Legal Blog

The Weekly Scenario from Steve Shane – 8.14.12

I get questioned more and more about what same sex couples can do in terms of their estate planning.  I wrote a few weeks back about a court case, “Windsor”, which was a New York District Court case which held that part of DOMA (the Defense of Marriage Act) is unconstitutional and that same-sex couples are entitled to a federal marital estate tax deduction.  Windsor is one of a handful of federal cases where courts have ruled against DOMA,  in one way or another.  Many commentators believe the Supreme Court will likely rule on the law’s constitutionality.  In fact, the plaintiff in the Windsor case, Edith Windsor, recently filed a Writ of Certiorari to the Supreme Court.   Still even in Maryland, D.C, New York and other states now recognizing same sex marriage, same sex couples will nevertheless have to file separate Federal income tax returns and are not entitled to pass assets to one another free of Federal gift and estate tax. One thing that has come to my attention that could be done is that under certain circumstances, a same-sex couple or a widowed partner can file a protection claim for refund on their federal tax return (income or estate).  In this case, the protective claim for refund is based on the fact that there is a contingency; in this case, the contingency is the pending case before the Supreme Court.  What the protective claim for refund does is it ensures that the statute of limitations will not run on the refund request while the case awaits a possible hearing before the high court.  Keep in mind that the Court does not have to grant the Writ and hear the case, it is at the court’s own discretion and may never go anywhere.   In general, the statute of limitations for filing a refund claim is the later of 3 years from the time the tax return is filed or 2 years from the date the tax was paid.   If DOMA is declared unconstitutional, the question becomes what will happen to those who overpaid on their taxes.  This is a question that has not been addressed by the Court so the answer is we don’t know.  If the taxes in question are substantial enough, the protective claim might be something that should be recommended to clients in those circumstances. Steven E. Shane Principal Offit│Kurman Attorneys At Law 301.575.0313 Washington 443.738.1513 Baltimore 410.218.9339 Mobile 301.575.0335 Facsimile Please note the above material discussed is intended to provide only general information. Do not, under any circumstances, solely rely on this information as legal advice. Legal matters are often complicated. For assistance with your specific legal problem or inquiry please contact me directly.