Probate and Unmarried Couples
Washington law provides strong legal protections for surviving spouses, including homestead protections and laws regarding community property and inheritance. But the death of a partner in an unmarried relationship presents special challenges for the survivor. Without adequate advance planning, the surviving partner may have no rights to control the disposition of the remains of the decedent, to serve as administrator of the partner’s estate, to remain in the home that the couple occupied before the partner’s death, or to keep any of the property the couple accumulated during their relationship. To defend the partner’s rights can be costly, time-consuming, and emotionally draining. This page discusses the legal rights that long-term committed partners might have in the assets left by their deceased partners, examines how some of the principal assets might be treated, and addresses some of the other issues that surviving partners might face when seeking reimbursement for their interest in their partner’s estate.
In 1948, the Washington Supreme Court decided a case brought by a man whose female partner died after a seven-year relationship. Creasman v. Boyle, 31 Wn.2d 345, 347, 196 P.2d 835 (1948). Before her death, the couple purchased a home that was placed in her name alone. But the down payment for the home came from the proceeds of the sale of his automobile, and the payments on the mortgage came entirely from his earnings during the relationship. Id. at 359. After her death, he brought an action to recover his interest in the home. The trial court awarded him one-half of the home. Id. at 346-47. But the Washington Supreme Court disagreed and reversed the trial court. The Supreme Court's ruling reaffirmed a harsh rule that had existed in Washington for unmarried couples, which later become known as the Creasman presumption, that is that “[p]roperty acquired by a man and a woman not married to each other, but living together as husband and wife, is not community property, and, in the absence of some trust relation, belongs to the one in whose name the legal title to the property stands.” Id. at 351.
Later, the courts did what they could to mitigate the effect of the decision by applying equitable principles such as joint venture and implied partnerships, constructive trusts, contract theories, among others. In re Marriage of Lindsey, 101 Wn.2d 299, 304, 678 P.2d 328 (1984). In the years following Creasman, the Washington Supreme Court came to regard the decision as an archaic and onerous one that made the law in this area unpredictable. Id.; see also In re Thornton’s Estate, 81 Wn.2d 72, 78, 499 P.2d 864 (1972).
In 1984, the Court finally overruled Creasman, declaring that courts must instead examine the relationship and the property accumulated during the relationship and make a just and equitable division of the property. Marriage of Lindsey, 101 Wn.2d at 304. In the next decade, the Washington Supreme Court articulated a clearer standard for courts to use by offering factors to use when determining whether a “meretricious” relationship existed, and if such a relationship existed, demanding that courts evaluate the interest each partner had in the property acquired during the relationship and justly and equitably divide that property. Connell v. Francisco, 127 Wn.2d 339, 346 & 835, 898 P.2d 831 (1995). These standards and their application to particular assets are discussed more fully below.
Before and after Creasman, Washington courts used the term “meretricious” to describe a long-term unmarried relationship. In Olver v. Fowler, 161 Wn.2d 348, 655, 657 n.1 (2007), the Washington Supreme Court recognized the derogatory nature of this term and began using the term “committed intimate relationship” or “CIR.” Another term sometimes used by Washington courts is “equity relationships.” See Walsh v. Reynolds, 183 Wn. App. 830, 834 n.1; 335 P.3d 984 (2014); In re Long & Fregeau, 158 Wn. App. 919, 925, 244 P.3d 26 (2010).
CIRs are not the same as state registered domestic partnerships (RDPs). RDPs were a creation of statute that permitted same-sex partners and certain opposite-sex partners (where one partner was over the age of 62) to enjoy the same benefits of marriage without being married. When same-sex couples were permitted to marry in 2012, the law eliminated RDPs except for those couples where one partner was over 62. See RCW 26.60.100. For couples in which both partners were under 62, the law automatically converted the RDP to marriage on June 30, 2014 unless the couple formally dissolved the RDP prior to it being converted. See RCW 26.60.100(3)(a) & (4). Therefore, same-sex couples that had an RDP automatically converted to marriage in 2014 enjoy all the rights of a married couple, as do older couples who remain in an RDP today.
CIRs are also not “common law marriages.” Washington’s supreme court has declined to recognize common law marriage in this state. In re Marriage of Pennington, 142 Wn.2d 592, 600, 14 P.3d 764 (2000). Unlike CIRs, common law marriages are relationships where both parties presume they are married. Few states still recognize common law marriages, but those that do, generally require three elements: The couple must live together as husband and wife, must hold themselves out as husband and wife, and must have a present intent to be married to each other. Jennifer Thomas, Pitfalls and Promises: Cohabitation, Marriage and Domestic Partnerships, 22 J. Am. Acad. Matrim. Law. 151, 157-59 (2009). CIRs in Washington are different in that the partners in a CIR know that they are not in a marriage.
What is a Committed Intimate Relationship?
A Committed Intimate Relationship (also known as a “CIR”) is a “stable, marital-like relationship where both parties cohabit with knowledge that a lawful marriage between them does not exist.” Connell v. Francisco, 127 Wn.2d 339, 346, 898 P.2d 831 (1995) (citing In re Marriage of Lindsey, 101 Wn.2d 299, 304, 678 P.2d 328 (1984). In Connell, the Washington Supreme Court provided five non-exclusive factors for courts to consider when evaluating an alleged CIR, stating that “[r]elevant factors establishing a [CIR] include, but are not limited to: continuous cohabitation, duration of the relationship, purpose of the relationship, pooling of resources and services for joint projects, and the intent of the parties.” Connell, 127 Wn.2d at 346 (citing Lindsey, 101 Wn.2d at 304–05; Latham v. Hennessey, 87 Wash.2d 550, 554, 554 P.2d 1057 (1976) (emphasis not in the original); In re Marriage of DeHollander, 53 Wn. App. 695, 699, 770 P.2d 638 (1989)). But these Connell factors are “neither exclusive nor hypertechnical” and no factor is more important than another. In re Marriage of Pennington, 142 Wn.2d at 605. Whether a relationship can be characterized as a CIR “depends upon the facts of each case.” Id. at 602 (citing In re Meretricious Relationship of Sutton, 85 Wn. App. 487, 490, 933 P.2d 1069 (1997)).
The first Connell factor is continuous cohabitation of the couple. The exact moment of cohabitation can be difficult to pin down. An unmarried couple will rarely immediately move in together. This can be a slow process. But then once the cohabitation is established, it can be interrupted by periods of separations. The cases that examine this element expose the difficulties that reality brings to this Connell factor. The Pennington court suggested that this element would be unmet when “a court would have great difficulty . . . factoring in the periods of separation into the division of property.” Pennington, 142 Wn.2d at 603.
The courts have found the continuous cohabitation factor satisfied where: (1) the parties cohabitated continuously for over ten years, Foster v. Thilges, 61 Wn. App. 880, 885, 812 P.2d 523 (1991); (2) the parties cohabitated for an eight to nine-year period, except for a three-month separation, In re Long & Fregeau, 158 Wn. App. 919, 926, 244 P.3d 26 (2010); and (3) the parties lived together for fifteen years, except for multi-week periods where one party’s commercial fishing job required him to be away, Ross v. Hamilton, 161 Wn. App. 1005, 2011 WL 1376767 at *7 (2011) (unpublished).
In contract, the courts have found cohabitation factor unsatisfied where (1) couple began living together in 1985, one person was married until 1990, one party moved out for a time in 1991, but they lived together until 1993, after which, they dated other people and one party lived with someone else, Pennington, 142 Wash.2d at 603; and (2) when a couple lived together from 1989 to 1993, broke up, then reconciled in 1994 and ended relationship at end of 1995, id. at 606.
Pooling of Resources
The fourth element requires the pooling of resources. The courts have said that “[b]ecause the nature of the common law claim of meretricious relationship operates primarily as a property claim, pooling of economic resources and functioning as an economic unit is an important factor in determining whether the parties ever intended to create a [CIR] whereby each party would have an interest in property acquired during the relationship.” Hobbs, 122 Wn. App. 1010, at *12. Given that the Connell factors are not hypertechnical, “[t]he question is not simply whether [the parties] pooled their resources and services for joint projects; the question is whether they pooled and invested their time, effort, or financial resources enough to require an equitable distribution of property.” Lockwood, 136 Wn. App. 1017, at *3. It is important to remember that CIR is a doctrine tied to equity and that the “[p]roperty acquired during a meretricious relationship is subject to distribution ‘so that one party is not unjustly enriched at the end of such a relationship.’ ” Niemela v. Adderley, 138 Wn. App. 1015, 2007 WL 1181007 at *4 (2007) (unpublished) (quoting Connell, 127 Wash.2d at 349).
“[A] joint account is not an essential factor in finding an equity relationship.” Long, 158 Wn. App. at 928 (citing Soltero v. Wimer, 128 Wn. App. 364, 115 P.3d 393 (2005)). In Bostain, the court found that the parties pooled their resources in the absence of any joint accounts because they built a home during their relationship and the movant helped plan the home, contributed to mortgage payments and paid the taxes and other home-related expenses. Bostain, 127 Wn. App. 1029, at *5. The courts have also found the pooling factor satisfied where: (1) the parties maintained joint bank accounts, commingled their earnings, paid bills together and submitted joint income tax returns, Fleming v. Spencer, 110 Wn. App. 1017, at *3 (2002) (unpublished); (2) one party contributed his “physical know-how and steady income,” and the other party contributed her “business savvy” and the coupling significantly increased their wealth. Ross, 161 Wn. App. 1005, at *5; and (3) the parties shared mortgage, utility, and other household expenses with regard to homes they individually owned and each party engaged in forbearance of rent and/or mortgage payments when necessary and they engaged in joint work on each other’s properties and on the home of one party’s mother. Long, 158 Wn. App. at 927-28.
In contrast, courts have found the pooling factor not satisfied where: (1) one party’s contribution was “spen[ding] money for food, household furnishings, carpeting and tile, and some kitchen utensils . . . [and] she cooked meals, cleaned house, and helped with interior decoration[,]” Pennington, 142 Wn.2d at 604; (2) each party maintained their “own home, vehicles, accounts, career-related assets, and other legal obligations” and neither party “paid for each other’s taxes, mortgages, utilities, or other legal obligations,” Hobbs, 122 Wn. App. 1010, at *11; and (3) one party’s contribution was payment of some utility costs, the purchase of some furniture and appliances, and providing assistance in converting a carport into a family room. Niemela, 138 Wn. App. 1015 at *4.
One court found no pooling where one party gifted land to the other. In Bell v. Leppard, 134 Wn. App. 1051, 2006 WL 2468760 at *1 (2006) (unpublished), Michael Bell received a house as part of a dissolution proceeding in which he agreed to refinance the house in order to remove his ex-wife from any financial obligation on the mortgage and to pay his ex-wife $10,000. Mr. Bell subsequently executed a quit-claim deed for the house in favor of his then girlfriend in order to avoid foreclosure and asked her to refinance the house in order for him to fulfill his obligation to pay his ex-wife $10,000. Id. His girlfriend refinanced the house and deposited the resulting money in her personal bank account. Id. Mr. Bell and his girlfriend separated a number of months later and he commenced suit against her. Id. In rejecting Mr. Bell’s claims, the court held that no CIR existed because, inter alia, the parties did not pool their resources. Id. at *2.
Duration of the Relationship
The second factor courts look to is the duration of the relationship. In analyzing this factor, courts ask whether the “relationship can be considered long enough to merit a property division much like a marriage of a similar length.” Long, 158 Wn. App. at 926-27. The courts have found the duration factor to be satisfied where: (1) the parties were in a seven to eight-year relationship, even though there were several instances of infidelity, id. at 927; (2) the parties were in a twelve-year relationship, even though they separated multiple times during that span, Pennington, 142 Wn.2d at 603-04; and (3) the parties were in a relationship lasting four years and three months, id. at 606.
In contrast, the courts have found the duration factor to be unsatisfied where the parties were in a romantic relationship for only one and a half years. Bell v. Leppard, 134 Wn. App. 1051, 2006 WL 2468760 at *2 (2006) (unpublished).
Purpose of the Relationship
Generally, the courts will find the purpose factor satisfied where the parties’ purpose includes some variation of companionship, love, sex, support, having a child, or raising a child. See, e.g., Fenn & Lockwood, 136 Wn. App. 1017, 2006 WL 3629147 at *3 (2006) (unpublished) (purpose factor satisfied where parties’ purpose was “companionship, love, sex, mutual support, having a child, raising their daughter, participating in a community to live like a marriage, but without state or religious involvement, to operate like-and present themselves to the world as a family, and to share the joys and responsibility of parenting.”); Ross, 161 Wn. App. at *5 (purpose factor satisfied where parties’ purpose was for “financial and emotional benefit”); Long, 158 Wn. App. at 927 (purpose factor satisfied where parties’ purpose was “mutual love, care, support, sex, friendship, and companionship”); In re Marriage of Bostain, 127 Wn. App. 1029, 2006 WL 1177586 at *5 (2005) (unpublished) (purpose factor satisfied where parties’ purpose was “mutual love, caring, support, sex, friendship and companionship”).
In evaluating the purpose of the relationship, one court found it significant that “even after an attorney advised the parties . . . that the State of Washington had adopted the concept of meretricious relationships, [the nonmoving party] took no steps ‘to avoid operation of the legal consequence of being in a meretricious relationship.’ ” Lockwood, 136 Wn. App. 1017, at *3.
Intent of the Parties in the Relationship
“Connell contemplates the mutual intent of parties to be in a [CIR].” Pennington, 142 Wash.2d at 604. While it is clear that the petitioner must show that this intent was shared by both parties, see Niemela, 138 Wn. App. 1015 at *3, the exact nature of the intent is unclear. One court, in quoting a commentator on the issue, concedes to the challenges of this factor “‘[i]s it intent to live together as if married, intent to share property, intent to not share property, or what?’” Seven v. Stoel Rives, LLP, 159 Wn.App. 1003, at *4 (2010) (unpublished) (quoting Kenneth W. Weber, 21 Washington Practice: Family and Community Property Law, § 57.8, at 340 (1997)).
The courts have found the intent factor to be satisfied where: (1) the parties held each other out to be husband and wife, were monogamous, were co-parenting their son, and eventually married; In re Marriage of McCarthy, 170 Wn. App. 1014, 2012 WL 3580059, at *3 (2012) (unpublished); (2) the parties held a ceremony in which they memorialized “their lifelong commitment to each other and their goals” and referred to each other as husband and wife and referred to one party’s sole proprietorship as a “family business,” Lockwood, 136 Wn. App. 1017, at *6; and (3) the parties purchased a car together, built a home together, and one party worked as the primary income earner so the other party could stay home with her son, and they eventually married. Bostain, 127 Wn. App. 1029, at *6.
In contrast, the courts have found the intent factor unsatisfied where: (1) one party refused marriage despite the other party’s insistence on marrying, Pennington, 142 Wn.2d at 604; (2) the parties did not hold themselves out as spouses and one party was married to someone else, id. at 772; and (3) the parties co-parented, but “failed to function in any sense as an economic unit.” Hobbs, 122 Wn. App. 1010, at *11 The courts have also observed that cohabitating out of “mutual convenience” does not satisfy the intent requirement. Niemela, 138 Wn. App. 1015, at *3.
In evaluating the intent of the parties, one court found it significant that “even after an attorney advised the parties that the State of Washington had adopted the concept of meretricious relationships, [the non-moving party] took no steps ‘to avoid operation of the legal consequences of being in a meretricious relationship,’ except with regard to [one piece of] property,” which they entered into a property agreement regarding. Lockwood, 136 Wn. App. 1017, at *6-7.
However, taking steps to avoid the operation of the legal consequences of a CIR may not be sufficient to negate other evidence of intent. In Bostain, the non-moving party had the movant sign a “non-marital agreement” which provided, inter alia, that each party would be responsible for their own expenses and that the property each acquired would remain separate. Bostain, 127 Wn. App. 1029, at *2. The nonmoving party argued that the agreement set out the intent of the parties to not be in a CIR. Id. at *6. The court rejected this argument because the non-movant proposed to the movant several times subsequent to the agreement, they purchased a car together, built a home and garage together, the non-movant worked as the primary income earner so the movant could stay home with her son, and they eventually married. Id.
Must All of the Factors Be Met?
In an unpublished opinion, division one of the Court of Appeals has suggested that all Connell factors must be met to show a CIR. In that case, the court held that the Connell factors “are the minimum requirements” for finding a CIR. Seven v. Stoel Rives, LLP, 159 Wn.App. 1003, at *6 (2010) (unpublished). The court explained: “Although the five factors in Connell are not meant to be exclusive, they are each essential elements of a CIR.” Id. at *5 (citing Vasquez v. Hawthorne, 145 Wash.2d 103, 108, 33 P.3d 735 (2001); Connell, 127 Wash.2d at 346)). While neither Vasquez nor Connell specifically state that all the factors must be satisfied to find a CIR, the Seven court explained as follows:
[Connell held] that the factors “include, but are not limited to: continuous cohabitation, duration of the relationship, purpose of the relationship, pooling of resources and services for joint projects, and the intent of the parties.” The word “include” means that these are the minimum requirements. The supreme court reiterated that in Vasquez, holding that the factors “are not exclusive, but are intended to reach all relevant evidence.” The supreme court has never held that there was a CIR in the absence of one of the Connell factors
Id. at *6 (footnotes omitted) (emphasis in original).
Connell appears to suggest, however, that not all factors need to be satisfied when it states: “While a ‘long term’ relationship is not a threshold requirement, duration is a significant factor. A ‘short term’ relationship may be characterized as meretricious, but a number of significant and substantial factors must be present. Connell, 127 Wn.2d at 346; but see Duncan v. Peterschick, 144 Wn.App. 1029, at *3 (2008) (finding it unnecessary to consider the pooling factor after it concluded that the intent factor was not satisfied). It is also notable that in an earlier decision, division one of the Court of Appeals referred to the Connell factors merely as “[s]ome factors to consider in deciding whether a couple had a meretricious relationship . . . .” Niemela, 138 Wn. App. 1015 at *2, and in another unpublished case, division one stated that the cohabitation factor “is not conclusive” and that “periods less than two years in length have been sufficient to establish, along with the other factors, a meretricious relationship prior to marriage.” Hobbs, 122 Wn. App. 1010, at *11 (emphasis added). While the contradictions and logic of division one’s position in Seven v. Stoel Rives may leave its holding in doubt, no case has expressly come to the opposite conclusion.
Evaluating and Dividing a Couple's Property
How Soon Must a Claim Be Brought?
If a surviving partner and family cannot agree on their own how to (or whether to) divide some of the assets between them, the surviving partner needs to be mindful of important deadlines for resorting to the courts for help. The surviving partner must bring a claim no later than three years after the relationship ended. In re Kelley and Moesslang, 170 Wn. App. 722, 737, 287 P.3d 12 (2012); but see Hobbs, 122 Wn. App. 1010, at *7 (respondent waived her statute of limitations claim when she failed to raise it in her answer).
A surviving partner may be tempted to bring a creditor claim against the estate to recover the amount the decedent’s estate owes the survivor for his or her portion of the community, but this would be a mistake. The surviving partner need not bring a creditor claim. See Witt v. Young, 168 Wn. App. 211, 275 P.3d 1218 (2012) (rejecting request by personal representative to bar CIR claim brought by surviving partner when she failed to file suit against the PR within 30 days of the PR’s rejection of her creditor claim). As a result, the survivor is not subject to the deadlines and requirements of the non-claim statute in chapter 11.40 RCW, but should closely follow the statute of limitations requirements discussed above.
Surviving partners should also be aware of RCW 11.11.070, which requires all “testamentary beneficiaries” who are entitled to a nonprobate asset that has passed to another person to bring a petition under TEDRA no later than (1) the earlier of six months after the will is admitted to probate or (2) one year after the account owner’s death. This statute of limitations would be important for a surviving partner to be aware of in the event that he or she is named in the will, but a nonprobate asset containing community-like property are passing to another beneficiary. It is unclear whether this statute of limitations would also apply to an unmarried partner who is unnamed in the will. Still, in asserting his or her community property-like claim against the nonprobate asset, it would be best for the surviving partner to comply with this statute.
Another limitations period for a CIR partner to remember is if one partner dies during the pendency of a case to dissolve a CIR. In such cases, the personal representative of the estate must be substituted as the respondent in the CIR case within four months of appointment. RCW 11.40.110. In In re Estate of Herrin, 189 Wn. App. 1049, 2015 WL 5124758 (2015) (unpublished), the unmarried couple was together for only two years, but one year after separation one of the partners filed a CIR action. About three years later, while the CIR action was pending, one partner died. The survivor filed a creditor claim in the probate action, and about one and a half years later, the PR moved to the close the probate and asked the court to disregard the claim for two reasons: A creditor claim is not the proper means for pursuing the claim, and the survivor failed to substitute the PR into the CIR case as a defendant. The trial and appellate court agreed that the survivor’s failure to follow RCW 11.40.110 was fatal to the claim.
Once a CIR is established, Connell requires courts to evaluate the nature of the property that was acquired during the relationship and the interest that each party has in that property, and then to divide the community-like property in a just and equitable manner.
Most of the law that governs the disposition of property and liabilities at the end of a marriage, RCW 26.09.080, apply equally to the end of a CIR. Connell, 127 Wn.2d at 349. In applying these principles to the end of a CIR, a court will presume that all assets and income acquired during the CIR are community-like and owned by both parties. Id. at 351. Any asset purchased or earned prior to the beginning of the relationship is separate and not before the court subject to distribution. Soltero v. Wimer, 159 Wn.2d 428, 434, 150 P.3d 552 (2007), citing Connell, 127 Wn.2d at 350. For assets acquired during the relationship, the partner claiming that the property is separate can rebut the presumption of joint ownership by showing proof that the asset was acquired by gift or inheritance, by separate funds or separate credit, or from the traceable rents, issues, and profits of separate property. Connell, 127 Wn.2d at 351; Cummings v. Anderson, 94 Wn.2d 135, 139, 614 P.2d 1283 (1980); In re Marriage of White, Wn. App. 545, 550, 20 P.3d 481 (2001).
The rents, income, profits and increase in the value of separate property are presumed to remain separate. However, this presumption can be overcome by showing that the increase was attributable to community labor or contributions. Marriage of Lindemann, 92 Wn. App. 64, 69-70, 960 P.2d 966 (1998). Such evidence must be “direct and positive.” Id. at 70. If the community’s funds or labor are used to increase the value of the separate property, the community may have a claim for reimbursement. Connell, 127 Wn.2d at 351. However, a court is permitted to offset the community’s right to reimbursement against any benefit the community received for its use and enjoyment of the separate asset. Id.
Generally, the nature of the property is established at the time of acquisition and does not change thereafter. Even though the community’s labor or income might increase the value of the separate property, the nature of the property remains separate. In re Estate of Borghi, 167 Wn.2d 480, 491 n.7, 219 P.3d 932 (2009). Clear and convincing evidence of the parties’ intent to change the nature of property is necessary before the court will consider it transformed from separate to community and vise versa. Id. at 491. Even the addition of the other partner to the title on property is insufficient alone to change the nature of the property from separate to community-like. See id. at 491.
“Hopeless commingling” of separate and community assets can give rise to a presumption that the assets are community. Schwartz v. Schwartz, 192 Wn. App. 180, 368 P.3d 173, 179 (2016). Separate property will remain separate even though it changes form as long as the separate property is traceable and identifiable. Id. But if the property becomes so intermingled that is impossible for a court to distinguish or apportion it, then it loses its character as separate and becomes community property. In re Marriage of Chumbley, 150 Wn.2d 1, 5-6, 74 P.3d 129 (2003).
A Surviving Partner is Not Considered a Spouse Under Washington's Intestate Succession Law
The Washington Supreme Court has held that a surviving unmarried partner cannot be considered a surviving spouse under Washington’s intestate succession law, which is the law the controls the division of a person's estate when there is no Will. RCW 11.04.015. Peffley-Warner v. Bowen, 113 Wn.2d 243, 253, 778 P.2d 1022 (1989). If Washington’s intestate statute were applied by analogy, the surviving partner would be entitled to all of the community property, including the deceased partner’s share (and possibly part or all of the separate property depending on whether the decedent was survived by children or a parent). See RCW 11.04.015.
In Peffley-Warner v. Bowen, 113 Wn.2d 243, 253, 778 P.2d 1022 (1989), the surviving partner applied for widow benefits under the Social Security Act, but was denied by the agency because she wasn’t a spouse of the decedent. She appealed to the Ninth Circuit Court of Appeals. The Ninth Circuit certified the question to the Washington Supreme Court, which answered unfavorably to the surviving partner. At the same time, the partner asked the trial court for an award in lieu of homestead under RCW 11.52.010, and was denied that too. In denying her claim to be considered a “spouse” under Washington’s intestate law, the sate Supreme Court emphasized that the “division of property following termination of an unmarried cohabiting relationship is based on equity, contract or trust, and not on inheritance.” Id. at 253. The surviving partner is neither “a surviving spouse nor an heir to [the] decedent…. She is therefore not entitled to share in the decedent's estate under Washington laws of intestate succession.” Id.
Who Has the Burden of Proof?
The partner who is trying to prove a CIR has the initial burden of proof. In re Relationship of Eggers, 30 Wn. App. 867, 873, 638 P.2d 1267 (1982) (“Whether a meretricious relationship is of a quality which would allow for equitable distribution is a question of fact . . . and the burden is on the party seeking equitable distribution.”).
In In re Estate of Langeland, 177 Wn. App. 315, 312 P.3d 657 (2013), the court faced resolving a conflict between two competing presumptions: The presumption that all assets accumulated during a committed intimate relationship are jointly owned, and the presumption that an inventory prepared by the administrator of an estate is correct. This case pitted the daughter of the decedent against his girlfriend of 18 years. The parties stipulated to the existence of a CIR. During the relationship, the decedent had purchased a large boat, house, and had proceeds from a software company. The inventory listed these assets as his property. The trial court placed the burden on the girlfriend to prove that the inventory was incorrect, and limited her testimony based on the dead man’s statute. When she was unable to meet her burden, the trial court awarded nearly all of the assets to the daughter. Id. at 320.
The court of appeals disagreed with the trial court’s decision to allow the inventory presumption to prevail over the community property presumption, and accordingly reversed the court’s property decision. Id. at 319. In reviewing the competing presumptions, the court was convinced that the presumption regarding jointly owned property in a CIR furthered more important policy priorities than the presumption that an inventory was correct. Furthermore, to elevate the presumption of a correct inventory above the community property presumption would give more rights and protections to the decedent’s heirs than the decedent would have had if he were alive. Id. at 327.
Treatment of Specific Property
Residence, Land and Other Real Property
Upon the death of an unmarried partner, the ownership of the home can be the most significant and emotionally fraught asset to deal with. If the decedent was the only person on title and did not leave a will devising the home to the partner, this can pose significant problems for the survivor. At best, the survivor would be entitled to only his or her one-half interest in the home because other heirs would take the decedent’s share of the home through the intestacy statute (RCW 11.04.015).
The division of real property at the end of a CIR is analyzed using the general community property law standards by analogy, that is, if the home was purchased before the relationship began, it is separate property, not subject to distribution by the court. If it is purchased during the relationship, it is community-like property that may be distributed in a fair and equitable manner at the end of the relationship. For more complicated situations where property is purchased with both community and clearly traceable separate property, the court divides the property according to the contribution of each. Chumbley, 150 Wn.2d at 8. Similarly, when real property is purchased through a down payment that is separate property, but the community obligates itself on the mortgage, the property is a mix of separate and community property in proportion to the credit pledged and the down payment. In re Dewey’s Estate, 13 Wn.2d 220, 227, 124 P.2d 805 (1942).
Even if the property is characterized as separate, however, the community may have a right to reimbursement for funds or labor used to increase its value. Connell, 127 Wn.2d at 351. However, a court is permitted to offset the community’s right to reimbursement against any benefit the community received for the use and enjoyment of the separate asset. Id. It is possible that the reasonable rental value that the community received by living in the separate asset would offset the payments the community paid towards a mortgage, taxes and upkeep. That is what happened in Miracle v. Miracle, 101 Wn. 2d 137, 139, 675 P.2d 1229 (1984). There, the trial court refused to grant the community an equitable lien on the house, concluding that “the reasonable rental value exceeded the payments that the community had made on the home, and therefore these payments constituted reasonable rental for the premises and the benefits which it afforded the community." The supreme court affirmed the trial court’s decision. Id.
Banking and other Financial Accounts
Almost all decedents leave behind a checking or savings account. Often, although less common, they also leave behind stocks or a brokerage account. The same general community property rules apply to these assets as they do to other personal property. For example, the checking account could be comprised of income earned during the relationship or the stocks could have been purchased during the relationship. Under these circumstances, the survivor could have a claim to a portion of these assets.
If these assets pass to the estate, the surviving partner may need to file a petition to recover his or her community-like interest in these accounts. If however the decedent named a person other than the surviving partner as the joint account holder with right of survivorship or a pay-on-death (POD) beneficiary, the survivor may have increased difficulty recovering his or her interest. With these designations, the non-partner beneficiary can gain quick access to these assets after the death of the account holder, and the beneficiary could have title to the funds or stocks before the surviving partner even knows about it.
TEDRA (chapter 11.96A RCW) grants broad powers to the superior courts to resolve matters involving probate and nonprobate assets. See RCW 11.96A.030(2)(g). But there may be other avenues for pursuing and stopping a payout. In Kitsap Bank v. Denley, 177 Wn. App. 559, 312 P.3d 711 (2013), a bank filed a complaint for a restraining order under a banking statute (now-RCW 30A.22.210) that allows a bank to refuse, without liability, to pay over money that is designated to a beneficiary in a POD account until all parties consent to the payment or a court order directs the payment. If however the funds are already in the hands of the beneficiary, an action under TEDRA may be necessary.
A common asset left by a decedent is a retirement account, such as a 401(k) or IRA. If the decedent designated the surviving partner as the beneficiary, the survivor should have little difficulty obtaining the funds. The company holding the funds should give the survivor the option of rolling the funds into an inherited plan or cashing the account out.
If the surviving partner is not the named beneficiary, he or she may still have an interest in the account if it contains assets that were accumulated during the CIR. Successfully asserting that claim may be challenging however depending on what type of account it is. If the retirement account is a qualified plan governed by ERISA, such as a 401(k), the partner will likely be unsuccessful in any attempt to gain his or her share of the community’s contributions to the account. The federal law that governs many retirement accounts (Employee Retirement Income Security Act (ERISA)) requires the plan administrator to follow the designation made by the account holder, notwithstanding state law. Egelhoff v. Egelhoff, 121 S.Ct. 1322 (2000) (holding that ERISA’s requirement that the plan administrator pay out the policy to the beneficiary designated on the plan documents pre-empts Washington’s law that revokes a designation of a former spouse). Attempts to work around that requirement by suing the beneficiary after the plan administrator has made the distribution have also been unsuccessful. See Lundy v. Lundy, 187 Wn. App. 948, 352 P.3d 209 (2015) (holding that estate could not recover ERISA-governed benefits from beneficiary after distribution from administrator).
It is also unlikely that a probate court’s order requiring the plan administrator to distribute the funds to the surviving partner would be permitted. At the end of a dissolution proceeding of a CIR, the court can issue a Qualified Domestic Relations Order (QDRO), ordering the plan administrator to carve out a portion of the 401(k) to the partner who isn’t the account hold. But this appears to be only possible at the end of a dissolution proceeding, not at the end of a probate proceeding, and probably even then, not in all cases. In Owens v. Automotive Machinist Pension Trust, 551 F.3d 1138, 1147 (9th Cir. 2009), the Ninth Circuit held that a superior court order awarding an unmarried partner fifty percent of her partner’s ERISA qualified pension benefit was a valid QDRO because it involved “marital property rights,” and that the unmarried partner qualified as an “Alternate Payee” under the relevant statute because she was a “dependent” when her partner was the primary wage earner and she stayed home and took care of the children and home. The Ninth Circuit however has rejected such orders when issued by probate courts. See Ablamis v. Roper, 937 F.2d 1450, 1456 (9th Cir. 1991) (“The limited QDRO exception applies only to ‘domestic relations’ orders ‘made pursuant to a state domestic relations law,’ not to ‘probate’ orders or orders made pursuant to probate law…. [P]robate orders seek to distribute resources upon the event of death; they concern the establishment of wills and the settlement of decedents’ estates.”).
While ERISA applies to all 401k plans, it does not apply to many IRAs. Still, IRAs are usually tax deferred, and withdrawals and transfers need to be considered very carefully. At the end of a divorce, Code Section 408(d)(6) permits the IRA to be divided without either spouse suffering immediate tax consequences, and the funds transferred to the partner are considered his or her IRA:
The transfer of an individual’s interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse.
26 U.S.C. Section 408(d)(6). The author is unaware of any method of transferring a portion of the IRA to an unmarried partner who is not the beneficiary without incurring unfavorable tax consequences. In a court proceeding that is facing this issue, a method for the surviving partner to receive his or her share of the community interest of an IRA may only be for the surviving partner to receive other assets of the estate that are the equivalent to the contribution made by his or her half of the community to the retirement plan.
Often unmarried persons will name their partners as the primary beneficiaries of their life insurance policies. But when that does not happen, a question arises as to whether any of the proceeds are community-like property. While the author is unaware of any Washington cases addressing this issue upon the death of a CIR partner, there is clear Washington guidance as it applies to married couples, and there is little reason to believe that the same rules would not apply to a CIR.
Under Washington law, when community funds are used to pay the premiums on a life insurance policy, the community has an interest in the proceeds of the policy. If the life insurance policy is a term policy and the payment on the latest term before death was made with community funds, the surviving spouse will have an interest in one-half of the proceeds regardless of the beneficiary designation. This is known as the risk payment doctrine. Aetna Life Ins. Co. v. Wadsworth, 102 Wn.2d 652, 659, 689 P.2d 46 (1984). On the other hand, if the policy is a cash value policy, the “apportionment rule” applies. Under this rule, “[o]wnership of the proceeds will be separate property or community property in proportion to the percentage of total premiums which have been paid with separate or community funds.” Porter v. Porter, 107 Wn.2d 43, 49, 726 P.2d 459 (1986).
It is likely that the result would be different for a surviving CIR partner if the insurance policy is governed by ERISA. As with ERISA pre-emption issues involving employee benefit plans, practitioners should be aware of federal pre-emption involving insurance policies of federal employees. In Hillman v. Maretta, 133 S.Ct. 1943 (2013), a federal employee failed to remove his ex-wife from his Federal Employees’ Group Life Insurance policy. After he died, the policy was paid to the ex-wife. Like the Washington law in Egelhoff, supra, Virginia had a law that revoked such designations. But Virginia law had an additional “work-around” the federal pre-emption: it allowed the parties who would have otherwise received the policy—had it not been for federal pre-emption—to sue the party who received the funds. The Supreme Court held that this Virginia law too was pre-empted by federal law. It is therefore reasonable to conclude that federal pre-emption would not allow a surviving partner to take his or her community interest in an ERISA governed insurance plan if the surviving partner is not the named beneficiary.
If federal pre-emption does not bar the community-like claim for a portion of the policy proceeds, a surviving partner has choices in how to recover his or her interest in the insurance policy. When notified of the potential claim by the surviving partner, an insurance company may commence and interpleader action and deposit the insurance proceeds into the registry of the court. See Wadsworth, 102 Wn.2d at 654. The surviving partner may also bring a TEDRA claim to recover the insurance proceeds under the authority to bring claims to resolve issues involving nonprobate assets. See RCW 11.96A.030(2)(g).