Register as Domestic Partners in California to Expedite Escrow

23 Apr Register as Domestic Partners in California to Expedite Escrow

Across California, as we process escrows for same-sex buyers and non-married couples over the age of 62 who are buying permanent residences or vacation homes, the topic of registered domestic partnerships arises. It’s important when choosing how to hold title to know how California law defines a Domestic Partnership, as outlined below. Buyers who meet these qualifications must register with the State of California to receive their Rights of Survivorship. Any other Domestic Partnership registration or out-of-state same-sex marriage will not be accepted by the State and can delay the escrow process.

California law states that in order to hold title as Community Property with or without  Rights of Survivorship you must be either Husband and Wife or Registered Domestic Partners. Why are Buyers interested in Rights of Survivorship? Rights of Survivorship defines co-owners as having equal possession and interest in the property, so if, for example, one of the partners were to pass away, the property simply transfers to the surviving partner.

Sometimes, same-sex couples, as well as opposite-sex couples who are not married and over 62, will begin the escrow process assuming that because they’re registered as Domestic Partners in their home state (or perhaps were married in Canada) that they qualify as Domestic Partners in California. This is false and can result in the buyers having to vest title as single persons.  It may be an option for the buyers to go through the process of registering as Domestic Partners with the State during escrow in order to hold title as community property, but this can run the risk of delaying escrow as there is time and hassle associated with appearing in court to file the appropriate papers, etc.  If buyers are aware of the facts surrounding Domestic Partnership ahead of time, they can register on their own time and save everyone involved stress and delays in order to take title as community property.

By clarifying California’s Domestic Partnership rules and regulations to your Buyers, you will help them create a lasting financial arrangement that properly and legally reflects their relationship.

To be registered Domestic Partners in California, both persons must:

• Have a common residence;
• Agree to be responsible for each other’s basic living expenses;
• Neither be married, nor a member of another domestic partnership;
• Not be related by blood;
• Be at least 18;
• a: Be members of the same sex, or
  b: If at least one is over age 62, be of opposite genders;
• File a Declaration of Domestic Partnership with the California Secretary of State wherein each partner must consent to California court jurisdiction if the couple seeks a dissolution or nullity of their relationship.

It’s also important to consider certain clarifications to these stipulations:

• Legislators limited domestic partnership for opposite-sex couples to only those where one partner is over aged 62 in order to protect benefits like Social Security.
• To be eligible for the rights and responsibilities of domestic partnership, under California law you must be registered with California’s statewide registry. The state of California does not recognize same-sex marriages performed in Canada or Domestic Partnerships registered in other states in the U.S., nor does it offer the benefits to couples registered as domestic partners by cities within California.

It is important to keep in mind that there are potential tax and other legal implications to how you take title in the purchase of property.  The implications are generally unique to the specific situation at hand and we at CV Escrow advise buyers and sellers to consult with their CPA and/or attorney for advice pertinent to their specific situation.