Originally published on Forbes.com July 21st, 2014
I’ve known some gay couples that refused to accept the half loaf of domestic partnership that some states, including New Jersey, until recently, put forth as an alternative to marriage equality. The record in the New Jersey Tax Court in the case of the Estate of Marie P. Frappoli does not indicate what the reason was that influenced Ms. Frappolli and Dorothea Angelou to not register as domestic partners, but you can’t rule that out.
Although their relationship satisfied the statutory criteria for a domestic partnership, Ms. Frappolli and Ms. Angelou did not execute and file an Affidavit of Domestic Partnership with the local registrar. Nor did the couple register as domestic partners in any other jurisdiction that recognizes domestic partnerships or similar relationships.
Not registering as domestic partners proved to be an expensive decision as Ms. Frappoli’s estate was assessed nearly $180,000 in transfer taxes that would have been avoided had Ms. Angelou been formally recognized as a domestic partner.
The house that the couple had shared had been purchased by Ms. Frappoli in her own name in 1966. In 1993, it was transferred to herself and Ms. Angelou as joint tenants with rights of survivorship.
The Director increased the value of Ms. Angelou’s inheritance by considering her inherited interest in the couple’s residence to be the full value of the property pursuant to N.J.S.A. 54:34-1f. That statute provides that the full value of property jointly held by a decedent and a beneficiary must be included in the taxable estate. In light of the Director’s final determination, the transfer inheritance tax liability of the Estate was determined to be $178,845.57.
The Estate had an argument.
The Estate concedes that Ms. Frappolli and Ms. Angelou did not execute and file an Affidavit of Domestic Partnership. It argues, however, that the couple substantially complied with the statute and that the execution and filing of an Affidavit of Domestic Partnership is, in effect, a formality which can be overlooked in light of the couple’s long-term relationship.
But the New Jersey Tax Court was not buying it.
The plain language of the statute negates the proposition that the statute’s protections can be applied to a couple who has not executed and filed an Affidavit of Domestic Partnership, even if they otherwise satisfy the statutory requirements for a domestic partnership.
It is quite plain that the Legislature authorized limited circumstances – emergency medical situations – in which a couple may be treated like domestic partners, even though they have not executed and filed an Affidavit of Domestic Partnership. The facts of this case do not fall within the exception to the Affidavit requirement. This commonsense provision represents a rational legislative response to challenges a couple may face when confronted with a medical emergency. No similar exigencies are present when a couple neglects to make sufficient estate planning decisions over a period of years during which they might otherwise have obtained a registered domestic partnership.
The estate also had an estoppel argument that went nowhere.
Nor is the court convinced by the Estate’s argument that the Director should be estopped from treating Ms. Angelou as a Class D beneficiary because the Division of Taxation website, on an unspecified date, discussed inheritance tax implications for domestic partners, but did not mention the need for domestic partners to execute and file an Affidavit of Domestic Partnership.
The only evidence in the motion record on this point is a certification from Joseph P. Hurley, Jr., Esq., a friend of Ms. Frappolli and Ms. Angelou. Mr. Hurley visited the Division’s website after Ms. Frappolli’s death.
The relevance of Mr. Hurley’s belief is not explained in the record. He is not a beneficiary of the Estate, and does not certify that he represents the Estate or Ms. Angelou. He merely states that as a friend of Ms. Angelou he assisted in filing the inheritance tax return. In addition, Mr. Hurley’s reliance on the website to assist in completing a tax return was not reasonable. Surely, an attorney with Mr. Hurley’s years of experience, including his 22 years of experience in representing the Delaware Division of Taxation, would understand that competent representation in tax matters requires counsel to consult statutes and legal precedents when completing an inheritance tax return. Mr. Hurley does not reference his review of any statute, regulation, Division of Taxation bulletin, instruction or other written materials. It is difficult for this court to accept the proposition that an attorney with longtime experience representing an out-of-State taxing authority would credibly argue to this court that it was reasonable for him to draw conclusions about New Jersey tax law and provide assistance in completing an inheritance tax return based solely on his review of a website.
You know how it goes. Like Abraham Lincoln often said, many of the quotations on the internet are inaccurate.
The Windsor decision, which declared the Defense of Marriage Act unconstitutional, had an effect in New Jersey. The New Jersey Supreme Court had previously ruled in Lewis V Harris that the state had to provide same sex couples with the same rights and benefits as married couples. That was what Ms. Frappoli’s estate was hoping for and would have received if they had registered. In Garden State Equality v Dow, the Court ruled that thanks to Windsor, domestic partnerships, which would not be recognized as marriages under federal law were no longer enough. (Prior to Windsor even a state-recognized same-sex marriage would not be recognized under federal law.)
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