Yesterday, the Supreme Court heard oral argument in Hollingsworth v. Perry, the case concerning the validity of California’s Proposition 8.
A link to the audio and transcript of the oral argument is here.
The California Supreme Court had held marriage was a fundamental right for all couples in California, without regard to gender. Thus, same-sex marriage ensued in May 2008. In November of the same year, Proposition 8, which defined marriage as only between a man and a woman, effectively overturned the California Supreme Court’s decision.
Today, the Court hears oral argument in U.S. v. Windsor, the case concerning the validity of the Defense of Marriage Act (“DOMA”). DOMA provides that only a marriage between a man and a woman will be recognized by the federal government, among other provisions which are not directly at issue. In Windsor, a decedent woman had been married to another woman. Their marriage was not recognized for purposes of the federal estate tax marital deduction, resulting in a greater tax burden for the estate.
These cases have far-reaching implications for your same-sex client couples (current and future) and for the estate planning which you might do for them on a go-forward basis. Nine states and the District of Columbia currently allow same-sex marriage. In addition, some states recognize same-sex marriages validly created elsewhere. In whatever state you are located, these cases could have great impact on LGBT planning in your state.
If your state allows or recognizes same-sex marriage, Windsor could result in federal recognition of those marriages. Federal recognition would mean that planning for same-sex couples might be much the same as planning for traditional married couples. This would impact not only estate planning, but also elder law planning, and financial planning. Federal recognition would mean that both spouses’ assets would be considered for Medicaid purposes. It would also mean eligibility for Social Security Survivor benefits and a broad range of other federal benefits including the ability to file a joint tax return.
If your state does not allow or recognize same-sex marriage, Hollingsworth v. Perry could hold that there is a constitutional right for same-sex couples to marry in all states.
These changes could mean significant changes in planning for LGBT couples. You will want to be prepared.
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
- 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