Tax Issues Following the Supreme Court Decision in Obergefell v. Hodges

supreme court - IRS - rainbowIn a legal landmark decision, the U.S. Supreme Court recently ruled that the Constitution guarantees a right to same-sex marriage (Obergefell v. Hodges). Previously, we blogged about changes to employee benefit plans, and trust and estate documents. Now, here’s a breakdown on some key state and federal tax implications. Continue reading Tax Issues Following the Supreme Court Decision in Obergefell v. Hodges

How Are Michigan Trusts & Estates Laws Impacted by Obergefell v. Hodges?

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The Supreme Court’s ruling in Obergefell v. Hodges will have wide-ranging implications across the country. The impact on estate planning and the administration of trusts and estates in Michigan is  staggering. The Obergefell ruling dictates that same-sex couples may exercise the fundamental right to marry. This is a constitutionally protected right from which other rights of same-sex married couples flow. To assert these fundamental rights, individuals need not await legislative action; however, it is expected that all States, including Michigan, will update their statutes to comport with the Obergefell ruling. Once non-conforming laws are updated, exercising these rights will be easier. A summary of rights impacting trusts and estates, that flow from a same-sex couple’s fundamental right to marry, are outlined below.

Estate Planning and Tax Issues

Before Obergefell, with proper planning, same-sex couples could provide for each other and designate each other as a fiduciary, just as heterosexual married couples. Even so, married same-sex couples, even those living in non-recognition states such as Michigan, did not have equal federal estate and gift tax advantages as heterosexual married couples until after the United States v. Windsor case in 2013. After Obergefell, married same-sex couples, living in any state, will be given equal tax treatment in their state of residence. For example, same-sex married couples will no longer have to file separate state and federal tax returns but will need to prepare only one federal tax return on which to base their income tax filings. Same-sex married couples should discuss with their tax preparer if it would be worthwhile seeking refunds for prior years. In states other than Michigan, that have inheritance and state estate taxes, same-sex married couples will now be able to inherit from each other without having to pay these taxes.


Same-sex married couples will now have priority in the probate court to serve as personal representative, conservator, guardian, and, under Michigan Court Rules, will be identified as an interested person (heir or spouse) and have the right to receive notice of a variety of probate proceedings. In addition, all surviving spouses have the right to inherit under the intestacy laws, to elect against their spouse’s will, receive statutory spousal allowances, and petition for proceeds from wrongful death actions.

Medical Issues

Michigan has next-of-kin laws that allow spouses, in certain circumstances, to make medical decisions, anatomical gifts, and determine funeral and burial rights of their spouse. Before Obergefell, same-sex married couples did not qualify as their spouse’s next-of-kin because Michigan did not recognize the marriage of the couple. These rights will now be recognized for all married couples in Michigan.

Family Law

Same-sex couples may now marry in Michigan and same-sex marriages solemnized in other states must now be recognized by Michigan. All married couples in Michigan will be able to get a divorce and adopt their spouse’s child or adopt children together. Visitation, child support and custody decisions will also be impacted by Obergefell. Family law issues were specifically addressed by the Obergefell Court; having children and raising a family is a protected constitutional right of same-sex couples.

Governmental Benefits and Creditor Issues

Governmental benefits, such as Social Security, Veterans benefits, and Workers’ Compensation, in many cases depend on state law and, until now, such benefits were not available to spouses of married same-sex couples. Spousal rights, in life and as a surviving spouse, are aspects of one’s marital status that are constitutionally protected.

Creditor protection will be greater for married same-sex couples as they will be able to benefit from owning real property as tenants by the entireties and will be able to own certain other financial assets as tenants by the entireties, including membership interests in an LLC. Insurance on the life of a spouse, that names a spouse as a beneficiary, enjoys certain creditor protection that should be available to all married couples.

Real Property

There are numerous real property issues that will be affected by Obergefell; however, only a few are discussed here. Obergefell may well be the end of the archaic law of dower in Michigan. Tenancy by the entireties protection was previously enjoyed by only a “husband and wife.” Going forward, such protection will be enjoyed by any married couple. The uncapping of real property taxes will also be impacted as conveyances to spouses are generally exempt from uncapping laws.

General laws

There are numerous Michigan laws that will have to be updated given the Obergefell v. Hodges case. A cursory check on the uses of both “husband” and “wife” in all of Michigan’s Compiled Laws reveals over 300 statutes that use these terms. Perhaps each instance of “husband” or “wife” will be changed to “spouse” but, in any event, it will be a long process as all such laws will have to be carefully reviewed, bills drafted, and legislation enacted.

It may be difficult for a same-sex couple to assert the rights discussed above prior to the updating of Michigan law.  This is simply because many of the laws specifically use the words “husband” and “wife” instead of “spouse.” A key passage in Obergefell addresses this issue and provides a path of action until our laws are changed [Slip Op., at 24]:

The dynamic of our constitutional system is that individuals need not await legislative action before asserting a fundamental right. The Nation’s courts are open to injured individuals who come to them to vindicate their own direct, personal stake in our basic charter. An individual can invoke a right to constitutional protection when he or she is harmed, even if the broader public disagrees and even if the legislature refuses to act.

It will be many years before Michigan’s statutes fully comport with the recent Supreme Court ruling in Obergefell. This process is already underway by the Michigan Law Revision Commission.  Click HERE to see more information on this project.

This blog serves as a general summary of the Obergefell decision and does not constitute legal advice. Our lawyers at Fraser Trebilcock will continue to monitor changes in order to assist with your trust & estate planning needs. If you have questions or would like more information, contact attorney Marlaine C. Teahan. Marlaine chairs the Trusts and Estates practice at Fraser Trebilcock and handles a wide variety of matters including: drafting wills, trusts and durable powers of attorney; trust and estate administration; guardianship and conservatorship matters; and probate litigation. To learn more about how to put together your own estate plan, contact Marlaine at 517.377.0869 or


Federal Government Will Recognize Same-Sex Marriages in Michigan

U.S. Attorney General Eric Holder said today the federal government will recognize the roughly 300 same-sex marriages that took place in Michigan last Saturday, before a federal appeals court put those unions on hold.

“I have determined that the same-sex marriages performed last Saturday in Michigan will be recognized by the federal government,” said Holder in a statement. ” These families will be eligible for all relevant federal benefits on the same terms as other same-sex marriages. The Governor of Michigan has made clear that the marriages that took place on Saturday were lawful and valid when entered into, although Michigan will not extend state rights and benefits tied to these marriages pending further legal proceedings.  For purposes of federal law, as I announced in January with respect to similarly situated same-sex couples in Utah, these Michigan couples will not be asked to wait for further resolution in the courts before they may seek federal benefits to which they are entitled.”

Continue reading Federal Government Will Recognize Same-Sex Marriages in Michigan

Michigan Will Not Recognize Same-Sex Marriages, Ban to Stay in Place Pending Appeal

The state of Michigan will not recognize the more than 300 same-sex marriages performed last weekend. Governor Rick Snyder’s announcement comes one day after an appeals court indefinitely stopped any additional same-sex marriages, while it reviews a decision that struck down a 2004 law that says marriage only is between a man and a woman.

Continue reading Michigan Will Not Recognize Same-Sex Marriages, Ban to Stay in Place Pending Appeal

Judge Rules State’s Same-Sex Marriage Ban Unconstitutional

The recent decision by a federal court in Michigan in DeBoer v. Snyder could have major implications for your employee benefit plans.  The extent of the impact on a particular plan will depend upon the provisions of the plan—particularly how the term “spouse” is defined—as well as future litigation and regulatory developments.

Continue reading Judge Rules State’s Same-Sex Marriage Ban Unconstitutional

IRS: All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

Continue reading IRS: All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes

DOMA Ruled Unconstitutional

This morning, in United States v. Windsor, the United States Supreme Court ruled that the Defense of Marriage Act (also known as “DOMA”) is unconstitutional because it violates the 5th Amendment’s guarantee of equal protection.  Therefore, same-sex marriages that are valid under state law will be recognized for purposes of federal laws.

Continue reading DOMA Ruled Unconstitutional

Supreme Court Ruling: Defense of Marriage Act

Holding: In a 5-4 decision, the Supreme Court held that DOMA is unconstitutional, and same sex couples who are legally married are entitled to equal treatment under federal law. The ruling means that the federal government must recognize gay marriages deemed legal in 12 states and the District of Columbia.

Continue reading Supreme Court Ruling: Defense of Marriage Act