In late June, the United States Supreme Court determined that the portion of the Defense of Marriage Act (DOMA) that defined marriage as a union between one man and one woman was unconstitutional in the absence of a specific federal policy.
However, the Supreme Court’s ruling does not impact the portion of DOMA that specifies that no state is required to give effect to another state’s recognition of homosexual unions.
The case involved a claimed marital deduction in the estate of a decedent who was in a homosexual union at the time of death – the parties were registered as domestic partners under New York law and then participated in a ceremony in Canada. The Court’s decision created several tax issues, including the impact of conflicting state laws, and the effective date of the Court’s decision for tax purposes.
Several other estate planning provisions are also impacted, including the marital deduction, portability of the unused exclusion at the first death, and “gift splitting.”