James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
What Happens Now: The Aftermath of DOMA (Defense of Marriage Act)
Author: James F. McDonough
Date: August 1, 2013
Key Contacts
Back
The United States Supreme Court recently struck down the Defense of Marriage Act (DOMA) as unconstitutional. Despite this ruling, there are a number of issues that will result from this decision where the laws of the states will differ.
Consider a gay couple, A and B, with a valid marriage under the law of the state where they reside (the “Home State”). Assume that this couple owns property in a state (“non-resident state”) that does not recognize gay marriage. What are the implications? I pose a number of questions that are sure to arise.
Assume the property in the Non-resident State is income producing property. May this couple file a non-resident income tax return as married or must they file separate returns?
What income tax rate or table may this couple use? May they use married or must they file separately and under what status?
Assume there is a judgment rendered in the non-resident state against A. Is B, a non-debtor, able to protect his or her property interest from the levy of A’s creditor? May the entire property interest, that of A and B, be protected in the same manner as in the case of ownership by husband and wife as tenants by the entirety?
Assume A has a qualified retirement plan account (401K) but does not name anyone as beneficiary. Do the default rules operate to pass the retirement account to B, the survivor?
Assume the non-resident state does not recognize gay marriage and has an inheritance tax that imposes a tax based upon the relationship of the recipient, B, to the decedent, A. What is the tax classification of the B? If New Jersey did not recognize B as the spouse of A, inheritance tax would be imposed at 15%.
Is a state law Qualified Domestic Relations Order (QDRO) drawn on the Home State effective against a custodian in the non-resident state that does not recognize gay marriage?
Assume an estate tax return must be filed in the Non-resident State. How do you compute the marital deduction for state law purposes if B is not considered a spouse in the non-resident state?
These are some of the issues that will arise in the coming years. The Supreme Court’s decision resolves only the question before it. The decision does not address the collateral consequences. Although planning could address these issues, I am certain that case law, confusion and controversy are ahead.
- Practices: Tax and Trusts & Estates, Real Property Tax Strategies, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
How Can Trusts Be Used in Business Succession?
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Author: George McGowan
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Author: George McGowan
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.