Estate Planning for Same-Sex Couples in Texas After DOMA Ruling

Last week, in a landmark decision, the Supreme Court of the United States ruled that the Section 3 of the Defense of Marriage Act (“DOMA”) is unconstitutional.

Edith Windsor had challenged DOMA after the death of her partner of 44 years, Thea Spyer, to whom she was legally married. The couple lived in New York, which recognizes same sex unions, at the time of Ms. Spyer’s death.

Ms. Spyer left her entire estate to Ms. Windsor. Because the value of the estate exceeded the estate tax exemption, Ms. Windsor tried to claim the unlimited marital deduction, which allows spouses to pass an unlimited amount of assets to each other without any estate tax liability.

The IRS determined that Ms. Windsor was not eligible to claim the deduction because Article 3 of DOMA provided that the word “spouse” referred only to a person of the opposite sex who is a husband or wife. The Supreme Court found that Article 3 violated the Due Process Clause of the Fifth Amendment.

The effect of the Supreme Court’s ruling is that same-sex couples who are legally married and living in states that recognizes their union will be entitled to the same federal rights and benefits as heterosexual spouses, including more than 1,000 federal benefits such as Social Security.

However, it’s important to note that Section 2 of DOMA, which allows states to refuse to recognize same sex marriages performed in other states, remains intact. Therefore, the impact of the decision on couples who are legally married and move to a state that does not recognize their marriage is less clear. Texas does not recognize same-sex marriages.

In order to protect themselves, committed same-sex couples in Texas, including those married in other jurisdictions, need to have comprehensive estate planning to ensure that their wishes are followed during their incapacity and/or when they die.

These documents include Wills, Durable Powers of Attorney, Medical Powers of Attorney, HIPAA Authorizations and Directives to Physician. In addition to the five basic estate planning documents, same-sex couples should also consider declaring a guardian in the case of their incapacity and appointing an agent to dispose of their remains.