United States v. Windsor struck down Section 3 of the Defense of Marriage Act and recognized the same sex marriage of Ms. Windsor and Ms. Spyer for the marital deduction for federal estate tax purposes. However, the still leaves wealthy families and estate planners with some questions. It is clear from the decision that couples who are married in states that recognize same-sex marriage, among them Washington and California (based on Prop 8 decision), will now have access to the marital deduction under the federal estate tax, as well as a bevy of other federal benefits. What is less clear is what happens if those couples move to a state like Oregon, which does not recognize same-sex marriage.
Though same-sex Oregonians cannot legally marry in the state, they can chose to register as domestic partners, which gives them the tax and legal benefits of being married for Oregon purposes, but is not recognized by the federal government or Oregon as a marriage. It does not appear that the precedent set with Windsor applies to domestic partners, meaning that Oregonians in this position will receive the same benefits as if they were married for purposes of the Oregon estate tax, but not the federal estate tax. The question remains how the federal government will treat same sex couples who are legally married in one state, say Washington, and move to a state that does not recognize same sex marriage. Are they still married for federal purposes but not for the state they now domiciled, or does the new state’s position on same sex marriage invalidate the marriage for federal purposes?
In Oregon, if a same sex couple is married in Washington and moves to Oregon, the Washington marriage is not recognized by Oregon, but the couple can register as Domestic Partners. Does this registration and the fact that Oregon does not recognize same sex marriage terminate the marriage for federal purposes or does the couple receive the federal benefits because the marriage is valid in Washington and the couple received Oregon benefits because they are registered Domestic Partners? Hopefully this will be decided soon so our clients are not left wondering.
