Illinois Civil Unions
16 May 2011
Illinois recently passed a new law that will recognize civil unions between same sex and opposite sex couples in Illinois as well as same sex marriages and civil unions entered into in other states.
This Act, known as the "Illinois Religious Freedom Protection and Civil Union Act," provides for the application, license, and certification of civil unions in the State of Illinois and will become effective on June 1, 2011. In addition to establishing a mechanism for certifying new civil unions in the State, the Act also provides for the automatic recognition of same-sex marriages and civil union arrangements entered into in other jurisdictions. After June 1, all parties to such arrangements will be treated as "spouses" under Illinois law.
Obligations, Responsibilities, Protections, and Benefits
The Act provides that parties to an Illinois Civil Union shall have the same "obligations, responsibilities, protections, and benefits" as spouses under Illinois law, which includes the following:
· Recognition of spousal status under the Illinois Probate Code, including for the purposes of intestate inheritance, claiming a statutory share, receiving a spousal award and allowing for preference in nomination as representative of a spouse’s estate;
· The right to hold real estate in a tenancy by the entirety;
· Healthcare rights, including for hospital visitation, medical decision-making, and access to information;
· Rights after death, including for the purposes of authorizing anatomical gifts, accessing medical records, and making funeral arrangements;
· The right to seek an equitable division of assets upon dissolution;
· The right to seek spousal financial support as well as child custody, visitation and support;
· The ability to jointly file state income tax returns;
· Access to the domestic relations court for the purpose of dissolving a civil union, which may be secured in the same manner as a divorce under Illinois law;
· Protection under domestic violence laws;
· The right to make wrongful-death and loss of consortium claims after the death of a partner;
· Spousal benefits for public employees; and
· The right to exercise the spousal testimonial privilege, which gives individuals the right to refuse to testify in court against a spouse.
The "obligations, responsibilities, protections, and benefits" granted to civil union spouses by the Act encompasses only those spousal rights and responsibilities established under Illinois law. Federal rights and responsibilities, including those related to the receipt of federal benefits, are not affected.
Effects on Estate Planning
Under Illinois's current estate tax regime, an estate tax is imposed on amounts passing at death in excess of $2,000,000. At current rates, the Illinois estate tax would equal $352,158 on a $5,000,000 estate. To alleviate the burden this tax would place on a surviving spouse, the Illinois estate tax, like the federal estate tax, provides for an unlimited marital deduction for amounts passing to a surviving spouse or to a QTIP for the benefit of a surviving spouse. By making use of this deduction, married couples may postpone the imposition of the Illinois estate tax on any portion so passing until the death of the surviving spouse.
The Illinois Civil Union Act will, for the first time, give same-sex couples the equal right to take advantage of the Illinois marital deduction in order to preserve, for the benefit of a surviving partner, that portion of the deceased partner's estate that would otherwise be subject to tax.
Some estate plans take advantage of the marital deduction by transferring that portion of an estate in excess of the available estate tax exemption (the threshold amount below which the estate tax is not imposed) to a marital trust upon the death of the first spouse to die. The terms of the marital trust usually provide for income and sometimes principal to be paid to the surviving spouse during his or her life.
Because the Illinois exemption is only $2,000,000, rather than the $5,000,000 federal estate tax exemption, careful estate planning is required so that any portion of an estate falling between these amounts will qualify for both the Illinois marital deduction and the federal estate tax exemption. This can be done though use of an Illinois-only QTIP trust, which will be available to same-sex spouses and civil union partners after the Act goes into effect.
The Illinois Civil Union Act also provides for the recognition of the same-sex marriage and civil union laws of other states, and therefore individuals who enter into same-sex marriages, civil unions, or similar arrangements in other jurisdictions will also be treated as spouses under Illinois law. For persons who have already entered into a marriage or civil union in another jurisdiction, no action is necessary to take advantage of the Illinois law, as the Civil Union Act provides for the automatic recognition of these arrangements beginning on June 1, 2011.
Estate Planning Considerations
Although the Illinois Civil Union Act recognizes parties to civil unions as spouses for all purposes of state law, it is important to note that such a designation may not alter the treatment of parties under the laws of other jurisdictions. Because of the potential for such disparate treatment, same-sex couples should continue to pay special attention to their estate and life planning documents. Currently, parties to civil unions are not able to take advantage of the marital deduction for federal estate tax purposes or receive the benefits of married persons under federal law. Additionally, as other states may refuse to recognize Illinois civil unions, it is important that same-sex couples continue to maintain healthcare powers of attorneys and other life planning documents that will secure their desired rights and benefits while travelling outside of Illinois.