Our good friend Emily Bouchard has a piece in Forbes today on estate planning for couples.  Here’s an excerpt:

“How married couples and domestic partners structure their estate plans can make the difference between whether a family stays connected or gets blown apart after the first spouse or partner passes away. Things can be even more complicated and volatile in blended families – when there are step and half siblings and stepparents in the mix.”

Read the full article here.

Social media accounts like Twitter and Facebook are beginning to take their place in the pantheon of highly contested properties for divorcing couples in California. As we all know, couples dissolving their marriages divide a wide range of assets already – everything from cars and homes to stock options, businesses and artwork. The unavoidable fact is that social media accounts are property, and as the value of such property increases, so too will the litigation surrounding them.

In California, absent a prenup, any asset acquired during marriage is considered community property and must be divided evenly between divorcing spouses. Any property acquired before marriage, after the date of separation, or through gift or bequest (meaning inheritance) is considered separate property and immune from division. There are of course exceptions to these rules, but that’s a good overview.

By this definition, social media accounts created during marriage will almost certainly be characterized as community property. Accounts created prior to marriage may also be defined as community property in part, depending on whether the value increased during the marriage, and whether the personal effort of either spouse contributed to that increase (which of course it would have).

The terms of service of the various social media companies also play a role in defining whether an account is considered property and subject to division. Twitter, for example, defines the content which users create as the property of the user. Twitter sees the content as separate from the account services themselves which Twitter provides. Arguably, the right to access the account and manipulate the content is a kind of property as well.

The content within the accounts, and the right to access the accounts both increasingly have economic value, and couples understandably want to add all value to the marital asset division calculus.

The big hurdle, of course, is valuing the accounts. Valuation has always been more of an art than a science. This is even more the case when it comes to untested intellectual property assets like social media accounts. Some parties are looking to the actual business flowing from the accounts as a benchmark for determining value. Others are more inclined to take a multiple of earnings – the challenge being that earnings are just beginning to manifest for these assets.

This area of property division is new, but it’s heating up. Asset division provides many challenges to divorcing couples. Careful attention needs to be paid to properly value and divide IP, particularly this distinctly tricky type of IP. A person seeking to divide a social media account, just like any asset, is well advised to seek the counsel of an experienced California family law attorney.

Our office practices family law in San Francisco and the Bay Area. As a result, we work on the forefront of many of these issues. If you have questions, feel free to give us a call.

The issue of whether marriage rights should be granted equally to everyone is, inexplicably, an on-going debate around the country.  Complicating the conversation is the fact laws are applied differently from state to state, and that federal and state law conflict at various points.  As of the writing of this post, lesbian and gay couples who are legally married under state laws are nonetheless denied federal benefits because of the so-called “Defense of Marriage Act” (DOMA).

For this reason, it is important to understand which rights marriage traditionally confers, and how these rights differ between state law and federal law.  This knowledge can allow both gay and unmarried heterosexual couples to protect their families.

Many gay and lesbian couples attempt to use premarital agreements and estate planning methodologies to overcome some of the federal inequities.   This can be effective to an extent, but the use of wills, powers of attorney, advanced healthcare directives, and cohabitation agreements simply cannot resolve all of the problems created by DOMA.   For instance, these strategies do nothing for lesbian and gay couples who wish to keep their non-citizen spouse or partner in the U.S. and avoid deportation.  The estate planning alternatives are little comfort to a family torn apart my immigration policy.

The following is a highlight of many of the Rights and Responsibilities afforded to California married couples and California Registered Domestic Partners (RDPs)
1. Joint parental rights of children if born during the marriage or RDP
2. Joint adoption
3. Joint Insurance Plans
4. Status as “next-of-kin” for hospital visits and medical decisions
5. Bereavement or sick leave to care for partner or children
6. Right to make a decision about the disposal of loved ones remains
7. Crime victims recovery benefits
8. Standing to sue for wrongful death or for “loss of consortium”
9. Wrongful death benefits for surviving partner and children
10. Welfare and public assistance
11. Domestic violence protection orders
12. Judicial protections and immunity—testimonial privilege in court proceedings
13. Automatic inheritance in the absence of a will (or in the event that a will is invalidated)
14. Filing of joint state income tax returns
15. Testimonial privilege in state court proceedings
16. Spousal protection from property tax increase upon the death of a co-owner spouse

Here is a list of some of the most important Federal Rights & Responsibilities of Marriage, which are denied to same-sex couples because of DOMA.
1. Immigration and residency for spouses from other countries
2. Crime victims recovery benefits
3. Judicial protections and immunity in federal court
4. Joint filing of bankruptcy petitions
5. Spousal veterans benefits
6. Social Security benefits
7. Medicare benefits
8. Joint filing of federal tax returns
9. Income tax deductions, credits, rates exemption and estimates
10. Deferred Compensation for pension and IRAs
11. Estate and gift tax benefits  (there are substantial estate tax benefits to marriage)
12. Medical care for survivors and dependents of certain veterans

Our office regularly advises clients on how to protect themselves and their families, whether or not they decide to marry.  If you have any questions about your rights in the light of DOMA or other federal statues, you should contact a qualified family attorney.  We’re happy to help.

Many people fear that drafting a prenup means that they are admitting their marriage will end before it has even begun. The fact is (and please forgive my being a trifle morbid here) that all marriages end – if not in divorce, then in death. For this reason, the California state legislature (and every other state in the Union for that matter) has helpfully crafted a default (read “generic”) plan for you in case you die without an estate plan, or divorce without a prenup. So the question you should really be asking yourself, is not whether a prenup means your marriage will end, but whether the government’s generic plan is the right plan for you.

A prenup, like an estate plan, is nothing more than a document allowing you to take control over your property. Most people believe they are better suited to decide how their property should pass at death than the government, and the same logic often applies to divorce. Many couples also find that defining their expectations before marriage helps minimize conflict later.

If you have a prenup or are planning to have one, then you have already determined that the cookie-cutter government plan is not right for you and your family. Chances are that the government plan for how your property should be divided at death will not meet your standards either.

So with those preliminary points out of the way, let’s turn to the meat of this posting: the intersection of the two documents.

It is important for married couples and registered domestic partners to make sure that their estate plans and their premarital agreements are not in conflict. It is not uncommon for estate planning attorneys who do not have experience with family law to narrowly focus on issues such as minimizing “death taxes” at the exclusion of other previous intentions of their clients. A common mistake is for an estate planning attorney to re-title property for the sake of the estate plan, but in contravention of the premarital agreement. This can have the unfortunate effect of negating the premarital agreement entirely, and you can imagine the negative impact that might have.

Another example is that many clients on a second marriage want to ensure that their property will pass to their children from the first marriage, and not to the new spouse’s family. This is possible, but the estate plan and the prenup need to work in conjunction with one another to be effective. One document cannot do the job if the other is not in agreement.

For these reasons, it is extremely important that your attorney have an understanding of both estate planning and family law. The law around property varies greatly depending on the context and circumstances. Failure to have an attorney review your unique situation from a global perspective can have serious unintended and very expensive consequences.

Is entering a California “registered domestic partnership” the right move for you and your partner?  More and more gay and lesbian couples are finding that the law relating to their relationship is confusing, and potentially very expensive.

Many couples who have been together for years, and who registered as domestic partners, are surprised when they later end their relationship and discover they are subject to the special rules surrounding “community property.”   In other words, they discover that half of their earnings during the domestic partnership are deemed to belong to their partner, and that they may have to pay spousal support (sometimes called alimony).   This is all because California law now extends the same burdens and benefits of marriage to registered domestic partners.

Further complicating matters for lesbian and gay couples is the fact that while some states recognize California domestic partnership, many do not.  This becomes a problem when gay and lesbian couples move out of California and then wish to “divorce” in their new state.  Many are forced to move back to California for the sole purpose of finalizing their divorce.

Gay and lesbian couples in California also face the reality of a complicated and confusing tax filing process.  In California, domestic partners must file their returns as “married.”  Because of the so-called “Defense of Marriage Act,” however, the IRS and federal government refuse to acknowledge either gay marriage, or domestic partnerships for tax purposes.  Thus, gay and lesbian couples must file separate individual returns for federal taxes, and then complete a mock “married” federal return in order to get the proper numbers to then go back and place on their California state returns.  This quickly becomes extremely complicated.

More and more gay and lesbian couples are using Preregistration Property Agreements (“prenups”) to avoid many of these community property and alimony issues later on.  Other couples are choosing to not register at all, and instead are making sure that they have the appropriate documents such as wills, trusts, powers of attorneys and healthcare directives in place to protect themselves and create a quasi-marital relationship.

There is no right answer to how any couple should memorialize their relationship.  Understanding the legal effect of their decisions however, can save time, frustration, and potentially money down the line.