Category Archives: Property Division

Q&A: Am I Responsible for my Domestic Partner’s Medical Bills?

iStock_000001166476SmallQuestion: I am curious about financial liability with domestic partnership…i.e., if one of us should fall ill and, in the process, incur monumental medical bills above and beyond what Medicare or Supplemental insurance will pay, is the other partner liable for the bill should the ill partner die?

Answer: The answer to this question depends on the type of domestic partnership registration and the law that applies to the claim or debt.

There is generally no joint liability for these types of debts in a local or employer-based domestic partnership. However, under some city registrations, such as San Francisco, domestic partners are jointly liable for their “basic living expenses” – defined as the cost of basic food and shelter and “expenses which are paid at least in part by a program or benefit for which the partner qualified because of the domestic partnership.” This could arguably include medical expenses if they were paid in part by a health insurance program, which the sick partner qualified for as a result of the domestic partnership. A creditor, such as a hospital or insurance company could make a claim as a third-party beneficiary against the surviving partner based upon the city registration. However, it’s my understanding that this is rarely done.

If the partners are in a marriage-equivalent state registration (such as a California domestic partnership or a New Jersey civil union), then they are subject to most of the same state laws as married couples, including those laws affecting property rights and responsibilities for debts to third parties. Debts governed by state law will extend to the surviving domestic partner, just like they would with a married spouse.

If the claim is based on federal law, such as a Medicaid reimbursement, the domestic partnership won’t likely create joint liability since the federal government doesn’t recognize couples in civil unions or domestic partnerships as “married.” But, that rule could change in the future.

If you haven’t yet taken the plunge with your partner, and you’re really concerned about his or her debts and the potential for joint liability as a result of your union, it’s probably best not to get married or register anywhere.

For more Nolo information on same-sex marriage, domestic partnerships and registrations, click here.

You can find comprehensive coverage of these and other same-sex legal issues in our Same-Sex Marriage and Domestic Partnership titles.

Divorced Madoff Victim Wants His Money Back – From His Ex

A New York attorney, Steven Simkin, settled his divorce in 2006 by dividing property and assets equally with his wife, Laura Blank. At the time, the couple had a large sum invested in Bernie Madoff’s now-infamous Ponzi scheme. Mr. Simkin opted to leave his money there; his wife preferred cash, so he took $6.6 million in cash out of the Madoff account and paid it to her. She also got one of their houses and half of the rest of their assets.

The divorce had been final for more than two years when the Madoff fund collapsed, and Mr. Simkin immediately went to his wife and asked for a do-over on the distribution of assets. She refused. He took her to court, arguing the theory of “mutual mistake.” That theory says that when both parties to a contract are laboring under the same erroneous belief–for example, that the value of an item is much greater than it actually is–the contract can be cancelled. Mr. Simkin argues that because both he and his then-wife were mistaken in their belief that they had money in the Madoff account, their settlement agreement should be voided. Ms. Blank’s rejoinder is that there was no mistake and that the money was there at the time, as evidenced by Mr. Simkins’ ability to take out $6.6 million to pay her for her share. She says the only mistake was Mr. Simkins’ belief that the account would continue to have value in the future–a mistake made by many a divorcing spouse who retains certain assets based on a belief that they’ll continue to appreciate.

Does this seem like a simple question of Mr. Simkin regretting a bad decision? Apparently the courts don’t think so–the case is now pending in New York’s highest court, after a trial court held in favor of Ms. Blank and an appellate court overturned that ruling.

My favorite part is the claim of “extreme hardship” by Mr. Simkin, who earns at least $3 million annually as a partner at the law firm that is representing him in the divorce do-over case (for free).

Check back for updates when the New York high court rules on this interesting case.