A woman had been with her companion for 51 years when she passed away at age 92. The woman left behind a $200 million estate that oddly did not have any provisions for her long-time partner. Her partner challenged the will and asked to be included and eventually reached a settlement with executors that allowed him to keep the house that they shared along with a substantial trust account.
The major issue in this case is whether a common law marriage could be inferred and used to both entitle the woman’s partner to a share of the estate and exempt him from paying estate taxes. This is a complex issue because only one state recognizes common law marriages and that is not the state where the couple lived. Nonetheless, the man successfully convinced the estate executors that he was entitled to a share of the estate by showing that the 51-year relationship was consistent with that of a legally married couple.
This is a difficult argument to win, particularly for individuals who had the legal ability to marry but chose not to do so for many years. That fact in conjunction with a will providing for others and not for the partner made this case an even steeper uphill climb for the man. However, he managed to convince the executors and federal taxiing authorities to recognize the relationship as marital, allowing him to negotiate for a tax-free settlement. This was viewed generally as the most equitable solution, since one person who was named in the estate plan was a nephew of the woman who was a convicted murderer who once planned to have the couple killed. Eventually that case was also resolved with the multi-million dollar trust fund going to fund scholarships.
Source: Forbes, “New Jersey Gets To Second Guess IRS On Estate Tax Marital Deduction,” Peter J. Reilly, Feb. 20, 2014.