DOMA Decision and the Impact on Estate Planning

In a groundbreaking U.S. Supreme Court decision, United States v. Windsor, the Supreme Court decided that Section 3 of the Defense of Marriage Act (i.e. DOMA) was unconstitutional. To read a summary of the decision, check out this page. Section 3 defined “marriage” to be between a man and a woman for Federal benefits. The result of Windsor is that same-sex married couples will now be treated as spouses for purposes of numerous Federal statutes. With regards to estate planning benefits, the following benefits will now be afforded to same-sex couples. (i.) Deferring income taxes where a spouse inherits a deceased spouse’s IRA or other qualified retirement plan. (ii.) Transferring wealth, either during life or at death, from one spouse to the other spouse without incurring a transfer tax. (iii.) Deferring estate taxes when a spouse passes away. The Windsor decision does not legalize same-sex marriage and it doesn’t hold that same-sex couples...