James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Rhode Island, Same Sex Divorce and Portability: Imperfect Together
Author: James F. McDonough
Date: August 13, 2013
Key Contacts
Back
Rhode 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?
- Practices: Tax and Trusts & Estates, Estate & Trust Litigation, 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
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
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
Common Causes of Partnership Disputes and How to Resolve Them
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
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.