In our June Blog we discussed a federal district court case (southern district of New York) that had ruled that a portion of the Defense of Marriage Act (DOMA) was unconstitutional. As we noted, however, the case had limited precedential authority as it was just a lower level federal court.  The case was appealed to the Second Circuit Court of Appeals where the decision was upheld—although on a different theory.

This ruling may have wide reaching impact on a number of US tax laws that apply or benefit same-sex couples.  The case at hand dealt with whether the decedent’s estate would be allowed a “marital deduction” for assets passing to the surviving partner.

As a caveat—the other circuit courts have yet to address this issue.  Also to note is that the couple were married in Canada and registered as domestic partners in New York.  However, not all jurisdictions allow for such marriages.  We will continue to monitor how this issue progresses through the courts.