Court case is key for same-sex couples

AUG 12, 2012
Financial advisers who have same-sex couples as clients need to keep abreast of a recent legal decision that is headed toward the Supreme Court. A federal court in New York has declared that part of the federal Defense of Marriage Act, which states that a marriage must be between one man and one woman, is unconstitutional because it violates the equal protection clause of the 14th Amendment. In the Windsor v. U.S. decision, the judge ordered that Edith Windsor be refunded $363,000 that was taken from the estate of her deceased female spouse because she wasn't allowed to claim the marital deduction, even though their union was recognized by New York. Her lawyers have asked the Supreme Court to take up the case without waiting for a decision by an appeals court. Many think that this case will need to be answered by the nation's top court. If ruled unconstitutional, the federal law passed in 1996 no longer will stand in the way of same sex couples' receiving income and estate marital tax deductions, as well as other benefits, such as Social Security or pensions. “The writing is on the wall that DOMA will no doubt be brought before the Supreme Court in the next year or two,” said Cathy Pareto, an adviser whose eponymous firm in Miami oversees $60 million in assets. She said the Windsor case is “groundbreaking” for couples in states where she contends that they should be able to take advantage of the financial benefits awarded married couples. Six states — Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont — as well as Washington, D.C., recognize same-sex marriage. President Barack Obama in May expressed support for same-sex marriage, and his administration has said that it will stop defending DOMA from legal challenges. [email protected] Twitter: @skinnerliz

Latest News

Fed's Bowman pushes for lighter-touch AI oversight at smaller firms
Fed's Bowman pushes for lighter-touch AI oversight at smaller firms

Supervision vice chair speaks following recent launch of AI adoption practices by regulators.

Why fixed income still belongs in your clients' portfolios
Why fixed income still belongs in your clients' portfolios

In an era of AI euphoria and market FOMO, getting back to basics with fixed income may be the most contrarian and most important move advisors can make.

Voya expands advisor managed accounts to add private market assets
Voya expands advisor managed accounts to add private market assets

Voya Financial adds private equity, credit and real estate options to its AMA program, building on support for looser federal investment rules in retirement accounts.

With executives leaving, Osaic’s Reid now in the spotlight
With executives leaving, Osaic’s Reid now in the spotlight

Shannon Reid, president of Osaic and the network’s number two executive, has plenty of challenges, industry executives said.

Investors sue crypto fund and platform, alleging $1.5 million never returned
Investors sue crypto fund and platform, alleging $1.5 million never returned

Auditors flagged the commingling. The COO allegedly knew. Investors kept getting the pitch

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.