On June 26, 2013, the Supreme Court of the United States struck down the federal Defense of Marriage Act (DOMA) by declaring it unconstitutional. This landmark ruling has myriad implications and touches upon many areas of law affecting same-sex couples across the country.
The door has now been opened for same-sex couples living in those states that allow same-sex marriage to take advantage of the federal estate planning opportunities afforded by straight couples, such as estate tax planning and retirement benefit planning. Same-sex spouses may need to rethink their wealth management strategies and estate plans in order to redistribute wealth, change beneficiary designations and amend estate plans.
Importantly, this decision also creates new complexities for divorcing same-sex couples given the continued lack of portability of same-sex marriages and the incongruent availability of federal and state benefits for same-sex spouses. For example, if a couple marries in Massachusetts and relocates to a state that has a state DOMA law, the federal government will not recognize the marriage.
Additional implications for same-sex couples resulting from yesterday’s decision relate to Social Security benefits, VA benefits, immigration issues, ERISA and health insurance benefits.
The attorneys at Burns & Levinson have watched these historic events unfold and are continuing to analyze the impact on our clients. Following are some tidbits of insight from attorneys Peter Zupcofska and Lisa M. Cukier that have been printed in Boston Spirit Magazine’s own blog on Boston.com.
DOMA Decision’s Dichotomy
Boston Spirit’s Blog on Boston.com
June 26, 2013
The US Supreme Court DOMA ruling means that gay and lesbian married couples in same sex marriage states will now be able to file as married 1040 tax returns. In addition, divorcing couples will have the right to significant tax benefits that run to divorcing straight couples, specifically, alimony tax treatment and the ability to make property transfer without incurring capital gains taxes. On the death of a spouse, the surviving gay or lesbian spouse will not have to pay the federal taxes just as a surviving straight spouse has not had to pay such taxes.
What if a Massachusetts gay couple married for 5 years moves to Florida or a whole host of other states that do not recognize marriage between same sex partners- would that mean that those federal benefits received by the gay and lesbian couples in Massachusetts would be erased because they moved to these other states? This dichotomy creates significant and rarely discussed complications. Since individual states can refuse to follow federal law, couples who are married in a state where gay marriage is recognized and then live in a state that does not recognize gay marriage can encounter difficulties in many aspects of normal life.
Don’t Pop the Cork Just Yet
Boston Spirit’s Blog on Boston.com
June 26, 2013
With today’s rulings in United States v. Windsor and Hollingsworth v Perry, the US Supreme Court delivered a ruling of immense importance in the landscape of equality. Same sex couples who are married in states that permit gay couples to marry, may finally enjoy the full panoply of rights enjoyed by straight couples. Married same-sex couples in those states can finally enjoy all state and federal benefits, rights and protections of marriage. But don’t pop a cork yet. And don’t be lulled into complacency and a belief that the marriage equality fight has concluded. To the contrary, same-sex marriages are still largely a second class status. The federal government will still deny same sex marriages and not recognize the marriages of same-sex spouses who marry in states that permit same-sex marriage, but who then relocate to or travel to any of the 36 other states that have state DOMA laws. Don’t be lulled into thinking that your marriage can cross state borders! If a couple marries in Massachusetts, for example, and relocates to a state that has a state DOMA law, the federal government can still deny Social Security benefits and VA benefits. The marriage will not be recognized by immigration authorities. The couple will not be protected by marital deduction estate planning for estate tax purposes. ERISA retirement protections will dissolve upon crossing the border. Health insurance benefits may be denied. Crossing state lines will mean that the couple may not be able to secure a divorce if needed, and even if a divorce were somehow granted by a state with a DOMA law, assets divided incident to the divorce will not be subject to tax protections and advantages aimed at preventing spousal impoverishment. And what if one spouse remains in the state that permitted the marriage and the other spouse relocates to a state that prohibits same-sex marriages; how will state and federal law be applied to protect the marriages of couples whose marriage cross jurisdictions? Which law applies? While today’s decisions are awesome and incredible given the sea change in national recognition of gay relationships, the fact remains that same-sex marriages are not reliable marriages. Until same sex marriage is portable across state lines, it is a second class status. And separate is not equal.