Gay marriage ruling boosts benefits, but confusion expected

Wed Jun 26, 2013 5:24pm EDT
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By Kim Dixon

WASHINGTON (Reuters) - A U.S. Supreme Court ruling on Wednesday forcing the federal government to recognize same-sex marriage in states where it is legal will open up new benefits to thousands of gay couples, but confusion may reign in states that do not allow gay marriage.

At issue in the case were the estate taxes a New York lesbian widow owed upon her wife Thea Spyer's death in 2009. Because they were gay, surviving spouse Edith Windsor missed out on a lucrative tax break - the exemption from the federal estate tax on wealth passed from one spouse to another.

It was denied because of the Defense of Marriage Act (DOMA), a law passed by Congress and signed by President Bill Clinton in 1996 that defined marriage as between a man and a woman.

Wednesday's ruling clears the way for Windsor to claim a $363,000 tax refund, plus interest, and for gay couples possibly to enjoy more than 1,100 federal benefits, rights and burdens linked to marriage status.

Details must be worked out by regulators, including the timing for benefits to kick in, and how couples fare in the 37 states that do not allow gay marriage. Before Wednesday's ruling, 12 of the 50 U.S. states permitted gay marriage. California would be the 13th.

Traditionally, marital tax status has been based on where the couple currently resides, but that is not always the case.

"We don't have any idea of what the rights are of someone who gets married in New York and lives in Florida," said Todd Solomon, a benefits attorney at McDermott Will & Emery.

An estimated 114,000 same-sex couples are legally married in the United States and as many as one-third of them live in states that do not recognize marriage, according to the Williams Institute, an arm of the University of California at Los Angeles School of Law.   Continued...