Court Awards Federal Estate Tax Refund To Surviving Spouse Of Lesbian Couple

Under existing federal law, spouses who pass away can leave property of any value to their surviving spouses free of federal estate taxes. This is called the “unlimited marital deduction.” However, under the Defense of Marriage Act (DOMA), a federal law passed in 1996, marriage is defined as “only a legal union between one man and one woman as husband and wife, the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.” As a result, DOMA denies federal benefits, like the unlimited marital deduction, to married same-sex couples which are provided to married opposite-sex couples. Recently, a federal district court, finding DOMA to be unconstitutional, awarded the surviving spouse of a lesbian couple reimbursement for the federal estate taxes she paid on her wife’s estate. Windor v. United States of America, Docket No. 10 Civ. 8435 (S.D.N.Y., June 6, 2012)

Edith Windsor and Thea Spyer were married in Canada in 2007. The couple lived in New York City when Ms. Spyer died in 2009.  Although New York State considered the couple married, the federal government did not and taxed Ms. Syper’s estate as though the two were not married. As a result, Ms. Windsor, now 82 years old, had to pay Ms Spyer’s substantial estate tax bill because of DOMA.

Ms. Windsor sued the U.S. government, seeking to have DOMA declared unconstitutional and asking for a refund of the more than $350,000 in estate taxes she was forced to pay. Granting Ms. Spyer’s motion for summary judgment, federal court judge Barbara Jones from the U.S. District Court for the Southern District of New York found that DOMA’s denial of equal benefits to same-sex couples violated the Equal Protection Clause of the Fifth Amendment. Among other things, Jones stated that it was unclear how DOMA preserved traditional marriage, which is one of the stated purposes of the law. This is the fifth case to strike down DOMA.

The case is annexed here – Windor v. United States of America, Docket No. 10 Civ. 8435 (S.D.N.Y., June 6, 2012)

NY Times article about the couple’s wedding can be found here – Thea Spyer and Edith Windsor