Sometimes the tail does wag the dog. The U.S. Supreme Court struck down a portion of the Defense of Marriage Act (DOMA) which required same-sex couples to be treated as unmarried for purposes of federal law including its estate tax code. The Court found that the provision was an unconstitutional deprivation of the equal protection clause of the U.S. Constitution. This ruling opens the doors for many lawfully married same sex couples to receive the benefit of the most significant and useful estate tax break, the unlimited marital deduction.
While Arizona is a long way off of recognizing same-sex couples, the Court’s ruling allows a couple to become lawfully married in another jursidiction and still claim the unlimited marital deduction for amounts transferred during life or at death to the other spouse. Estate plans of lawfully married same sex couples should be reviewed to make sure their estate plan takes into account this new opportunity.