updated 7/7/2008 9:14:45 PM ET 2008-07-08T01:14:45

An adult adoption involving lesbian partners and a claim to a share of a family fortune built on IBM has been annulled, bouncing the case to Maine's highest court.

At issue is whether it was legal for a judge to allow Olive Watson to adopt Patricia Spado in 1991 in Knox County, where the longtime partners spent several weeks each summer on an island in Penobscot Bay.

Watson was a daughter of Thomas Watson Jr., who took International Business Machines Corp. from punch cards into electronic computing.

The relationship between Spado and Watson ended a year after the adoption was approved, and in 2005 — after Thomas Watson and his wife had both died — the adoption was challenged in court by other heirs to the Watson fortune.

After Thomas Watson and his wife died, their grandchildren became eligible for cash payouts and Spado claimed the adoption made her a beneficiary.

The probate judge who granted the adoption granted the heirs' petition and annulled it on a residency issue on April 24, but her sealed ruling didn't come to light until an appeal brief was filed with the state supreme court, the Maine Supreme Judicial Court. In Maine, adoption records are confidential, even though the women were in their 40s when the adoption took place.

Spado and Olive Watson had lived together for 14 years before their breakup, spending only five nights apart. Under their separation agreement, Watson paid her ex-partner about $500,000 in exchange for relinquishing her claim to certain real estate.

The settlement, however, was apparently not intended to terminate Spado's rights to inheritance as a granddaughter. Her court filings contain a letter signed by Watson after the breakup in which she says: "I shall at no time initiate any action to revoke or annul my adoption of you."

Adult adoption legal in Maine
Gay rights activists say the case shows the lengths to which same-sex couples would go to ensure a partner's financial security in the days before they were allowed to form civil unions or to marry.

Olive Watson and Spado had been living in New York at the time of the adoption, but that state barred the adoption of a homosexual partner.

Maine law required that the adoptee had to "live" in the state and the adopting parent had to "reside" there, but the state's adoption law does not specifically define either term. During their 14 years together, Spado and Watson spent several weeks each summer at Watson's home at her family's compound on North Haven, known as Oak Hill.

In their legal appeal brief, Spado's lawyers argue against annulling an adoption that had been allowed to stand for so long on the basis of undefined domicile requirements.

"Most disturbing, this challenge can come not just in a direct appeal, but at any time, even decades later, in a collateral attack long after final judgment and longstanding reliance on the adoption," the brief stated.

Even though the heirs reached their goal of annulling the adoption, they also are appealing in a bid to broaden the foundation of their case. Their attorney, Stephen Hanscom, plans to argue that the adoption should also have been annulled on other grounds: that it was obtained by two partners seeking to manufacture inheritance rights and that they did not intend to establish a normal parent-child relationship.

Hanscom plans to file his legal brief at the end of the month.

The Maine Supreme Judicial Court is likely to hear arguments on the appeals this fall.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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