By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Estate Planning Law Firm

Some gay couples refuse to file for domestic partnership status that some states, including New Jersey, permit as an alternative to marriage. A recent New Jersey Tax Court decision discloses how financially damaging that failure will be.

In this case, two women choose not to register as domestic partners. Why they made that choice is not disclosed.

Although their relationship satisfied the statutory criteria for a domestic partnership, they 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 in the U.S. that recognizes domestic partnerships or similar relationships.

One partner died and her estate was assessed nearly $180,000 in inheritance taxes that would have been avoided had she been formally recognized as a domestic partner.

The house that the couple had shared had been purchased individually but it was transferred to herself and her partner as joint tenants with rights of survivorship.

The Director increased the value of the 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 argued, however, that the couple substantially complied with the statute and that the execution and filing of an Affidavit of Domestic Partnership can be overlooked in light of the couple’s long-term relationship.

But the New Jersey Tax Court rejected this position.

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.

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, they cannot claim the benefits of that relationship in the absence of filing the Affidavit of Domestic Partnership.

The estate also had its estoppel argument rejected outright.

To discuss your NJ estate planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.