By referendum, Maryland voters retained the expansion of the definition of “marriage” contained in the 2012 Act to include same sex couples, effective for marriages occurring in Maryland after the first of the year. Even before that vote, Maryland recognized same sex marriages from other jurisdictions. The Court of Appeals recognized an out-of-state same sex marriage for the purposes of applying Maryland divorce law.   Port v. Cowan, 426 Md. 435, 44 A.3d 970 (May 18, 2012).   This holding was based on the common law doctrine of “comity” which basically means that laws of other jurisdictions will be applied as long as those laws do not offend a fundamental public policy in the state.

As a result of the referendum, there will no longer be the general 10% inheritance tax for transfers at death from the deceased spouse to the surviving spouse. Prior to the new legislation, there was a limited exemption from the tax for a residence used by an unmarried couple in certain circumstances but otherwise testamentary transfers were exposed to the more general rule. The Maryland Estate Tax, however, presents a more complex story. Maryland uses the federal estate tax return, including the rules governing that return, to determine the Maryland Estate Tax. Thus, a technical correction will probably be necessary for a legally married same sex couple to be treated as married for the unlimited marital deduction for Maryland Estate Tax purposes.

For federal estate tax purposes, of course, federal law applies. The Federal Defense of Marriage Act (“DOMA”) precludes same sex married couples from being treated as married for federal tax purposes. Across the country, there are various cases challenging DOMA.   In a recent New York case, the United States Court of Appeals held that DOMA violates the equal protection clause of the U.S. Constitution and therefore the bequest from the deceased partner qualifies for the marital deduction under federal estate tax law.   U.S. v. Windsor.   The U.S. Supreme Court has granted certiorari in Windsor which presumably will settle the issue of whether DOMA violates the Constitution.

In Maryland, of course, the issue of whether a same sex union can be recognized as a marriage was settled by the referendum. For the marriage to be recognized for federal estate tax purposes, either a change in the federal statutory law or a finding that such law is unconstitutional will be necessary.