Although New York is not the first state to legalize same-sex marriage, it is the largest state to confer these rights.  New York’s same-sex marriage law will not only change the day-to-day lives of same-sex couples in New York but will also likely fuel the gay-rights movement given the state’s size and influence on the legislation of other jurisdictions.  The new law will also drastically affect the estate planning of same-sex couples and the rights of the survivor at the other’s death.

Existing Law

Under existing law in New York, a same-sex couple cannot enter into a marriage within the state.  New York’s Domestic Relations Law contains the requirements that a couple must satisfy in order to enter into a marriage in New York.  Although it does not specifically allow or disallow same-sex couples to marry in New York, the New York Court of Appeals ruled in 2005 that it limits marriage within the state to different-sex couples.

The New Law

The Marriage Equality Act was signed on June 24, 2011 and takes effect thirty days later, on July 24, 2011.  The Act makes certain changes to the Domestic Relations Law to grant same-sex couples the ability to enter into marriage within the state while preserving certain protections and exemptions provided to benevolent organizations, religious institutions, and members of the clergy.  The Act also confers the rights and benefits currently enjoyed by different-sex married couples under state law to same-sex married couples.

In order to confer same-sex couples the ability to marry in New York and the rights and benefits associated with marriage, the following provisions were added to the Domestic Relations Law:

  1. “A marriage that is otherwise valid shall be valid regardless of whether the parties to the marriage are of the same or different sex.”
  2. “No government treatment or legal status, effect, right, benefit, privilege, protection or responsibility relating to marriage, whether deriving from statute, administrative or court rule, public policy, common law or any other source of law, shall differ based on the parties to the marriage being or having been of the same sex rather than a different sex.”
  3. “When necessary to implement the rights and responsibilities of spouses under the law, all gender-specific language or terms shall be construed in a gender-neutral manner in all such sources of law.”
  4. “No application for a marriage license shall be denied on the ground that the parties are of the same, or a different, sex.”

Although these changes were only made to the statutory text of the Domestic Relations Law, the Act directs that all other state law be interpreted consistently with the intent of the Act.  Specifically, the Act provides as follows:

The omission from [the A]ct of changes to other provisions of law shall not be construed as a legislative intent to preserve any legal distinction between same-sex couples and different sex couples with respect to marriage.  The legislature intends that all provisions of law which utilize gender-specific terms in reference to the parties to a marriage, or which in any other way may be inconsistent with [the A]ct, be construed in a gender-neutral manner or in any way necessary to effectuate the intent of [the A]ct.

Effect on NY Estates

A survivor of a same-sex marriage is now entitled to certain rights and benefits if the other dies a domiciliary of New York.  Following are some examples of these rights and benefits:

1.     “Distributee” (or heir) status

2.     Inheritance rights in the deceased’s estate if the deceased did not have a Will

3.     First right to become the Administrator of the deceased’s estate if the deceased did not have a Will

4.     Right of election to take a share of the deceased’s estate (the greater of $50,000 or one-third of net estate)

5.     Standing to object to the deceased’s Will

6.     Right to the exemption for family benefit

7.     Potential claim to wrongful death proceeds

Given the sweeping changes to New York law made by the Act, any property passing to the survivor of a same-sex marriage from the other should be entitled to an estate tax marital deduction at the state level in New York.  This means that any property passing to the survivor will be free of New York estate tax.  This is a significant benefit conferred by the Act to same-sex married couples.  We expect that the state’s Department of Taxation and Finance will issue some sort of guidance on the issue.  The major complication is the linkage between the New York’s tax law and federal tax law.  At the federal level, a same-sex couple will not be able to utilize an estate tax marital deduction because of the mandate of DOMA (Defense of Marriage Act).  There is no question that there will be issues to address in the implementation of the new law.