Wednesday, April 16, 2014
Life After Windsor
It has been just eight months since the United States Supreme Court issued its landmark ruling in U.S. v. Windsor (570 U.S. ____ (2013)), but the effects of the decision have been significant and widespread. In Windsor, the Court partially invalidated the Defense of Marriage Act (DOMA). Enacted in 1996, DOMA contained two key provisions intended to “defend” marriage: section 2 of the Act gave individual states the power to recognize, or not recognize, same-sex marriages validly performed in other states or jurisdictions; section 3 specifically defined marriage as between one man and one woman. In Windsor, the Court invalidated section 3 of the Act, but section 2 remains in place.
While Windsor made it clear that federal law now recognizes same sex marriages, it left us with the question of how the marital status of same-sex couples will be determined. Does “marriage” require residency in a state that recognizes same-sex marriages? Or are same sex couples who marry in states that recognize same sex marriages considered married for purposes of federal law? Since Windsor, federal agencies have been left to promulgate rules to flesh out this issue.
Most agencies, including the IRS, have adopted the “state-of-celebration” rule, meaning any same-sex couple that marries in a jurisdiction where same-sex marriage is recognized will be considered married under federal law. For example, if a gay couple from Oregon marries in Washington state (which recognizes same-sex marriages), the IRS will consider the couple to be married for all purposes of federal tax law.
Windsor presents a myriad of opportunities and challenges in the areas of family law and estate planning—particularly during tax season where insurance, gift and estate taxes are concerned. Issues such as spousal support, property division, qualified domestic relations orders (QDROs), pension and military benefits are also implicated. For states like Oregon, which recognizes same-sex domestic partnerships but does not recognize same-sex marriages, proper planning is essential, and your estate planning and family law attorney(s) can help you further navigate the complex and ever-changing rules.
Written by John Christianson, Of Counsel, Estate Planning.