Today the U.S. Supreme Court ruled that Section 3 of the Defense of Marriage Act (“DOMA”) violates the Equal Protection clause of the 5th Amendment to the U.S. Constitution. The opinion of the court in United States v. Windsor, written by Justice Kennedy, states that “DOMA seeks to injure the very class New York seeks to protect. By doing so it violates basic due process and equal protection principles applicable to the Federal Government.” The decision marks a historic moment in the national debate over same-sex marriage and will likely be the focus of much discourse. But there is one important issue that may otherwise fall through the cracks: this was a case about the federal estate tax.
Edith Windsor met her wife Thea Spyer in 1963 and the two became engaged four years later, never knowing whether they would legally be able to wed. They registered as domestic partners in 1993 in their home state of New York and were finally married in Toronto, Canada in 2007. Ms. Spyer passed away in 2009 and left her entire estate to Ms. Windsor. If Ms. Spyer had been a man, the entire bequest to Ms. Windsor would have passed tax free, under the marital deduction to the federal estate tax. However, when Ms. Windsor filed for the marital deduction, the Internal Revenue Service disallowed it, saying that under DOMA Ms. Windsor and Ms. Spyer were not in a recognized marriage and could not have the benefit of the marital deduction. The IRS assessed a $363,053 tax on Ms. Spyer’s estate, she paid the tax, and sued the government for a refund. Today, Edith Windsor not only gets the satisfaction of having her 44 year relationship finally recognized by the federal government, but she also gets a refund of the estate tax paid in 2009, plus interest.
Many questions remain that will be sorted out in the coming days, months (and probably years) – by the courts, Congress, and the Executive Branch. For couples in same-sex marriages (currently recognized by 12 states, and the District of Columbia) however, in addition to federal tax consequences, today’s ruling provides access to a significant number of federal law benefits. These benefits include Social Security survivor benefits, benefits under federal employee health plans, and veteran’s benefits.
