The need for legal advice and estate planning for same-sex couples is more critical now after the Supreme Court’s recent decision striking down DOMA.
The Supreme Court’s recent decision in United States v. Windsor struck down the Defense of Marriage Act of 1996 (DOMA), the federal law that prohibited the federal government from recognizing same-sex marriages legalized by the states, and which allowed states to refuse to recognize same-sex marriages performed under the laws of other states.
DOMA contained two operative provisions: Section 2 of DOMA allows states to refuse to recognize same-sex marriages performed under the laws of other states. Section 3, which was the subject of the challenge before the Supreme Court, defined “marriage” and “spouse” as excluding same-sex partners.
While DOMA did not, by its terms, forbid states from enacting laws permitting same-sex marriages or civil unions or providing state benefits to residents in that status, its definition of marriage for purposes of more than 1,000 federal laws, regulations, and/or directives effectively denied federal benefits to same-sex married couples.
The Supreme Court’s decision in Windsor held that DOMA’s operation in practice created two different classes of married couples in states that allow same-sex marriage. As the Court said, “same-sex couples were forced to live as married for the purpose of state law but unmarried for the purpose of federal law,” thus diminishing the stability and predictability of a basic personal relationship the state found proper to acknowledge and protect. And because DOMA’s principal purpose and practical effect was to create inequality amongst state-sanctioned marriages whereby federal law is normally supposed to create equality amongst US citizens, the Supreme Court struck down DOMA as unconstitutional.
This means that for the first time, same-sex married couples, and their families, are entitled to various federal benefits they otherwise were denied because of DOMA. For example, same-sex spouses of government employees are now entitled to government healthcare benefits without additional costs and taxes. Same-sex married couples are now able to file jointly on their federal income tax returns – no longer forced to file state income tax returns one way and federal income tax returns another. Same-sex married couples are now able to inherit federal pensions and retirement accounts the same way opposite-sex married couples can. Same-sex married couples may now be buried together in veterans’ cemeteries. Same-sex married couples are now entitled to the Bankruptcy Code’s special protections for domestic-support obligations.
The Supreme Court’s decision in Windsor also guarantees Social Security benefits to families upon the loss of a spouse and parent, benefits that were previously denied because of DOMA’s far-reaching effects. It also serves to resolve problems in immigration cases where same-sex couples may have been legally married but the federal government, through DOMA, refused to acknowledge the marriage.
The Supreme Court’s decision also allows same-sex married couples the benefit of the federal marital deduction, thus potentially saving millions of dollars in federal estate and gift taxes.
Federal estate and gift tax law enables married couples who are US citizens to make both lifetime gifts and testamentary bequests to one another entirely tax free. These gifts may be made in unlimited amounts and may be made outright or in trust, all because of the federal dollar-for-dollar marital deduction. However, the marital deduction requires that the spouses be legally married. Prior to the Supreme Court’s decision in Windsor, same-sex couples were not entitled to the federal unlimited marital deduction because they were not legally married in the eyes of the federal government. However, with the demise of DOMA, a same-sex married couple would be entitled to the same federal marital deduction as an opposite-sex married couple, thus paving the way for same-sex married couples to properly and effectively plan their estates to save as much in federal estate and gift taxes as opposite-sex married couples already do.
So, if you, or a loved one, need our guidance and support to know what you or they are entitled to, now that DOMA is no more, please call us. Whether it is a new Will to make sure the federal marital deduction is applied, or new trusts to ensure more effective and comprehensive estate tax savings, it is time to take advantage of the tried and true estate planning techniques that, until the Supreme Court’s decision in Windsor, have only been available to opposite-sex married couples.
If you would like more information on how the Law Offices of Jeffrey A. Asher, PLLC, can help you, please contact us at (877) 207-6803 or at email@example.com.