and most assets and liabilities would be divided equally. It also gives the courts the potential to order one partner to provide continuing financial support to the other.

Unless the pair set up a legal agreement before the law’s effective date -- essentially a pre-partnership agreement -- almost all assets and debts accumulated by either partner during the union would be considered community assets and debts, Hertz said.

Q: Are all live-in partners affected by this law?

A: No. It affects only those who sign up with the state’s domestic partner registry. About 29,000 couples are currently listed. These individuals will be automatically covered by the law. People who don’t want to be covered by the law need to remove themselves from the registry.

Those who wish to register -- or terminate their registry -- can obtain the necessary forms on the California secretary of state’s website at ss.ca.gov/dpregistry.

Q: Who can register with the state?

A: Gay and lesbian couples, as well as unmarried straight couples in which at least one of the partners is 62 or older. This age requirement was designed to accommodate older heterosexual couples who have remained officially single so as not to jeopardize their Social Security benefits.

Q: What if you don’t want to be covered by the law?

A: Until Dec. 31, either partner can unilaterally withdraw their registry. After Dec. 31, those who want to dissolve their union under the new domestic partnership rules will need to have a formal dissolution -- the equivalent of a divorce.

Q: What’s the benefit of registering -- or remaining registered?

A: Registration provides a number of benefits, including the ability to jointly own property, have legal standing to sue on behalf of a partner and, potentially, to receive family medical insurance through a partner’s work-based plan. (California government insurance plans recognize the state registry, but the policies of non-government employers vary.)

Q: Is there any way to get those benefits without registering?

A: Some companies may be willing to provide spousal workplace benefits with a simple notarized statement. In addition, it is possible to draft legal documents that would designate someone to step in to make medical and financial decisions for you in the event of your incapacity.

And, of course, you can write a will to leave your assets to whomever you choose. However, to get all the legal rights that registration provides would require a stack of legal documents, Pizer said. And some things -- such as commercial fishing licenses and other government business licenses -- could not be transferred without the legal standing that marriage or the domestic partnership law will provide.

Q: Is there any way to alleviate the financial risk of registration while still getting the other benefits?

A: You can alleviate most of the financial risks, with the exception of any financial obligation owed to your children, by executing the equivalent of a prenuptial agreement, Pizer said. That would require the services of an attorney.

Q: Does registration affect federal income taxes or Social Security benefits?

A: The domestic partnership law affects only state laws, so gay and lesbian couples will still not be able to earn spousal Social Security benefits or file joint tax returns.

Kathy M. Kristof, author of “Investing 101” and “Taming the Tuition Tiger,” welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past columns, visit latimes.com/kristof.