Argument before the Court today

libby18bell

In case people didn't realize what the argument before the court today will be about.  A widow (her wife died, she was legally married in Canada) is being forced to pay $400,000 + in Estate taxes, which would never happen to a male/female marriage.  I'm guessing there's a form of discrimination there somewhere, the only phrase that comes to mind is Homer Simpson D'oh.

Because Federal Government paperwork references "marriage" it does not reference Civil Union having one title for one group and another title for another group wouldn't work.  Also there are many states that do not have Civil Unions point blank, and trust me there are a large group of people who do not want Civil Unions, many New Yorkers for example.  

professorscience

So, I'm really curious why these estate taxes are falling on the widow?  I mean, the federal government does not recognize their marriage, so why would this woman have any financial responsibility for the estate?  I haven't had a chance to look into the case -- Monday was the first I even heard anything about it.  

It just seems pretty backward.  Like, I can completely understand why I would be held financially responsible for my husband's estate -- we're married.  The US didn't recognize these women as married, so why is her burden so much greater than one in a federally recognized marriage?

I don't really understand much about estate taxes, so I'm legitimately curious.  Is it just that the widow was listed as "next of kin?"  Because in that case, I'd still be my husband's next-of-kin, so wouldn't the same taxes fall on me if he died?

libby18bell

With regards to a married couple (male/female) the federal gov't allows you to leave almost everything to that person without penalty.  Meaning if you own a house your spouse can then inherit the house no issues.  Estate taxes are at issue when you leave something to someone who is not your spouse.  Think family farm, and having to pay estate taxes to keep it.  If an asset is left to a spouse or a Federally recognized charity, the tax usually does not apply.  So in order for her widow to receive what was left to her, she must pay estate taxes, since DOMA does not recognize her marriage.

The issue at stake in both cases, yesterday and today isn't jiust the term "marriage" but what that term provides with it.  There are numerous rights that married couples have that non married couples do not have, right of survivorship issues, hospital issues, etc. 

chelseamb11

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/cultural-wedding-boards_catholic-weddings_argument-before-the-court-today?plckFindPostKey=Cat:Cultural%20Wedding%20BoardsForum:615Discussion:4450aad2-9058-4327-a6c0-61be13366a8dPost:3c0e42f9-6030-4496-b31c-8db42bbea96f">Re: Argument before the Court today</a>:
[QUOTE]With regards to a married couple (male/female) the federal gov't allows you to leave almost everything to that person without penalty.  Meaning if you own a house your spouse can then inherit the house no issues.  Estate taxes are at issue when you leave something to someone who is not your spouse.  Think family farm, and having to pay estate taxes to keep it.  If an asset is left to a spouse or a Federally recognized charity, the tax usually does not apply.  So in order for her widow to receive what was left to her, she must pay estate taxes, since DOMA does not recognize her marriage. The issue at stake in both cases, yesterday and today isn't jiust the term "marriage" but what that term provides with it.  There are numerous rights that married couples have that non married couples do not have, right of survivorship issues, hospital issues, etc. 
Posted by libby18bell[/QUOTE]

I don't know how all of that works, but is it possible to designate that "person" (right of survivorship, hospital, etc) even if they aren't your spouse?  If not, it should be done.  What if someone chooses to NOT get married for whatever reason?  Or if they're divorced or widowed with no family?  They shouldn't be denied having their "person" more or less just because they choose to stay single.  Otherwise it's automatically next of kin right?  What if someone's next of kin is someone they have no relationship with?

I'm not referring it to the tax thing outlined above, but moreso those instances where a decision has to be made medically or financially.  I have no clue how that all works.  Last time I was in the doc they gave us stuff to fill out so that H and I could be eachother's "person" which surprised me because I thought it was automatic since we were married.  It's all such a confusing legal process.

GoodLuckBear14

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/cultural-wedding-boards_catholic-weddings_argument-before-the-court-today?plckFindPostKey=Cat:Cultural Wedding BoardsForum:615Discussion:4450aad2-9058-4327-a6c0-61be13366a8dPost:4d0c1838-10c6-49bc-aa79-1d9de619dc7a">Re: Argument before the Court today</a>:
[QUOTE]In Response to Re: Argument before the Court today : I don't know how all of that works, but is it possible to designate that "person" (right of survivorship, hospital, etc) even if they aren't your spouse?  If not, it should be done.  What if someone chooses to NOT get married for whatever reason?  Or if they're divorced or widowed with no family?  They shouldn't be denied having their "person" more or less just because they choose to stay single.  Otherwise it's automatically next of kin right?  What if someone's next of kin is someone they have no relationship with? I'm not referring it to the tax thing outlined above, but moreso those instances where a decision has to be made medically or financially.  I have no clue how that all works.  Last time I was in the doc they gave us stuff to fill out so that H and I could be eachother's "person" which surprised me because I thought it was automatic since we were married.  It's all such a confusing legal process.
Posted by chelseamb11[/QUOTE]

You can and your legal next of kin (parents, children, etc.) can fight it and the person may lose all of this.  Only marriage guarantees these things because a spouse is the first in line for next of kin.

libby18bell

If you are single your next of kin decides, and when I say single, according to most states and the federal government that's not married to a peson of the opposite se, point blank.  So for instance if it's between your same sex partner whom you have been with for years upon years, or your parent who doesn't approve of your lifestyle it's your parent that gets to decide, think of the emergency situation when you don't have paper worked filled out ahead of time.  Also hospitals in some states do not make exceptions to the next of kin relationship in ICU or emergency situations.

Also right of survivorship is only with married couples.  There is no exception to this either, the joy of the laws, but they also made the law that way so to prevent abuse, but now it has denied people go figure.

CrazyCatLady3

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/cultural-wedding-boards_catholic-weddings_argument-before-the-court-today?plckFindPostKey=Cat:Cultural%20Wedding%20BoardsForum:615Discussion:4450aad2-9058-4327-a6c0-61be13366a8dPost:4d0c1838-10c6-49bc-aa79-1d9de619dc7a">Re: Argument before the Court today</a>:
[QUOTE]In Response to Re: Argument before the Court today : I don't know how all of that works, but is it possible to designate that "person" (right of survivorship, hospital, etc) even if they aren't your spouse?  If not, it should be done.  What if someone chooses to NOT get married for whatever reason?  Or if they're divorced or widowed with no family?  They shouldn't be denied having their "person" more or less just because they choose to stay single.  Otherwise it's automatically next of kin right?  What if someone's next of kin is someone they have no relationship with?<strong> I'm not referring it to the tax thing outlined above, but moreso those instances where a decision has to be made medically or financially.  I have no clue how that all works.  Last time I was in the doc they gave us stuff to fill out so that H and I could be eachother's "person" which surprised me because I thought it was automatic since we were married.  It's all such a confusing legal process.</strong>
Posted by chelseamb11[/QUOTE]

<div>In this case, where you are single and want to designate a "person" as you say, for financial stuff it would be a power of attorney that you sign and have notarized, and for medical stuff it would be a health care proxy form.  Not sure why you would have to do that if you're already married; maybe it's a state-specific thing in your state?</div><div>
</div><div>Usually, if you're already married, this stuff would come automatically.</div><div>As for the tax issues, you can't just contract the tax benefit to someone; it's a benefit conferred by the federal gov't to spouses only.  For the making health/financial decisions, that would be a *power* you are contracting to someone, as opposed to a financial *benefit* you are receiving.</div>

ohmrs2014

When my Grandmother away, obviously everything was left to my dad and his brothers.  They had to pay an estate tax because obviously they weren't spouses.  When my uncle passed away, my dad and his brothers again were left with his share to split up amongst the three of them.  Again, they had to pay estate taxes because they obviously weren't married.

I feel sorry for that poor woman who is left to pay all that in estate taxes.

chelseamb11

Can anyone deny an estate left to them so that they don't have to pay the taxes?  Like give it to charity instead or something?

daria24

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/cultural-wedding-boards_catholic-weddings_argument-before-the-court-today?plckFindPostKey=Cat:Cultural%20Wedding%20BoardsForum:615Discussion:4450aad2-9058-4327-a6c0-61be13366a8dPost:aec82c07-7f53-4d57-aa15-f4a2428c5361">Re: Argument before the Court today</a>:
[QUOTE]Can anyone deny an estate left to them so that they don't have to pay the taxes?  Like give it to charity instead or something?
Posted by chelseamb11[/QUOTE]

<div>Yes you can reject an inheritance, however you can't just pass it along to someone else of your choosing. If you reject it, it will go to either the other people listed in the person's will, or the legal next of kin.</div><div>
</div><div>The issue at stake in today's case isn't "oh man, she left me all this money and I don't want to pay the taxes on it." It's "her estate was built by BOTH of us, but because the federal government doesn't recognize our civil marriage, I have to pay taxes on an estate." For instance, my H and I both contribute money from our salary into an investment account. If one of us were to pass away, the other person would inherit that account and NOT pay an estate tax on it. But this woman, because the government doesn't recognize her union, DOES have to pay taxes even though it was an estate she and her spouse built TOGETHER. That's why it's discriminatory. </div>

jess9802

Lurker here...

When you die, all of your assets are included in your gross estate, regardless of who will inherit them or acquire ownership under a beneficiary designation or right of survivorship. At the time Edith Windsor's wife died in 2009, the first $3.5m of one's estate would pass free of estate tax (known as the estate tax exemption); anything above that was subject to federal estate tax unless there were various deductions. Under federal tax law, there is an unlimited marital deduction for estate taxes. The end result is that nothing that passes to your spouse at death (whether by outright bequest or operation of law) is taxed, regardless of the size of the estate.

Under current federal law, the estate exemption is currently $5m indexed for inflation, but there is also portability - you not only get your $5m exemption, but can use your spouse's unused exemption, so there is the possibility of married couples being able to pass $10m+ free of federal estate tax. Of course under DOMA only married couples consisting of one man and one woman qualify - so there is a disparate impact there.

Whether the rationale for DOMA meets the Court's intermediate scrutiny standard is another question altogether....