Back in November 2010 Edith Windsor filed a lawsuit against the federal government seeking reimbursement of over $363,000 in estate taxes that she paid as the result of the death of her partner of 44 years, Thea Spyer. The New York residents were legally married in Canada in 2007 and Ms. Spyer died in 2009, leaving her entire estate to Ms. Windsor. Since U.S. federal law does not legally recognize same sex marriages due to a 1996 law called the Defense of Marriage Act ("DOMA"), which only recognizes marriages between one man and one woman, Ms. Windsor's inheritance of Ms. Spyer's estate resulted in a $363,053 federal estate tax bill. This would not have been the case had Windsor and Spyer been considered legally married under U.S. federal law, since no federal estate taxes would have been owed due to the unlimited marital deduction. Thus, Windsor had no choice but to timely pay the estate tax bill in order to avoid interest and penalties and then the ACLU filed a lawsuit against the federal government on Ms. Windsor's behalf.
Fast forward nearly two years and on October 18 in a 2-1 decision, the United States Court of Appeals for the Second Circuit upheld a lower court decision that declared Section 3 of DOMA, which bars the federal government from recognizing marriages between same sex couples who are seeking federal benefits tied to being married, unconstitutional as it relates to the Windsor case. In a departure from the lower court's decision, the Court of Appeals applied the "intermediate scrutiny test" and found that "the statute does not withstand that review." In response to the decision, the ACLU's website states the following: "The [appeals] court decided that when government discriminates against lesbians and gay men, the discrimination should be presumed to be unconstitutional and the government has to have a very good reason for the discrimination. This is the first federal appeals court to decide that a higher standard of review applies to sexual orientation discrimination."
Since there is now disagreement among the federal circuits when it comes to DOMA, it is likely that the U.S. Supreme Court will take up one or more of the cases and come to a decision on the constitutionality of DOMA once and for all.
- November 2010 - Should Same Sex Couples Have to Pay Federal Estate Taxes?
- August 2011 - U.S. DOJ - Same Sex Couples Should Not Have to Pay Estate Taxes
- June 2012 - Federal District Court Rules That Married Same Sex Couples Do Not Have to Pay Estate Taxes
- July 2012 - DOMA Estate Tax Case Appealed to U.S. Supreme Court
- October 2012 - Court finds US marriage law unconstitutional
- Asset Protection Planning for Same Sex - Are AB Trusts Only for Married Couples?
- What Same Sex Couples Need to Know About Estate Planning