In a 5-4 ruling, the Supreme Court held in Obergefell v. Hodges that the 14th amendment requires all states to license a marriage between two persons of the same sex, and to recognize same-sex marriages validly performed out of state.
Justice Anthony Kennedy wrote the majority opinion, and was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Chief Justice John Roberts filed a dissenting opinion, in which Justices Antonin Scalia and Clarence Thomas joined. Scalia, Thomas and Alito also filed their own dissenting opinions, in which other justices joined.
In reversing the Sixth Circuit Court of Appeals, Justice Kennedy wrote: “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.”
“Today’s ruling will provide both same-sex and opposite-sex married couples with the same rights across all 50 states and the District of Columbia,” said Gail Cohen, vice president and general trust counsel for Fiduciary Trust Company International.
“The myriad of state and federal rights and privileges that are afforded to married couples will apply to everyone equally,” she added. “As advisers, we can now provide advice to all of our married clients in a manner that is consistent regardless of where the marriage takes place and regardless of where the married couple lives.”
“The decision affects fewer states than a ruling the other way would have done,” said Mark Luscombe, principal federal tax analyst for Wolters Kluwer. “Only four states were directly before the court, so the ruling technically only directly applies in Michigan, Ohio, Kentucky and Tennessee. Other states may decide to go along with the Supreme Court on this, or drag their heels and wait until a federal court with jurisdiction over them files a decision in line with this case.”
“There are 20 states in which same-sex marriage has been imposed by a court,” Luscombe observed. “Had the ruling gone the other way, it might have caused some of the 20 states to try to reverse.”
Rishi Agrawal, a state tax law editor at Bloomberg BNA, said the U.S. Supreme Court’s decision in Obergefell v. Hodges allows same-sex couples to now marry in all 50 states. “This right confers the same benefits to same-sex married couples that opposite-sex married couples already have in all states, including the ability to file joint tax returns and the right to inherit property from each other,” he said.
“Before the decision, same-sex married couples were already able to file joint tax returns at the federal level as a result of the 2013 U.S. Supreme Court case, U.S. v. Windsor. The 37 states that already recognized same-sex marriage generally require same-sex married couples to use the same filing status on their state returns as on their federal return. However, most states that did not recognize same-sex marriage required couples to file individually or as head of household. Some states even required same-sex married couples that filed jointly at the federal level to prepare pro forma individual returns for their federal taxes, creating an additional burden for those couples.”
“As a result of today’s decision, it is likely that states that did not recognize same-sex marriage before will follow the lead of other states and require same-sex married couples to use the same filing status on their state returns as on their federal returns,” he added. “We anticipate that states will soon issue tax guidance as a result of today’s decision on how same-sex couples can file joint returns and whether couples who were already married can file amended returns for 2014.”
“The U.S. v. Windsor decision in 2013 specifically addressed the fact that same-sex spouses may take advantage of the federal estate tax exemption for married couples when inheriting property,” Agrawal noted. “Following today’s decision, same-sex married couples will likely be treated identically to all married couples in all states with regards to estate tax and other inheritance issues.”
“The decision is the culmination of decades of litigation and the fastest shift in public opinion in American history,” said Nicole M. Pearl, a partner in the Los Angeles office of McDermott Will & Emery who has extensive experience in estate and tax planning for gay, lesbian and unmarried couples.
Those couples who live in states that don’t currently allow or recognize same-sex marriages will finally have the opportunity under federal tax regulations to:
- Make unlimited gifts to one other without having to worry about gift tax implications.
- Leave property to one another without the survivor needing to pay estate taxes.
- Leave an IRA to the surviving spouse as a “rollover” IRA, which is treated much more favorably for tax purposes than an “inherited” IRA.
- Qualify as a surviving spouse for purposes of determining Social Security benefits. For instance if a deceased spouse was receiving a higher Social Security benefit than the surviving spouse, the surviving spouse can generally qualify for the higher benefit.
Various state benefits will also accrue to such couples. Pearl added that those who traveled to another state to marry but reside in a state that does not currently recognize their marriage may be able to take advantage of certain state rights afforded only to married couples, including:
- Rights to visit each other in the hospital, or act as guardian or conservator for an incompetent spouse.
- Rights to file joint state income tax returns, thus saving money in many cases.
- Rights to inherit property under a state’s intestacy statute, or to act as executor or personal representative of a deceased spouse’s estate, and importantly,
- Enable same-sex couples to end a marriage that did not work out. Most states allow anyone to obtain a marriage license—regardless of where a couple is living. However, a couple generally cannot file for divorce in the court of any state in which they do not live.