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Tax Court Upholds Validity of Marriage for Purposes of Estate Tax Marital Deduction

(Parker Tax Publishing June 2021)

The Tax Court held that a deceased taxpayer's Israeli marriage to his third wife was valid and that the third wife was therefore the taxpayer's surviving spouse for purposes of determining the marital deduction for the decedent's estate under Code Sec. 6056(a). The court rejected the IRS's argument that the taxpayer's religious divorce from his previous wife was invalid under New York law and found that under New York law, a marriage is valid if it is considered valid in the place where celebrated and the IRS presented no evidence to cast doubt on the validity of the Israeli marriage. Est. of Grossman v. Comm'r, T.C. Memo. 2021-65.


Semone Grossman was born in Germany in 1930 and spent most of his childhood in Poland. He and his family were Jewish and many of his family members, including his parents, perished in the Holocaust. Semone was interned in a series of concentration camps during the war, but ultimately survived and emigrated to the United States in or around 1949. He settled in New York City and got into the business of owning and operating parking garages.

Semone's first wife, Hilda, was also Jewish. Semone and Hilda were married in New York City in 1955 and subsequently had two children together. Semone and Hilda stopped living together in the mid-1960s. In 1965, they entered into a separation agreement that set out their respective property rights and required Semone to make regular payments to Hilda. From that point on, Semone and Hilda never reconciled or cohabited. By 1967, Semone had begun a new relationship with Katia Equale, who was not Jewish. Semone traveled to Mexico to obtain a divorce from Hilda and, although Hilda did not appear or otherwise participate in the proceeding, the divorce was granted by a Mexican court. After Semone obtained the divorce, Semone and Katia participated in a civil marriage ceremony in New Jersey and subsequently had two children.

By 1974, Semone and Katia's relationship had ended. In that year, Hilda filed suit in New York against Semone and Katia seeking a declaratory judgment that the Mexican divorce was null and void and that she (Hilda) remained Semone's lawful wife. After a trial held in 1976, the court ultimately found in Hilda's favor. However, as already noted, Semone and Hilda did not cohabit after the court issued its decision. By 1986, Semone was engaged to Ziona. Ziona was a dual United States-Israeli citizen and a resident of New York. Her parents, siblings, and other family members and friends still lived in Israel at the time of Semone and Ziona's engagement, and Ziona traveled between the United States and Israel several times per year to visit. Semone also had family and friends in Israel, and Semone and Ziona decided to get married there.

Before his marriage to Ziona, Semone asked Hilda to cooperate with him in the giving of a get, which is a religious divorce under rabbinical law. In 1986, Semone and Hilda appeared before an orthodox rabbinical court (Beth Din) in New York and Semone gave Hilda a get. Several weeks later a rabbi executed a letter confirming that Semone had obtained a Jewish divorce in the rabbi's presence. Semone presented the rabbi's letter to the Beth Din of America in New York, and the Beth Din of America issued a second letter confirming that Semone was free to be married according to Jewish law.

As part of their marriage registration process, Semone and Ziona traveled to Israel and presented evidence of the get to the Tel Aviv Beth Din. A rabbi from the Tel Aviv Beth Din signed the letter from the Beth Din of America, noting that it was "allowed." Semone and Ziona were then issued a form ketubah (marriage contract), permitting them to marry in Israel. In 1987, Semone and Ziona were married in Tel Aviv, Israel, in a traditional Orthodox Jewish religious ceremony. Semone and Ziona completed and signed the ketubah and were issued a marriage certificate by the Israeli Ministry of Religious Services. The certificate noted that, before entering the marriage, Ziona was single and Semone was divorced. After their marriage ceremony in Israel, Semone and Ziona returned to New York and continued to live there until Semone's death in 2014. During those years, Semone and Ziona lived together as husband and wife. They had two children and shared a home and finances. Semone and Ziona filed joint federal income tax returns. Semone and Ziona also purchased a burial plot in Israel, where Semone is now buried alongside Ziona's parents. Semone's last will and testament directed that any reference to "my wife" means Ziona, and only Ziona. Hilda continued to live in New York until her own death in 2014. She saw Semone and Ziona socially from time to time. She filed federal tax returns as "single." When Semone died, Hilda made no statutory claim against his estate as a surviving spouse.

Semone's estate was valued at approximately $87 million, most of which was bequeathed to Ziona. On its Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, the estate claimed a marital deduction under Code Sec. 2056(a) with respect to the assets bequeathed to Ziona. In 2018, the IRS determined a deficiency and assessed a penalty after determining that Semone and Ziona were not married to each other for federal estate tax purposes and thus that Ziona did not qualify as Semone's surviving spouse under Code Sec. 2056(a). The estate challenged the deficiency in the Tax Court, and the IRS and the estate both filed motions for partial summary judgment.

Under Code Sec. 2001(a), a tax imposed on the transfer of a decedent's taxable estate. The value of the taxable estate is determined under Code Sec. 2056(a) by deducting the value of any interest in property which passes or has passed from the decedent to his or her surviving spouse. In Est. of Goldwater v. Comm'r, 64 T.C. 540 (1975), the Tax Court held that the identification of a decedent's surviving spouse is a federal issue that is generally determined by applying the law of the state where the decedent's estate is administered. In this case, there was no dispute that Semone, Ziona, and Hilda all resided in New York at all relevant times, that Semone died in New York, and that his estate was being administered in New York. Under New York law, a marriage is recognized as valid if it is considered valid in the place where celebrated, subject to two exceptions: (1) cases of incest or polygamy, and (2) prohibitions by positive law (i.e. statutory law).

The IRS contended that Hilda was the surviving spouse because she and Semone never validly divorced under New York law. The IRS argued that both of the exceptions to New York's place of celebration rule applied. First, the IRS contended that Semone and Ziona's marriage was bigamous since Semone was never validly divorced. Second, the IRS asserted that Semone and Zelda's marriage violated New York positive law because the New York constitution provides that divorces can be granted only by judicial proceedings. In addition, the IRS argued that finding Ziona to be Semone's spouse would open the floodgates to other New Yorkers ending their New York marriages without notice to their existing spouses, contrary to New York public policy. The estate maintained that Ziona was Semone's surviving spouse because New York applies a place of celebration rule and there was no dispute that the marriage was valid in Israel, the place of celebration.


The Tax Court granted partial summary judgment for the estate after finding that Semone and Ziona's marriage was lawful and that Ziona was therefore the surviving spouse for purposes of Code Sec. 2056(a). The court agreed with the estate that the analysis should focus on Semone and Ziona's marriage and that the place of celebration rule controlled the outcome of the case. The court found that since at least 1881, the New York Court of Appeals has recognized as valid a marriage considered valid in the place where celebrated. According to the court, there was no genuine dispute that Israel considered Semone and Ziona to be validly married. The court noted that the estate had submitted an Israeli marriage certificate, along with a completed ketubah and other documents, while the IRS had presented no evidence to challenge the authenticity of those documents or otherwise to cast doubt on their validity. Thus, the court concluded that New York would respect Semone and Ziona's marriage unless one of the two exceptions to the place of celebration rule applied.

The court found that neither of the two exceptions applied in this case. Addressing the IRS's assertion that Semone's marriage to Ziona was bigamous, the court reasoned that the issue under Code Sec. 2056(a) was not whether Semone and Hilda were validly divorced but whether Ziona was Semone's surviving spouse for federal estate tax purposes. To determine whether Semone and Ziona were validly married, New York law required that the court consider the rules of the place of the celebration of the marriage, i.e., Israel. The court said it was undisputed that Israel viewed Semone and Hilda as validly divorced and Semone as capable of remarrying. The court also found that Semone and Ziona's marriage did not violate the New York constitutional provision recognizing only divorces by judicial proceeding. The court reasoned that the provision does not purport to have extraterritorial effect and cannot be violated by actions that take place outside of New York. Further, the court pointed out that the estate sought recognition of Ziona's Israeli marriage to Semone. The court did not have before it a request by a party to Semone's first or second marriage with respect to a divorce decree.

Observation: The court emphasized that its ruling in this case was a narrow one that addressed only whether the New York Court of Appeals would recognize Semone and Ziona's marriage, celebrated in Israel, uncontested for many years by the previous spouse, and left undisturbed by the New York courts. The Tax Court said that it made no broad pronouncements on how couples may or may not obtain valid divorces in New York.

For a discussion of the estate tax marital deduction, see Parker Tax ¶227,100.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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