Organizations representing the gay and lesbian communities lauded the U.S. Supreme Court’s two rulings Wednesday–one striking down provisions of the Defense of Marriage Act (DOMA) and the other upholding the right of gay couples to marry in California. But advocates also warned that the decisions may complicate planning for same-sex couples and their advisors because of the existing patchwork of state bans on same-sex marriages.
Wednesday’s 5-to-4 ruling on DOMA, written by Justice Anthony Kennedy, noted that “The Constitution’s guarantee of equality…cannot justify disparate treatment of” lesbian and gay couples. Under the law, the court concluded, “same-sex married couples have their lives burdened, by reason of government decree, in visible and public ways.”
The Supreme Court’s separate ruling declared unconstitutional California’s Proposition 8, passed in 2008, which limited the granting of marriage licenses to heterosexual couples. The Supreme Court ruled in the case, Hollingsworth v. Perry, that the proponents of Proposition 8 did not have legal standing to appeal a U.S. District Court’s ruling that the proposition is unconstitutional.
“The Supreme Court’s decisions mean that all legally married couples will finally be protected by the federal government and marriage will be returned to California,” says Andre Banks, executive director of All Out. “These decisions will have an enormous impact on millions of families and affirm the commitment to equal protection guaranteed by the U.S. Constitution for all people, regardless of their sexual orientation or gender identity.”
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Hollingsworth v. Perry, previously known as Perry v. Schwarzenegger and Perry v. Brown, was filed on behalf of two same-sex couples in federal district court in California in May 2009. Under the sponsorship of the American Foundation for Equality Rights, co-founded by HRC President Chad Griffin, and represented by conservative attorney Ted Olson and liberal attorney David Boies, the plaintiffs achieved victories in both district court and the U.S. Court of Appeals for the Ninth Circuit, both of which ruled Proposition 8 unconstitutional.
In Windsor v. U.S., Edie Windsor, represented by the ACLU and the law firm Paul Weiss, challenged section 3 of DOMA, which required her to pay $363,000 in estate taxes after her partner and spouse of more than 40 years passed away. If Edie had been married to a man, instead of a woman, her estate tax bill would have been zero.
Under the DOMA ruling, gays and lesbians who live and marry in a state that permits same-sex marriage will be able to receive federal marriage benefits within the month. Among them: the ability to take advantage of the unlimited federal marital deduction, as same-sex couples can transfer assets to beneficiaries free of gift and estate tax.
This benefit alone can save same-sex couples costly and time-consuming implementation of tax-avoidance techniques, say observers. These included, for instance, placing assets in a revocable living trust or in a will established for the benefit of the surviving partner.
“[The DOMA ruling] was predicted by legal experts, but it’s still a remarkable and hopeful moment,” says Chuck Wolfe, president and CEO of the Gay & Lesbian Victory Fund. “And while the ruling doesn’t extend marriage equality to any other states, it does mean that when we finally win there too, those wins will be even sweeter.” But sources warn that federal benefits—there are more than 1,000 federal laws and programs to which LGBT couples may be subject—will vary, depending on their situation. Couples that live and marry in a state that allows same-sex marriage, but move to a state that still has a ban, may receive benefits from certain agencies, but not others.
The IRS and Social Security Administration, for example, make determinations as to benefits based on where couples reside and not where they marry. Similarly, federal benefits will vary by agency in situations where gay couples visit or marry in a state where same-sex marriage is permitted, but reside in a state where a ban is in force.