THE NEW 2016 IRS DEFINIATION OF HUSBAND AND WIFE

♠ Posted by Marc J. Soss in Elective Share Trust,estate plan,estate planning,Estate planning attorney,florida estate plan,florida marriage planning,same sex estate planning,same-sex couples

The Internal Revenue Service (IRS) has formally put into place, effective September 2, 2016, amendments to the regulations that define “who is married for tax purposes.” The new regulations state that it will interpret the term “husband and wife” as any two people who are married to each other, even if they are a same-sex couple. The IRS is addressing this issue as a result of the 2013 U.S. Supreme Court ruling in United States v. Windsor (which struck down the section of the Defense of Marriage Act (DOMA) prohibiting recognition of same-sex marriages for federal purposes) and the 2015 Supreme Court ruling in Obergefell v. Hodges (that made same-sex marriage legal throughout the nation).

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SAME -SEX COUPLES CONTEMPLATING MARRIAGE SHOULD NOT PUT IT OFF

♠ Posted by Marc J. Soss in estate plan,estate planning,florida estate planning,NJ estate planning,same sex estate planning,same-sex couples

A recent New Jersey Tax Court ruling, unpublished opinion, emphasizes the importance for same-sex couples to not put-off marriage for estate planning purposes.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.  

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