A recent and historic decision in the Supreme Court overturned a portion of the federal Marriage Defense Act (DOMA), making it unconstitutional. The decision was taken after years of difficulties faced by same-sex couples with regards to inheritance planning and asset protection. “Federal laws are illegitimate, for no lawful purpose trumps the purpose and effect of belittling and harming persons whom the State, with its marriage laws, seeks to protect personally and with dignity,” Justice Anthony Kennedy wrote. “By seeking to override these protections and treat those persons living in marriages with less respect than others, federal law violates the Fifth Amendment.”
Although federal tax law allows married couples to give each other unlimited gifts, same-sex couples have not, until recently, been granted this same right. Although federal law allows married couples to leave an unlimited amount of property to their spouse at the time of death without incurring a land tax, this same freedom has never been granted to same-sex couples in the United States. However, a recent Supreme Court decision changed all this. In fact, this historic decision will make a difference in the interpretation of more than 1,000 federal laws and regulations, and affect everything from veteran’s benefits to taxes and estate planning for same-sex couples legally married in states that allow it.
As a real-world example, there is now a widow in New York, one of the states where same-sex marriage is legal, who will receive a $360,000 refund from the IRS for property taxes she was forced to pay when her same-sex partner dies. However, there are other real-world cases, the outcome of which has yet to be determined. For example, what about a scenario where a same-sex partner has died? Can the property tax return be changed? The answer to that question remains unanswered, as state and federal courts scramble across the country to address the increasingly significant topic of same-sex marriage equality at all levels.
Six same-sex couples in Florida recently filed a lawsuit against the state’s ban on gay marriage. The premise of the lawsuit is that the ban violates fundamental guarantees of the US Constitution, including the right to marry regardless of sexual orientation. The lawsuit follows federal judges in Utah and Oklahoma declaring the state’s same-sex marriage bank unconstitutional. Both decisions are currently under appeal. The wedding landscape in the United States is changing.
So what does this mean for you if you are in a same-sex relationship or if you are married in a confessional status? This could mean a significant change in your rights and obligations under the law. Now, it’s more important than ever to consult with an estate planning attorney who can review your circumstances to help determine if these changes could be of benefit to you.