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RI Same-Sex Couples Won’t Have to Pay Estate Taxes

by Joe Siegel
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Monday Nov 12, 2012
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A recent favorable ruling regarding estate taxes for same-sex couples in the Ocean State gave activists hope for the passage of a marriage equality bill in 2013. The ruling comes on the heels of Governor Lincoln Chafee’s landmark executive order last May mandating state agencies to recognize the marriages of gay and lesbian couples who were married out of state, and the signing of a civil unions bill law by Chafee in July 2011.

On September 21, the Rhode Island Division of Taxation 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.

Attorney Lise Iwon had made a request from the agency for a declaratory ruling in regard to the estate of her late spouse Peg Laurence, who died last March. Through her will, Laurence left all of her property to Iwon. Iwon and Laurence had been together for 32 years since meeting in law school. The couple married in Massachusetts, and had been married for five years until Laurence’s death.

But whether any property that Iwon 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 Iwon would be treated as partially owned by Laurence. Failing to recognize Iwon and Laurence’s marriage would have cost Iwon hundreds of thousands of dollars in estate taxes.

"I’m proud that Peg was rebellious even in death," said Iwon. "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."


LGBT Activists and Advocates Celebrate the Ruling

LGBT activists also cheered the ruling and noted more progress was being made to guarantee the state’s same-sex couples equal treatment under the law.

"This is certainly great news and another important step forward in the effort to provide all Rhode Islanders with equal rights, recognition and protections under the law," said Ray Sullivan, Campaign Director for Marriage Equality Rhode Island (MERI).

"Anyone who knew Peg Laurence knows that she would have insisted her estate go without penalty to her beloved wife Lise," said activist C. Kelly Smith. "The Chafee administration wisely recognizes that married same sex couples are really no different from married opposite sex couples, and thus, everyone benefits from this ruling. If the RI General Assembly would just pass the marriage equality bill, now backed by a solid majority of public opinion, we could all move on with the business of living our lives free from the worries that have burdened too many of us needlessly. Lise Iwon deeply deserves this protection, and so do the rest of us."

Reverend Gene Dyszlewski, a longtime advocate for same-sex marriage who mounted an unsuccessful run for the 26th District seat in the Rhode Island Senate, said that that move was a step in the right direction.

"Apparently there are some people in government who get it, recognizing equality is the rational and just alternative," said Dyszlewski. This decision shows strength and leadership from thoughtful people in government who usually go unappreciated: bureaucrats."

Veteran LGBT activist Kate Monteiro said that this was a great decision in favor of same-sex couples, adding that although it would have seemed self-evident for civil unioned couples by law and married couples by virtue of the Governor’s executive decision, it was important that this declaratory ruling clarified the point for all involved.

"The passing of Peg Laurence was a huge loss for our community, and more importantly for her beloved partner, Lise Iwon," Monteiro added. "That Lise, in her grief, once again had to take up the mantle to fight for our community’s civil rights, is sad. That she did so with strength in her heart and steel in her spine, however, is nothing less we have come to expect from Lise."


Ruling Will Not Be Challenged

Janson Wu, an attorney at Boston’s GLAD (Gay and Lesbian Advocates and Defenders), believes the Division of Taxation’s ruling is ironclad and will not be challenged by opponents of same-sex marriage.

"The reasoning of the Division of Taxation’s decision is extremely strong," said Wu. "Given the Governor’s strong support of marriage equality for all Rhode Islanders, it is unlikely that this decision would be overturned or repealed."

House Speaker Gordon Fox (D-Providence) has promised a vote on a marriage equality bill when the General Assembly reconvenes in January. But the bill faces an uphill fight in the State Senate. Senate President Teresa Paiva-Weed (D-Newport) has blocked a vote on the bill in the past.

Wu said that while it is unclear what impact this decision would have on the legislature’s deliberation over the marriage equality bill in the next session, the ruling sends a message to those who oppose marriage rights for gay and lesbian couples.

"What is clear from this decision is the enormous harm and impact that the denial of marriage has on Rhode Island’s gay and lesbian couples," Wu said. "Stories like those of Lise and Peg are what will ultimately win us the votes in the legislature that we need to finally pass the marriage equality bill. We look forward to that debate in the next session and to the Governor’s continued, strong leadership on this issue of family fairness."


Joe Siegel has written for a number of other GLBT publications, including In newsweekly and Options.

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