RI Ruling on Taxes Will Bring Relief to Bereaved Spouses
In a move sparked by a request for declaratory ruling by Lise Iwon in regard to the estate of her late spouse Peg Laurence, the Rhode Island Division of Taxation has ruled that same-sex couples who are married or joined in civil union will be allowed to take the same marital deductions that opposite-sex couples are able to take for purposes of estate taxes.
Peg Laurence and Lise Iwon, both well-known attorneys in the state, had been together for 32 years since meeting in law school. The couple married in Massachusetts, and had been married for five years when Peg died on March 2, 2012. Through her will, Peg left all of her property to Lise.
However, whether any property that Lise inherited would be exempt from Rhode Island’s estate tax was an open question. It was also unclear whether any joint property that passed to Lise would be treated as owned one-half by Peg. Failing to recognize Lise and Peg’s marriage would have cost Lise hundreds of thousands of dollars in estate taxes.
“I’m proud that Peg was rebellious even in death,” said Lise. “She was a zealous advocate for disenfranchised people. I know she’d be happy not just for me, but for all spouses in my position. Everyone should be treated fairly at one of the toughest times in life, as when a spouse dies.”
The September 21, 2012 declaratory ruling is based upon Rhode Island’s long-standing rule of recognizing marriages validly performed in other jurisdictions, as well as upon the state’s civil union law, which took effect in July 2011, explicitly stating that civil union partners would have all the rights of married spouses. Prior to the ruling, same-sex couples in either a marriage or a civil union had to pay taxes on an estate worth more than roughly $893,000 even though their heterosexual counterparts did not.
Janson Wu of Gay & Lesbian Advocates & Defenders (GLAD) praised the ruling, saying, “Governor Lincoln Chafee’s administration has consistently tried to bring fairness to Rhode Island’s LGBT citizens. This ruling is in line with that record, and is extremely meaningful for gay and lesbian families.”
“Tax equity is one really critical piece of full equality,” said Lise’s attorney Nancy Fisher Chudacoff of Hardy Tabor & Chudacoff. “Spouses who build a life and assets together should not be penalized – piling insult on injury – when one of them dies. In all of my years of practice, this is one of the achievements of which I am most proud.”
Both Ms. Chudacoff and GLAD advocated with the Division of Taxation on Ms. Iwon’s behalf.
Rhode Islanders with questions about the ruling can contact GLAD’s Legal InfoLine at 1-800-455-GLAD, or firstname.lastname@example.org.