What may turn out to be a landmark case is before the Supreme Court of the United States. The case before the Court certainly has the potential to change estate planning for members of the LGBTQ community. Interestingly, the case itself focuses on estate taxes; however, the implications for same-sex couples go much deeper.
The Court heard oral arguments recently in a case that stems from the death of a New York taxpayer back in 2009. The taxpayer left her rather large estate to her partner of 44 years.
For heterosexual couples, a spouse may leave an entire estate to the other spouse without incurring any estate taxes pursuant to the unlimited marital tax deduction. Because the same-sex couple in the case before the Court was not considered to be legally married in the eyes of the federal government because of the Defense of Marriage Act, or DOMA, the gift was subject to over $350,000 in estate taxes.
The deceased’s partner sued for a return of the estate taxes paid based on the argument that DOMA violates the Equal Protection Clause of the Constitution. The lower courts agreed with her argument. Now, it is up to the SCOTUS to decide the issue.
If the Court agrees with the argument made in the case, it could have far reaching consequences. Not only would it change estate planning significantly for same-sex couples, but it could finally make as many as a 1,000 federal benefits available to them as well as prohibit states from passing laws that define marriage as a union between a man and a women.
- My Parent/Spouse Shows Early Signs of Dementia. Can We Still Do Medicaid Planning? - July 20, 2015
- What Happens to a Living Trust When One Spouse Dies? - July 13, 2015
- Medicaid Spousal Impoverishment Rules - July 7, 2015