Up until now, planning for same-sex couples has been a minefield of different state and federal laws. A couple could be married under state law yet be considered legal strangers for federal purposes because of the Defense of Marriage Act. Not only does DOMA mean that a marriage in New York or Iowa need not be respected in Oklahoma or Utah, it also prohibits the federal government from extending the various benefits of marriage to same-sex married couples. These benefits include the right to file a joint tax return, the ability to give money to each other without payment of a gift tax, and social security survivor benefits, among others.
The United States Supreme Court has decided to hear two cases. Windsor examines the constitutionality of DOMA in an estate tax setting. Another case examines California’s Proposition 8, which narrowly removed the right of same-sex couples to marry in that state.
Depending on the outcome of these cases, planning for same-sex couples may become much less complicated. It is possible that there will be uniformity of marriage laws concerning same-sex couples across all states and between the state and federal governments.
But, the outcome is not certain. If DOMA is held to be unconstitutional, then same-sex spouses could equalize their estates like many opposite sex spouses do. If DOMA is upheld, same-sex couples still have the waning days of 2012 to make transfers to their partners and take advantage of the temporary $5.12 million applicable exclusion.
I will keep you updated on these cases in 2013. Decisions are expected in these cases sometime next summer.
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
Latest posts by Steve Hartnett (see all)
- Beneficiary Designations, etc., Aren’t a True Substitute for a Trust - February 19, 2019
- New Tax Proposals - February 12, 2019
- State Income Taxation of Nongrantor Trusts - February 5, 2019