This fascinating case came before the U.S. Tax Court, which handed down its decision on May 27, 2021, concluding that Ms. Ziona Grossman, the third wife of Mr. Semone Grossman, was his surviving spouse under the Internal Revenue Code. The facts are a bit convoluted. Mr. Grossman married his first Wife, who was Jewish, in NY in 1955 and separated 10 years later. Mr. Grossman obtained a unilateral divorce in Mexico. Two years later, he married his second Wife in a civil marriage ceremony in New Jersey. About 8 years later, that relationship ended. At about the same time, Mr. Grossman’s first wife sued Mr. Grossman and his second wife for a declaratory judgment that his Mexican divorce was null and void. She won, and was declared Mr. Grossman’s lawful wife (his second wife could not be his lawful spouse given that he could not remarry until his first marriage was legally dissolved). In 1986, Mr. Grossman then became engaged to his third Wife, Ziona, who was also Jewish, and they planned a wedding to occur in Israel. Before that marriage, Mr. Grossman and his first Wife appeared before an orthodox rabbinical court in NY to obtain a Jewish religious divorce, evidence of which was presented in Israel so he could then marry his third wife. Mr. Grossman and his third wife lived happily in NY for 27 years until his death, and at no time did his first wife challenge their marriage. Then, Mr. Grossman died. The Commissioner of Internal Revenue (not Mr. Grossman’s first wife) took the position that Mr. Grossman’s religious divorce from his first wife was invalid under NY law, and therefore, she was still his lawful and surviving spouse. Mr. Grossman’s estate disagreed, arguing that NY law is irrelevant to the dispute and that the Court should be looking at Israeli law.

Why does the IRS care? When Mr. Grossman’s estate filed its tax return, it took a marital deduction with respect to assets bequeathed to his third wife (which was approximately $79million of an $87million estate). In March 2018, the IRS Commissioner sent the estate a notice that it was deficient by about $35million in its federal estate tax. It also assessed an additional deficiency of about $7million. These deficiencies related predominantly to the fact that the IRS determined that Mr. Grossman’s third wife was not, in fact, his lawful spouse and that he was still lawfully married to his first wife.

Whether a person is a surviving spouse is determined under the law of the state where the decedent’s estate is being administered. The Court looked briefly at Israeli law. For Mr. Grossman and his third Wife to marry in Israel, they had to demonstrate that all prior marriages were dissolved by death or divorce. Since two Jews marrying in Israel would do so in a religious ceremony, the only means of obtaining a legal divorce that has effect in Israel is through a get (i.e., a religious divorce). A civil divorce has no effect on an individual’s eligibility to remarry under Jewish religious law. Mr. Grossman and his third wife obtained a get from a rabbinical court that was recognized in Israel which permitted them, under Israeli law, to legally marry. The Commissioner argues that Mr. Grossman and his first Wife’s get from a NY rabbinical court was not sufficient to legally divorce them under NY law – they needed to obtain a civil divorce according to NY domestic relations law. The estate, and the Tax Court, disagreed and instead looked at NY law’s application of the lex loci celebrationis rule: a marriage, if valid where it was celebrated, is valid everywhere (short of some contrary public policy or positive law). Mr. Grossman and Ziona were legally married in Israel. Israel deemed Mr. Grossman and Wife #1’s divorce by way of a NY rabbinical court to be sufficient to legally marry him to Wife #3. Bigamy is illegal in Israel. Mr. Grossman’s lawful spouse is Wife #3. She is the surviving spouse, and as such, was entitled to take the surviving spouse tax deduction.

Buttressing the Court’s conclusion is NY’s strong presumption in the validity of a second marriage, where, in this case, a complete stranger to the marriage, the IRS, had the high burden of proving it invalid. Furthermore, NY courts have long held that a party cannot take a position contrary to that which is stated in a tax return, and Mr. Grossman’s first wife consistently filed as single in her returns post-get, meaning even she would not likely be able to challenge Mr. Grossman’s marriage to Wife #3.