
James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Author: James F. McDonough
Date: August 13, 2013
Of Counsel
732-568-8360 jmcdonough@sh-law.comRhode Island Governor Chafee issued an executive order directing the state to recognize same-sex marriages performed out-of-state. The executive order does not, however, permit same sex divorce. Society is in a state of limbo where executive orders can address some, but not all, of the issues.
How does one address the use of the Federal Estate Tax Exemption, currently $5,250,000, for same-sex couples in states that do not recognize same-sex marriage? If A and B marry in a state that permits same-sex marriages and then move to a state that does not recognize same-sex marriage, are they married for state death tax purposes? Typically, a couple must be married under state law before they are eligible for the marital deduction. Whether they are married is of critical importance for federal estate tax purposes where marital deduction, the $5,250,000 Exemption and the portability of the Deceased Spouse Unused Exclusion Amount (“DSUEA”) are the pillars of estate planning. Portability is where the surviving spouse adds the exemption of the first-to-die to his or her own. In states that have an estate tax that follows federal law, there may be new impediments that prevent consistency.
Consider the same-sex marriage of A and B where A dies and B survives. If the marriage of A and B is not recognized by the state of residence, what is the Deceased Spouse Unused Exclusion Amount (“DSUEA”)? Is B entitled to use A’s exemption or is it lost if not used?
Assume that B survives A and then remarries C. In theory, B should lose the DSUEA from A because B has remarried and the couple of A and C are therefore only entitled to the DSUEA of either A or C. This is the rule that applies to traditional couples.
If the state recognizes the same-sex marriage, then B should be entitled to have estate tax portability of A’s DSUEA. Suppose the state where A and B reside does not recognize their marriage. We could, conceivably, file a federal estate tax return on A’s death and elect portability. B, however, would not be able to elect portability on the state level, so B may be forced to use A’s exemption instead. Is it possible, where a state follows the federal estate tax rules, to file completely different returns because of this disconnect?
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!