Defense of Marriage Act (“DOMA”) and Estate Planning in PennsylvaniaJuly 19, 2013
How Does the End of DOMA Impact Pennsylvania Estate Planning?
As you may have heard, the United States Supreme Court has struck down the Federal Statute known as the Defense of Marriage Act (DOMA). The case was interesting because it involved an estate between two lesbians that were married under New York law. The Complaint filed by the surviving spouse, Windsor, was based on her requirement to pay Federal Estate Tax upon the death of her wife. She and Thea Spyer had originally gotten married in Canada. When they lived in New York their gay marriage was recognized by New York State, but not by Federal law. Ms. Windsor challenged the Federal Statute because she felt that it was unfair that a heterosexual married couple will pay no Federal Income Tax for any transfers between spouses, but since she was subject to DOMA, she was required to pay $360,000.00 in Federal estate taxes.
She sought assistance from the Supreme Court to have this taxable claim refunded. The Court agreed with her and refunded the Windsor’s tax with interest and also struck down the Statute.
What to Remember about the end of DOMA
The important thing to take away from the Court case is that whether you are unmarried heterosexuals, or, an unmarried homosexual couple, you should look at estate planning. Currently, under Pennsylvania law, there is no provision for “gay” marriage. This means that gay people living together are treated as unrelated people and pay higher tax rates than married people. This is obviously unfair. To mitigate this taxable “hit,” it is suggested that you consult with an attorney to use a variety of estate planning devices to minimize taxable transfers. This includes both heterosexual and homosexual unmarried couples.
If you need further information about estate planning after DOMA, please feel free to contact me, Steven P. Miner, at (717) 724-9821 or firstname.lastname@example.org.