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DOMA may Cause Complicated Estate Planning for Same-Sex Couples


The Defense of Marriage Act, a federal law passed in 1996, has generated controversy since its passage. The law, which denies federal recognition of gay marriages, has recently come into question due to the way it impacts the estate planning needs of same-sex couples in New York and throughout the country.

According to a federal court's ruling, DOMA violates the Equal Protection Clause of the Fifth Amendment. This is because it denies equal benefits to same-sex couples. For example, a surviving spouse in a heterosexual marriage may receive any amount of property without paying federal estate tax. However, the same does not hold true for same-sex couples.

The issue is that while the same-sex couple's marriage may be valid in their home state, such as New York, the federal government does not recognize same-sex unions. Therefore, it does not grant the surviving spouse from a same-sex marriage an exemption from the estate tax. In short, the gay surviving spouse may get a hefty tax bill while the heterosexual surviving spouse pays no tax at all.

As long as DOMA exists, same-sex couples in New York and elsewhere may experience complicated estate planning and should take extra precautions. Because of the added legal complexities of those precautions, same-sex couples may benefit from seeking experienced professional advice.

Even though heterosexual couples do not have to worry about DOMA, like same-sex couples, they would also benefit from planning ahead. That planning may include drafting wills, setting up trusts or preparing a power of attorney.

Although thinking about the end may not be pleasant, a well-thought out estate plan can bring peace of mind. The sooner it gets done, the sooner the person knows that they have protected themselves and their loved ones.

Source: Forbes, "LGBT Couples Should Take Steps to Protect Their Assets," Bernard A. Krooks, Aug. 16, 2012