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The Latest in LGBT Estate Planning: Challenges to DOMA


The Defense of Marriage Act (“DOMA”), signed by President Clinton in 1996 defined marriage for federal purposes as the union of a man and a woman. Various appeals are working their way through the federal court system that challenge the constitutionality of DOMA. Among other things, DOMA is contrary to the doctrine of Full Faith and Credit usually given by one jurisdiction to another under conflict of law principles.

 The Obama administration announced on February 23, 2011, that it would not defend DOMA in federal court. It believes that the law is unconstitutional because it is discriminatory.

 The effect of DOMA on estate planning is that neither the unlimited marital deduction nor the new “portability” of unused applicable exclusion amounts between married couples of the same gender are recognized under federal law, potentially resulting in adverse estate tax results to gay and lesbian couples compared to married couples of different gender.

 It is unlikely that DOMA will be overturned in Congress during the current session. Generally, Republicans, who control the House of Representatives, favor DOMA. Therefore, until DOMA is actually overturned in the federal court system, the announcement by the Obama administration has no effect on estate planning for LGBT couples in states where they are legally married. You can expect that a challenge to the constitutionality of DOMA will find is way to the Supreme Court sooner or later, probably this year. At the Supreme Court, as it is currently composed, you may expect a 5-4 vote, which could go either way.

 If DOMA is overturned, then the unlimited marital deduction and portability will indeed be available to married couples of the same gender. None of this affects same-sex couples whose status is that of a “civil union.”