On October 18, 2012, the Second Circuit Court of Appeals issued its decision in Estate of Spyer, Docket No.  12-2335-35-cv(L), ruling that the federal Defense Against Marriage Act (“DOMA”) is unconstitutional as it violates the Constitution’s Equal Protection Clause. In Estate of Spyer, the surviving spouse of a married same-sex couple was denied the benefit of a marital deduction under federal tax laws for assets passing upon death to the surviving spouse. Under federal tax law, a deceased spouse’s estate is entitled to a deduction from estate tax for assets passing to a surviving spouse.  However, DOMA defines “marriage” and “spouse” in a manner that prevents a same-sex married couple from qualifying for the marital deduction upon a spouse’s death.

The lawsuit was filed in the United States District Court for the Southern District of New York by Edith Windsor, the 83-year-old surviving spouse of Thea Spyer, alleging that she was entitled to be treated as a surviving spouse under federal law and that her spouse’s estate was entitled to a marital deduction for assets passing to Ms. Windsor on death. Furthermore, Ms. Windsor claimed that the IRS owed her spouse’s estate a $363,035 estate tax refund for failing to apply the marital deduction in this instance. The New York court ruled in favor of Ms. Windsor and held that Section 3 of DOMA (the portion of the law that defines the terms “marriage” and “spouse”) violated the Constitution’s Equal Protection Clause stating that there was no rational basis to support it.  The Second Circuit Court of Appeal affirmed the New York Court’s decision.

Interestingly, three months after the lawsuit was filed by Ms. Windsor against the United States in New York, the U.S. Department of Justice, on behalf of the United States, declined to defend DOMA. At that point, members of Congress, through the Bipartisan Legal Advisory Group of the United States House of Representatives, hired counsel to defend DOMA in the lawsuit.  The United States continued as a party in the lawsuit, but switched sides advocating that the court rule DOMA unconstitutional.

The issues of how tradition and morality with respect to the institution of marriage were raised in this matter.  The Appellate Court aptly responded:

“Our straightforward legal analysis sidesteps the fair point that same-sex marriage is unknown to history and tradition. But law (federal or state) is not concerned with holy matrimony. Government deals with marriage as a civil status—however fundamental—and New York has elected to extend that status to same-sex couples.  A state may enforce and dissolve a couple’s marriage, but it cannot sanctify or bless it.  For that, the pair must go next door.”

At this time, California law does not authorize same-sex marriage in California. The status of this law is currently on appeal as summarized in my blog article Same Sex Marriage in California.

It will be interesting to see if the U.S. Supreme Court will agree to review Estate of Spyer to definitively rule on the issue of whether DOMA is constitutional.

If you would like to discuss this or other trusts and estates issues, please contact the attorneys at Drucker Law Offices, 468 North Camden Drive, 2nd Floor, Beverly Hills, CA 90210, 310.285.5375 Tel, 310.444.9754 Fax, www.druckerlaw.com