In what many consider to be a decision that is long overdue, a federal judge has ruled that the Defense of Marriage Act’s (DOMA) denying equal benefits to same-sex couples violates the equal protection clause of the Fifth Amendment. This recent ruling was handed down as a summary judgment to plaintiff Edith Windsor.
Windsor sued the government for not recognizing her 2007 marriage, in Canada, to her partner of 44 years, Thea Spyer. As a result of that denial, and the resulting unavailability of a marital deduction, Windsor paid out $363,000 in federal estate taxes on the death of her spouse.
In Windsor v. United States, the court ordered the government to repay the widow the money it had taken from her in federal estate taxes, thus setting a precedent for other jurisdictions with similar cases.
This is more than a legal victory in recognizing the rights of others. It is more than the fact that this is the fourth judge to rule against the Defense of Marriage Act. If the decision stands, it means that State marriages would receive federal recognition, and that married same-sex clients could file joint income tax returns, get marital deductions for gifts and estate taxes, etc.
Same-sex clients often want to use married joint trusts. Currently, this is not advisable because of the lack of federal recognition of the relationship. In the eyes of the federal authorities, including the IRS, the couple is two single individuals who are unrelated to each other. The Second Circuit has yet to rule on this case. Then, presumably, the case will be appealed to the Supreme Court. If the Supreme Court grants cert. and reaches the same conclusion as the District Court, only then should same-sex clients use joint trusts.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
- Double Your Gifting with Spousal Gift-Splitting - January 11, 2022
- Tax Planning for 2022 - December 28, 2021
- Donor Advised Funds: Too Good to Be True? - August 10, 2021
