U.S. Supreme Court Rules Surviving Spouse Of Lesbian Couple Entitled To Estate Tax Refund

New York recognized the marriage of state residents Edith Windsor and Thea Spyer, who wed in Ontario, Canada, in 2007. When Spyer died in 2009, she left her entire estate to Windsor. Windsor sought to claim the federal estate tax exemption for surviving spouses, but was barred from doing so by a federal law called the Defense of Marriage Act (DOMA). DOMA defined “marriage” and “spouse” as excluding same-sex partners. Windsor paid $363,053 in estate taxes and sought a refund, which the Internal Revenue Service denied. Windsor filed a lawsuit against the United States, contending that DOMA violated the principles of equal protection incorporated in the Fifth Amendment. The United States District Court for the Southern District of New York ruled against the United States, finding DOMA unconstitutional. Ruling that it could discern no rational basis for DOMA’s prohibition on recognizing same-sex marriages, the district court ordered the U.S. Treasury to refund Windsor’s tax with interest. The United States Court of Appeals for the Second Circuit affirmed.

Today, in a 5-4 decision, the U.S. Supreme Court declared that DOMA is an unconstitutional deprivation of equal liberty under the Equal Protection Clause of the Fifth Amendment. The Court held that DOMA discriminated against same-sex couples who are legally married under state law since states have the power to define and regulate marriage. According to the court, “DOMA instructs all federal officials, and indeed all persons with whom same-sex couples interact, including their own children, that their marriage is less worthy than the marriages of others. The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity.” The decision means that same-sex couples who are legally married must now be treated the same under federal law as married opposite-sex couples.

The ruling has many implications for same-sex couples with regard to federal estate taxes, gift taxes, Social Security benefits, and IRA beneficiary rollover rules, among other things.

The U.S. Supreme Court’s decision is annexed here – United States v. Windsor, Executor of the Estate of Spyer