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U.S. Appeals Court Concurs That Gay Widow Should Receive Estate Tax Refund

  • October 19th, 2012

In a case involving the surviving spouse of a lesbian couple who is seeking reimbursement of federal estate tax she was forced to pay because she was not considered married under federal law, a U.S. appeals court has ruled that a key provision of the federal law is unconstitutional.

A three-judge panel of the U.S. Court of Appeals for the Second Circuit ruled 2-1 that the federal Defense of Marriage Act’s (DOMA) definition of marriage as a union between a man and a woman discriminates against gay men and lesbians who marry in states that allow same-sex weddings and violates the Constitution’s equal protection clause.  The ruling, which the U.S. Supreme Court will likely review, means that the surviving spouse, Edith Windsor, is another step closer to receiving a refund of more than $363,000 in estate taxes she paid when she inherited property from her wife because the federal government did not consider the couple to have been married. (Heterosexual spouses can leave any amount of property to their spouses free of federal estate tax.)

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As ElderLawAnswers reported, a federal district court judge issued a similar ruling in June and that judge awarded Ms. Windsor reimbursement for the tax bill she paid on her wife's estate.  

The district court’s ruling was stayed and a congressional legal group authorized by Republicans to defend DOMA quickly filed an appeal of the ruling with the U.S. Court of Appeals for the Second Circuit, which covers the states of New York, Connecticut and Vermont and agreed to hear the case on an expedited basis.  Ms. Windsor, 83, suffers from a serious heart condition.  Her lawyers have also asked the U.S. Supreme Court to hear the case, and the Court has been asked to hear two other cases challenging the statute.  In an article on the Second Circuit's ruling, the New York Times suggests that the Windsor case may well be the one the high court chooses to take. 

Background of the Windsor Case

Edith Windsor and Thea Spyer became engaged in 1967 and were married in Canada in 2007, although they lived in New York City. When Ms. Spyer died in 2009, Ms. Windsor had to pay Ms Spyer's estate tax bill because of DOMA, a 1996 law that denies federal recognition of gay marriages.

Although New York State considered the couple married, the federal government did not and taxed Ms. Syper's estate as though the two were not married. Ms. Windsor sued the U.S. government seeking to have DOMA declared unconstitutional and asking for a refund of the more than $363,000 federal estate tax she was forced to pay.

On June 6, 2012, federal court judge Barbara Jones from the U.S. District Court for the Southern District of New York ruled that there was no rational basis for DOMA's prohibition on recognizing same-sex marriages. Jones stated that it was unclear how DOMA preserves traditional marriage, which is one of the stated purposes of the law.  As ElderLawAnswers reported last year, President Obama decided to stop defending DOMA, so members of Congress formed an advisory group to defend the law. This was the fifth case to strike down DOMA.

For more on the appeals court’s decision from Bloomberg News, click here.

To read the U.S. Appeals Court’s ruling, click here.

Last Modified: 10/19/2012

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