Potential Estate Planning Implications of Illinois Civil Unions


On June 1, 2011, when civil unions become a reality in Illinois, both same-sex and opposite sex couples who choose to solemnize their relationships through the new process will be granted a whole set of rights previously unavailable. Along with these rights comes a whole array of issues related to how civil union partners plan for the disposition of their estate upon their demise.

One right that civil union partners will benefit from is distribution of property rights for the surviving civil union partner upon the death of his/her partner. While this will be the case whether the deceased partner spent the time to draw up a valid will under Illinois law, it is still important for individuals to consult an experienced attorney to ensure that their property ends up in the hands of those that they care about most. Civil union partners will also be guaranteed to be treated as a spouse when it comes to medical information related to their spouse, as the ability to make decisions for an incapacitated partner.

Additional rights that civil union partners may be entitled to are not as cut and dry. While civil union partners will receive the same treatment as traditional partners when it comes to taxes and other issues in Illinois, the federal Defense of Marriage Act prevents equal treatment for civil union partners on a federal level.

One common estate planning tool is the qualified terminable interest in property election (“QTIP”). This is an irrevocable election by the personal representative of an estate to have certain property that is part of the gross estate, that the decedent provided his surviving spouse with a life interest, qualify for an estate tax marital deduction. Although civil union partners cannot make the QTIP election to take advantage of federal tax benefits, they should contact an experienced estate planning attorney to ensure that they receive proper Illinois state tax benefits and to devise the best plan for their assets upon their death.

Under federal law, spouses who transfer property to their spouse during marriage do not recognize any income for the appreciated value of the property, and the recipient spouse does not recognize income from receiving the property. However, this federal benefit will not be available to civil union spouses. Consulting an expert can help to newly solemnized civil union partners make sure that they receive every state benefit they are entitled to and dispose of their property in ways that maximize other benefits and tax breaks.

If you have questions as to how to best plan for your future as civil union partners, or any other estate planning needs, contact Waltz, Palmer & Dawson, LLC at (847) 253-8800.