Thea Spyer and Edith Windsor were a couple for more than four decades when they decided to get married in Canada in 2007. Spyer passed away in 2009 and left a considerable sum of money to Windsor.
The Internal Revenue Service presented Ms. Windsor with an estate tax bill $363,053.
There is an unlimited estate and gift tax exemption on asset transfers between spouses. However, this does not apply to same-sex couples who are legally married in a particular state or country.
This is because of provisions contained within Section 3 of the Defense of Marriage Act. Windsor is challenging the constitutionality of this measure because she says it violates the Equal Protection Clause that is contained within the United States Constitution.
The Supreme Court will decide on the case. The District Court in New York and the Second Circuit Court of Appeals have already heard the arguments, and each of them ruled in favor of Edith Windsor.
If the highest court was to agree with these lower court rulings they could issue either a broad or a more narrow ruling. The broader ruling would render the Defense of Marriage Act unconstitutional and all same-sex marriages would be federally recognized.
Another possibility would be to issue a more narrow ruling that found in favor of the plaintiff but was only applicable to the Second Circuit.
There are some 1000 federal benefits that are afforded to married couples that legally married gay couples do not have access to, so this decision could have a wide ranging impact even beyond the realm of estate planning.
- The Questions of Estate Planning, Part 4: Where - December 27, 2019
- The Questions of Estate Planning, Part 3: When - December 20, 2019
- The Questions of Estate Planning, Part 2 - December 13, 2019
