Trust and Estate Counsel

Tennessee Estate Planning Law

Insight and commentary on estate planning issues impacting affluent residents of Tennessee

Estate Tax Refund Ordered for Widow of Same Sex Marriage

A previous article detailed a case in which Edith Windsor had to pay $350,000 of federal estate taxes when her spouse died because Edith’s spouse was a woman rather than a man. The tax penalty was based on a 1996 federal law signed by President Clinton known as the Defense of [Heterosexual] Marriage Act (“DOMA”). The actual tax cost was significantly higher than $350,000 because New York also charged more than $200,000 of inheritance taxes that would not have applied if Edith’s spouse had been a man.

A federal judge in New York recently ordered the IRS to refund the federal estate taxes that were assessed. The judge ruled that DOMA is unconstitutional.

It appears that the constitutionality of DOMA will eventually be decided by the U.S. Supreme Court. Unless and until DOMA is thrown out, you should assume that gifts and bequests to your spouse will not qualify for a gift or estate tax marital deduction unless your spouse is a member of the opposite sex.