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Domestic partnership laws might gain clarity in 2013

On Behalf of | Jan 15, 2013 | Estate Planning |

Last month the U.S. Supreme Court decided that it will hear two cases dealing with same-sex couples and the discrimination they have encountered under federal and California laws. The Supreme Court will hear the cases in March and may have a decision sometime around the middle of summer.

People in domestic partnerships and same-sex marriages have had to struggle through an ever-changing landscape of potentially discriminatory state and federal laws, but they are now hoping that the highest court in the land will finally put some of these issues to rest.

In the case of United States v. Windsor, the court will essentially decide whether the federal Defense of Marriage Act violates the equal protection guarantee of the U.S. Constitution because it treats people differently based solely on their sexual orientation. Because of DOMA, same-sex couples who are legally married in certain states are still subject to federal income and estate taxes as individuals under a system that doesn’t recognize their union.

The second case, Hollingsworth v. Perry, will address the question of whether California’s Proposition 8, the ballot initiative to ban the state’s recognition of same-sex marriage, is valid. This case has major implications for California residents, as well as the power of states to pass legislation that disadvantages a class based on sexual orientation and deprives them of a vested right.

Both cases have the potential to present major changes to the way same-sex couples handle their estate planning. As of now, California residents wanting to provide for their same-sex spouses and partners in a will may have to endure disparate tax treatment under federal law. However, with the help of an experienced estate planning attorney, they can still minimize their tax liability.

Source: Record Online “Protecting Your Future: NY’s same-sex spouses should plan estates,” Bonnie Kraham, Jan. 3, 2013

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