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Estate Tax Issues Continue to Plague Married New York Same Sex Couples

Thousands of same sex New York couples have wed since the state became the sixth to legally allow such unions last month. At the time our New York estate planning attorneys noted how the change means that these couples are no longer required to pay state taxes on domestic partnership benefits, will gain access to worker’s compensation benefits, can bring wrongful death lawsuits on behalf of their spouse, and can file joint state tax returns. In addition, surviving same sex spouses are no longer subject to New York estate taxes on assets they receive from their partners at death.

However, the fight for equality continues. Same sex marriages are specifically repudiated at the federal level through the Defense of Marriage Act (DOMA). This has significant repercussions on the estate planning needs of married same sex couples. These couples cannot file joint tax returns or joint bankruptcy petitions. Upon the death of one spouse the other cannot inherit veterans benefits or Social Security benefits. Also, property passing to a surviving spouse is subject to federal estate taxes.

Our New York estate planning lawyers work with families on plans that account for both state and federal tax and asset transfer issues. We understand the complexities that same sex couples continue to face when preparing for the future as a result of the divergence in the law at the state and the federal levels. These inequalities led several area publications to issue joint appeals last week calling for DOMA to be declared unconstitutional. For example, the Syracuse Post-Standard noted that “the law discriminates by denying homosexual spouses significant federal benefits that flow automatically to heterosexual spouses.”

In addition, late last month our New York Attorney General Eric Schneiderman filed a friend-of-the-court brief in a federal case related to a surviving spouse who was forced to pay estate tax on the inheritance of her female partner. Mr. Schneiderman noted that “The State of New York has long recognized out-of-state, same sex marriages and the enactment of the Marriage Equality Act further cements our state’s position on this critical civil rights issue.” The case is working its way through the federal system and is expected to reach the U.S. Supreme Court. However, the law is still on the books making it important for all married same sex couples in our area to seek professional assistance to ensure that their long-term financial and caregiving preparations are tailored to account for issues at both the state and federal level.

See Our Related Blog Posts:

Married Same-Sex Couples Need to Consider Effect of Defense of Marriage Act

Marriage Equality May Change New York Estate Planning Needs for Same Sex Couples

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