We don't normally report on cases outside of Washington State but the decision out of New York in Windsor v. United States has such important long term implications for our same sex couple clients, we had to make sure they got the news.

On June 6, 2012, in Windsor v. United States, U.S. District Judge Barbara Jones in the Southern District of New York granted summary judgment to Edith Windsor and created a precedent that is likely to positively affect same-sex married couples for years to come. Edith was awarded $353,053, plus interests and costs for the federal estate tax that she was wrongfully required to pay upon the death of her beloved wife.

Edith met her late spouse, Thea, nearly 50 years ago in New York City. Even though no state in the United States afforded legal recognition to same-sex couples, in 1967, Thea proposed to Edith. In 1977, Thea was diagnosed with multiple sclerosis, which gradually debilitated her over the years and made her a quadriplegic. After being engaged for 40 years, in 2007, Thea and Edith decided to legally marry in Canada since same-sex couples were still not permitted to marry under New York law. Their marriage in Canada was recognized in New York because New York affords legal recognition to civil marriages that are lawful in the jurisdiction where they are performed. See Matter of the Estate of Ranftle, No. 4585-2008 (N.Y. Sur. Ct. Jan. 26, 2009). On February 5, 2009, Thea lost the fight against her health battles and passed away, leaving her entire estate to Edith. In June 2011, New York became the sixth state to allow same-sex couples to marry.

While Thea's estate slightly exceeded the applicable federal exclusion amount set forth in 26 U.S.C. 2010(c), under 26 U.S.C. § 2056(a), a decedent's estate is generally entitled to an unlimited marital deduction for the value of any property that passes from the decedent to his or her surviving spouse. Whether a couple is married for purposes of the estate-tax marital deduction hinges on whether the couple is considered validly married under the law of the state. See Eccles v. Comm'r, 19 T.C. 1049, 1051, 1053-54 (1953).

While on its face, the estate-tax marital deduction applies to all legally married couples, same-sex couples have been denied these benefits due to the plain language of the Defense of Marriage Act (DOMA). Section 7 of DOMA provides:

"[i]n determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word 'marriage' means only a legal union between one man and one woman as husband and wife, and the word 'spouse' refers only to a person of the opposite sex who is a husband or wife." 1 U.S.C. § 7." Due to DOMA, the Internal Revenue Service excluded same-sex spouses from the benefits of the estate-tax marital deduction. This consequently caused Thea's estate to owe $363,053 in federal estate tax, which is an amount that the estate would not have had to pay if she married a male.

In 2010, Edith challenged the federal government's refusal to recognize her marriage—that was deemed valid under New York law—for federal estate-tax purposes, and she won. In February 2011, President Obama's administration came to the conclusion that Section 3 of DOMA, which bars the federal government from recognizing the legal marriages of same-sex couples, is unconstitutional and decided that the U.S. Department of Justice would no longer defend such discrimination in court. The Bipartisan Legal Advisory Group of the U.S. House of Representatives (BLAG) intervened to defend the constitutionality of DOMA and argued that DOMA provides a federal definition of marriage and it is what is "universally accepted in American law." Windsor v. United States, 1:10-cv-08435 BSJ-JCF, p. 18. Judge Jones of the Southern District of New York disagreed with BLAG and held that DOMA's definition of marriage does not pass constitutional muster and is unconstitutional as applied to Edith. As a result of this groundbreaking case, couples living in states that license or respect same-sex marriages are now entitled to equal treatment for federal estate-tax purposes. This case also suggests that executors of estates involving a same-sex surviving spouse may be entitled to a refund of federal estate taxes that they may have been wrongfully required to paid.

Washington's Estate tax, which applies to many more couples in Washington because it has a personal exemption of $2 million, already grants the unlimited exemption to registered domestic partners.  This case, if upheld by Supreme Court could extend that same equality to the federal level. 

If you are in a same sex relationship and would more information on issues that might affect your estate plan, contact us for a free 1/2 hour consultation at info@phinneyestatelaw.com or (206) 459-1908.

Earlier this month, the Washington State Court of Appeals for Division One, issued a new opinion on the Slayer Rule.  In Robin v. Rice, the court held that someone who acts in self-defense is not precluded from inheriting under the slayer rule.  It further held that a victim of domestic violence can introduce evidence of an aggressor's prior bad acts of domestic violence in order to show the victim's state of mind, an element of self-defense. 

The slayer rule in Washington State and Federal Law holds that someone who willfully and unlawfully caused the death of another cannot inherit under a will, trust, or as the beneficiary under a life insurance policy or other non-probate asset.   In this case the deceased had a long history of committing domestic violence against her partner and the jury found that her death resulted from hitting her head after being pushed by her partner.  The jury also found that the push was an act of self-defense.  The court distinguished self-defense from a finding of not-guilty by reason of insanity which it found did not protect a killer from the affects of the slayer rule.  The court held the an act of self-defense is not illegal and therefore the slayer rule does not apply.

If you have questions about the slayer rule or other issues in a probate or transfer of non-probate assets, contact us at info@phinneyestatelaw.com or (206) 459-1908.

Phinney Estate Law is proud to endorse Ref. 74 to confirm the right of same sex couples to marry.    We work with many same sex couples on estate planning, probate, and family law cases. 

Working with these couples will never be exactly like planning for opposite sex married couples until Federal Law changes to eliminate the discrimination in benefits and tax rights but we were so proud of the Washington State Legislature for passing the same sex marriage bill in Washington to make things in this state no longer "separate but equal" but just equal. 

We were disappointed that the opponents of equality were able to get enough signatures to require the matter to go before voters.  We hope it will turn out to be a chance for all voters to show they support equality just as much as their representatives.  What we hope will not happen is that people will be confused about earlier messages not to sign the petitions and think that voting no is the right way to vote.  So this will the be first of many reminders from us that if you, like us, support marriage equality to you want to vote YES on Ref. 74 this fall.  Want get more involved, learn how at Washington United for Marriage.