Same-Sex Marriage And The Federal Estate Tax

In November, 2010, a court action was filed in the U.S. District Court, Southern District of New York, seeking a refund of the estate tax levied on a married same-sex couple, which would not have applied to a married straight couple and which arguably violated the United States Constitution. The plaintiff in that action, Edith Schlain Windsor (“Edie”) challenged the constitutionality of section 3 of the Defense of Marriage Act (“DOMA”) which required Edie to pay federal estate tax on her same-sex spouse’s estate.

Edie met her late spouse, Thea Clara Spyer (“Thea”), nearly a half-century ago at a restaurant in New York City. Edie and Thea went on to spend the rest of Thea’s life living together in a loving and committed relationship in New York.

After more than forty years, Thea and Edie were finally legally married in Toronto, Canada in 2007. Having spent virtually their entire lives caring for each other in sickness-including Thea’s long battle with multiple sclerosis-and in health, Thea and Edie were able to spend the last two years of Thea’s life together as married.

New York State legally recognizes Edie and Thea’s marriage and provided them with the same status, responsibilities, and protections as other married people. However, Edie and Thea were not considered “married” under federal law because of the operation of the statute known as DOMA, and, as a result, Edie was forced to pay more than $350,000 in federal estate tax that she would otherwise not have had to pay if Edie and Thea’s marriage were recognized under federal law.

This month, the District Court upheld Windsor’s constitutional challenge to section 3 holding that it violates the Equal Protection Clause of the United States Constitution thereby allowing for the marital deduction.

This is a rapidly evolving area of the law. If you are an executor in a similar situation, you should move quickly to file protective claims.

For tax help from an experienced attorney, call Mitchell A. Port at (310) 559-5259.