♠ Posted by Marc J. Soss in estate plan,estate planning,florida estate planning,NJ estate planning,same sex estate planning,same-sex couples at Friday, May 27, 2016
A
recent New Jersey Tax Court ruling, unpublished opinion, emphasizes the
importance for same-sex couples to not put-off marriage for estate planning
purposes. New Jersey has both an estate tax and an inheritance tax, and
taxpayers must pay the higher of the two taxes. The estate tax impacts estates
of more than $675,000. Notwithstanding a 31-year relationship, registration as
a same-sex domestic partner under New Jersey's Domestic Partnership Act (DPA), and
a marriage scheduled to take place with 6 days of his death, the New Jersey Tax
Court Judge ruled that the survivor did not qualify as a surviving partner for
estate tax purposes under New Jersey law.
As a result of his failure to qualify as a surviving spouse he was not entitled
to a $101,041 estate tax deduction under New Jersey tax law.
The Judge, in applying a “very
strict reading of the statute,” reached this conclusion based upon the fact
that the couple were eligible to enter into either a civil union or a marriage
as of the date of the decedent's death and did neither. In 2007, New Jersey had
enacted the Civil Union Act which allowed same-sex partners, who entered into a
civil union, to be treated the same as opposite-sex spouses for purposes of
calculating the New Jersey estate tax. Subsequently, in October 2013, the New
Jersey Supreme Court, in Garden State Equality v. Dow, permitted same-sex
couples to marry. The New Jersey's statute on domestic partnership is
“unequivocal” in providing exemptions only for personal income and inheritance
taxes and not the estate tax.
