Readers in the Seattle area may be interested to learn that issues connected to estate administration lie at the heart of a federal appeals court ruling that strikes yet another blow against the constitutionality of the federal Defense of Marriage Act. The court concluded that the section of the law that denies recognition of same-sex marriages for all federal purposes violated constitutional equal protection guarantees by requiring a same-sex spouse to pay an inheritance tax, for which a heterosexual spouse would enjoy an exemption.
The plaintiff, an 83-year-old woman, married her spouse in a state that legally recognizes same-sex marriages. Because the Defense of Marriage Act prohibits recognizing same-sex marriages in the application of federal tax laws, the woman faced a $363,000 tax liability after the death of her spouse. Concluding that the act unfairly treated same-sex couples differently from opposite-sex couples for no legitimate reason, the 2nd U.S. Circuit Court of Appeals became the seventh federal court to strike down at least one portion of the law.
While the recent decision marks a step closer to estate planning equality for same-sex couples, the court's ruling in this case hinged on the fact that state law gave legal recognition to same-sex marriages. In states like Washington that do not yet legally recognize same-sex marriage, couples need to consider extra estate planning measures to help ensure that their wishes will be carried out. However, Washington residents will vote next week on upholding a state law passed earlier this year that legalizes same-sex marriage.
Even though state law provides for legal recognition of domestic partnerships, a community property agreement can help clarify partners' intentions when it comes to distributing estate property to heirs and, more importantly, can help make certain that inheritance rights are respected.
An experienced estate planning professional can craft a community property agreement that meets the requirements of state law and serves the estate planning goals of same-sex couples.
Source: Washington Blade, "BREAKING: Second Circuit latest to strike down DOMA," Chris Johnson, Oct. 18, 2012