Supreme Court Approves Same-Sex Marriage: Tax and Legal Implications for Same-Sex Spouses

by Jackson Walker
Contact

On June 26, 2015, the Supreme Court handed down its decision in the landmark case of Obergefell v. Hodges. The Court held that the Fourteenth Amendment to the United States Constitution requires all states to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state.

Writing for the majority, Justice Anthony Kennedy stated that:

No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization's oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.

United States v. Windsor

The decision in Obergefell comes just two years after the Supreme Court's ruling in United States v. Windsor. In Windsor, the Court held that Section 3 of the Defense of Marriage Act, which federally defined marriage as a union between one man and one woman as husband and wife, was unconstitutional under the Constitution's guarantee of equal protection under the law. The effect of Windsor is that the federal government must recognize same-sex marriages that have been approved by the states. Following Windsor, Texas same-sex married couples were granted the rights of married persons in a number of federal areas including federal tax benefits, active military benefits, federal employment benefits for employees of the U.S. government, and immigration benefits. However, until the Obergefell decision, Texas was not required to, and did not, permit or recognize same-sex marriages for purposes of Texas law. This left same-sex Texans who were married in a state that allowed same-sex marriage in a sort of legal limbo: if they got married outside of Texas, they were entitled to certain federal benefits of marriage, but Texas denied them all of the benefits of marriage under Texas law.

As a result of Windsor, and now Obergefell, the world is dramatically different for same-sex married couples in Texas. Thousands of laws have been affected by these two decisions. Below is brief summary of where things stand as a result of these Supreme Court decisions:

Income Taxes

Same-sex spouses are required to file their federal income tax returns as either married filing jointly or married filing separately. Depending upon individual income levels, marriage can raise or lower the income taxes owed by a same-sex couple.

Giving Property During Life or at Death

Same-sex spouses can give unlimited amounts of property to each other during life without causing federal gift tax to be owed. Same-sex spouses can leave unlimited amounts of property to each other at death without causing federal estate tax to be owed at the death of the first spouse.

IRA Rollovers

Same-sex spouses have the right to roll over a deceased spouse's IRA into their own IRA, a right not afforded to non-spouse beneficiaries. In many cases, a spousal rollover can provide increased income tax deferral and other tax advantages.

Community Property

Same-sex spouses should now be subject to the Texas community property regime. Under Texas law, property acquired before a marriage is considered a person's separate property. Property acquired during a marriage is presumed to be community property of both spouses, unless it is received by gift, devise, or inheritance (and can be proved to have been so received by "clear and convincing evidence"), or if otherwise agreed by the spouses. Income either spouse earns during the marriage is considered community property as is property purchased with income earned during the marriage. Dividends, interest and other income earned on either spouse's separate property during the marriage are considered community property. Like their heterosexual counterparts, if same-sex spouses desire to keep their respective estates entirely separate or if they would like to convert existing separate property into community property, they will need to enter into a marital property agreement that complies with Texas law.

Inheritance Rights of Surviving Spouse

If a person dies without a will in Texas, the laws of intestate succession direct the disposition of such person's property on death. For purposes of these laws, prior to Obergefell, same-sex couples were treated as legal strangers. However, when a married person dies without a will, the surviving spouse has certain inheritance rights to receive a deceased spouse's property. For example, when a married Texan dies without descendants, all of the community property would pass to the surviving spouse, all separate personal property would pass to the surviving spouse and one-half of all separate real property would pass to the surviving spouse.

Rights of a Surviving Spouse in the Predeceasing Spouse's Property

Surviving spouses in Texas have certain special rights upon a predeceasing spouse's death. For example, a surviving spouse is given an exclusive lifetime right of occupancy of the homestead as long as he or she elects to occupy it as his or her home, regardless of the disposition of the homestead that is directed in the predeceasing spouse's will. In addition, a predeceasing spouse cannot dispose of a surviving spouse's interest in community property at death, by will or otherwise. If the predeceasing spouse's will purports to dispose of a surviving spouse's property, the surviving spouse may make an election either (i) to assert the surviving spouse's property rights in lieu of receiving any benefits under the predeceasing spouse's will or (ii) relinquish any of the surviving spouse’s rights in property disposed of by the predeceasing spouse and accept the benefits given to the surviving spouse under the predeceasing spouse's will. This is commonly referred to as the Widow's/Widower’s Election.

Medical Decision-Making Authority

In Texas, marriage alone does not make one spouse the agent of the other for purposes of making medical treatment decisions on behalf of the other spouse who is physically or mentally unable to make decisions for himself or herself. However, the Texas Consent to Medical Treatment Act allows a spouse to serve as surrogate to consent to medical treatment on behalf of an adult patient in a hospital who is comatose, incapacitated or otherwise mentally or physically incapable of communication and who has not otherwise designated an agent. A spouse has the first priority under the statute to make such treatment decisions.

Hospital Visitation Rights

Historically, some hospitals restricted hospital visitation rights to spouses and blood relatives only. In response to perceived injustices, President Obama issued a memorandum recommending that the U.S. Department of Health and Human Services, or HHS, detail guidelines for hospital visitation that prohibit discrimination based on "race, color, national origin, religion, sex, sexual orientation, gender identity, or disability." HHS issued such regulations in November 2010. The regulations, applying to hospitals participating in Medicare or Medicaid, prohibit these types of discrimination in hospital visitation and made it clear that designated visitors should be permitted access to patients regardless of whether they have a legally recognized relationship.

Duty of Support and Spousal Privilege

Spouses have the duty to support each other and receive the protection of spousal privilege (i.e., a confidential communications privilege and a privilege not to testify against a spouse in a criminal case).

Decisions Regarding Disposition of Remains

Unless another person is designated in a written instrument signed by the predeceasing spouse, the surviving spouse has the right to control the disposition, including cremation, of the predeceasing spouse's remains, has responsibility to inter the remains, and is liable for the reasonable cost of interment.

Things We Do Not Know

There is still lack of clarity as to how certain of these changes will work, mostly oriented around the time of effectiveness of the Obergefell decision. The decision indicated that Texas law prohibiting same-sex marriage was not constitutional. That being the case, is the validity of a same-sex marriage in Texas (and the rights associated with it) going to be effective from the date of the court decision, or, if the Texas prohibition was never constitutional, from the date of a marriage that predates the decision? This question applies to issues such as the following:

  • When will a couple's community property begin to accrue?
  • When will spousal benefits under social security benefits or VA rules (both of which were conferred based on a marriage being recognized in the state of domicile) begin to accrue?
  • If a married Texas person died after otherwise legal marriage but before the date of the Obergefell decision, does Texas law now allow that person to claim an interest in the estate under the rules of intestacy?

Texas has informal (common-law) marriage that is statutorily defined as a man and a woman (1) agreeing to be married, (2) living together in Texas as husband and wife, and (3) representing to others that they were married.

  • Will this statute now be construed to apply to same-sex couples?
  • If so, will a same-sex informal marriage that predates the date of the Obergefell decision be conferred legal status based on the unconstitutionality of the existing law?
  • On what date would the effectiveness of such a marriage begin?

Time, and likely future court decisions, will clarify these questions.

Estate Planning Review

In light of these major changes, it is important that same-sex spouses with existing estate plans contact one of our estate planning attorneys to discuss the following:

  • Does the dispositive scheme of the existing estate plan still make sense given that spouses can give unlimited amounts of property to each other during life and at death without triggering gift or estate tax?
  • How do the spouses wish to address the characterization of their property as separate or community property after marriage?
  • Are existing beneficiary designations on retirement accounts still appropriate? Is spousal rollover desired?
  • Does the estate plan contain a grantor retained income trust (a "GRIT")? If so, GRITs are no longer available for same-sex married couples.
  • Existing trusts should be reviewed to determine if a same-sex spouse is currently serving as trustee. The trust may now be a grantor trust because the grantor is deemed to have the powers of his or her new spouse.

For same-sex committed couples or spouses without any existing estate plan, it is equally important to contact one of our estate planning attorneys to discuss planning for the disposition of property at death, the designation of agents to make property and health care decisions in the event of incapacity, and many of the other unique non-tax driven considerations (e.g., family dynamics) that apply in the context of planning for same-sex committed couples and spouses.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackson Walker | Attorney Advertising

Written by:

Jackson Walker
Contact
more
less

Jackson Walker on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.