Team Tisser Foundation (TTF) is a non-profit corporation founded by Doron M. Tisser and his wife Laurie. TTF raises money for various charitable purposes and does not focus on any one charity or charitable purpose. The goal is to raise as much money as possible to "Help Make A Difference" by "Improving Life for Others." TTF has made donations to Memorial Sloan-Kettering Cancer Center, Leukemia & Lymphoma Society, Challenged Athletes Foundation, as well as charities helping people affected by natural disasters such as Hurricane Katrina and the Tsunamis. Since 2000, TTF has donated over $250,000 to over 40 different charities. Friends and clients generally donate money to TTF to support Doron's participation in triathlons and marathons. If you would like more information about TTF, please contact Doron at doron@tisserlaw.com, or visit www.teamtisser.org

About
Doron M. Tisser
Doron M. Tisser has specialized in estate and gift planning, tax planning, trust and probate administration, charitable giving, buy-sell agreements, and related areas for over 30 years. Mr. Tisser is one of less than 100 attorneys in California who has been designated as both a Certified Specialist in Probate, Estate Planning and Trust Law, and as a Certified Specialist in Taxation Law by the State Bar of California Board of Legal Specialization.

Mr. Tisser has been chosen by his peers as a Top 100 Super Lawyer in Southern California since 2011. In addition, he has been selected by his peers as Super Lawyer for Southern California since 2009. Mr. Tisser has also been awarded the highest possible rating by his peers, an “A.V.” rating, for the Martindale-Hubbell Law Directory. This rating is based on ethical considerations and legal skills.

Mr. Tisser has been quoted and referenced in many magazines and newspapers across the country including Forbes Magazine, US News and World Report, Wall Street Journal, Los Angeles Times, and Entrepreneur Magazine.

Doron competes in triathlons, including Ironman races, and raises money for charities through Team Tisser Foundation, a non-profit corporation he co-founded with his wife Laurie.

What’s Happening

If you would like Doron M. Tisser to speak to your group or organization about the new estate tax laws, trust administration or other estate planning subjects, please contact Laura at laura@tisserlaw.com or call Laura at (818)226-9125.

Estate Planning After DOMA

At the end of June, the Supreme Court of the United States struck down the federal Defense of Marriage Act (DOMA) in United States v. Windsor.

In that case, Edith Windsor was forced to pay an estate tax upon the death of her same sex spouse, Thea Spyer, in the amount of $363,000. Under DOMA, they were not considered to be married for federal purposes. Had their marriage been recognized under federal law, no estate taxes would have been due at Thea’s death, since federal estate tax law provides for an unlimited marital deduction between spouses.

Edith brought a refund suit contending that DOMA violated the Equal Protection Clause of the 5th Amendment. The Supreme Court agreed, finding the definition of marriage in DOMA, namely that it required one man and one woman, to be unconstitutional.

The ruling makes over 1,000 federal laws and regulations available to same sex married couples. The following are some of the estate and tax laws that will be affected.

Retirement Assets

While the laws relating to distribution of IRAs and other qualified retirement plans are complex, generally speaking, a surviving spouse has special rights which other beneficiaries do not have. A non-spouse individual beneficiary of a retirement account generally must begin taking distributions from the deceased’s IRA – and therefore begin paying income taxes – in the year following the plan owner’s death.

A surviving spouse who is named as the beneficiary of the IRA may roll the deceased spouse’s IRA over into her own IRA and postpone the required distributions until the year after she reaches age 70 ½. This means the surviving spouse does not have to take any distributions or pay any income tax on the assets until that time.

Estate Tax

As discussed above in the case of Windsor, due to the unlimited marital deduction between spouses (who are U.S. citizens), generally no estate tax is due until the surviving spouse passes away.

In addition to the marital deduction, current estate tax law also provides for portability. Portability is the surviving spouse’s right to use his or her deceased spouse’s unused estate tax exemption. For a discussion of portability in greater detail, please see our prior newsletters.

Gift Tax

Just as there is an unlimited amount you can pass to a spouse at death, there are no limits on what you can give your spouse while you are living. Before DOMA was found to be unconstitutional, any transfers between same sex spouses would require the transferor to file a gift tax return and utilize a portion of his or her gift and estate tax exemption (or pay a gift tax if no exemption was available).

For example, if a spouse owned a home and put the home in joint tenancy with her same sex spouse so that it could avoid probate at her death, she would have to file a gift tax return showing a gift of one-half of the property. This was not the case for traditional married couples who had no filing requirements for transfers between them.

After Windsor, same sex spouses will be able to transfer property between them without filing gift tax returns.

Looking Back and Going Forward

It is important to understand that because DOMA was found to be unconstitutional, the application of the law to the various federal statutes does not simply stop; it was never valid to begin with.

This means that any same sex couples who filed income tax returns, gift tax returns, or estate tax returns, or spouses who did not file for portability, or who elected an inherited IRA rather than a spousal rollover, or any number of other elections which were unavailable under DOMA, may look to seek refunds, relief and other remedies.

Going forward, there are other issues which Windsor did not address, such as one state’s right to refuse to recognize same sex marriages performed in another state, and how this would impact the couple’s classification for federal tax laws. As a result of the above, same sex married couples should review their estate plans.