Financial advisers who have same-sex couples as clients need to keep abreast of a recent legal decision that is headed toward the Supreme Court.
A federal court in New York has declared that part of the federal Defense of Marriage Act, which states that a marriage must be between one man and one woman, is unconstitutional because it violates the equal protection clause of the 14th Amendment.
In the Windsor v. U.S. decision, the judge ordered that Edith Windsor be refunded $363,000 that was taken from the estate of her deceased female spouse because she wasn't allowed to claim the marital deduction, even though their union was recognized by New York. Her lawyers have asked the Supreme Court to take up the case without waiting for a decision by an appeals court.
Many think that this case will need to be answered by the nation's top court. If ruled unconstitutional, the federal law passed in 1996 no longer will stand in the way of same sex couples' receiving income and estate marital tax deductions, as well as other benefits, such as Social Security or pensions.
“The writing is on the wall that DOMA will no doubt be brought before the Supreme Court in the next year or two,” said Cathy Pareto, an adviser whose eponymous firm in Miami oversees $60 million in assets.
She said the Windsor case is “groundbreaking” for couples in states where she contends that they should be able to take advantage of the financial benefits awarded married couples.
Six states — Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont — as well as Washington, D.C., recognize same-sex marriage.
President Barack Obama in May expressed support for same-sex marriage, and his administration has said that it will stop defending DOMA from legal challenges.
lskinner@investmentnews.com Twitter: @skinnerliz
