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The Impact of the DOMA Decision

Marriage Financial Planning Attorneys Birmingham, AL

The Impact of the DOMA Decision

The Defense of Marriage Act provides, in part, that “marriage” is a legal union between one man and one woman as husband and wife. The word “spouse” is defined as a person of the opposite sex which is a husband or a wife. Section 3 of the Act prevents same-sex married couples from being recognized as “married” for the purpose of qualifying for government employee benefits, Social Security benefits, tax benefits and filing status, among other things.

The U.S. Supreme Court overturned that provision, finding that the surviving spouse of a lesbian couple was entitled to the benefit of the estate tax marital deduction and ordered her a refund of the federal estate tax she had paid plus interest. The couple had been married in California which recognizes same-sex marriage.

The Court stated that the U.S. Constitution’s provisions protecting the right of all citizens to due process of law was violated by imposing a disability on a class of persons deemed by the state (CA) to be entitled to recognition.

Same-sex married couples who remain in a state permitting same-sex marriage will receive Social Security benefits (including spousal and survivor’s benefits), Veterans benefits, retirement benefits, health insurance, Medicare enrollment benefits, Medicaid spousal impoverishment protections, disability benefits, and tax benefits. The spouse will have full rights in federal estate planning as to the marital deduction, disclaimers, portability, and gift splitting. In addition, these couples will be able to file joint tax returns, utilize spousal roll-over provisions for IRA’s and other qualified retirement accounts.

The impact of this ruling on states that have not adopted laws permitting same-sex marriage (such as Alabama) is unclear, but based upon the Full Faith and Credit clause of the U. S. Constitution that requires states to give equal recognition to the laws of other states, laws that are constitutional in the states in which the action takes place could result in Alabama having to honor a marriage that was valid in another state. In addition, different federal agencies follow different standards to determine who is married: some agencies use the “place of celebration” and some states use the “place of residence” to establish what rights are available. The IRS, the SSA and the VA use place of residence.

Recent decisions in other state may provide guidelines to Alabama. A Pennsylvania Court found that a surviving spouse of a same-sex marriage which was legal in Canada was entitled to federal ERISA benefits. In addition, an Ohio court held that the registrar of death certificates in the state must recognize a valid same-sex marriage that was legal in another state pointing out that Ohio recognizes other types of valid out of state marriages that Ohio does not – such as marriage between cousins and the marriage of minors.

The Defense Department announced on August 14th that it will offer benefits to same-sex spouses of military personnel and other employees beginning in September. These benefits include health care coverage, housing allowance and survivor benefits. The marriage must be valid in the place of celebration.

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