California Domestic Partnerships and Same-Sex Marriage

[Source: California Domestic Partnerships and Same-Sex Marriage]

Family Law Expert Peter M. Walzer authors the chapter “Agreements Between Domestic Partners.”

Agreements Between Domestic Partners

Peter M. Walzer

1. INTRODUCTION
2. Scope of Chapter §5.1
3. Agreements in Context of Domestic Partner

Relationships §5.2

5. Overview of Types of Agreements §5.3
6. AGREEMENTS MADE OUTSIDE OF REGISTRATION

CONTEXT

1. Agreements Required by Employers
2. Nature of Employer-Required Agreements §5.4
3. Rescission of Employer-Required Agreements §5.5
4. Nonmarital Cohabitation (“Marvin”) Agreements §5.6

Ill. AGREEMENTS MADE IN ANTICIPATION OF REGISTRATION

(“PREREGISTRATION”)

1. Overview
2. General Nature and Scope of Preregistration Domestic

Partnership Agreements §5.7

2. Agreements for Domestic Partners Registered Before

2005 §5.8

1. Need for Independent Counsel and Disclosure of Assets and

Liabilities

1. Independent Counsel §5.9
2. Disclosure of Assets and Liabilities
3. Need for Disclosure, Unless Waived §5.1 0
4. “Seven Calendar Day” Rule §5.11
5. Confirmation Versus Separate Property Agreements §5.12
6. Confirmation Agreements §5.13
7. Separate Property Agreements §5.14
8. Limitations Posed by Federal Law in Transferring or Dividing

Property §5.15

111

California Domestic Partnerships • 112

5. “Spousal” Support Planning §5.16
6. Amending or Revoking Agreement After Registration §5.17
7. Statute of Limitations and Equitable Defenses §5.18
8. AGREEMENTS MADE WHILE REGISTERED

(“POST REGISTRATION”)

1. Overview
2. General Nature and Scope of Postregistration Domestic

Partnership Agreements §5.19

2. Special Rules for Partners Registered Before January 1,

2005 §5.20

3. Disclosure and Need for Independent Counsel §5.21
4. Views on Validity of Post registration Agreements
5. Presumption of Undue Influence §5.22
6. Parties Free to Contract If No Unfair Advantage

Taken §5.23

5. Prohibited Subjects of Agreement §5.24
6. Support of Partner §5.25
7. AGREEMENTS TO TERMINATE PARTNERSHIP OR FOR

LEGAL SEPARATION (“DISSOLUTION AGREEMENT”)

1. Overview
2. General Nature and Scope of Domestic Partnership

Dissolution Agreements §5.26

2. Matters Generally Included Within Agreement §5.27
3. Disclosure and Need for Independent Counsel
4. Disclosure §5.28
5. Need for Independent Counsel §5.29
6. Special Issues for Domestic Partners
7. Tax Issues
8. Property Divisions

(1) No Treatment Under IRC §1041 §5.30

(2) Consideration of Possible California Real Property

Reassessments §5.31

1. Child Support and Dependency Exemption

(1) Child Support §5.32

(2) Dependency Exemption §5.33

1. Living Expenses and Support of Partner

(1) Consideration of Gift Tax in Contracting About Living

Expenses

(a) Why Gift Tax Issue Arises §5.34

(b) Agreement for Gift of Living Expenses §5.35

(2) Support of Partner §5.36

ii3 • Agreements Between Domestic Partners

2. Determining Duration and Amount of Support for Partner
3. Support Duration §5.37
4. Support Amount §5.38
5. Child Custody and Visitation §5.39
6. Choice of Law and Jurisdiction §5.40
7. FORMS

A Special Provisions for Domestic Partnership Agreements

1. Form: Waiver of Rights Provided by Fam C §297.5

for Pre-2005 Period of Registration as Domestic

Partners §5.41

2. Form: Acknowledgement by Registered Domestic

Partners of Confidential Relationship and Representation by Counsel, and Agreement to Provide Full

Disclosure §5.42

3. Form: Provision That All Property Acquired During

Partnership Is Separate Property, Except as Otherwise

Designated in Agreement. §5.43

4. Form: Treatment of Loan Proceeds §5.44
5. Form: Provision for Exchange of Income Tax Information

and Use of Same Tax Return Preparer §5.45

6. Form: Provision for Filing of Separate Income Tax

Returns §5.46

7. Form: Provision for Declaring Proceeds of Sale of Joint

Property on Tax Returns §5.47

8. Form: Provision for Indemnification for Unforeseen Tax

Consequences §5.48

9. Form: Provision Addressing Tax Liability for Assets

Acquired Before 2005 That Are Retroactively Treated as

Community Property §5.49

10. Form: Provision for Gift of Living Expenses §5.50
11. Sample Complete Agreements
12. Form: Pre-registration Domestic Partnership

Agreement-Confirmation Style Agreement §5.51

2. Form: Postregistration Domestic Partnership

Agreement §5.52

3. Form: Simple Domestic Partnership Dissolution

Agreement-Partners Waive Support and Own Primarily

Separate Property §5.53

• 5.1 California Domestic Partnerships • i 14

1. INTRODUCTION

• 5.1 A. Scope of Chapter

This chapter discusses agreements entered into by California domestic partners before (see §§5.7-5.18) and after (see §§5.19-5.25) registration of their partnerships with the Secretary of State (see Fam C §298.5), as well as agreements entered into in contemplation of a dissolution of their partnership or a legal separation of the partners (see §§5.26-5.40).

• 5.2 B. Agreements in Context of Domestic Partner Relationships

Although the agreements discussed in this chapter are similar in form and content to those used by married couples, the unique circumstances of domestic partners, and particularly same-sex partners, should be kept in mind in drafting or advising a client about agreements. Many same-sex domestic partners have lived together for long periods before the opportunity to register their partnerships came to pass, and therefore many may already have accumulated substantial property, have children, and otherwise be in relationships of such confidence that the law imposes fiduciary standards in evaluating transactions between the partners.

See generally Fam C §721.

The attorney must pay particular attention to the need for disclosure of assets and obligations in the course of preparing agreements (see §5.10, 5.21, 5.28), as well as to considering the need for separate counsel for each partner (see §§5.9, 5.21, 5.29, chap 3).

In addition, because registered domestic partners do not enjoy the benefits that federal law confers on married couples (see 1 USC

• 7), the attorney must take into account such key matters as tax consequences of property transfers and payment of support, as well as the ability to secure for each partner his or her share of any federally regulated benefit, such as pension and retirement benefits under the Employee Retirement Income Security Act of 1974 (ERISA), military retirement benefits, and the like. On tax issues in general, see chap 15. On employee benefits under ERISA and related issues, see chap 8.

The date of domestic partnership registration is now viewed as tantamount to “the date of marriage” for purposes of property rights and financial support between registered domestic partners (see Fam

115 • Agreements Between Domestic Partners §5.3

C §297.5(m)(1)). This chapter uses the terms “preregistration domestic partnership agreement” as the analog of “premarital agreement,” “post-registration domestic partnership agreement” as the analog of “marital” or “postmarital agreement,” and “domestic partnership dissolution agreement” as the analog of “marital settlement agreement” in discussing the various agreements domestic partners may need and that are largely governed under the Family Code. For a comprehensive general discussion of agreements in the family law context, with multiple forms, see California Marital Settlement and Other Family Law Agreements (3d ed Cal CEB 2005).

• 5.3 C. Overview of Types of Agreements

There are a variety of agreements that domestic partners may enter into, or have entered into, before or after registering as domestic partners. Outside the context of state registration, some domestic partners have entered into agreements required by their employers in order for both partners to enjoy certain benefits, such as health care coverage (see §5.4). Other partners may have retained counsel to draft nonmarital cohabitation agreements. And some have drafted their own cohabitation agreements either ad hoc, by using a form book, or by receiving some assistance from a legal clinic. Domestic partners may have entered into an oral agreement to share their property or support each other; and still others have implied contracts to share property and take care of each other (see §5.6). Finally, partners may enter, or have entered, into agreements specifically in contemplation of domestic partner registration (see §§5.7-5.18), or while registered (see §§5.19-5.25), or with the expectation of dissolving their partnership (or legally separating) (see§§5.26-5.40).

PRACTICE TIP> If domestic partners who registered between January

1, 2000, and December 31, 2004, entered into written or oral contracts-either before registration or while registered-it can be argued that these contracts are extinguished as a matter of law, or are at least voidable, as of January 1, 2005, when Farn C §297.5(m) became operative. This interpretation is possible because the Domestic Partner Rights and Responsibilities Act of 2003 (DPRRA) (Slats 2003, ch 421) imposed on registered domestic partners the community property and support laws that were not contemplated by any prior agreement, and may render any prior agreement meaningless. See Fam C

• 5.4 California Domestic Partnerships • i 16
• 297.5(m)(1). It is true that in the future a court may hold that the new law should not be applied retroactively and that any agreement entered into before January 1, 2005, is a valid and enforceable agreement, but until then registered domestic partners are advised to rewrite their agreements. In contrast, otherwise valid agreements entered into before January 1, 2005, by unmarried persons who have not registered as domestic partners should still be enforceable because the law has not changed for same-sex or opposite-sex couples who are simply living together (see discussion of “Marvin” agreements in §5.6).

11. AGREEMENTS MADE OUTSIDE OF

REGISTRATION CONTEXT

1. Agreements Required by Employers

• 5.4 1. Nature of Employer-Required Agreements

In order to receive various types of employee benefits for the domestic partners of unmarried employees, some employers have required that employees seeking such benefits show evidence of having entered into a standard form agreement as drafted by the employer. For example, an agreement was required by the University of Southern California (USC) entitled “Mutual Agreement of Financial Dependence.” The university did not require the parties to be represented by counsel in entering into the agreement, despite the fact that the parties may have been in a fiduciary relationship. The agreement stated that “Both of us agree to jointly hold property in equal shares and to be legally responsible for each other’s debts, both to the extent delineated for community estates under California law.” USC required an unmarried couple who wished to share benefits to agree that the community property laws of California would apply to them. USC is no longer requiring that couples enter into this agreement. Now, in order to be eligible for benefits, they must be registered domestic partners.

In the future, employers should require only that the couple be in a registered domestic partnership. They should not require that partners enter into an agreement like the one that USC required. Because of the lack of uniformity in the law over time, there may be many forms of employer-required agreements circulating that affect couples who entered into them before registering as domestic partners.

• Agreements Between Domestic Partners §5.5

As partners’ relationships terminate, these agreements will be litigated and their enforceability will be tested. The standard contractual defenses will be used to attempt to defeat the enforceability of the agreements, e.g., lack of capacity to enter into a contract, duress, fraud, statute of frauds, laches, and estoppel. See CC §§1567; Wells Fargo Bank v Bank of America (1995) 32 CA4th 424, 439, 38 CR2d 521 (discussing estoppel and laches); Whorton v Dillingham (1988) 202 CA3d 447, 456, 248 CR 405 (estoppel to assert statute of frauds).

Furthermore, domestic partners who entered into employer-required agreements after registering their partnership may now be deemed to have been in a fiduciary relationship, and because of insufficient disclosure, the agreement would be subject to invalidation. See Fam C §297.5(a); Marriage of Bonds (2000) 24 C4th 1, 29, 99 CR2d 252.

• 5.5 2. Rescission of Employer-Required Agreements

Rescission is a procedure to undo or cancel a contract, in order to return nonbreaching parties to the positions they occupied before a transaction. If you are representing a party who wishes to terminate an employer-required agreement, you should serve a notice of rescission if you wish to assert the defense of fraud, mistake, duress, undue influence, or failure of consideration. See CC §§1689(b)(1),

1691. These grounds may be applicable in situations in which the parties were presented with an agreement drafted by an institution as a requirement for the parties to share medical benefits. The partner who wishes to end the relationship, the rescinding party, must give prompt notice of rescission to the other partner.

NOTE~ In representing a party who seeks to terminate an employer-required agreement, attorneys have to be careful, because the parties entered into this agreement to obtain medical coverage, and if the other partner cannot obtain new medical coverage, and especially if the other partner becomes ill, the partner who wishes to terminate the contract may be subject to liability.

In addition, if the parties sign a CC §1542 mutual waiver of release of known and unknown claims, both parties may be waiving their right to sue each other for a sexually transmitted disease, or for any other tort that may have occurred during the relationship.

• 5.6 California Domestic Partnerships • 118

Therefore, an attorney who is advising a client to terminate this type of contract must advise the client of the potential consequences of signing a mutual waiver of known and unknown claims.

• 5.6 B. Nonmarital Cohabitation (“Marvin”) Agreements

Some domestic partners may have entered into a nonmarital cohabitation agreement before registering their partnership. This type of an agreement would have been voluntarily entered into by the parties (and not required by a third party) for the purpose of ordering their financial affairs during and after cohabitation. Since the landmark decision of Marvin v Marvin, these agreements have been called “Marvin Agreements,” or “palimony” agreements. These agreements address the ownership of property and the payment of support, just as a premarital agreement would. Marvin v Marvin (1976) 18 C3d 660, 665, 134 CR 815.

The law of contracts governs this type of agreement under the Civil Code. The Family Code does not apply, except insofar as parentage and child support are concerned-and those issues generally are not subject to contractual modification. Express or implied contracts between unmarried cohabitants are enforceable, except to the extent the contracts are explicitly founded on meretricious sexual consideration or otherwise violate established contractual principles. Marvin v Marvin (1976) 18 C3d 660, 665, 134 CR 815; Milian v DeLeon (1986) 181 CA3d 1185, 1193, 226 CR 831 (implied contract to own and divide property equally). On the selection of a Marvin agreement as an alternative to registering as a domestic partner, see chap 2. For a more complete discussion of agreements for nonmarital cohabitation and sample forms, see California Marital Settlement and Other Family Law Agreements, chap 19 (3d ed Cal CEB 2005).

119 • Agreements Between Domestic Partners

Ill. AGREEMENTS MADE IN ANTICIPATION

OF REGISTRATION

(“PREREGISTRATION”)

1. Overview

• 5.7 1. General Nature and Scope of

Preregistration Domestic Partnership

Agreements

• 5.7

Unregistered domestic partners who are otherwise competent to

contract and who intend to register their partnerships with the Secretary

of State–like couples who intend to marry-are free to enter

Into a preregistration agreement that is the equivalent of a “premarital”

agreement if it complies with Fam C §§1600-1617 (California’s

Uniform Premarital Agreement Act). See generally Fam C §§297.5,

1610(a), 1613. The agreement must be in writing and signed by

both parties. It is enforceable without consideration and becomes

effective on the partners’ registration. Fam C §§1611, 1613.

The agreement may concern any of the matters included within

Fam C §1612(a):

The rights and obligations of each of the parties in any of

the property of either or both of them, whenever and wherever

acquired or located;

The right to buy, sell, use, transfer, exchange, abandon, lease,

consume, expend, assign, create a security interest in, mortgage,

encumber, dispose of, or otherwise manage and control property;

The disposition of property on separation, partnership dissolution,

death, or the occurrence or nonoccurrence of any other

event;

• The making of a will, trust, or other arrangement to carry

out provision of the agreement;

The ownership rights in and disposition of the death benefit

from a life insurance policy;

The choice of law governing the construction of the agreement;

and

Any other matter, including the parties’ personal rights and

• 5.7 California Domestic Partnerships • 120

obligations, not violating public policy or a statute imposing

a criminal penalty.

The parties may not adversely affect the right of a child to support

in their preregistration agreement (Pam C §1612(b)), and should

not include provisions attempting to control a child’s religious upbringing

in the event of a dissolution. See, e.g., Marriage of Weiss

(1996) 42 CA4th 106, 117, 49 CR2d 339 (premarital agreement

to raise children in spouse’s faith was unenforceable). In addition,

personal issues and penalties for bad behavior during the registered

partnership cannot be part of the agreement, because a court may

find that they are unenforceable and void the entire agreement. See,

_e.g., Diosdado v Diosdado (2002) 97 CA4th 470, 474, 118 CR2d

494 (liquidated damages provision for sexual infidelity during marriage

was invalid). On provisions concerning support of a party

during the partnership or thereafter, see §§5.16, 5.37-5.38.

Under the law of premarital agreements, persons who enter into

such an agreement traditionally are not presumed to owe a fiduciary

duty to each other. See Marriage of Bonds (2000) 24 C4th 1, 61,

99 CR2d 252; Fernandez v Fernandez (1961) 194 CA2d 782, 790,

15 CR 374. However, because many domestic partners may have

lived together for many years before registration, accumulated property,

had children together, and otherwise formed relationships of confidence,

the law may find that a fiduciary standard does apply with

respect to transactions between the partners. Therefore, the parties

may be held to a higher standard of good faith and fair dealing

with each other in making agreements than other unmarried individuals.

See Marriage of Bonds (2000) 24 C4th 1, 61, 99 CR2d 252;

Marvin v Marvin (1976) 18 C3d 660, 682 n22, 134 CR 815.

If the parties are in a confidential relationship, they must make

a full disclosure to each other of assets and financial obligations

in advance of entering into the agreement, or risk having the agreement

found unenforceable, even though the Family Code permits

a waiver of the disclosure. See Pam C §1615(a)(2)(A)-(B). Most

of the defenses to a premarital agreement concern grounds for finding

unconscionability and voluntariness, as described in Pam C §1615,

and these will now apply to domestic partners. Pam C §297.5.

On special rules for partners who registered their partnerships

before 2005, see §5.8. On the need for independent counsel and

disclosure of assets and liabilities, see §§5.9-5.11. For a clause acknowledging

that the partners are in a confidential relationship, see

121 • Agreements Between Domestic Partners §5.8

• 5.42. For a full discussion of premarital agreements, see California

Marital Settlement and Other Family Law Agreements, chap 17 (3d

ed Cal CEB 2005).

NOTE> Although at this time few states recognize California domestic

partnerships, it is possible that in the future another state

may have jurisdiction to dissolve the domestic partnership, and

California law may not apply. It would he prudent to include

a choice-of-law clause in the agreement and also address the

application of other states’ laws. Other states have enacted

their own versions of the Uniform Premarital Agreement Act,

some of which, like California, have elected to vary from the

original version promulgated by the Conference of Commissioners

on Uniform State Laws. There is a uniform annotated code

that shows how sister states have interpreted various sections

of that Act.

• 5.8 2. Agreements for Domestic Partners

Registered Before 2005

Domestic partners who registered their partnerships with the Secretary

of State before January 1, 2005, have been given a “window

period” within which to draft an agreement that complies with the

provisions of Fam C §§1600-1620 (all but §1620 govern premarital

agreements). Under Fam C §297.5(m)(2), such an agreement must

be fully executed and in force as of June 30, 2005, to be effective.

Family Code §297.5(m)(2) was added to Fam C §297.5-which

grants registered domestic partners nearly all the same rights, duties,

and obligations as spouses-in connection with a companion provision

(Fam C §297.5(m)(1)) that makes §297.5 retroactive to the

date of partner registration with respect to property and support

rights of the partners. The intended purpose of the window period,

therefore, was to enable this group of registered domestic partners

to have an opportunity to create a premarital-type agreement to govern

their financial affairs, just as if they had not yet registered.

At least two issues are raised by these provisions. First, there

is a question concerning whether this retroactive legislation is constitutional,

as noted below. Second, because the partners who registered

before January 1, 2005, stand in a posture essentially analogous

to that of married persons, they have a presumptively higher level

of duty to each other with respect to negotiating and implementing

• 5.9 California Domestic Partnerships • 122

the agreement. Marriage of Bonds (2000) 24 C4th 1, 61, 99 CR2d

252. That is, their duty would be subject to Fam C §§721 and

1620, which collectively impose a fiduciary standard requiring the

highest good faith and fair dealing, require full disclosure of assets

and liabilities, and restrict the parties in “alter[ing] their legal relations,

except as to property.” Therefore, “window period” agreements

entered into by pre-2005 registrants are arguably more in the nature

of “postmarital” agreements than traditional “premarital” agreements.

For discussion of postmarital agreements (referred to as “postregistration”

agreements in this chapter), see §§5.19-5.25.

-NOTE~ It may be unconstitutional to apply Fam C §297 .5 retroactively

to partners who registered before January 1, 2005, the

general operative date of that statute. See Marriage of Buol

(1985) 39 C3d 751, 218 CR 31; Marriage of Fabian (1986)

41 C3d 440, 451, 224 CR 333. It could be argued, however,

that Buol and Fabian can be distinguished because domestic

partners who had registered before 2005 were given written

notice by the Secretary of State in three letters of their right

to terminate their registration before January 1, 2005. Fam

C §299.3. For a clause addressing the retroactive application

of Farn C §297.5 to property acquired before January 1, 2005,

that may be included in an agreement intended to be effective

on or before June 30, 2005, see §5.41.

1. Need for Independent Counsel and

Disclosure of Assets and Liabilities

• 5.9 1. Independent Counsel

To ensure that an agreement made in contemplation of partnership

registration is enforceable, both parties must be represented by independent

counsel. Although technically attorneys are required only

if there is a provision concerning “spousal” support for a partner

(Farn C §1612(c)), it is better practice for both parties to obtain

representation even if there is no limitation on “spousal” support.

On the specific need for counsel in contracting for a limitation or

waiver of support, see §5.16.

tf a party or both parties are not represented, the requirements

are as follows: “after being advised to seek independent legal counsel,

[the party] expressly waived, in a separate writing, representation

123 • Agreements Between Domestic Partners §5.10

by independent legal counsel.” Fam C §1615(c)(1). Family Code

• 1615 goes on to state that “if unrepresented by legal counsel, (the

party] was fully informed of the terms and basic effect of the agreement

as well as the rights and obligations he or she was giving

up by signing the agreement, and was proficient in the language

in which the explanation of the party’s rights was conducted and

in which the agreement was written. The explanation of the rights

and obligations relinquished shall be memorialized in writing and

delivered to the party prior to signing the agreement. The unrepresented

party shall, on or before the signing of the premarital agreement,

execute a document declaring that he or she received the information

required by this paragraph and indicating who provided that information.”

Fam C §1615(c)(3).

The requirement that a party who is opposing the enforcement

of the agreement be “fully informed of the terms and basic effect

of the agreement … [and that J explanation of the rights and obligations

relinquished shall be memorialized in writing and delivered

to the party prior to signing the agreement” gives discretion to the

trial court to determine that the explanation of the agreement was

not adequate. This creates uncertainty about the enforceability of

the agreement that can lead to litigation, not only over the terms

of the agreement, but about whether the “memorialization” was adequate.

The parties are looking for predictability and certainty, which

cannot be afforded to the parties when one or both of them are

unrepresented by counsel.

PRACTICE TIP>- Family Code §1615 effectively provides that to

be enforceable the agreement must not have been executed

under duress, fraud, or undue influence, and_ the parties must

not bave lacked capacity to enter into the agreement. Independent

representation of each of the parties by counsel will help

avert a claim that a party was under duress, undue influence,

or lacked capacity to enter into the agreement. This is yet

another reason to encourage each party to the agreement to

have independent representation.

2. Disclosure of Assets and Liabilities

• 5.10 a. Need for Disclosure, Unless Waived

As part of the process of entering into an agreement made m

• 5.11 California Domestic Partnerships • 124

contemplation of domestic partnership registration, there must be

a “fair, reasonable, and full” disclosure of assets and liabilities, unless

there is a waiver of that disclosure. Fam Code §1615(a)(2)(A)-(B).

The agreement must be presented at least seven days before it is

signed (not seven days before the registration), as discussed in §5.11.

Fam C §1615(c)(2). For a more complete discussion of these agreements,

see California Marital Settlement and Other Family Law

Agreements, chap 17 (3d ed Cal CEB 2005).

PRACTICE TIP~ The attorney should advise the client that fraud

in the disclosures could make the agreement unenforceable.

It is better practice to provide a minimum value or a range

of values for assets when the value is difficult to determine,

such as with businesses and real estate. Although the Family

Code permits the parties to waive disclosure beyond that which

is provided (Fam Code §1615(a)(2)(B)), it is not recommended

that there be any waiver of disclosure for parties who are already

living together and are registered domestic partners (which

could be the case for partners drafting a “preregistration” agreement

under Fam C §297.5(m)(2)).

• 5.11 b. “Seven Calendar Day” Rule

Under Fam C § 1615, the parties must have “not less than seven

calendar days between the time that party was first presented with

the agreement and advised to seek independent legal counsel and

the time the agreement was signed.” Fam C §1615(c)(2). The Family

Code does not make it clear whether the party must be presented

witb the final draft seven days before the agreement is signed or

just with the first draft. Because of this ambiguity, it is beHer practice

to wait seven days after the final draft is served to sign the agreement.

Note that there is no requirement that the agreement be signed a

certain number of days before the date of registering a domestic

partnership. It is recommended that the agreement not be signed

on the registration date (or on any ceremony commemorating the

partners’ commitment through registration), to avert a later claim

that the party signed the agreement under duress.

PRACTICE TIP~ Attach a proof of delivery showing the date the

final draft is delivered to the other party to the agreement

for the record or include in the agreement an acknowledgment

125 • Agreements Between Domestic Partners §5.14

of the date the other party received the final draft of the agreement.

Make sure that the signatures on the agreement are dated

on the eighth day after the final agreement was delivered to

the parties.

• 5.12 C. Confirmation Versus Separate Property

Agreements

There are two main categories of agreements that are typically

used in a premarital agreement situation, which should be applicable

to a preregistration domestic partner agreement: “confirmation” agreements

and “separate property” agreements.

• 5.13 1. Confirmation Agreements

A “confirmation” agreement confirms that certain property of the

parties will remain separate property, such as a business, various

items of personal and real property, or a retirement plan owned

before domestic partnership registration. This type of agreement does

not change the default rule that property acquired during the domestic

partnership is presumed to be community property. See Fam C

• §297.5(a), 760. It is designed to avoid the often expensive disputes

about how much of the appreciation in a listed asset is community

property and how much is separate property.

This type of agreement is simple and relatively easy to negotiate.

It does not address newly acquired property and therefore does not

protect property acquired after registration, leaving that subject to

the general community presumption. This kind of agreement may

not be sufficient for a client with extensive real estate or business

holdings. The proceeds of a loan are often treated. as community

property without an agreement (based on the intent of the lender

doctrine). See Gudelj v Gudelj (1953) 41 C2d 202, 210, 259 P2d

656; Marriage of Grinius (1985) 166 CA3d 1179, 1186, 212 CR

803. When separate property is financed or refinanced, what was

once separate property can become infused, or commingled, with

community property. A confirmation agreement is also not well suited

to deal with multiple future transactions and acquisitions.

• 5.14 2. Separate Property Agreements

A “separate property” agreement fundamentally changes the de§

5.15 California Domestic Partnerships • 126

fault laws of community property in the Family Code. The cornerstone

of the agreement is the provision that there is no community

property except what the agreement designates as community. See

generally Marriage of Dawley (1976) 17 C3d 342, 31 CR 3. Accordingly,

by operation of the agreement there is no presumption that

property acquired during the registered domestic partnership is community

property. This type of agreement is useful when there is

a lot of income or other property and many transactions are anticipated.

This agreement can protect the propertied partner against inadvertently

commingling separate and community property.

PRACTICE TIP> The separate property agreement can offer better

protection for a client’s separate property estate than a confirmation

agreement but is often more difficult to negotiate than a

confirmation agreement because often the client must designate

property he or she is willing to share as a quid pro quo for a

signature on the agreement. Furthermore, the agreement cannot

provide for lump sum payments at the time of a dissolution of

the domestic partnership, because they may be considered promotive

of dissolution and therefore are against public policy in

California. Marriage of Dajani (1988) 204 CA3d 1387, 251 CR

871; Marriage of Noghrey (1985) 169 CA3d 326, 215 CR 153.

Any interest that is transferred to the partner or to the community

must be made during the ongoing domestic partnership. This

kind of agreement is easier to negotiate for “second” domestic

partnerships or for an individual with significant wealth who can

afford to make transfers during the partnership.

• 5.15 D. Limitations Posed by Federal Law in

Transferring or Dividing Property

Many property rights are dependent on federal law, which is unlikely

to recognize domestic partnership rights (see chap 1). See

1 USC §7 (federal Defense of Marriage Act, or DOMA). Examples

are federal retirement rights under the Employee Retirement Income

Security Act of 1974 (ERISA) and the Uniformed Services Former

Spouses’ Protection Act (USFSPA). It is doubtful that California

courts will be able to order these assets directly divided for domestic

partners in the manner of marital interests, in the event the parties

dissolve their registered domestic partnership. See 10 USC

127 • Agreements Between Domestic Partners §5.16

• 1408(d)(2) (USFSPA); 29 USC §1056 (ERISA). On domestic partner

rights to employee benefits, see chap 8.

Courts can, however, order a domestic partner employee (the recipient

of employment benefits) to receive the funds as constructive

trustee for the nonemployee domestic partner and pay over the community

share to the other partner. See Marriage of Beltran (1986) 183

CA3d 292, 227 CR 924; Marriage of Fithian (Fithian II) (1977) 74

CA3d 397, 141 CR 506. Of course, this assumes that federal courts

will agree that California courts have the jurisdiction to divide these

federal benefits in the case of nonmarital domestic partnerships,

which is uncertain. Such a transfer may also have tax consequences to

• both the employee partner and nonemployee partner (see chap 15).

Clients who are considering a domestic partnership should be

advised that until the law is settled, they must each be responsible

for his or her own retirement planning because it is not clear that

the community property laws relating to the division of retirement

plans can be enforced.

In addition, any transfers of property between domestic partners

must be analyzed in light of both potential income and gift tax

consequences. On tax issues concerning a transfer or division of

property, see §§5.30-5.31 and chap 15.

• 5.16 E. “Spousal” Support Planning

Domestic partners who are planning to register their partnership

may make provision in their agreement for the support of either

partner in the event the partnership terminates or the parties legally

separate. A waiver or limitation of support of either partner in the

event of dissolution of the partnership or legal separation is also

possible. Fam C §§1612(c), 1620; Marriage of Pendleton & Fireman

(2000) 24 C4th 39, 99 CR2d 278. Accordingly, whether the client

is planning to enter into a confirmation agreement or a separate

property agreement, he or she may choose to have a clause that

limits the amount of spousal support that the client will be obligated

to pay if the parties’ relationship ends.

In the context of spousal support after a marriage is terminated,

Fam C §4320(1) provides that one of the considerations by the court

is the “goal that the supported party shall be self-supporting within

a reasonable period of time [and] [ e ]xcept in the case of a marriage

of long duration as described in [Fam C] §4336, a ‘reasonable period

• 5.17 California Domestic Partnerships • 128

of time’ for purposes of this section generally shall be one-half

the length of the marriage [but] nothing in [section 4320] is intended

to limit the court’s discretion to order support for a greater or lesser

length of time, based on any of the other factors listed in [section

4320], Section 4336, and the circumstances of the parties.” Under

Fam C §4336, there is a presumption that a marriage of 10 years

or more is one of “long duration.” Fam C §§4320(1), 4336. For

longer than a 10-year marriage, the support may be ordered for

an indefinite period. The supported spouse is entitled to live according

to the marital standard of living. This obligation can be significant

and if coupled with child support can amount to more than 50 percent

of net income. There is no guarantee that a limitation or waiver

of spousal support will be enforced. A court will determine whether

the limitation is unconscionable at the time of enforcement (dissolution

of partnership). Fam C §1612(c). These principles will now

also apply in the context of domestic partners. Fam C §297.5.

On tax issues related to support planning for a partner, see §5.36

and chap 15. On determining “length of the partnership” and related

issues for purposes of determining the duration of support, see §5.37

and chap 13.

PRACTICE TIP> Family Code §1612(c) states that any provision

in a premarital agreement regarding spousal support, including

but not limited to a waiver of it, is not enforceable if the

party against whom enforcement of the spousal support provision

is sought was not represented by independent counsel

at the time the agreement containing the provision was signed,

or if the provision regarding spousal support is unconscionable

at the time of enforcement. It further provides that an otherwise

unenforceable provision in a premarital agreement regarding

spousal support may not become enforceable solely because

the party against whom enforcement is sought was represented

by independent counsel. This provision makes it imperative

for a party who agrees to a limitation or waiver of support

in a preregistration-type agreement to be independently represented

by counsel.

• 5.17 F. Amending or Revoking Agreement After

Registration

After domestic partners register their partnership, a preregistration

129 • Agreements Between Domestic Partners §5.19

agreement that was entered into by the partners may be amended

or revoked only by a written agreement that is signed by both parties.

Such an agreement is enforceable without consideration. Fam C

• 1614.

NOTE> It is unclear whether an amendment will be treated as a

postregistration agreement (for married persons, a “postmarital

agreement”) under Marriage of Haines (1995) 33 CA4th 277,

39 CR2d 673, under which if one party gains an advantage, the

agreement will be presumed to be made by undue influence. It

is not clear whether the parties who are amending a preregistration

agreement can waive disclosure as provided under Fam C

• 1615(a)(2)(B). It is better practice to provide a “fair, reasonable,

and full disclosure of the property or financial obligations

of the other party” by analogy to Fam C §1615(a)(2)(A) and not

attempt to waive the disclosure in whole or in part. In a particular

case, rather than amending the agreement, counsel may consider

drafting another agreement that does not modify the terms

of the preregistration agreement. This “stand alone” document

would not alter the original agreement.

• 5.18 G. Statute of Limitations and Equitable

Defenses

Under Fam C §1617, as applied to domestic partners, any statute

of limitations applicable to an action asserting a claim for relief

under a preregistration agreement is tolled during the period of registered

domestic partnership of the parties to the agreement. However,

equitable defenses limiting the time for enforcement, including laches

and estoppel, are available to either party. Fam C §1617.

• 5.19

1. AGREEMENTS MADE WHILE

REGISTERED (“POSTREGISTRATION”)

1. Overview
2. General Nature and Scope of

Postregistration Domestic Partnership

Agreements

Agreements entered into by domestic partners who have already

registered their partnership may be termed “postregistration” (or

• 5.19 California Domestic Partnerships • 130

“postmarital”) if made with the intention of keeping the partnership

intact, and not as a prelude to a separation of the parties or termination

of their partnership. If, however, the agreement is made in

contemplation of a separation or dissolution of the partnership, it

comes within the framework of a partnership termination (“marital

settlement”) agreement (see §§5.26-5.40).

Parties may desire to enter into a postregistration agreement for

a number or reasons, including, for example:

To transmute the character of property from community to separate,

or vice versa (see Fam C §852);

To clarify the ownership of property or the terms of a preregistration

agreement; or

To revoke a preregistration agreement. See Fam C §1614.

Thus, for example, a postregistration agreement might be used

to govern the character of property acquired before or after registration,

or to change what would otherwise be community property

to the separate property of one party. See Fam C §852.

Registered domestic partners are given wide latitude concerning

the subjects of their agreements, particularly with respect to property,

so long as they observe the fiduciary standards of disclosure and

fair dealing imposed on them by statute. See Fam C §§721, 1500,

1620. They are constrained, however, not to make an agreement

that is promotive of dissolution of the partnership, or that “alters

their legal relations” as registered domestic partners, except with

respect to property. See Faro C §1620; Marriage of Higgason (1973)

10 C3d 476, 487, 110 CR 897, overruled on other grounds in Marriage

of Dawley (1976) 17 C3d 342, 352, 131 CR 3. The parties’

mutual consent to the agreement is apparently the only consideration

needed. See Estate of Wilson (1976) 64 CA3d 786, 798, 134 CR

749. On divergent views taken regarding whether a presumption

of undue influence applies to the partners in contracting, see §§5.22-

5.23.

As in the case of preregistration and partnership dissolution agreements,

significant tax effects may accompany any property transfer

or transmutation, and counsel must analyze these with respect to

potential gift, estate, and income tax implications. On tax effects

of property transfers between registered domestic partners, see chap

15.

I .j I

131 • Agreements Between Domestic Partners

• 5.20 2. Special Rules for Partners Registered

Before January 1, 2005

• 5.21

Under a special, retroactive statute applicable to domestic partners

registered before January 1, 2005, the partners are permitted to make

an agreement that they intend to be governed by Fam C §§1600-1620

(all but §1620 govern premarital agreements). Fam C §297.5(m)(2).

This provision was included as part of an amendment to Fam C

• 297.5 that retroactively treats the date of partnership registration

as the “date of marriage” for purposes of property and support rights.

Fam C §297.5(m)(1). Such an agreement must be fully executed

– and in force as of June 30, 2005, to be effective. Fam C §297.5(m)(2).

Although this type of agreement would normally be termed a preregistration

agreement, it is more in the nature of a postregistration

agreement to the extent the parties’ preexisting relationship as registered

partners raises their duties to one another to those of a fiduciary.

See Marriage of Bonds (2000) 24 C4th 1, 61, 99 CR2d 252. See

also Fam C §721. For further discussion of the law concerning

partners who registered before January 1, 2005, see §5.8.

• 5.21 3. Disclosure and Need for Independent

Counsel

While there is no statutory requirement that parties to a postregistration

agreement be represented by independent counsel, it is

more likely that the agreement will withstand attack if both are

represented. See, e.g., Marriage of Friedman (2002) 100 CA4th

65, 122 CR2d 412 (one party was attorney and signed conflict waiver,

and other party was represented by counsel). The comments in

• §5.9-5.10 concerning the need for a full disclosure ~f the parties’

assets and liabilities and need for independent counsel in the pre-registration

agreement situation also apply regarding post-registration

agreements. Unlike preregistration agreements, however (see §5.11),

there is no “seven day rule” (see Fam C §1615(c)(2)) before signing

a post-registration agreement, but it is recommended that rules for

preregistration agreements also be followed for post-registration agreements.

• 5.22
• 5.22

California Domestic Partnerships “‘ 132

1. Views on Validity of Postregistration

Agreements

1. Presumption of Undue Influence

There are two divergent lines of cases on the validity of postmarital

agreements. One line, beginning with Marriage of Haines (1995)

33 CA4th 277, 39 CR2d 673, holds that any contract entered into

during marriage (and by extension, registered domestic partnership)

in which one party gains an advantage is presumed to be procured

by undue influence. Courts of equity view gifts and contracts that

are made or take place between parties occupying confidential relations

“with a jealous eye.” Marriage of Haines (1995) 33 CA4th

277, 294, 39 CR2d 673. Other cases hold similarly, as in the case

of stock transfer during marriage. Marriage of Barneson (1999) 69

CA4th 583, 81 CR2d 726.

A fiduciary obtains an advantage if his or her position is improved,

or he or she obtains ·a favorable opportunity or otherwise gains,

benefits, or profits. Marriage of Lange (2002) 102 CA4th 360, 125

CR2d 379.

• 5.23 2. Parties Free to Contract If No Unfair

Advantage Taken

A line of cases holds that parties to a postnuptial agreement are

free to contract with one another if no unfair advantage is taken.

The reasoning underlying this viewpoint may be summarized as

follows. The general rule is that married people, and therefore registered

domestic partners, may enter into any contract between themselves

that they might enter into if they were unmarried (or unregistered).

Fam C §721(a). These agreements must be in writing and

are subject to the same rules as contracts generally. See Marriage

of Iberti (1997) 55 CA4th 1434, 64 CR2d 766. See also Fam C

• 852(a) (requiring express written declaration for transmutation of

property). For example, in Marriage of Friedman (2002) 100 CA4th

65, 122 CR2d 412, an appellate court upheld a postmarital agreement

that provided for certain income and businesses to be separate property.

In that case, the court also found that the agreement did not

favor either party and actually protected the contesting party from

the other party’s creditors. 100 CA4th at 67.

PRACTICE TIP> It is important that both parties be represented

133 • Agreements Between Domestic Partners §5.25

by independent counsel-though this is not a strict requirement-

and that there is adequate consideration for the agreement.

If it is perceived by a court that one party obtained

an unfair advantage in the agreement, the agreement is likely

to be set aside.

• 5.24 C. Prohibited Subjects of Agreement

In addition to provisions “altering the parties’ legal relations, except

with respect to property” (see Fam C §1620), there are some

provisions that likely will not be upheld in a postregistration agree-

– men! on public policy grounds. These include, for example:

Provision for liquidated damages for sexual infidelity during

the relationship (Diosdado v Diosdado (2002) 97 CA4th 4 70,

474, 118 CR2d 494);

Provision of a financial penalty if a party’s drug addiction

recurs (Marriage of Mehren & Dargan (2004) 118 CA4th 1167,

13 CR3d 13); and

Payment for personal services, such as nursing services, during

the relationship (Borelli v Brusseau (1993) 12 CA4th 647, 651,

16 CR2d 16).

• 5.25 D. Support of Partner

During the course of an ongoing marriage or registered domestic

partnership, there is a mutual duty of support that is imposed by

statute. See Fam C §§297.5(a), 720, 4300. Although for preregistration

agreements there is a special statutory provision regarding limiting

or waiving spousal support by agreement (see Fam C §1612(c)),

there is no specific statute or case law regarding limitations or waivers

of support in a postregistration agreement. On the one hand,

it is arguable that if there is full disclosure and the parties are each

represented by counsel, they should be able to limit or waive support

by postregistration agreement. Conversely, the mutual duty of support

during an ongoing marriage conceivably may be seen as one of

the “legal relations” that spouses and registered domestic partners

cannot alter (see Fam C §1620), and early case law on prohibiting

provisions that tend to “promote dissolution of marriage” may also

come into play. See Marriage of Higgason (1973) 10 C3d 476,

• 5.26 California Domestic Partnerships • 134

487, 110 CR 897, overruled on other grounds in Marriage of Dawley

(1976) 17 C3d 342, 352, 131 CR 3. As a result, it is recommended

that the attorney proceed with great caution in including a provision

limiting or waiving support by means of a postregistration agreement.

Note that, in any event, by analogy to the preregistration agreement

(see Fam C §1612(c)), it appears that a court construing a support

limitation or waiver may decide to determine the unconscionability

of the provision as of the time of enforcement. On income and

gift tax considerations with respect to support of a partner during

an ongoing registered partnership or after its dissolution, see chap

15.

• 5.26

1. AGREEMENTS TO TERMINATE

PARTNERSHIP OR FOR LEGAL

SEPARATION (“DISSOLUTION

AGREEMENT”)

1. Overview
2. General Nature and Scope of Domestic

Partnership Dissolution Agreements

Registered domestic partners who contemplate a dissolution of

their partnership (or obtaining a judgment of legal separation) may

enter into a written agreement that fully settles their financial and

related affairs, including matters related to children. See Fam C

• §721, 1500, 1620, 3580. The parties’ mutual consent is sufficient

consideration for the agreement. Fam C §3580. The agreement made

by the parties can be termed one for “partnership termination” or

dissolution that is analogous to a “marital settlement agreement.”

Registered domestic partners who meet the requirements for administrative

termination of their partnership without court actionanalogous

to summary dissolution of marriage (see Fam C §299)are

required to have executed a written agreement describing a division

of their assets and liabilities, as well as all other legal instruments

needed to effectuate the agreement as one condition of using

the administrative procedure. Fam C §299(a)(7).

Registered domestic partners who require court action to terminate

their partnerships (see chap 20) are not required to enter into a

dissolution agreement, but are encouraged to do so as part of the

settlement process. In the absence of a written agreement (or oral

stipulation in open court), the family court is required to divide

135 • Agreements Between Domestic Partners §5.27

any community property of the parties equally and make other necessary

orders as provided in the Family Code. See Fam C §§2010,

2550. If the partners have reached agreement, they may submit their

written agreement to the court for approval, or may enter into a

written “stipulation for judgment” that has the effect of a written

agreement. See Fam C §2550; Cal Rules of Ct 5.116.

Provisions of an agreement concerning child custody and visitation,

child support, and support of the partners are subject to court

approval and are deemed made under the power of the court; therefore

they are always made a part of the court’s judgment of dissolution,

annulment, or legal separation, in addition to being recited in the

-parties’ written agreement. See Fam C §§2010, 3022, 3585, 3590;

Marriage of Goodarzirad (1986) 185 CA3d 1020, 1027, 230 CR

203 (continuing jurisdiction of court over custody).

NOTE> The agreement should be notarized and signed by both

parties (and their respective attorneys), although notarization

is technically required only if one of the parties defaults in

the underlying proceeding or if the parties wish to record the

agreement. See Fam C §§1502, 2338.5. For a full discussion

of drafting agreements of this kind, see California Marital

Settlement and Other Family Law Agreements, chap 4 (3d

ed Cal CEB 2005).

• 5.27 2. Matters Generally Included Within

Agreement

In drafting an agreement in anticipation of terminating a registered

domestic partnership, the parties typically include provisions covering

matters such as these:

The facts of their partnership registration;

Date of the parties’ separation;

Listing of the parties’ minor children;

Listing of the parties’ community assets and obligations;

Listing and confirmation of the parties’ individual separate assets

and obligations;

Child custody, visitation, and child support;

• 5.28 California Domestic Partnerships • 136

Division (allocation) of community assets and liabilities between

the parties (including any reimbursements);

Support of either or both parties (or waiver of support);

Payment of attorney fees;

Handling later-discovered assets or liabilities;

Handling income tax returns and any assessed tax deficiencies;

Waiving rights to inherit or administer the estate of the other;

Governing law, severability, indemnification, and acknowledgement

of disclosure; and

Any other issues unique to the parties’ situation.

1. Disclosure and Need for Independent

Counsel

• 5.28 1. Disclosure

Like spouses, registered domestic partners are subject to the fiduciary

standards of persons in confidential relationships (see Fam

C §721). These standards do not necessarily end when the parties

separate, but extend to management and control of community assets

and liabilities until such time as these are divided by the parties’

agreement or by the court. Fam C §llOO(e). This duty includes

the obligation to make full disclosure between the parties of all

material facts and information regarding the existence, characterization,

and valuation of all assets the community has or may have

an interest in, and debts for which the community is or may be

liable. In addition, each party must provide the other with access

to all information, records, and books that pertain to the value and

character of those assets and debts, on request. Fam C §llOO(e).

See Fam C §2102 (special disclosure duties until date of distribution

of community and quasi-community assets and liabilities).

Moreover, as part of the dissolution (or legal separation) proceeding,

the parties must exchange prescribed initial and final declarations

of disclosure, which include an income and expense declaration and

a schedule of assets and debts. The final declaration of disclosure

may be waived by the parties under certain circumstances; however,

the waiver cannot be made in the parties’ dissolution agreement

and must be made by execution of a waiver under penalty of perjury

137 • Agreements Between Domestic Partners §5.30

in open court or by separate stipulation. Fam C §§2103, 2105-2106.

The waiver of the final declaration of disclosure may increase the

risk that the agreement will later be set aside, and is not advised.

• 5.29 2. Need for Independent Counsel

As in the case of other agreements discussed in this chapter (see

• §5.9, 5.21, and chap 3), separate representation of each party to

the partnership dissolution agreement is strongly recommended, and

correspondingly, dual representation of the parties is discouraged.

• 5.30

1. Special Issues for Domestic Partners
2. Tax Issues
3. Property Divisions

(1) No Treatment Under IRC §1041

One of the problems particular to domestic partners is the issue

of tax consequences of transactions between the partners. The Domestic

Relations Tax Reform Act of 1984 (DRTRA) drastically changed

prior law that had provided for a recognition of gain on certain

transfers of properties between spouses incident to dissolution. See,

e.g., U.S. v Davis (1962) 370 US 65, 8 L Ed 2d 335, 82 S Ct

1190; Carrieres v C.I.R. (9th Cir 1977) 552 F2d 1350. As a result

of DRTRA, IRC §1041 prohibits the recognition of any gain on

any transfers of property between spouses during marriage, or after

the marriage if the transfer was incident to divorce. “Incident to

divorce” was defined in a subsequent regulation as being any transfers

between ex-spouses within one year of the dissolution and, presumptively,

any transfers within six years of divorce. Aoy property transferred

between spouses, for any reason, is treated as a gift. The

transferee takes the transferor’s basis with no step-up for any payments

that may have been made.

Because of the federal Defense of Marriage Act (DOMA) (1 USC

• 7), IRC §1041 does not apply to registered domestic partners, because

neither partner would qualify as a “spouse” under the limitations

of DOMA. Therefore, property transactions between registered

domestic partners are potentially taxable and may be categorized

as a gift, a sale, or a payment for services rendered, depending

on the type of transaction and the IRS interpretation (see chap 15).

i

I

• 5.31 California Domestic Partnerships ” i 38

In addition, the domestic partners are unable to file joint income

tax returns, and any provision in their dissolution agreement will

need to describe how they will treat filing of any final returns and

handling of any tax deficiencies assessed against either or both partners

by the IRS or California taxing authorities. See Fam C

• 297.5(g). For a form concerning the exchange of tax returns that

may be adapted for use in a partnership termination agreement, see

• 5.45.
• 5.31 (2) Consideration of Possible California Real

Property Reassessments

Under California Proposition 13 and its progeny, transfers of real

property between spouses are not treated as changes of ownership

for property taxation purposes. Rev & Tax C §63. Because rights

created by initiative cannot be extended by legislative action (Fam

C §297.50)), it is presently unclear whether this marital benefit

will be available to registered domestic partners. Fam C §297.50).

• 5.32

1. Child Support and Dependency

Exemption

(1) Child Support

In the marital context, payment of child support is not taxable

to the recipient of support (usually the parent with primary custody)

or deductible from income by the support payor. IRC §§71, 215.

While it is unclear how the IRS will handle payments of child

support by domestic partners, it appears that payments will still

be nondeductible by the payor. Whether the recipient partner will

need to recognize the payment as taxable income is less clear, but

it is possible that recognition may be required. On how the federal

Defense of Marriage Act (DOMA) may affect treatment of child

support, see chap 15.

• 5.33 (2) Dependency Exemption

Under IRC §152, a registered domestic partner may be eligible

to claim a dependency exemption with respect to a child who is

a subject of the parties’ family law proceeding. Normally, the exemption

is taken by the parent who has physical custody of a child

for the greater portion of a tax year. See IRC §152(a), (c)(1), (e).

i 39 • Agreements Between Domestic Partners §5.34

A special rule permits the other parent to take the exemption pursuant

to the parties’ agreement and a written declaration by the custodial

parent (on IRS Form 8332) that he or she will not claim the child

as a dependent for the tax year in question. See IRC §152(e).

Under an alternative basis for the exemption, a child potentially

may be a “qualifying relative” if two conditions are met: (1) The

child had the same principal place of abode as the partner and was

a member of the taxpayer’s household, and (2) more than half of

the child’s support was paid by that partner. See IRC §152(d)(1)-(2).

For further discussion of dependency exemptions, see chap 15, and

Practice Under the California Family Code: Dissolution, Legal Sepa-

– ration, Nullity §7.3 (Cal CEB Annual).

• 5.34

1. Living Expenses and Support of

Partner

(1) Consideration of Gift Tax in

Contracting About Living Expenses

(a) Why Gift Tax Issue Arises

All lifetime transfers of property for which the donor receives

less than full and adequate consideration are subject to federal gift

tax. See Treas Reg §25.2512-8. Annual gift tax returns are due

generally on April 15 of the following year. See IRC §6075(b ).

The gift tax is cumulative for all taxable gifts made by an individual

throughout his or her lifetime; i.e., all taxable gifts made by an

individual in applicable previous years are carried forward and added

to the present year’s gifts to determine the marginal gift tax rate

applicable to the present year’s gifts. See IRC §2502.

Under limited circumstances, the value of a gift reported on a

gift tax return will become binding on the IRS when that value

becomes relevant for purposes of determining the tax on later gifts

and the tax on the donor’s estate. Generally, there must have been

adequate disclosure on the gift tax return and the time for assessment

of tax must be closed. IRC §§2001(f), 2504(c), 6501(e).

In order to avoid the gift tax, there must be adequate consideration

for the transfer. See Treas Reg §25.2511-1(g)(1). If it is not a gift,

it will be treated as a sale or an exchange and must be bona fide,

at arm’s length, and free from any donative intent.

PRACTICE TIP> There is a danger that a domestic partnership

• 5.35 California Domestic Partnerships • 140

might be construed as an employee-employer relationship and

that the payments are for services rendered. There is a panoply

of labor laws that would apply to this type of relationship

that are beyond the scope of this publication. The problems

include complying with minimum wage laws, withholding requirements,

overtime regulations, workplace rules, and so forth.

The partners might choose this arrangement, however, so that

the “employee” can qualify for Social Security benefits, which

may be the only way to acquire “retirement benefits.” In that

event, the parties would need to enter into an appropriate employment

agreement drafted by experienced employment counsel.

• 5.35 (b) Agreement for Gift of Living Expenses

To clarify the nature of any living expenses that are provided

from one registered domestic partner to the other that are not otherwise

to be treated as support, the parties may wish to include a

clause in their agreement that the provision of expenses is to be

treated as a gift.

• 5.36 (2) Support of Partner

For married (or formerly married) individuals, spousal support

is deductible from gross income for the payor and includable in

the payee’s income for income tax purposes. IRC §§71, 215. Because

of the federal Defense of Marriage Act (1 USC §7), the alimony

(spousal support) provision of the Internal Revenue Code apparently

will not apply to registered domestic partners. While treatment of

support by the IRS is still unclear, it is possible the IRS will treat

the payment of partner support as income to the payee, while not

permitting deduction by the payor as alimony. On various positions

the IRS might take, sec chap 15.

The family law courts must consider the different tax consequences

in awarding partner support to domestic partners under Fam Code

• 43200), which provides that the court must consider the “immediate

and specific” tax consequences to each party. Running computer

support programs to calculate “spousal support” for domestic partners

will lead to incorrect results, however, because these are calibrated

to include certain tax effects applicable to spouses. Thus, in drafting

an agreement, the special tax issues involved in domestic partner

141 • Agreements Between Domestic Partners §5.38

“spousal support” should be considered. On making adjustments

to the support programs, see chap 13.

• 5.37

2. Determining Duration and Amount of

Support for Partner

1. Support Duration

In the area of providing support for a domestic partner, the process

of integrating domestic partnership law into family law is going

to be difficult and will likely result in an examination of the history

of sexual-orientation-based discrimination and the judicial interpretation

of the legislature’s intent with regard to issues that were not

considered but are very real. For example, Fam C §4320 states

that the duration of the marriage is a key factor to be considered

when awarding spousal support. Fam C §4320(f). This will also

be true for partner support, but how is the duration of the partnership

to be measured? If the length of the union is measured solely by

the date that the couple first registered as domestic partners, then

it would be interpreted consistently with marriages-regarding which

a period of prior cohabitation cannot be considered for spousal supc

port purposes. Marriage of Burlini (1983) 143 CA3d 65, 191 CR

541. Consistent interpretation is the stated intention of the legislature.

See Fam C §297.5.

However, unlike different-sex couples (who could marry), samesex

couples did not have the ability to register as domestic partners

in California until comparatively recently. Thus, using a “date of

registration” marker for support-regardless of how long and stable

the relationships were-could produce an inequitable result. An argument

will be made that when measuring the length of the union,

“it would be both unreal and unjust to preclude judicial consideration

of the entire [domestic partner relationship] history of the parties.”

In re Marriage of Chapman (1987) 191 CA3d 1308, 1315, 237

CR 84. For further discussion of this issue, see chap 13.

• 5.38 b. Support Amount

In addition to differences in determining the duration of support

for a partner in comparison with spouse or former spouse (see §5.37),

there are differences in calculating the amount of partner support.

The temporary spousal support guidelines, as incorporated into comI

• 5.39 California Domestic Partnerships • 142

puler programs such as SupporTax and DissoMaster, assume that

unless the parties are filing joint tax returns, an option not open

to domestic partners, the support will be deductible to the payor

and taxable to the payee. The spousal support result is adjusted

to take these tax effects into consideration. This often results in

a significantly higher spousal support award. Because partner support

likely will not be deductible for income tax purposes and is likely

to be taxable to the recipient, these results must be adjusted.

Failure to make this adjustment will often result in too high an

award. It also means that the amount awarded to a domestic partner

may be significantly lower than the amount awarded to a spouse

in identical circumstances. On making adjustments to support programs,

see chap 13.

Note that use of temporary support guidelines is not permitted

in determining long-term or “permanent” support. Marriage of Burlini

(1983) 143 CA3d 65, 69, 191 CR 541.

• 5.39 3. Child Custody and Visitation

Registered domestic partners may make provision for the custody

and visitation of their children in their dissolution agreement. Agreements

on child custody and visitation are generally well received

by the family court and much preferred over litigation of these issues.

See, e.g., Fam C §3061 (temporary custody order to be made in

accordance with parties’ agreement, absent exceptional circumstances).

However, custody and visitation provisions are subject to

court approval and are deemed made under the power of the court

to act in the best interest of the child. The parties can neither confer

custody jurisdiction on the court nor divest it from the court by

their agreement. See Fam C §§2010, 3022; Marriage of Goodarzirad

(1986) 185 CA3d 1020, 1027, 230 CR 203 (continuing jurisdiction

of court over custody).

Note that provisions of a custody agreement that attempt to regulate

a parent’s religious upbringing of a child or exposure of the child

to particular religious beliefs are unlikely to be enforceable. See, e.g.,

Marriage of Weiss (1996) 42 CA4th 106, 117, 49 CR2d 339 (court

refused to enforce agreement whose purpose was to prevent parent

from involving child in religious activities, unless there was clear

showing of harm). On custody and visitation proceedings generally,

143 • Agreements Between Domestic Partners §5.40

see chap 14, and Practice Under the California Family Code: Dissolution,

Legal Separation, Nullity, chap 7 (Cal CEB Annual).

• 5.40 4. Choice of Law and Jurisdiction

Parties to an agreement settling their rights with respect to property

and other matters frequently include a “choice of law” provision,

as well as provisions concerning court jurisdiction. In view of the

unique situation involving the development and implementation of

domestic partnership law in California, any provision on choice of

law should refer to interpreting the agreement under “the law of

the state of California.” In addition, by statute, California courts

have jurisdiction over all proceedings relating to the dissolution of

domestic partnerships, legal separation of partners in a domestic

partnership, and nullity of domestic partnerships, even if neither

domestic partner is a resident of, or maintains a domicile in, California

when the proceedings are filed. Fam C §299(d). This provision

was necessitated by the reality that California registered domestic

partners may not be able to have their rights and obligations determined

by courts of states that have analogous substantive or procedural

law. Therefore, parties should ordinarily not attempt to vary

from this mandate in drafting any provision concerning court jurisdiction,

keeping in mind that they cannot otherwise confer jurisdiction

by their own agreement or divest a court of jurisdiction-particularly

in matters such as child custody and child support. There may be

future litigation over the application of conflicting state and federal

statutes relating to support and custody jurisdiction. See 28 USC

• 1738A (Parental Kidnapping Prevention Act), 28 USC §1738B

(Full Faith and Credit for Child Support Orders Act). See also the

Hague Convention on the Civil Aspects of International Child Abduction;

Uniform Child Custody Jurisdiction and Enforcement Act (as

applied by jurisdictions other than California).

NOTE> By statute, a legal union of two persons of the same sex, other

than a marriage, that was validly formed in another jurisdiction

and that is substantially equivalent to a California domestic partnership

must be recognized as a valid domestic partnership in California

regardless of whether it bears the name domestic partnership.

Fam C §299.2. It appears that California does not have

continuing jurisdiction over proceedings relating to those unions

(because they were not registered in California using the forms

• 5.41 California Domestic Partnerships • 144

advising parties of such jurisdiction), but the California courts

may be utilized to terminate them or grant a legal separation.

1. FORMS
2. Special Provisions for Domestic

Partnership Agreements

• 5.41 1. Form: Waiver of Rights Provided by Fam C
• 297.5 for Pre-2005 Period of Registration

as Domestic Partners

Partner A and Partner B registered their Domestic Partnership

with the Secretary of State of California on __ [date, e.g., April

1, 2002]__. They acknowledge that Family Code §297.5(m)(1)

has the effect of applying statutes, cases, and other sources

of law concerning community property, responsibility for debts

to third parties, other rights and duties concerning property,

and rights to support retroactively to the date of registration

of their Domestic Partnership. Partner A and Partner B agree

to vary from this provision of the Family Code, in that they

agree that the Family Code will apply retroactively only to

January 1, 2005, __ [or the date of this agreement]__. Partner

A and Partner B understand and acknowledge that by agreeing

to alter Family Code §297.5(m)(1) there may be a resulting loss

of community property rights and support rights, but they agree

to waive these rights under the Family Code with respect to

the time period before January 1, 2005.

Comment: Family Code §297.5(m)(1) provides that with respect

to property and support rights of domestic partners, any reference

in statutes, case law, or otherwise to the “date of marriage” is deemed

to refer to the date of the partners’ registration. Under Fam C

• 297.5(m)(2), domestic partners have until June 30, 2005, to execute

and have in force an agreement that complies with Fam C §§1600-

1620. This provision is a simple agreement intended to waive any

rights involving property or support that might otherwise accrue

to either partner before January 1, 2005, as a result of the retroactive

application of the law to the date of the partners’ registration. A

variation of this clause would permit the parties to use the date

of the agreement, instead of January 1, 2005, as the commencement

date for rights under the Domestic Partner Rights and Responsibilities

Act of 2003 (Stats 2003, ch 421).

145 • Agreements Between Domestic Partners §5.43

• 5.42 2. Form: Acknowledgement by Registered

Domestic Partners of Confidential

Relationship and Representation by

Counsel, and Agreement to Provide Full

Disclosure

Partner A and Partner B are registered domestic partners,

as provided under Family Code §§297 and 298.5. They desire

to enter into an agreement governing their rights and liabilities

with respect to property and related matters. They agree that

they are in a confidential relationship and are held to the highest

standards of good faith and fair dealing, and therefore they

agree to provide to each other full, fair, and reasonable

disclosure of their assets and obligations, and each partner

confirms that he or she understands the disclosure provided

and that the disclosure provided was a full, fair, and reasonable

disclosure. Both parties are benefiting from this agreement and

neither party is gaining an unfair advantage. Furthermore, they

each have retained counsel to represent them in this matter

in order to ensure that they each fully understand their rights

and responsibilities pursuant to this agreement.

Comment: This form may be used to recite the acknowledgement

by registered domestic partners that they stand in a relationship

of confidence that imposes on each of them the duty of the highest

good faith and fair dealing toward each other, in the manner of

a fiduciary. See, e.g., Fam C §721. It further acknowledges that

each party does not waive any right to disclosure of assets and

liabilities in entering into the agreement, and that each party is separately

represented by counsel with respect to the agreement. The

form may be used as part of a postregistration agreement, or as

part of a preregistration agreement for parties who– registered their

domestic partnership before January 1, 2005, and are making an

agreement in compliance with Fam C §297.5(m)(2).

• 5.43 3. Form: Provision That All Property Acquired

During Partnership Is Separate Property,

Except as Otherwise Designated in

Agreement

Partner A covenants and agrees that all of the following

are the separate property of Partner B, and shall be enjoyed

by him and subject to his disposition as his separate property

J

• 5.43 California Domestic Partnerships 9 146

in the same manner as if no domestic partnership had been

entered into, except as specified in this Agreement in _ _ [specify

sections of agreement describing community property, e.g., sections

7 and 8]_ _: all property and income currently owned by Partner

B and hereafter directly received by Partner B of any nature

or source or in any place, including but not limited to income

from those assets listed on Exhibit “A” attached hereto, as

well as all the earnings and income resulting from Partner B’s

personal services, skill, effort, and work during the registered

domestic partnership, and all property acquired by or coming

to Partner B by purchase, gift, bequest, exchange, devise,

.inheritance, profit, rent, accretion, exchange, appreciation,

accumulation, or increase during the domestic partnership, or

by any other means during the registered domestic partnership.

Partner A acknowledges that he understands that, except

for this Agreement, the earnings and income resulting from

the personal services, skill, effort, and work of Partner B during

the parties’ domestic partnership, including the real and

personal property purchased with such earnings and income

and a portion of Partner B’s existing real and personal property

maintained with said earnings and income, would be community

property in which Partner A would have a one-half interest,

but that by this Agreement Partner B’s earnings and income

and the property acquired, as well as the property that is

maintained with said earnings and income, are made Partner

B’s separate property, free and clear of any actual or potential

(be it community property or otherwise) right, title, interest,

or claim of Partner A.

Partner B covenants and agrees that all of the following

are the separate property of Partner A, and shall be enjoyed

by him and subject to his disposition as his separate property

in the same manner as if no domestic partnership had been

entered into, except as specified in this Agreement in __ [specify

sections of agreement describing community property, e.g., sections

7 and 8]_ _: all property and income currently owned by Partner

A and hereafter directly received by Partner A of any nature

or source or in any place, including, but not limited to, income

from those assets listed on Exhibit “B” attached hereto, as

well as all the earnings and income resulting from Partner A’s

personal services, skill, effort, and work during the registered

domestic partnership, and all property acquired by or coming

147 • Agreements Between Domestic Partners §5.44

to Partner A by purchase, gift, bequest, exchange, devise,

inheritance, profit, rent, accretion, exchange, appreciation,

accumulation, or increase during the registered domestic

partnership, or by any other means during the registered

domestic partnership.

Partner B acknowledges and understands that, except for

this Agreement, the earnings and income resulting from the

personal services, skill, effort, and work of Partner A during

the parties’ registered domestic partnership, including the real

and personal property purchased with such earnings and

income and a portion of Partner A’s existing real and personal

property maintained with said earnings and income, would be

community property in which Partner B would have a one-half

interest, but that by this Agreement Partner A’s earnings and

income and the property acquired, as well as the property that

is maintained with said earnings and income, are made Partner

A’s separate property, free and clear of any actual or potential

(be it community property or otherwise) right, title, interest,

or claim of Partner B.

Comment: This form may be used to create a “separate property”

agreement, either before or after the registration of domestic partners.

On the use of this agreement, see §5.14.

• 5.44 4. Form: Treatment of loan Proceeds

Should the parties, or either of them, borrow any funds or

acquire any asset or assets with borrowed funds during the

registered domestic partnership, the presumption created by

the time of acquisition under Family Code §§760 and 803 or

any similar statute or holding shall not apply. Such loan

proceeds and/or any property acquired with such loan proceeds

shall belong to the party or parties in the manner that title

is held to it. Therefore, if title to that property is held in one

party’s name alone, it shall be and remain that party’s separate

property, subject to change only as provided for in this

Agreement. Such property can only be community property

or have any community property interest if there exists an

Agreement, in writing, signed by both parties, expressly

creating such community property. The manner in which the

loan proceeds or credit was obtained shall not be a factor

in determining the character, separate or community, of loan

• 5.44 California Domestic Partnerships • 148

proceeds or property acquired with loan proceeds. This includes

but is not limited to

1. whether the loan was applied for in both names;
2. whether any loan documents, including applications,

financial statements, promissory notes, or security documents,

refer to or are signed by both parties;

1. whether information was provided to the lender concerning

the income or assets of both parties; and

1. whether the lender intended to and/or did rely on

community income and assets, separate property of one or

both parties, or a combination for security or repayment.

The parties expressly intend that this Agreement will override

the doctrines of Marriage of Grinius (1985) 166 CA3d 1179, and

Gudelj v Gudelj (1953) 41 C2d 202, and any similar or later

case that looks to the lender’s intent and time of acquisition

to determine the characterization of loan proceeds and/or

property acquired with loan proceeds.

If __ [specify party, e.g., Partner B]_ _ borrows funds in

__ [his/her]__ name for business or personal use, the repayment

of that loan shall be __ [specify party, e.g., Partner B]_ _’s sole

responsibility.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership. Both

“separate property” and “confirmation” type agreements should include

a clause that addresses characterization of loan proceeds. In

Gudelj v Gudelj (1953) 41 C2d 202, 259 P2d 656, and Marriage

of Grinius (1985) 166 CA3d 1179, 212 CR 803, courts looked to

the intent of the lender in order to characterize property as either

separate or community. If you are using a confirmation agreement,

you must ensure that if certain property is characterized as separate,

a future encumbrance on the property does not change its character

lo community. If you are drafting a separate property agreement,

you must ensure that the overall separate property scheme is not

diluted by future loans against the property. For related discussion

of separate properly and confirmation agreements, see §§5.13-5.14.

149 • Agreements Between Domestic Partners §5.47

• 5.45 5. Form: Provision for Exchange of Income

Tax Information and Use of Same Tax

Return Preparer

Partner A and Partner B agree that they will use the same

income tax preparer and will exchange a pro forma tax return

on or before February 1 of each year in which they are

registered domestic partners, so that their individual tax returns

are consistent with each other.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership. Registered

domestic partners are not permitted by law to file joint income

tax returns (see Fam C §297.5(g)), so it may not be clear to each

partner how the other partner is handling various aspects of income

tax reporting. This form assures that the partners will make use

of a common income tax preparer, the partners will have access

to the tax returns of each other, and the tax returns will be consistent

between the taxpayers.

• 5.46 6. Form: Provision for Filing of Separate

Income Tax Returns

Partner A and Partner B agree that they will each file separate

state and federal income tax returns. Partner A agrees to declare

all __ [his/her]__ personal earned income on __ [his/her]__ state

and federal tax returns. Partner B agrees to declare all

__ [his/her]__ personal earned income on __ [his/her]__ state

and federal income tax returns.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership. Registered

domestic partners are not permitted by law to file joint income

tax returns, and earned income may not be treated as community

property for income tax purposes (see Fam C §297.5(g)). Because

the domestic partners may not be familiar with the law, this form

specifies that the partners will file separate returns.

• 5.47 7. Form: Provision for Declaring Proceeds of

Sale of Joint Property on Tax Returns

[Choose one of the following alternatives]

• 5.48 California Domestic Partnerships • 150

[Alternative 1]

If Partner A and Partner B own real property in joint tenancy

or as community property, they agree that they will each declare

• one-half of the proceeds of sale as capital gains income on

their separate income tax returns.

[Alternative 2]

If Partner A and Partner B own real property in tenancy in

common or in a business partnership, they agree that they

will each declare a percentage of the proceeds of the sale as

capital gains income on their separate income tax returns

according to their respective ownership interests in the property.

In the event the deed or partnership agreement does not

specify their ownership interests, they shall each __ [specify:

declare one-half the proceeds of the sale or declare a percentage

interest according to their initial capital contribution to the purchase

price of the property]__.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership. The

agreement should provide a way to address the issue of declaring

gain from the sale of jointly held property (or property that is otherwise

community property).

• 5.48 8. Form: Provision for Indemnification for

Unforeseen Tax Consequences

Partner A shall indemnify and hold Partner B harmless from

all tax liability (including penalties, interest, and additional

assessments) asserted by federal or state taxing authorities

arising out of __ [his/her]__ transfer to Partner B of any property.

Partner A shall hold Partner B harmless from all fees and

expenses in connection with any examination, negotiation, or

litigation regarding such liability.

Partner B shall indemnify and hold Partner A harmless from

all tax liability (including penalties, interest, and additional

assessments) asserted by federal or state taxing authorities

arising out of __ [his/her]__ transfer to Partner A of any property.

Partner B shall hold Partner A harmless from all fees and

151 • Agreements Between Domestic Partners §5.50

expenses in connection with any examination, negotiation, or

litigation regarding such liability.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership, including

as part of a partnership dissolution agreement.

• 5.49 9. Form: Provision Addressing Tax Liability

for Assets Acquired Before 2005 That Are

Retroactively Treated as Community

Property

Partner A and Partner 8 recognize that the retroactive

application of the Family Code to property either of them

acquired since __ [date of partnership registration, e.g., January

1, 2002]__, under Family Code §297.5(m) may create a taxable

transaction. If a tax is assessed, Partner A and Partner 8 agree

that _ .Jspecify, e.g., each pays one-half of the federal and state

tax obligation due/Partner A agrees to pay the federal and state

tax due, including penalties and interest, and hold Partner 8 harmless

therefrom]__.

Comment: This form may be used by domestic partners who

registered their partnership before January 1, 2005, in an agreement

made under Fam C §297.5(m)(2). On when such an agreement may

be used, see §5.8. Family Code §297.5(m)(l) applies the domestic

partnership laws as they relate to property and support of registered

domestic partners retroactively to the date of the partners’ registra·

tion. What formerly was the sole property of one partner could

have become community property or partially community property.

Because the IRS may treat this as a taxable transaction, the form

addresses how the partners will allocate responsibility between each

other for paying any resulting tax liability.

• 5.50 10. Form: Provision for Gift of Living Expenses

Partner A’s payment of partner 8’s living expenses is

intended to be a gift and is to be assessed against Partner

A’s lifetime annual gift tax.

Comment: This form may be used by domestic partners in an

agreement made before or after registration of their partnership, including

as part of a partnership dissolution agreement. It is intended

• 5.51 California Domestic Partnerships • 152

to clarify the nature of the payments being made, and to distinguish

them from traditional support of a partner.

1. Sample Complete Agreements

• 5.51 1. Form: Preregistration Domestic Partnership

Agreement-Confirmation Style Agreement

PREREGISTRATION DOMESTIC PARTNERSHIP AGREEMENT

THIS AGREEMENT is made on __ , 2005, between Jane

Smith (“Jane”) and Mary Jones (“Mary”).

1. RECITALS

1.1. Jane and Mary are each unmarried adults, have no

children, and are contemplating registering together as domestic

partners with the State of California. Each is a resident

of the State of California.

1.2. Jane and Mary intend by this Agreement to define the

rights and obligations of each of them in the property of the

other whenever and wherever acquired or located.

1.3. Jane and Mary have been advised by their respective

legal counsel of the California Supreme Court decision in Marvin

v Marvin (1976) 18 C3d 660, and its progeny. Jane and Mary

desire to disavow any claims or rights that, except for the

operation of this Agreement, either might have acquired in the

property of the other by virtue of their relationship before

registering as domestic partners, and to renounce any claims

or rights, except for this Agreement, either might acquire in

the future in the property of the other by reason of their

registered domestic partnership relationship or otherwise.

1.4. Jane and Mary have also been advised by their counsel

of the California Supreme Court decision in Estate of MacDonald

(1990) 51 C3d 262. Jane and Mary acknowledge that this

Agreement may change the characterization or ownership of

property that either or both of them now own or that they

may hereafter acquire. Jane and Mary expressly acknowledge

and understand that, but for this Agreement, some or all of

their property rights and interests in and to the property that

153 • Agreements Between Domestic Partners §5.51

they now own or that they may hereafter acquire might be

different.

1.5. This Agreement constitutes a Preregistration Domestic

Partnership Agreement, as defined in California Family Code

• 1610(a). This Agreement shall be effective upon actual registration

of a domestic partnership between the parties with the

State of California. If for any reason such registration does

not take place, this Agreement shall be void.

1.6. Jane and Mary each own certain property and have

certain debts that are each party’s sole and separate property

and debts. Jane and Mary acknowledge that each party

possesses adequate knowledge of the property, income, earning

capacity, and financial obligations of the other by reason of

disclosures heretofore made and made in this Agreement.

Furthermore, both Jane and Mary have had an opportunity to

see and review an unaudited financial statement of the other

showing the approximate composition and estimated amount

of the property and debts of the other. Also, both parties

understand and acknowledge that Jane and Mary may each

at some time receive property in the form of gifts, devises,

bequests, or inheritances that are not certain or ascertainable

at this time but are, nevertheless, covered by this Agreement.

1.7. Each party Is willing to enter into this Agreement

voluntarily regardless of the nature or extent of the assets,

liabilities, income, or expenses of the other, and voluntarily

and expressly waives any right to disclosure of the property

or financial obligations of the other beyond the disclosures

previously provided.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration,

including the contemplated registered domestic partnership

between the parties and the mutual promises set forth in this

Agreement, Jane and Mary agree as follows with respect to

their rights in the property, income, assets, and liabilities that

either party may have or may acquire:

2. SEPARATE PROPERTY

2.1. All property now owned by each of Jane and Mary,

• 5.51 California Domestic Partnerships .. 154

whether or not specifically disclosed to the other, is and shall

remain the separate property of Jane or Mary, as the case may

be.

2.2. All property received by either party before the parties’

domestic partnership registration (including, but not limited

to, property received as salary, bonus, royalty, residual, override,

profit participation, deferment, or other similar forms of

compensation), and all property received at any time as a gift,

bequest, or inheritance, including any interest Jane or Mary

may hereafter acquire from a trust heretofore established by

either party’s relatives, shall be the separate property of the

party who receives it.

2.3. The parties understand that Jane owns shares of stock

in Acme, Inc. (“Acme”), and it is their intention that these shares

of stock, and any interest in any successors thereto, whether

or not incorporated, shall be and remain the separate property

of Jane and not the community property of the parties. Jane

shall be entitled to vote any shares in Acme or any interests

in any successors thereto owned by her, or by a trust for her

benefit of which she is the trustee, and Mary shall not at any

time have any voting rights with respect to such shares or

interests.

2.4. All income, rents, profits, reinvestment, dividends, interest,

accumulations, and appreciation in value derived from a

party’s separate property shall also be such party’s separate

property, irrespective of whether such income, rents, profits,

reinvestments, dividends, interest, accumulations, or appreciation

in value is attributable solely to market conditions, the

passage of time, or the personal services, skill, effort, management,

talent, or work of either party. The parties understand

that, but for this Agreement, some or all of such income, rents,

profits, reinvestment, dividends, interest, accumulations, and

appreciation in value would or might be the community property

of the parties.

2.5. Each party shall, to the extent possible, maintain

sufficient books and records in order to account for or trace

each party’s separate property. Although failure to maintain

these books and records with respect to any particular item

or account may prevent a party from proving the separate

155 ” Agreements Between Domestic Partners §5.51

property character of such property, such failure shall not

constitute a waiver or modification of either party’s rights or

obligations with respect to any other property as expressly

set forth in this Agreement.

3. COMPENSATION AND EARNINGS FROM ACME

The parties understand and acknowledge that Acme, an

enterprise having shares that are owned entirely by Jane as

her separate property (as provided in Paragraph 2.3), is a

personal services company for which Jane is likely (but not

required) to render services from and after the parties’ domestic

partnership registration. Any compensation or earnings re·

ceived by Jane or any employee benefit plans (hereafter

“Plans”) for Jane’s benefit from Acme during the parties’

registered domestic partnership as compensation for personal

services, skill, effort, or work, including bonuses, shall be

characterized as follows:

3.1. If such compensation or earnings received by Jane or

such Plans are attributable to receipts by Acme on account

of services, effort, or work that was furnished before the date

of the parties’ domestic partnership registration, such com·

pensation or earnings shall be and remain Jane’s separate

property as provided in Paragraph 2.

3.2. If such compensation or earnings received by Jane or

such Plans are attributable to receipts by Acme on account

of services, effort, or work that was furnished on or after the

date of the parties’ domestic partnership registration, such

compensation or earnings shall be and remain the parties’

community property as provided in Paragraph 4.

3.3. To the extent of the community property determined

under Paragraph 3.2 in a fiscal year of Acme during the parties’

registered domestic partnership, such Plans shall be the parties’

community property, and Jane shall have a separate property

interest in such contributions only to the extent that such

community property in such fiscal year is less than the

aggregate amount received by such Plans during such fiscal

year. Thus, for example, if in a fiscal year of Acme (i) it receives

$200,000 from sources described in Paragraph 3.1 and $800,000

from sources described in Paragraph 3.2, and (ii) distribution

of $980,000 is made to Jane and $20,000 to such Plans, then

• 5.51 California Domestic Partnerships • 156

the amount received by such Plans shall be the parties’

community property, and the amount received by Jane shall

be $780,000 community property and $200,000 Jane’s separate

property. II the facts are the same as in the preceding sentence

except that Acme receives $980,000 from sources described

in Paragraph 3.1 and $20,000 from sources described in

Paragraph 3.2, then the amount received by such Plans shall

be the parties’ community property, and the entire amount

received by Jane shall be her separate property. If the facts

are the same as in the preceding sentence except that such

Plans receive $25,000, then $20,000 received by such Plans

shall be the parties’ community property, $5000 received by

such Plans shall be Jane’s separate property, and the entire

amount received by Jane shall be her separate property.

4. COMMUNITY PROPERTY

4.1. Except and to the extent provided in Paragraph 3 with

respect to compensation or earnings received by Jane from

Acme, all compensation and earnings received by Jane or Mary

during their registered domestic partnership as compensation

for personal services, skill, effort, or work furnished after

registration of their domestic partnership shall be the parties’

community property (the “community property earnings”).

Community property earnings shall exclude receipts and accumulations

described in Paragraph 2.4, but shall include all other

compensation and earnings received for personal services,

including, but not limited to, amounts received as salary, bonus,

royalty, residual, override, profit participation, deferment, or

other similar forms of compensation.

4.2. The interest of each party as a participant in any Plans

with respect to contributions made on and after the date of

registration of the parties’ domestic partnership shall be the

community property of the parties.

4.3. Notwithstanding Paragraph 4.1, compensation for personal

services, skill, effort, or work earned by either party from

and after the date of their separation shall be and remain the

separate property of such earning party.

4.4. Both parties acknowledge that neither party is under

any obligation to generate any minimum amount of community

property earnings at any time. Furthermore, each party waives

157 • Agreements Between Domestic Partners §5.51

any claim that the community property earnings received by

the earning party is insufficient to compensate the community

for the efforts expended by such earning party. If either party

renders services to any partnership or corporation in which

such party or either party’s family may have an interest from

time to time, and such party receives inadequate or no

compensation for such services, that fact shall neither be a

basis for (i) converting any interest such party (or any trust

for either party’s benefit) owns in such partnership or corporation

into the parties’ community property nor be a basis for

(ii) giving rise to a claim of reimbursement by the community

from such party.

4.5. All income, rents, profits, reinvestments, dividends,

interest, accumulations, and appreciation in value derived from

community property earnings also shall be the parties’ community

property, irrespective of whether such income, rents,

profits, reinvestments, dividends, interest, accumulations, or

appreciation in value is attributable solely to market conditions,

the passage of time, or the personal services, skill, effort,

management, talent, or work of either party.

4.6. The parties’ community property shall not be directly

or indirectly invested in any corporation, partnership, joint

venture, or other business entity in which either party or either

party’s family now has or may in the future have an ownership

interest, nor shall the parties’ community property be loaned

to any person or entity without the written consent of both

parties. If, however, either party invests or loans any of the

parties’ community property without complying with the foregoing

formalities, the community shall be entitled to reimbursement

from the investing or loaning party for the monies so

invested or loaned, with interest at the federal ·midterm rate

of interest from time to time, compounded semiannually, from

the date of investment or loan, reduced by the amounts

recovered or received on account of such investment or loan.

(It is the parties’ intention by the preceding sentence that the

community receive the greater of interest on the amount

improperly invested or loaned under this Paragraph or the

actual return on such investment or loan.) However, the

community shall be a creditor only with respect to any such

investment or loan and shall not hold any equity interest in

nor be entitled to any portion of any appreciation in such

• 5.51 California Domestic Partnerships • 158

corporation, partnership, joint venture, or other business entity,

and the sole remedy of the community shall be reimbursement

from the investing or loaning party as provided in this

Paragraph.

4.7. As used in this Paragraph 4, references to a party’s

family shall refer to the issue of such party’s grandparents

and the spouses of any such issue (excluding the other party).

For purposes hereof, a party and each party’s family shall be

deemed to have an interest in an entity if such party and that

party’s family, or trusts for the principal benefit of any one

or more of them, in the aggregate hold more than forty percent

{40%) of the outstanding ownership interests, directly or

• indirectly, in such entity.

4.8. The parties may establish one or more savings or

checking accounts into which the parties can deposit their

community property income; the expenses set forth in Para·

graph 5.2 shall be paid from such accounts. The rights to the

parties’ community property shall be as determined under the

laws of the State of California from time to time.

5. DEBTS

5.1. Debts incurred by either of the parties before their

domestic partnership registration date shall be the separate

property debts of and paid by the party who incurred them

from each party’s separate property, and the separate property

of the other shall not be charged with or be liable for such

debts, except as provided in Paragraph 6.2.

5.2. Community debts incurred on and after the parties’

domestic partnership registration date shall be ·paid from

community income or community property funds. Unless the

parties otherwise agree, community debts shall include, without

limitation, the expenses of food; household supplies; furniture;

furnishings; utilities; clothing; medical and dental care; medical,

life, accident, and automobile insurance; gasoline; auto repair;

property taxes; assessments; ordinary repairs on any residence

used by the parties as their home from time to time; entertain·

ment; reasonable joint travel; and joint gifts.

5.3. If separate income or separate property funds of a party

are used to satisfy a community debt or obligation or a separate

159 • Agreements Between Domestic Partners §5.51

debt or obligation of the other party, then the party who

contributes such separate income or separate property funds

shall be entitled to reimbursement for such expenditures from

community property or the other’s separate property thereafter

acquired, without interest, as provided in California Family Code

• 920, provided, however, that the parties may agree at the time

of the advance or at any time thereafter that the party who

contributes such separate income or separate property funds

either is entitled to interest or is not entitled to any reimbursement,

in which event the contribution of separate income or

separate property funds shall be deemed a gift to the community

or the other party, as the case may be. Notwithstanding the

preceding sentence, there shall be no right to reimbursement

if a party uses each party’s separate property funds in discharge

of each party’s obligation of support under California Family

Code §914. The agreement referred to in this Paragraph shall

be evidenced by a written instrument signed by both parties.

6. GIFTS TO MARY ON REGISTRATION OF DOMESTIC

PARTNERSHIP

Notwithstanding any other prov1s1on of this Agreement to

the contrary, within thirty (30) days following the parties’

domestic partnership registration, Jane shall transfer the

following to or for the benefit of Mary, as Mary’s sole and

separate property, in which Jane shall have no interest and

for which Jane shall be entitled to no reimbursement:

6.1. The 1995 Volvo 855 turbo station wagon currently being

used by Mary; and

6.2. Sufficient cash to satisfy Mary’s separate property debts

on the date of their domestic partnership registration, which

cash may be paid directly to Mary’s creditors.

7. AGREEMENT CHANGES CHARACTERIZATION OR OWNERSHIP

OF PROPERTY

Jane and Mary acknowledge that this Agreement may change

the characterization or ownership of property that either or

both of them now own or that they may hereafter acquire. Jane

and Mary expressly acknowledge and understand that, but for

this Agreement, some or all of their property rights and interests

• 5.51 California Domestic Partnerships • 160

in and to the property that they now own or that they may

hereafter acquire might be different under California law.

8. FEDERAL AND STATE INCOME TAX RETURNS

8.1. The parties agree that they will each timely file separate

state and federal income tax returns. Mary agrees to declare

all of her personal income on her state and federal tax returns.

Jane agrees to declare all of her personal income on her state

and federal tax returns.

8.2. The parties agree that they will use the same income

tax preparer and will exchange a pro forma tax return on or

before February 1 of each year in which they are registered

domestic partners, so that their individual tax returns are

consistent with each other.

9. OWNERSHIP OF TANGIBLE PROPERTY

9.1. Any property, such as furniture, appliances, or furnishings

located in or around the residence that the parties occupy

from time to time, for which no documents of title exist that

is in the possession of either or both parties shall have the

same character as the property used to acquire such property.

If both parties have furnished such consideration from their

separate property, each party shall be deemed to have a

separate property interest in a fraction of such property, the

numerator of which is the amount of the consideration

furnished by either party and the denominator of which is the

aggregate consideration furnished by both parties. For purposes

of this Paragraph, a written document, signed by the

party who furnished all or a portion of the . consideration

necessary to acquire an item of property, and stating that such

party is making a gift of the item or either party’s interest in

the item to the other party, shall be deemed to be the document

of title indicating that the item is the separate property of the

other party.

9.2. Notwithstanding any provision of this Agreement to the

contrary, gifts from one party to the other of clothing, jewelry,

personal effects, books, or other items of similar nature costing

less than Five Thousand Dollars ($5000) per item shall not

require a written document to evidence their character as the

161 • Agreements Between Domestic Partners §5.51

donee’s separate property nor shall the donor be entitled to

any reimbursement of her contribution.

10. DISSOLUTION OF DOMESTIC PARTNERSHIP

This Agreement does not purport to cover all of the

consequences of a dissolution of a registered domestic partnership

of Jane and Mary, it being understood that such dissolution

is neither desired nor contemplated. However, in the unfortunate

event that the parties’ registered domestic partnership is legally

terminated, other than by reason of death, that is, by dissolution,

or the parties’ legal separation pursuant to court order

or written or oral agreement, or in the event the parties hereto

cease living together for a continuous period of twelve (12)

months and one of the parties intends to remain separate and

apart, the parties agree that their rights with respect to the

property owned by them, or either of them, shall be settled

and determined in accordance with this Agreement. In particular,

the parties agree as follows:

10.1.As provided in this Agreement, neither party shall have

any interest in the separate property of the other, and nothing

in this Agreement shall divest a party from that party’s property

as determined under this Agreement. Both parties understand

that the laws of many states give courts the power to require

a husband or a wife, upon separation or divorce, to transfer

a share of either party’s property, whether separate property,

domestic partnership property, or community property, to the

other party. This power is sometimes referred to as the power

to require “equitable distribution.” Neither party wishes a court

to have this power. Therefore, each party hereby waives any

right either party would have had, in the absence of this

Agreement, to receive a share of the separate property of the

other upon separation or dissolution and agrees that if the

parties are separated or the registered domestic partnership

is dissolved or terminated (other than by either party’s death),

neither party will assert any claim to receive a share of the

separate property of the other, whether by way of equitable

distribution or otherwise.

1 0.2. Nothing in this Agreement shall be construed as a

waiver of either party’s right to receive spousal (domestic

• 5.51 California Domestic Partnerships fl 162

partnership) support as determined under the laws of the State

of California.

10.3.1f the parties own undivided interests in real or personal

property as community property, tenants in common, or as

joint tenants, such property shall be divided in kind as the

parties agree, in proportion to their respective ownership

interests therein. If the parties cannot agree upon such division

with respect to any such property, those properties shall be

sold, and the net proceeds of sale shall be divided between

the parties in proportion to their respective ownership interests

therein.

11. ACTIONS THAT DO NOT CONSTITUTE CHANGE IN

OWNERSHIP OF PROPERTY

If any of the following events occurs during the parties’

registered domestic partnership, under no circumstances shall

any or all of such events be evidence of either party’s express

or implied intention or agreement to convert the separate

property of either party into the community property of the

parties nor to convert the community property of the parties

into the separate property of either party: (i) the filing of joint

income tax returns; (ii) the designation of either party as a

beneficiary or as an Executor, Trustee, or other fiduciary with

respect to the property or estate of the other, whether during

lifetime or at death; (iii) the fact that a creditor has relied on

the property or credit of one party for the purpose of extending

credit to the other party or to Jane or Mary jointly; (iv) any

oral statements or representations by the parties or either of

them, whether made to the other or to third parties, including

family members, friends, business associates, creditors, or

otherwise; (v) the commingling by one party of either party’s

separate property with the separate property of the other party

or with the parties’ community property; or (vi) the payment

by either party from either party’s separate property of any

obligation for the benefit of the other party or the parties jointly,

including, but not limited to, the payment of mortgages, interest,

assessments, taxes, or improvements.

163 c Agreements Between Domestic Partners §5.51

12. LIMITATION ON APPLICABILITY OF COMMUNITY PROPERTY

LAWS

The community property and quasi-community property laws

of the State of California shall not apply to change the separate

property of either party, or the income therefrom, to community

or quasi-community property. Moreover, the marital property

laws of any other state shall not apply to give either party

any property rights other than those provided for in this

Agreement.

13. BINDING AGREEMENT

13.1. This Agreement shall be binding upon and inure to

the benefit of the parties hereto and their heirs, successors,

personal representatives, and assigns. All references herein

to Jane or Mary shall also refer to their respective heirs,

successors, personal representatives, and assigns where necessary

to carry out the intent of this Agreement. Neither party

intends by this Agreement to make any provisions for the other

party’s relatives, and none of such relatives shall be considered

third party beneficiaries of this Agreement. No other party shall

have any rights to enforce any of the provisions of this

Agreement.

13.2. This Agreement shall remain in full force and effect

even if the parties marry under the laws of any state of the

United States or under the laws of any other country.

14. ENTIRE AGREEMENT; NO CHANGES WITHOUT WRITING

This Agreement is the entire understanding of the parties.

There are no promises, representations, or undertakings by

either party to the other except as herein set forth. No portion

of this Agreement may be canceled or amended except by a

written instrument executed and acknowledged by both parties.

15. ENFORCEMENT OF AGREEMENT

No failure of a party to enforce any part of this Agreement

shall affect either party’s right to enforce any part of this

Agreement, and no waiver of a breach of any part of this

Agreement shall waive any succeeding breach of any part of

this Agreement. The form of this Agreement has been prepared,

• 5.51 California Domestic Partnerships o 164

and negotiations in connection herewith have been carried on,

by both parties and their attorneys, and this Agreement shall

therefore be construed simply and fairly and not strictly for

or against either of the parties.

16. OWNERSHIP OF PROPERTY OUTSIDE CALIFORNIA

If during their registered domestic partnership the parties

are residents of, or own property situated in, any state other

than the State of California, their interests and rights in such

property shall, notwithstanding the law of such state, be

d!;!termined under this Agreement.

17. RESIDENCE OUTSIDE CALIFORNIA

17.1. The parties agree that if they establish a residence

outside the State of California, each party shall agree to

amendments to this Agreement that are reasonably necessary

to conform to the law of the state of the parties’ residence

and that as closely as possible effect the parties’ original

intentions as expressed in this Agreement.

17.2. Each party shall reexecute this Agreement or agree to

other formalities necessary to conform to the law of the state

of the parties’ residence.

17.3. None of the above prov1s1ons shall be construed as

negating the parties’ intention to have the validity, interpretation,

construction, legality, and enforcement of this Agreement,

the obligations and rights hereunder, the terms and conditions

hereof, the meaning hereof, or any other matter relating hereto

governed by the internal laws, and not the law of conflicts,

of the State of California, regardless of whether this Agreement

has been reexecuted or amendments made hereto.

18. GOVERNING LAW; CONSTRUCTION

The validity, interpretation, construction, legality, and enforcement

of this Agreement, the obligations and rights hereunder,

the terms and conditions hereto, the meaning hereof, or any

other matter relating hereto shall be governed by the internal

laws, and not the law of conflicts, of the State of California.

If any part of this Agreement is found invalid, such part shall

be deemed severed herefrom, and this Agreement shall other165

• Agreements Between Domestic Partners §5.51

wise remain in full force and effect. Paragraph headings are

used for convenience only and are not to be considered in

the construction hereof.

19. EXECUTION OF NECESSARY DOCUMENTS

Each party, at the request of the other or either party’s

successors or assigns, shall execute, acknowledge, and deliver

(i) whatever additional documents may reasonably be required

to carry out the intention of this Agreement, including but not

limited to any consent required under the Retirement Equity

Act of 1984 so as to permit the designation of a beneficiary

other than the domestic partner for death benefits payable under

a qualified retirement plan, and (ii) any deeds or other

documents in order that good and marketable title to any

separate property can be conveyed by the requesting party,

free from any claim of the other party arising by reason of

their domestic partnership.

20. THIS AGREEMENT VOLUNTARY

Each party acknowledges that this Agreement has been made

freely and voluntarily and that each party is signing this

Agreement with a thorough understanding of the meaning,

significance, and potential consequences of every term and

provision hereof.

21. ATTORNEY FEES

If either party reasonably retains counsel for the purpose

of enforcing or preventing the breach of any provision of this

Agreement, for damages by reason of any alleged breach of

any provision hereof, for a declaration of such· party’s rights

or obligations hereunder, or for any other judicial remedy, then,

if such matter is settled by judicial determination (which term

includes arbitration), the prevailing party (whether at trial or

on appeal) shall be entitled, in addition to such other relief

as may be granted, to be reimbursed by the losing party for

costs and expenses incurred thereby, including, without limitation,

reasonable, itemized, and documented attorney fees and

costs for the services rendered to such prevailing party.

Notwithstanding any provision of this Paragraph 21 to the

contrary, the aggregate amount recovered by the prevailing

party under this Paragraph 21 shall not exceed Twenty Thou§

5.51 California Domestic Partnerships • 166

sand Dollars ($20,000). This Paragraph 21 shall apply only to

the enforcement or prevention of the breach of any provisions

of this Agreement and shall not otherwise prevent a court of

competent jurisdiction from awarding attorney fees and costs

in connection with a dissolution of the parties’ registered

domestic partnership or the determination of custody or support

of any minor children as provided in the California Family Code.

22. ADVICE OF COUNSEL

Each of the parties has been advised by separate and

independent legal counsel of each party’s own choosing; each

party has given careful and mature thought to the making of

this Agreement and is fully aware of the contents hereof; each

party has had the Agreement fully explained by such legal

counsel; and each party understands that the obligations

assumed hereunder are in full satisfaction of all obligations

that such party has now or might otherwise have to the other.

Each party has been advised by each party’s own legal counsel

of the substantial rights (to inheritance and to property that

such party could have under the laws of the State of California

if the parties were to become registered domestic partners and

then terminate or dissolve the registered domestic partnership,

or if one party should die while the parties were in a registered

domestic partnership with one another) that either party has

renounced, waived, released, or relinquished by this Agreement.

It has been acknowledged and agreed between the parties that

the Attorney Certifications attached hereto are not intended

to be and are not waivers of the attorney-client privilege.

23. COUNTERPARTS

This Agreement may be executed in counterparts.

THIS AGREEMENT is executed at __ , California, this

___ day of ___, 2005.

Jane Smith

Mary Jones

167 • Agreements Between Domestic Partners §5.51

STATE OF CALIFORNIA )

)

) ss

)

COUNTY OF LOS ANGELES )

)

On , 2005, before me, , Notary Public,

personally appeared Jane Smith, personally known to me (or

proved to me on the basis of satisfactory evidence) to be the

person whose name is subscribed to the within instrument,

and acknowledged to me that she executed the same in her

authorized capacity, and that by her signature on the instrument

the person, or the entity upon behalf of which the person acted,

executed the instrument.

WITNESS my hand and official seal.

Notary Public

STATE OF CALIFORNIA )

)

) ss

)

COUNTY OF LOS ANGELES )

)

On , 2005, before me, , Notary Public,

personally appeared Mary Jones, personally known to me (or

proved to me on the basis of satisfactory evidence) to be the

person whose name is subscribed to the within instrument,

and acknowledged to me that she executed the same in her

authorized capacity, and that by her signature on the instrument

the person, or the entity upon behalf of which the person acted,

executed the instrument.

WITNESS my hand and official seal.

Notary Public

ATTORNEY CERTIFICATIONS

The undersigned hereby certifies that he is an attorney at

• 5.51 California Domestic Partnerships • 168

law duly licensed and admitted to practice in the State of

California, that he has fully advised and consulted with Jane

Smith in connection with her property rights and has fully

explained to her the legal effect of the foregoing Agreement

and the effect that it has upon rights otherwise obtaining as

a matter of law, and that Jane Smith, after being duly advised

by the undersigned, acknowledged to the undersigned that she

understood the legal effect of the foregoing Agreement and

executed the same freely and voluntarily. Nothing in this

certification shall be deemed to waive the attorney-client

privilege.

LAW OFFICES OF—-

Date: ___ _

Name of Attorney

Attorney for Jane Smith

The undersigned hereby certifies that she is an attorney at

law duly licensed and admitted to practice in the State of

California, that she has fully advised and consulted with Mary

Jones in connection with her property rights and has fully

explained to her the legal effect of the foregoing Agreement

and the effect that it has upon rights otherwise obtaining as

a matter of law, and that Mary Jones, after being duly advised

by the undersigned, acknowledged to the undersigned that she

understood the legal effect of the foregoing Agreement and

executed the same freely and voluntarily. Nothing in this

certification shall be deemed to waive the attorney-client

privilege.

Date: ___ _

Name of Attorney

Attorney for Mary Jones

JANE SMITH FINANCIAL STATEMENT

CURRENT ASSETS

LIABILITIES

APPROXIMATE NET WORTH

ANTICIPATED INCOME FOR 2005 APPROXIMATELY

169 • Agreements Between Domestic Partners §5.51

ACKNOWLEDGMENT RE: FINANCIAL DISCLOSURES

The undersigned, Mary Jones, hereby acknowledges receipt

of the financial statement of Jane Smith and that she has

carefully and completely examined Jane Smith’s financial

condition, including assets and liabilities, as disclosed on said

financial statement. The undersigned further acknowledges that

she has made all inquiries of Jane Smith or of her attorneys

that she has deemed necessary or appropriate regarding Jane

Smith’s financial condition and that she voluntarily and expressly

waives any right to disclosure of the property or financial

obligations of Jane Smith beyond the disclosures provided in

said financial statement.

Date: ____ ,, 2005

Mary Jones

STATE OF CALIFORNIA )

)

) 55

)

COUNTY OF LOS ANGELES )

)

On , 2005, before me, , Notary

Public, personally appeared Mary Jones, personally known to

me (or proved to me on the basis of satisfactory evidence)

to be the person whose name is subscribed to the within

instrument, and acknowledged to me that she executed the

same in her authorized capacity, and that by her signature on

the instrument the person, or the entity upon behalf of which

the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public

MARY JONES FINANCIAL STATEMENT

CURRENT ASSETS

LIABILITIES

• 5.51 California Domestic Partnerships • 170

APPROXIMATE NET WORTH

ANTICIPATED INCOME FOR 2005 APPROXIMATELY

ACKNOWLEDGMENT RE: FINANCIAL DISCLOSURES

The undersigned, Jane Smith, hereby acknowledges receipt

of the financial statement of Mary Jones and that she has

carefully and completely examined Mary Jones’s financial

condition, including assets and liabilities, as disclosed on said

financial statement. The undersigned further acknowledges that

she has made all inquiries of Mary Jones or of her attorneys

that she has deemed necessary or appropriate regarding Mary

Jones’s financial condition and that she voluntarily and expressly

waives any right to disclosure of the property or financial

obligations of Mary Jones beyond the disclosures provided

in said financial statement.

Date: —-‘ 2005

Jane Smith

STATE OF CALIFORNIA

ss

COUNTY OF LOS ANGELES

On , 2005, before me, , Notary Public,

personally appeared Jane Smith, personally known to me (or

proved to me on the basis of satisfactory evidence) to be the

person whose name is subscribed to the within instrument,

and acknowledged to me that she executed the same in her

authorized capacity, and that by her signature on the instrument

the person, or the entity upon behalf of which the person acted,

executed the instrument.

WITNESS my hand and official seal.

Notary Public

Comment: This form is an illustrative version of a complete prere171

o Agreements Between Domestic Partners §5.51

gistration domestic partnership agreement, with attached financial

disclosures of the parties and acknowledgement of the disclosures.

It is intended to illustrate the type of matters to be addressed by

parties who intend to register as domestic partners with the California

Secretary of State. See Fam C §§298.5, 1600-1617. The disclosures

should be made before the agreement is signed (preferably early

on in the negotiations), but the agreement and disclosure acknowledgment

may be signed on the same day. On the special “seven calendar

day” rule, see §5.11.

This form of agreement is cast in the form of a “confirmation

style agreement”-an agreement that confirms that certain property

of the parties will remain separate property, such as a business,

various items of personal and real property, or a retirement. plan

owned before domestic partnership registration. This type of agreement

does not change the default rule that property acquired during

the domestic partnership is presumed to be community property.

See Fam C §§297.5(a), 760. For alternative clause language in the

form of a “separate property agreement,” see §5.43.

Note that with respect to a clause providing for the payment

of attorney fees, the clause illustrated in the agreement above should

be used with caution, because it may provide an incentive for the

impecunious partner to litigate, since he or she might feel there

is “nothing to lose.” On related clauses that may be utilized in

a preregistration agreement, see §§5.41-5.49. On the possibility that

parties to this type of agreement may be held to a higher standard

of disclosure of their assets and liabilities before entering into the

agreement than other unmarried persons, see §§5.7-5.8.

It is important for the attorney to keep in mind that there are

important potential income, gift, and estate tax consequences that

may attend a property agreement in the domestic partnership context,

because the rules applicable in traditional premarital situations do

not apply (see chap 15). Family law and estate planning attorneys

are urged to consult with tax counsel and accountants, as needed,

in connection with the drafting of an agreement governing the rights

of persons intending to register as domestic partners.

For a general discussion of preregistration and similar agreements,

respectively, see §§5.7-5.18, and California Marital Settlement and

Other Family Law Agreements (3d ed Cal CEB 2005).

• 5.52
• 5.52

California Domestic Partnerships • 172

2. Form: Postregistration Domestic

Partnership Agreement

Postregistration Domestic Partnership Agreement

This Agreement, effective as of the date of the second party

to sign (the “Effective Date”), is made between Robert Allen

Jones (“Robert”) and Raymond Thomas Brown (“Raymond”).

1. PURPOSE

This Agreement is made pursuant to California Family Code

• 721, and in a spirit of mutual cooperation. We desire to define

our respective property rights in our registered domestic

partnership in an effort to strengthen our bond to each other.

2. CONSIDERATION

We realize that under California community property law, or

under the laws of other states or countries that provide for

various forms of marital or domestic partner property rights,

each of us might acquire an interest in property that the other

owned before our registered domestic partnership, or in

specified other properties that we acquire during our registered

domestic partnership. It is our desire that certain properties

owned by each of us shall remain separate property, and that

the other party shall acquire no interest in these properties

by virtue of our registered domestic partnership relationship.

We have divided our property equitably between us partly on

the basis of who was primarily responsible for earning it. We

understand that under California law, we are both deemed to

have contributed equally to the acquisition of this property;

however, to us, dividing the property according to who was

directly responsible for earning it is fair and will strengthen

our union. Thus, Raymond will receive more of our existing

property but will waive any interest that he has in Robert’s

dental practice and the future income therefrom. Thus, each

of us preserves certain assets as that party’s respective separate

property to the exclusion of the other, and waives certain

property rights that he would or might acquire in the property

of the other, and these benefits and waivers form the consideration

for this Agreement.

173 • Agreements Between Domestic Partners §5.52

3. STATISTICAL INFORMATION

The following information is set forth by us:

Parties’ domestic partnership registered on: _____ , 2005

Robert’s Information

Full Legal Name: Robert Allen Jones

Mailing Address:

Date of Birth:

Citizenship: U.S.

Residence for Tax Purposes: California

Raymond’s Information

Full Legal Name: Raymond Thomas Brown

Mailing Address:

Date of Birth:

Citizenship: U.S.

Residence for Tax Purposes: California

4. DISCLOSURES

4.1. Separate Property. We acknowledge that we have each

made to the other a full and complete disclosure of the nature,

extent, and probable value of all of our assets and liabilities,

and these disclosures are set forth in Exhibits . We

are aware of no unique investment opportunities that have not

been disclosed to the other. We are aware of no obligations

for which the registered domestic partnership community may

be liable, other than those disclosed in the Exhibits hereto.

The values of the assets set forth on the Exhibits hereto

represent either the values set forth on the latest statements,

the cost of the investment, or our best opinion of value.

4.2. Income. Robert had income in 2000 of $570,000 from

his dental practice, $533,000 from interest and dividends, and

$76,000 in capital gains from investments. Rayrnond had income

in 2000 of $96,000 in salary, $721,000 in bonuses, $996,000

from interest and dividends, and $5,323,000 in capital gains

from investments. Raymond represents that this level of income

is historically extraordinary.

• 5.52 California Domestic Partnerships • 174

4.3. Accuracy of Information. It is understood that the figures

and amounts listed in section 4.2 and in Exhibits ——,=are

intended to be reasonably accurate and do not differ

substantially from what each of us believes is correct regarding

his respective property. It is further understood that no

appraisals have been done on any of the properties for

purposes of this Agreement. We agree that the foregoing

disclosures are not an inducement to enter into this Agreement,

nor do they constitute any consideration for this Agreement.

We agree that we would enter into this Agreement regardless

of the nature, extent, and value of each other’s assets, liabilities,

income, or expenses, and regardless of any financial arrange-

. ments for the benefit of either of us by the other. Therefore,

no error, omission, or inaccuracy in section 4.2 or in Exhibits

—-:- shall create any legal right in favor of either of

us, nor shall any such error, omission, or inaccuracy constitute

grounds for any legal remedy by either of us against the other,

including but not limited to challenging the validity or enforceability

of this Agreement. The present value of the assets is

agreed to be the value as of the dates shown in Exhibit

5. PROPERTY CONSIDERATIONS AND AGREEMENTS

5.1. Community and Separate Property. We have been advised

by our respective counsel that under California law:

5.1.1. Any property owned by a party before registration of

a domestic partnership is presumptively the separate property

of that party.

5.1.2. Any property received after registration of a domestic

partnership by gift from a registered domestic partner or any

other person, and any property received as the result of the

death of any person by will, trust, or intestate succession, is

presumptively the separate property of the person receiving

it.

5.1.3. After registration of our domestic partnership, the

income from separate property presumptively remains separate

property and the increase in value of separate property

presumptively remains separate property. There are some

California cases that have held that when the increase of value,

profits, or extraordinary income results specifically from the

I

175 • Agreements Between Domestic Partners §5.52

efforts of a spouse after marriage, a portion of the increase

in value, profits, or income can be apportioned to the communi·

1. We understand that the effect of these cases may be modified

by an agreement, and it is our intent to modify such effect

by this Agreement.

5.1.4. Family Code §2640 provides that in the event of a

dissolution of our registered domestic partnership, contributions

from separate property to the acquisition of jointly held

property will be reimbursed to the contributing party without

interest or adjustment for change in value. This rule may be

waived, but requires a specific waiver in writing.

5.1.5. We may change the character of property from separate

to community or community to separate by the terms of this

Agreement or by another instrument in writing. If this is done,

it should be done very carefully, and preferably with legal

advice, with full understanding of the consequences, including

the relationship of the change to the death of either of us

or to the termination of our marital status.

5.1.6. If one registered domestic partner obtains an advantage

over the other in an interpartner transaction, the law presumes

that such transaction was induced by undue influence.

5.1. 7. There are additional rules based on case law and

statute that affect the character of whether property is community

property or separate property and when rights of reimbursement

apply. Each of us has been advised to discuss the

applicable law with his or her own attorney to fully understand

the concepts of community and separate property and the effect

of this Agreement. Nothing in this section 5; 1 shall have the

effect of determining or changing our rights.

5.1.8. Notwithstanding the foregoing, and absent a future

agreement in writing by us, our intent is to specifically define

property that hereafter remains the separate property of each

of us or becomes under the terms of this Agreement either

community property or separate property of the other party.

5.2. Description of Separate Property. We agree that the

property described in Exhibit , attached to and made

a part of this Agreement by reference, is the separate property

of Raymond, and the property described in Exhibit ____ _

• 5.52 California Domestic Partnerships e 176

attached to and made a part of this Agreement by reference,

is the separate property of Robert. We agree that the property

described in Exhibit shall remain the sole and

separate property of Raymond, and the property described in

Exhibit shall remain the sole and separate property

of Robert. Except as otherwise specifically provided herein,

all separate property shall be confirmed without offset to the

person owning it and no separate property belonging to one

party shall be awarded to the other party. To the extent that

either of us has a community property interest in the property

confirmed as the separate property of the other, our intention

is to waive any community property interest that we may have

therein.

5.3. Community Property. We have community property as

set forth in Exhibit(s) to this Agreement. We agree

to utilize the Bank of America account listed on Exhibit

_____ to pay a portion of our income tax liability for the

year ___ _

5.4. Management of Property. As provided by the law of the

State of California, each of us shall have the right of management

of his or her separate property, and community property

shall be subject to joint management.

5.5. Increased Value of Separate Property During Registered

Domestic Partnership. Except as provided below, we agree that

all rents, issues, profits, appreciation, or increase in the value

of property described in Exhibit(s) that shall result

for any reason, including but not limited to the personal

services, skill, and work of either of us, shall remain the

separate property of the owner of that property. Each of us

understands that, except for this Agreement, the earnings,

income, and increase in value of such property resulting from

personal services, skill, effort, and work of one of us could,

under certain case law, in whole or in part, be determined to

be our community property, but under the terms of this

Agreement shall specifically remain the separate property of

the owner. We acknowledge that it is our intent to avoid any

apportionment of ownership of this property as was applied

or discussed in Pereira v Pereira (1909) 156 C 1, Van Camp

v Van Camp (1921) 53 CA 17, Todd v McColgan (1949) 89 CA2d

509, Beam v Bank of America (1971) 6 C3d 12, Marriage of

177 9 Agreements Between Domestic Partners §5.52

Dekker (1992) 17 CA4th 842, and like cases. Notwithstanding

anything in this Agreement to the contrary, we agree that the

following property shall be treated specially.

5.5.1. Family Residence

5.5.1.1. We live in the residence located at 21757 Moorpark

Avenue, Los Angeles, California (“the Family Residence”). A

legal description of the Family Residence is attached as Exhibit

5.5.1.2. We agree that the Family Residence shall be community

property on the Effective Date. The communitY shall assume

any loans outstanding on the Family Residence on the Effective

Date. This residence is currently titled in our family trust and

it is our intention for the trust to maintain title to this property.

We agree that neither party shall unilaterally attempt to remove

it from the trust.

5.5.1.3. The increase in equitY in the Family Residence after

the Effective Date and during the registered domestic partnership

because of appreciation and pay down of the encumbrance

against the residence shall be community property, regardless

of which of us makes the payments on the “mortgage.” Neither

of us shall have a right of reimbursement for payments that

we make from our separate property that reduce the encumbrance.

If either of us makes substantial improvements to the

residence using separate property, we agree that that person’s

separate property shall not be reimbursed for the cost of the

improvements.

5.5.1.4. We shall agree from time to time on the allocation

of the payment of expenses associated with the family residence.

5.5.1.5. We expect that in the future we may sell the Family

Residence and purchase a new residence (the “New Residence”).

The net proceeds of the sale of the Family Residence

(after subtracting commissions and other expenses of sale)

shall be applied towards the New Residence. If the net proceeds

exceed the purchase price of the New Residence, the surplus

shall be our community property. If the purchase price of the

New Residence exceeds the net proceeds from the sale of the

Family Residence, the balance shall be paid by us equally

• 5.52 California Domestic Partnerships ~ 178

unless we agree to a different proportion, in which case all

of the funds for the purchase price will be deemed to have

been contributed to the community and neither of us shall

have any right of reimbursement for our separate property

contributions thereto, and we hereby waive any right to

reimbursement under Family Code §2640.

5.5.2. Tooth & Gum Partnership. “TOOTH & GUM” is a dental

firm partnership that acquired Robert’s prior dental firm (Jones

Dental Group). It is anticipated that Robert will devote long

hours to TOOTH & GUM PARTNERSHIP and that as a result

thereof, the value of this partnership interest will grow rapidly.

We agree that, despite California community property law to

the contrary, it is fair that all income, profits, appreciation, and

increase in the value of said TOOTH & GUM PARTNERSHIP,

or any future dental firm that Robert may join or form, shall

remain Robert’s separate property. Each of us understands that

(1) as a general rule the earnings, income, and increase in

value of property acquired during our registered domestic

partnership is community property and (2) earnings, income,

and increase in value of community property attributable to

personal services, skill, effort, and work of one or both of us

is community property. Raymond further understands that the

value of Robert’s former dental practice was also a community

asset. Nevertheless, we agree that any increased value in

Robert’s dental practice, including but not limited to “goodwill,”

shall be and remain the separate property of Robert and that

any claim for a community interest in the increased value based

on the above concepts is specifically waived by Raymond.

5.5.3. Waiver of Community Property Rights in Intangible

Assets. Each of us waives any claim to any community property

interest in the following assets the other may now have or

may create during our registered domestic partnership: (1)

intangible career assets, including education, training, degrees,

and licenses, and any goodwill related to a business (including

but not limited to Raymond’s interests in Penner Capital

Management) or profession and (2) intellectual property rights,

including publications, writings, musical creations, inventions,

film, video, software, ideas, and other creative works. This

waiver includes any rights to copyright, trademark, prizes,

awards, and other creative work regardless of whether or not

they have been realized in the form of monetary compensation

179 • Agreements Between Domestic Partners §5.52

or a contract for payment of money during our registered

domestic partnership (and before any separation of us, should

that occur). Any claim that such assets have a community

property component resulting from efforts of the other party

during our registered domestic partnership (and before any

separation of us, should that occur) is waived.

5.5.4. Deferred Compensation. As used in this section, the

term “deferred compensation” shall include employee benefit

plans of all types, pension plans, annuity plans arising in

connection with employment, defined contribution or account

balance plans, SEP IRAs, SEP plans, profit-sharing plans, 401 (k)

plans, ERISA-governed plans, qualified plans, nonqualified

plans of deferred compensation, statutory entitlements connected

with employment, and IRA accounts for which voluntary

contributions are made during the registered domestic partnership,

but the term “deferred compensation” shall not include

any deferred performance fees or other compensation or

benefits arising from or accruing to any of Raymond’s separate

property listed in Exhibit . Each of us agrees that

all money and other assets contained in any “deferred compensation”

as broadly defined herein, including any future

contributions, shall be our community property without right

of reimbursement despite the contributions thereto being made

with our separate property earnings.

5.6. General Debts, Known and Unknown. The owner shall

be responsible for paying any and all debts, liabilities, or

obligations (“obligations”) secured by or directly related to

property designated as separate under the terms of this

Agreement unless otherwise specifically provided in this Agreement.

All other obligations incurred before our registered

domestic partnership shall be paid by the person responsible

for incurring such obligation. Each of us agrees that the party

whose responsibility it is to pay an obligation shall hold the

other party free and harmless from that obligation.

5.7. Maintaining and Changing Character of Property

5.7.1. Title Determines Ownership. Title shall determine the

ownership interest of each of us in any real property held by

us or in any personal property that is specifically titled unless

we agree otherwise in writing, including in this Agreement.

• 5.52 California Domestic Partnerships • 180

However, titling errors that are made by third parties, or

incorrect titling that clearly conflicts with the intent of a party

or parties changing or taking title, are subject to correction.

We understand that holding property as community property,

tenants in common, in joint tenancy, or in other forms may

have important legal consequences to each of us. We have

been advised that we should review and understand the

consequences of the form of ownership at any time we take

title to assets or property in any form as joint owners.

5.7.2. Change in Form of Property. We agree that a change

in the form of separate or community property shall not

constitute a change of character of that property. For example,

if an asset is purchased using funds from a party’s separate

property bank account, the asset remains that party’s separate

property.

5.7.3. Transfers of Ownership. Notwithstanding the provisions

of this Agreement, either of us may transfer, convey, devise,

or bequeath any property to the other after the Effective Date.

Neither of us intends by this Agreement to limit or restrict

in any way the right to receive any such transfer, conveyance,

devise, or bequest from the other at such future time. Any

such transfers in excess of $5000 in value must be evidenced

by a written instrument signed by the transferor, except for

clothing, jewelry, or personal effects.

5.7.4. Commingling of Property. The occurrence of transfers

through a community account or other form of community

ownership or the mistaken commingling or otherwise failing

to segregate the separate property or separate income of either

of us by a third party or by either of us shall not change

or constitute a change of character of that property or income,

nor shall it constitute a transmutation of that separate property

or income into community, quasi-community, joint marital, or

other similar type of property, and vice versa, except that the

terms of sections 5.7.1 and 5.7.2 shall prevail.

5.7.5. Use of Community Credit or Payments. If either of us

signs a loan for the benefit of the separate property of the

other, this shall not be the basis lor any claim that such

separate property is transmuted in whole or part to community

property, and each of us waives any community interest that

181 • Agreements Between Domestic Partners §5.52

might otherwise be made in such separate property. Any

payments from community property on a loan, taxes, maintenance,

or improvements for the benefit of separate property

shall not change the character of such property but shall be

subject to reimbursement to the community with reasonable

interest subject to any offsets allowed by law.

6. INCOME

6.1. Earnings During Registered Domestic Partnership. We

agree that all earnings, salaries, commissions, income, stock,

stock options, or other employee benefits (except deferred

compensation as described in section 5.5.4 of this Agreement)

resulting from personal services, skills, and efforts of either

of us shall be and remain the sole and separate property of

the acquiring party. Each of us voluntarily relinquishes all of

his or her interest in all such property of the other; each

acknowledges and understands that earnings, salaries, commis·

sions, income, stock, stock options, or other employee benefits

resulting from personal services, skills, and efforts of the other

party would be our community property in the absence of this

Agreement.

6.2. Compensation for Personal Injuries. All compensation

for personal injuries received by either of us shall be the

separate property of the injured party.

7. TRANSFERS ON DEATH

Each of us shall have the right to make his own respective

distribution of separate property and of his respective share

of the community property as provided for under the laws of

the State of California. We agree to keep each other reasonably

advised of the contents of our respective wills or trust

agreements so that at all times each of us shall know what

each of our expectations under any will or trust agreement

will be. Failure to keep the other party informed shall not be

a basis for declaring this Agreement or any will or trust

agreement invalid, but we do agree from time to time to

exchange information concerning disposition of our respective

estates.

• 5.52 California Domestic Partnerships • 182

8. TAX RETURNS

8.1. Tax Filing. We shall mutually agree whether to file

separate federal and state income tax returns. Each of us shall

cooperate and furnish all necessary documentation to the other

party for the timely preparation and filing of a separate return.

We acknowledge that under Family Code §297.5(g), registered

domestic partners must utilize for state income tax returns the

same filing status as would be used in filing federal income

tax returns, and that at this time it appears that only separate

returns may be filed by registered domestic partners.

9. WAIVER OF MARVIN CLAIMS

We acknowledge that we have been advised by our attorneys

of the principles enunciated by the California Supreme Court

in the case of Marvin v Marvin (1976) 18 C3d 660, which

addressed claims arising by virtue of couples living together

before marriage. We have not entered into any express or

implied agreement as contemplated in that case. In consideration

for all of the other provisions of this Agreement, each

of us expressly relinquishes any rights, claims, or remedies

arising out of our relationship before registration of our

domestic partnership.

10. TESTAMENTARY DOCUMENTS

In the event that either of us executes a will, living trust

agreement, or other estate planning document after the Effective

Date, we agree that any such document shall not be admissible

in evidence in a subsequent proceeding for dissoiution of our

registered domestic partnership, legal separation, or nullity to

determine whether or not any property owned by either of us

is community property or separate property. We have no present

expectation, however, that such proceeding will ever take place.

11. ATTORNEY REPRESENTATION AND FEES

11.1. Attorney Representation. Raymond has retained

::—-:::-:—:-‘ an attorney at law duly licensed to practice in

the State of California, to advise him in connection with this

Agreement. Robert has retained , an attorney at law

183 • Agreements Between Domestic Partners §5.52

duly licensed to practice in the State of California, to advise

him in connection with this Agreement.

11.2. Attorney Fees. Each of us shall pay his own respective

attorney fees and costs incurred in the negotiation and

preparation of this Agreement.

12. MEDIATION OF DISPUTES

If any dispute arises under the terms of this Agreement,

we agree to submit the dispute to mediation. The mediator

shall be selected by the presiding judge of the family law court

in the county where we reside. The costs of the mediation

shall be paid one-half by Robert and one-half by Raymond.

Each of us shall pay his own respective attorney fees incurred

in connection with the mediation.

13. ADDITIONAL PROVISIONS

13.1. Definition of Separation. The term “separation” as used

in this Agreement shall mean that each of us is living separate

and apart from the other with the intent to end our registered

domestic partnership. A statement of separation in writing by

either of us shall be determinative. Neither of us has any present

intention to separate from the other, however, or to end our

registered domestic partnership.

13.2. Entire Agreement. This Agreement is intended to be

our final, complete, and exclusive agreement on the matters

it covers. It supersedes any previous or contemporaneous oral

or written agreements between us with respect to these matters.

There are no representations, warranties, promises, or agreements

with respect to these matters except as set forth in this

Agreement.

13.3. Amendments and Waivers. This Agreement may not

be amended or terminated except by an instrument in writing,

signed by each of us. No failure to exercise and no delay in

exercising any right, remedy, or power under this Agreement

shall operate as a waiver thereof. No modification, alteration,

or waiver of any term, covenant, or condition of this Agreement

shall be valid unless it is in writing and signed by each of

1. We understand that oral promises or promises inferred from

conduct that would modify the terms of this Agreement will

• 5.52 California Domestic Partnerships • 184

not be binding on either of us. We have been advised that

we should obtain the advice of independent counsel before

entering into any future agreement between us.

13.4. Statements or Acts Inconsistent With This Agreement.

We recognize the possibility that we may from time to time

discuss the possibility of altering or amending the terms of

this Agreement (e.g., by acquiring jointly owned property, or

entering into a partnership or joint venture, etc.). It is specifically

agreed that any statements made during those discussions,

whether or not phrased in terms of promises, agreements,

representations, or otherwise, shall not be binding, and shall

be null and void, and of no force and effect, and shall be

considered as discussions only, unless and until they are

reduced to a written agreement signed by both of us. We further

recognize the possibility that each of us may, from time to

time, act in such a way and engage in such conduct as to

lead the other to believe that he or she intends to alter or

amend the terms of this Agreement. It is specifically agreed

that any such act or conduct by either of us shall not be

binding, and shall be null and void, and of no force and effect,

regardless of the inference drawn therefrom by the other party,

in the absence of a written agreement signed by both of us

setting forth our understanding.

13.5. Binding Effect

13.5.1. This Agreement shall inure to the benefit of, be

enforceable by, and be binding on, us and our heirs, personal

representatives, assigns, and any other successors in interest.

The terms of this Agreement shall not benefit any other person

or entity, except as specifically enumerated in this Agreement.

13.5.2. This agreement shall remain in full force and effect

even if the parties marry under the laws of any state of the

United States or under the laws of any other country.

13.6. Severability. If any term, provision, covenant, or condition

of this Agreement is held by a court of competent

jurisdiction to be invalid, void, or unenforceable, the remainder

of the provisions shall remain in full force and effect and shall

in no way be affected, impaired, or invalidated.

13.7. Governing Law. We intend to domicile in California,

185 e Agreements Between Domestic Partners §5.52

and this Agreement shall be governed by and construed in

accordance with the laws of the State of California in all

respects, including but not limited to any liability for the

obligations of the other, and the characterization and division

of property.

13.8. Change of Residence. We have been advised that certain

provisions of this Agreement may be in conflict with the law

of other jurisdictions. If we change our residence from California

to another state, we agree to consult with an attorney or

attorneys in the new jurisdiction to determine if this Agreement

presents any problems in the new jurisdiction. If either of us

is advised that there are sufficient legal issues to constitute

a problem, this Agreement may be reformed to effectuate the

original intent by mandatory mediation upon the request of

either of us.

13.9. Interpretation. This Agreement shall be construed as

a whole, according to its fair meaning, and not in favor of

or against either of us. For example, no provision shall be

construed in favor of the party receiving a benefit nor against

the party responsible for any particular language. Section

headings are used for reference purposes only and should be

ignored in the interpretation of this Agreement.

13.10. Counterparts. This Agreement may be executed in any

number of counterparts, each of which shall constitute one

and the same original.

13.11. Execution of Other Instruments. We agree that we shall

willingly, at the request of the other party or the successors

or assigns of the other party, execute, deliver, and properly

acknowledge whatever additional instruments may be required

to carry out the intention of this Agreement.

13.12. Acknowledgments. Each of us acknowledges that he

(a) is fully informed about the facts relating to the subject matter

of this Agreement and about the rights and liabilities of both

of us; (b) enters into this Agreement voluntarily, free from fraud,

undue influence, coercion, or duress of any kind; (c) has read,

considered, and understands each provision of this Agreement

and its consequences; and (d) believes this Agreement to be

fair, reasonable, and not unconscionable.

• 5.52 California Domestic Partnerships • 186

13.13. Confidentiality. We understand and agree that this

Agreement and each of its terms and the negotiations surrounding

it are confidential and shall not be disclosed by either

of us to any entity or person for any reason at any time without

the prior written consent of the other party, unless required

by law; except that, if necessary, either of us may disclose

the terms of this Agreement to legal, financial, and tax advisors.

Each undersigned party agrees to the terms and conditions

of this Agreement.

.Robert Allen Jones

Date Executed:——–

Raymond Thomas Brown

Date Executed:——–

Approved as to Form and Content:

Attorney for Robert Allen Jones

Attorney for Raymond Thomas Brown

STATE OF CALIFORNIA )

)

) ss

)

COUNTY OF LOS ANGELES )

)

On __ [date]__, before me, the undersigned, a Notary Public,

personally appeared Robert Allen Jones, personally known to

me (or proved to me on the basis of satisfactory evidence)

to be the person whose name is subscribed to the within

instrument, and acknowledged to me that he executed the same

in his authorized capacity, and that by his signature on the

instrument the person, or the entity upon behalf of which the

person acted, executed the instrument.

187 ° Agreements Between Domestic Partners

WITNESS my hand and official seal.

STATE OF CALIFORNIA )

)

)

)

COUNTY OF LOS ANGELES )

)

Notary Public

• 5.52

On __ [date]__, before me, the undersigned, a Notary Public,

personally appeared Raymond Thomas Brown, personally

known to me (or proved to me on the basis of satisfactory

evidence) to be the person whose name is subscribed to the

within instrument, and acknowledged to me that he executed

the same in his authorized capacity, and that by his signature

on ttie instrument the person, or the entity upon behalf of

which the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public

[Attach Exhibits, e.g., of each party’s separate assets and liabilities,

including liabilities for which community may be liable]

Comment: This form is an illustrative version of a complete postregistration

domestic partnership agreement. It is intended to illustrate

the types of matters that parties to an ongoing registered domestic

partnership (who do not intend to separate or dissolve the partnership)

may wish to address if they desire to clarify their rights and responsibilities

with respect to property and other matters during the existence

of their domestic partnership. For additional clauses that may be

utilized in a postregistration agreement, see §§5.41-5.49. On the

nature of postregistration agreements and the level of disclosure

required in connection with drafting them, see §§5.19, 5.21.

It is important for the attorney to keep in mind that there are

important potential income, gift, and estate tax consequences that

may attend a property agreement in the domestic partnership context,

because the rules applicable in marital situations do not apply (see

• 5.53 California Domestic Partnerships ., 188

chap 15). Family law and estate planning attorneys are urged to

consult with tax counsel and accountants, as needed, in connection

with the drafting of an agreement governing the rights of domestic

partners in an ongoing relationship.

For a general discussion of postregistration and similar agreements,

respectively, see §§5.19-5.25, and California Marital Settlement and

Other Family Law Agreements, chap 18 (3d ed Cal CEB 2005).

• 5.53 3. Form: Simple Domestic Partnership

Dissolution Agreement-Partners Waive

Support and Own Primarily Separate

Property

Simple Domestic Partnership Dissolution Agreement-Partners

Waive Support and Own Primarily Separate Property

1. Identification of Parties. This agreement is made between

Thomas M. Black, hereafter referred to as “Thomas,” and Patrick

1. Green, hereafter referred to as “Patrick.”
2. Date of Domestic Partnership Registration. The parties

were registered by the California Secretary of State’s Office

as domestic partners on __ [date]__, 2003, and ever since then

have been and are registered domestic partners.

3. Date of Separation. The parties separated from one another

and thereby made a complete and final break in their personal

relationship as of __ [date]__, 2005. As used in this Agreement,

the “date of separation” refers to this date.

4. Irreconcilable Differences. Irreconcilable differences have

led to the irremediable breakdown of the registered domestic

partnership, and there is no possibility of saving the domestic

partnership through counseling or other means.

5. Minor Children of the Registered Domestic Partnership.

There is one minor child of the parties’ registered domestic

partnership: Jane Marie Green-Black, born May 10, 2001, and

adopted jointly by the parties on __ [date]__, 2004, by order

of the California Superior Court, County of __ [name of

county]__, in action number __ [number]__. This child is not

related by blood to either Thomas or Patrick.

189 • Agreements Between Domestic Partners §5.53

6. Dissolution Proceedings. A petition for dissolution of the

registered domestic partnership of the parties was filed on

__ [date]__, 2005, in the Superior Court of California, County

of __ [name of county]__, case number __ [number]__, and that

action is currently pending.

7. Purpose of Agreement. Except as otherwise provided in

this agreement, its purpose is to make a final and complete

settlement of all rights and obligations between the parties,

including all property rights and all rights and obligations

concerning child custody and visitation, child support, and

“spousal” (partner) support.

8. Child Custody. Thomas and Patrick will have joint legal

custody of their minor child, Jane Marie Green-Black. Patrick

will have sole physical custody of the minor child, subject to

visitation by Thomas as set forth in Paragraph 9 of this

Agreement.

9. Visitation. Thomas will have reasonable rights of visitation

with the minor child.

10. Child Support. Thomas will pay to Patrick for child

support for Jane Marie Green-Black the sum of $500 per month,

an amount that equals what is required under the California

statewide uniform guideline, payable in advance, on or before

the fifth day of each month, commencing __ [date]__, 2005,

and continuing until the first to occur of the following events:

(a) The child attains age 19, or has attained age 18 and

either is not a full-time high school student or is self-supporting;

(b) The child dies;

(c) The child enters into a valid marriage, is on active duty

with any of the armed forces of the United States of America,

receives a declaration of emancipation under California law,

or otherwise becomes emancipated by leaving home and

becoming self-supporting;

(d) Patrick dies and Thomas assumes custody of the child;

or

• 5.53 California Domestic Partnerships • 1 90

(e) Further court order.

11. Maintenance of Health Insurance for Child. Thomas will

maintain coverage for the minor child under the medical and

dental insurance currently provided through his employment.

To facilitate the use of such coverage for the child, both parties

will cooperate fully and in a timely manner, including but not

limited to obtaining and providing all necessary insurance cards

and claim forms, completing and submitting all necessary

documents, and delivering all insurance payments. For purposes

of duration and modification, this provision will be

deemed part of the child support orders made by the court

in the parties’ dissolution action. If such insurance becomes

unavailable to Thomas on substantially the same terms as at

present, he will provide similar coverage, if any, available to

him at no cost or reasonable cost. This provision is intended,

when ordered by the court, to be a Qualified Medical Child

Support Order, as that term is used in 29 United States Code

• 1169. The names and last-known mailing addresses of the

plan participant and each child covered by this order are

Thomas M. Black, 1655 Fourth Street, Clearview, CA 95603, and

Jane Marie Green-Black, 36 Parker Place, Clearview, CA 95603.

The type of coverage to be provided is the group plan Coverage

A provided through Thomas’s employment. The period to which

this order applies is the period during which Thomas’s child

support obligation for the child continues.

12. Payment of Health Care Expenses Not Covered by

Insurance. Patrick will pay all medical, dental, orthodontic,

optical, psychiatric, psychological, and other health care expenses

of the minor child to the extent not covered by

insurance. For purposes of duration and modification, this

provision will be deemed part of the child support orders made

by the court in the parties’ dissolution action.

13. Waivers of “Spousal” Support Between Partners. Each

party hereby waives and releases all rights and claims to receive

“spousal” support from the other at any time, whether characterized

as “spousal support,” “domestic partner support,” or

otherwise. As used in this Agreement, “spousal support” and

“domestic partner support” refer to support under Family Code

• §3580, 3590-3604, 3650-3693, 4300-4360, 4500-4508, and like

provisions of California law. No court will have jurisdiction to

191 • Agreements Between Domestic Partners §5.53

order support payable by either party to the other at any time,

regardless of any circumstances that may arise. This paragraph

does not apply with respect to child support and maintenance

of health insurance for the parties’ minor child.

14. Identification and Confirmation of Separate Property. The

following are the separate assets of Thomas, to be confirmed

to him as his separate property. Patrick disclaims and waives

any and all rights and interest in each asset:

(a) Any and all interest in Public Employees’ Retirement

• System, account number –7720;

(b) Any and all beneficial interest standing in Thomas’s name

in the estate of Alice Louise Black, pending in Westover County

Superior Court, action number 31762-2, including but not

limited to a one-third share of the residue of the estate.

The following are the separate assets of Patrick, to be

confirmed to him as his separate property. Thomas disclaims

and waives any and all rights and interest in each asset:

(a) Any and all interest in State Teachers’ Retirement System,

account number ***-***-4121;

(b) 1991 Volvo 164E automobile, California license number

886DDF.

15. Warranty of Full Disclosure of Existence of Assets. Each

party warrants to the other that he does not have any knowledge

of any community assets other than those disclosed and listed

in this agreement.

16. Remedy for Breach. If either party has any knowledge

of any community asset other than those disclosed and listed

in this agreement, that warrantor will transfer or pay to the

warrantee, at the warrantee’s election, one of the following:

(a) If the asset is reasonably susceptible to division, a portion

of the asset equal to the warrantee’s interest in it;

(b) The fair market value of the warrantee’s interest in the

asset on the effective date of this agreement, plus interest at

• 5.53 California Domestic Partnerships • 192

the rate of 10% per annum from the effective date to the date

of payment; or

(c) The fair market value of the warrantee’s interest in the

asset on the date on which the warrantee discovers the

existence of the asset, plus interest at the rate of 10% per

annum from the discovery date to the date of payment.

This provision will not be deemed to impair the availability,

in a court of competent jurisdiction, of any other remedy arising

from nondisclosure of community assets.

17. Warranty of Full Disclosure of Existence of Liabilities.

Each party warrants to the other that he neither has incurred

nor will incur, on or before the effective date of this agreement,

any liability not disclosed and listed in this agreement on which

the other is or may become personally liable or that could

be enforced at any time against an asset held or to be received

under this agreement by the other party.

18. Remedy for Breach. If either party has incurred or does

incur, on or before the effective date of this agreement, any

liability not disclosed and listed in this agreement on which

the other is or may become personally liable or that could

be enforced at any time against an asset held or to be received

under this agreement by the other party, that warrantor will

fully indemnify the other with respect to the obligation,

including but not limited to any and all liability on the

obligation, attorney fees, and related costs. This provision will

not be deemed to impair the availability, in a court of competent

jurisdiction, of any other remedy arising from nondisclosure

of such liabilities.

19. Warranty Regarding Undisclosed Gifts or Transfers. Each

party warrants to the other that he has made no undisclosed

gifts or transfers for less than adequate consideration of any

community assets with fair market values over $250 without

the other party’s knowledge.

20. Remedy tor Breach. If either party has made any

undisclosed gift or transfer for less than adequate consideration

of any community asset with a fair market value over $250

without the other party’s knowledge, that warrantor will pay

to the warrantee a sum equal to half of the fair market value

193 • Agreements Between Domestic Partners §5.53

of the asset transferred, with the fair market value to be

determined, at the warrantee’s election, as of either (a) the

effective date of this agreement or (b) the date on which the

warrantee discovers the transfer, less any appreciation in the

asset’s value attributable solely to acts of the transferee(s) and

successor(s). The warrantor will further pay to the warrantee

interest at the rate of 10% per annum from the date elected

for determination of the fair market value of the asset to the

date of payment. This provision will not be deemed to impair

the availability, in a court of competent jurisdiction, of any

other remedy arising from undisclosed gifts or transfers for

less than adequate consideration.

21. Warranty Regarding After-Acquired Liabilities. Each party

warrants to the other that he will not incur, after the effective

date of this agreement, any liability on which the other will

be or may become personally liable or that could be enforced

against an asset held by the other party.

22. Remedy for Breach. If either party incurs, after the

effective date of this agreement, any liability on which the other

will be or may become personally liable or that could be

enforced against an asset held by the other party, that warrantor

will indemnify the other for any liability on the obligation,

attorney fees, and related costs.

23. Identification and Division of Community Property. Thomas

will be awarded and assigned, as his share of the community

property, the following assets:

(a) All household furniture, furnishings, and appliances at

the residence at 1655 Fourth Street, Clearview, California 95603.

(b) Balance on deposit in Thomas’s name with Acme Bank,

1500 University Avenue, Clearview, California, account number

“*’*-27312;

Patrick transfers to Thomas as his separate property all of

his rights and interest in each asset.

Patrick will be awarded and assigned, as his share of the

community property, the following assets:

• 5.53 California Domestic Partnerships “‘ 194

(a) All household furniture, furnishings, and appliances at

the residence at 36 Parker Place, Clearview, California 95603.

(b) Balance on deposit in Patrick’s name with Bank of the

Valley, 1403 North Ridge St., Clearview, California, account

number ****-3456.

Thomas transfers to Patrick as his separate property all of

his rights and interest in each asset.

The parties agree and acknowledge that they have no

community liabilities.

24. Payment of Attorney Fees and Costs. Each party will

bear all of his own respective attorney fees and costs incurred

in connection with the negotiation, preparation, and execution

of this agreement and the pending proceeding for dissolution

of the registered domestic partnership.

25. Tax Returns. Thomas and Patrick agree to file separate

income tax returns with the State of California and the Internal

Revenue Service for the current tax year, to utilize the same

tax preparer, and to provide one another with a specimen copy

of their respective returns. They further agree to separately

pay for the preparation of their own respective returns. Should

either party fail to cooperate fully, or in a timely manner, in

the filing of income tax returns or in providing information

to each other regarding income and deductions, that party will

indemnify the other for any increased tax liability, attorney and

accountant fees, and related costs resulting from that failure.

26. Allocation of Tax Refunds or Amounts Owing. The parties

acknowledge that each has filed separate state and federal

income tax returns throughout the period of their registered

domestic partnership. The parties agree that should any refund

be paid to either of them after the execution of this Agreement,

or any liability for underpayment of income taxes be assessed

on prior income tax returns or for returns filed hereafter for

the current tax year, any refund shall be the sole and separate

property of the recipient, and any liability shall be the sole

liability of the party against whom it was assessed. In the event

that the taxing authorities assess a liability against both parties

for the same income in the current year or for prior years that

195 • Agreements Between Domestic Partners §5.53

occurred during the registered domestic partnership, the parties

agree to equally share the payment of that liability.

27. Release of Liabilities and Claims. Except as otherwise

provided in this Agreement, each party hereby releases the

other from all interpartner obligations, whether incurred before

or after the effective date of this Agreement, and all claims

to the property of the other. This release extends to all claims

based on rights that have accrued before the domestic

partnership was registered, including but not limited to property

and support claims. The parties have considered such claims

in this agreement.

28. Waiver of Rights on Death of Other Party. Each party

hereby waives the right to receive any property or rights

whatsoever on the death of the other, unless such right is

created or affirmed by the other under a. will or other written

document executed after the effective date of this agreement.

Each party believes that he has received a fair and reasonable

disclosure of the property and financial obligations of the other

party. Each party’s waiver is intended to be an enforceable

waiver of that party’s rights under Probate Code §§140-147.

The rights waived include, but are not limited to, rights to

any of the following:

(a) Property that would pass from the decedent by intestate

succession;

(b) Property that would pass from the decedent by testamentary

disposition;

(c) A probate homestead;

(d) The setting aside of exempt property;

(e) A family allowance;

(f) The setting aside of an estate;

(g) An election to take community property against the

decedent’s will;

• 5.53 California Domestic Partnerships “‘ 196

(h) The statutory share of an omitted registered domestic

partner;

(i) An appointment as executor or administrator of the

decedent’s estate, except as the nominee of a third party legally

entitled to make such a nomination;

(j) Property that would pass from the decedent by nonprobate

transfer, such as the survivorship interest under a joint tenancy,

a Totten trust account, or a payable-on-death account; and

(k) Proceeds as beneficiary of any type of insurance policy.

29. Entire Agreement. This agreement contains the entire

agreement of the parties on these matters, superseding any

previous agreement between them.

30. Modification by Subsequent Agreement. This agreement

may be modified by subsequent agreement of the parties only

by an instrument in writing signed by both of them, an oral

agreement to the extent that the parties execute it, or an in-court

oral agreement made into an order by a court of competent

jurisdiction.

31. Attorney Fees in Action to Enforce or Modify Agreement.

The prevailing party in any action or proceeding to enforce or

modify any provision of this agreement, or any corresponding

provision of a subsequent judgment into which the provision is

merged, will be awarded reasonable attorney fees and costs. For

the moving party to be deemed the prevailing party for purposes

of this provision, at least 10 days before the filing of any motion

he must provide written notice to the other party specifying the

alleged breach or default, if capable of being cured, or the

modification requested. The other party must then be allowed

to avoid implementation of this provision by curing the breach

or default specified or executing an agreement for the modification

requested during the 10-day period.

32. Effective Date. The effective date of this agreement will

be the date of its execution by the second of the parties to

do so.

33. Court Action. If a judgment of dissolution of registered

domestic partnership is obtained by either party, the original

197 • Agreements Between Domestic Partners §5.53

of this agreement will be attached to the stipulated judgment.

The court will be requested to do the following:

(a) Approve the entire agreement as fair and equitable;

(b) Order the parties to comply with all of its executory

provisions;

(c) Merge the prov1s1ons relating to child custody and

visitation, child support, “spousal” support, future acts with

respect to property division, and income tax returns, and only

those provisions, into the judgment; and

(d) Incorporate the remainder of the agreement in the

judgment for the sole purpose of identification.

34. Legal Representation. Each party has been represented

in the negotiations and in preparation of this agreement by

an independent attorney of his own choosing: Thomas by

__ [name of attorney]__, and Patrick by __ [name of attorney]__.

Each party has carefully read this agreement in its entirety,

and his attorney has fully explained its contents and legal effect.

The foregoing is agreed to by:

Date: ___ _

Thomas M. Black

Date: ___ _

Patrick A. Green

Approved as conforming to the agreement of the parties:

Date: ___ _

Attorney for Thomas M. Black

Date: ___ _

Attorney for Patrick A. Green

[Include Notarial Acknowledgements for Parties’ Signatures]

Comment: This form is an illustrative version of a complete domestic

partnership dissolution agreement. It is intended to illustrate

the types of matters that parties may wish to address in settling

• 5.53 California Domestic Partnerships • 198

their rights to property, child custody, visitation, child and “spousal’

support, and attorney fees in anticipation of dissolving their registered

domestic partnership or seeking a legal separation. See generally

Fam C §§299, 3580. The form is representative of a “simple” agreement,

with the parties having few assets (and primarily separate

property assets) and agreeing to waive any right either may have

to support from the other. See Fam C §§3580, 3591.

In the fact pattern illustrated, the parties have a minor child (by

adoption, in this version) and the agreement makes provision for

that child’s custody, visitation, and support. Note that if the support

_ amount agreed to is less than what would be required under the

statewide uniform support guidelines, the agreement must recite all

of the factors listed in Fam C §4065(a):

The parties are fully informed of their rights;

The support amount (which will be implemented as a court

order) is being agreed to without coercion or duress;

The agreement is in the best interest of the children involved;

The needs of the children will be adequately met by the stipulated

amount; and

The right to support has not been assigned to the county (see

Welt & I C §1477) and no public assistance application is

pending.

The agreement is not required to be notarized, as such, but notarization

permits the parties to record it, and notarization is required

if the agreement is submitted to the court after one party defaults

in the proceeding. See Fam C §§ 1502, 2338.5.

It is important for the attorney to keep in mind that there are

important potential income, gift, and estate tax consequences in a

division of property or provision of support between domestic partners,

because the rules applicable in marital situations do not apply

(see chap 15). Keep in mind that IRC §1041, in particular, is inapplicable,

and that rules have not yet been promulgated by the IRS

or California taxing authorities to handle California domestic partnerships.

Family law and estate planning attorneys are urged to consult

with tax counsel and accountants, as needed, in connection with

the drafting of an agreement governing the rights of domestic partners

in terminating their partnership.

199 • Agreements Between Domestic Partners §5.53

On further considerations in preparing a domestic partnership dissolution

agreement, see §§5.26-5.40. For a general discussion of

marital settlement agreements, see California Marital Settlement and

Other Family Law Agreements (3d ed Cal CEB 2005).

chapter-5-agreements-between-domestic-partners