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In the battle between state and federal government to define “marriage,” a New York same-sex couple was victorious in Windsor v. U.S., a June 6, 2012 decision handed down by the United States District Court for the Southern District of New York. Therein, Judge Jones ruled that Thea Spyer’s estate was not required to pay tax on amounts passing to Thea’s same-sex spouse, Edie Windsor, because the amounts qualified for the unlimited marital deduction. As a result, the federal government is required to return over $350,000 to Edie, who also served as the estate’s executor.
Edie originally paid the estate tax because of DOMA, the 1996 Defense of Marriage Act, which provides that when interpreting federal law, an individual is only considered “married” if he or she was wed to a person of the opposite sex at the time of such person’s death. DOMA means that the unlimited marital deduction, which allows a decedent to pass an unlimited amount to his or her U.S. citizen spouse free from federal tax, does not apply to same-sex couples. This is true even if the couple was legally wed and living in a state that recognized their marriage at the death of one of the spouses. In 2011, the Department of Justice stated that it would cease defending DOMA, because of concerns that part of DOMA is unconstitutional. In Windsor, Judge Jones followed suit. As applied to Edie, she held the relevant DOMA provision unconstitutional due to its violation of the Equal Protection Clause of the 5th Amendment.
While Windsor doesn’t bind district courts in D.C. or Maryland, the decision will likely influence those courts if they are presented with the same issue, particularly once Maryland allows for same-sex marriages in 2013. Indeed, it seems like DOMA’s force is rapidly declining. It is important for same-sex couples to be vigilant of the advances in this area of the law so that they can plan accordingly and take advantage of every benefit made available to them. To discuss your estate planning needs, please contact us.
To read more from Altman & Associates on planning for same-sex couples, click here. And for recent news on taxes and same-sex couples in Maryland, see our post, A Victory for Same-Sex Couples?
- Gary Altman, Esq. and Coryn Rosenstock