RateWatch #395 – Married in San Francisco?

February 21, 2004 by Dick Lepre
dicklepre@rpm-mortgage.com

What's Happening

CPI was +0.5% in December, +0.2% core. Each of these is modestly higher than expectation but with the ongoing day-to-day volatility this is hardly a suggestion that inflation has returned. The dollar is up, equities down and Treasuries down. Hard to tell what people are doing with their money.  The one theme that has been constant for what seems to be more than one year is high intraday ranges in Treasuries. This makes the timing of rate locks annoyingly difficult.

Married?

Since San Francisco has decided to issue marriage licenses to same-gender couples I was
curious what the legal implications were for the real estate and mortgage industries.

After conferring with folks at the legal departments of title companies, I think that this is their position:  since these licenses are, on the surface, invalid under state law they will not vest the property as community property. They will go along with the instructions from the buyers as to the language of the vesting excepting that they will not vest as community property.  The title
policies will recite the language of the vesting verbatim. This, I think, distances the title industry
from taking any position as to the validity of the vesting.

Title insurance companies are not trying to take a social position on this matter, they are stating
that they are bound ultimately by state law and that state law declares these licenses to not be valid. If subsequent rulings from courts invalidate the state law preventing same-gender marriage, the title companies will follow those rulings.

The insurance that title policies offer lenders is not compromised by any vagaries associated with the marital status of such vesting. Everyone on title is responsible for the entire mortgage whether vested as joint tenants, community property, or tenants in common.

I think that it is unfortunate than Mayor Newsome decided to allow same-gender marriages and then sue the state to overthrow the law that invalidates those marriages.  It would have been more
appropriate to try to first overturn the law.  Having the mayor of a large city decide that his opinion will be substituted for state law because he deems that folks have certain rights is not the way to run things.  The modus of achieving his goal was clear - sue the state to overthrow the ballot proposition - something that he, as the mayor could have easily set into motion.

Understand that I am expressing no personal opinion here as to what should be done or what the outcome should be.  I am stating that this is not the way to accomplish goals.  Elected officials are supposed to uphold the law and are well-positioned to institute changes in laws if and when they disagree with them. If somehow one believes that the mayor of any city is supposed to order those
under him to disobey state law because that mayor disagrees with that law is a step toward
something akin to anarchy.

Property Rights and Marriage

Apart from San Francisco's marriage nouveau there are some other considerations that folks should have regarding marriage and property rights.  Some states (California, for example) are "community property states."  If you are married in a community property state and then move to a non-community property state your respective property rights may change to reflect the laws of
your new state of residence.  Seek legal advice.

Some state also recognize the legality of "common law marriages."  A common law marriage is one where there is
1) mutual consent
2) a sharing of property (such as a joint checking account)
3) the parties hold themselves out to others as being married and
4) being together for a "significant time" even if that length of time is not strictly defined.

A noted case was Marvin v. Marvin wherein Michelle Marvin sued the actor Lee Marvin for what has since been called "palimony."  She eventually lost because the court found that she and Lee
Marvin never agreed during their cohabitation to combine their efforts and earnings or to share
equally in any property accumulated as a result of their efforts. 

Different states that allow common law marriage have different requirements.  In addition, states are required to recognize common law marriages from other states.

I have the impression that, in the past, some people have pursued "common law marriage" as a
means of avoiding a divorce proceeding if and when the common law marriage ends.  This is
a bad idea.  There are several scenarios that show why: 
1) there will still be disputes about property rights and you may have to do more work to show that you were or were not "common law married" and then get a divorce to dissolve it - there is no such thing as a "common law divorce."

2) If your common law spouse is killed or injured in a traffic accident that is someone else's fault you may have to litigate the fact that you had a common law marriage and are entitled to sue for wrongful death

3) your common law spouse dies intestate and you have no kids. Guess what. You may get into a legal dispute with his/her parents, brothers and sisters as to who should inherit his/her stuff.

This brings up what is one of the legally knotted results of the same gender marriages.  Marriage
is supposed to have comity.  The United States Constitution requires every state to accord "Full
Faith and Credit" to the laws of its sister states. However, some states that specifically disallow
same gender marriages also specifically do not recognize same gender marriages performed in
other states.

It would appear that the legal issues involving marriage have become as knotted as a Rastafarians
locks and will require ye old Supreme Court of the United States to unravel.

Please read all of the above as a set of generalizations about property rights.  They vary from state to state. Make sure that if you are doing anything out of the mainstream you minimize the extent to which you compromise your property rights. Seek legal advice. Do not put the equity in your most valuable possession up as collateral for your opinion.

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