June 2013 the U.S. Supreme Court Expected to Decide a Federal Estate Tax Case and The Most Hotly Debated Civil Rights Case of the 21st Century: LGBT Rights v. Defense of Marriage Act

By Bruce D. Sires

Bruce D. Sires

This month, the U.S. Supreme Court is expected to rule on two cases argued last March which are at the forefront of the fight for civil rights for the LGBT community.  One challenges California’s Proposition 8, which overturned the marriage equality which had existed only briefly in that State.  The other challenges the 1996 Defense of Marriage Act, which deprives lesbian and gay couples who are legally married or in a civil union from obtaining any federally mandated benefit otherwise afforded to married couples, such as the federal estate tax marital deduction.

 

The case of United States v. Windsor arose in the State of New York.  Edith Windsor and Thea Spyer were married in Canada in 2007, and thereafter resided in New York when in 2009, Thea Spyer died, leaving her entire estate to her surviving spouse, Edith.  Edith filed a federal estate tax return, claiming the unlimited marital deduction.  The IRS denied the deduction based upon the Defense of Marriage Act which defines the terms “marriage” and “spouse” for all purposes under federal law.  Section 3 of the Act defines “marriage” as a legal union between one man and one woman as husband and wife, and defines a “spouse” as either a husband or a wife under the foregoing definition.  Edith paid the federal estate tax and filed a claim for refund.  The IRS denied the claim and Edith filed suit.  The U.S. District Court for the Southern District of N.Y. and the Second Circuit Court of Appeals both rejected the IRS’s position and ordered the refund.  The U.S. Supreme Court granted certiorari last December, and argument was heard at the end of March.

 

It does appear that time could well be ripe for the Supreme Court to overturn the Defense of Marriage Act, thereby providing marriage equality as to federal benefits, such as the marital deduction.  However, it would be irresponsible to speculate on whether the Court will hold that marriage equality is a constitutionally protected right, thereby overturning the law in the majority of states.

Planning for lesbian and gay clients, whether married, in a registered domestic partnership, in a committed relationship or single, requires care and sensitivity from the professionals called upon to advise them.  If you or your partner want to protect each other, or you're solo and want to protect your assets, seek sound, competent and sensitive financial and legal advice.  The Tax and Wealth Planning attorneys at Valensi Rose, PLC would be pleased to assist you.

 

Contact: Bruce Sires