Illinois Civil Union Act

On January 31, 2011, Governor Patrick Quinn signed into law the Illinois Religious Freedom Protection and Civil Union Act (the “Civil Union Act”).  The effective date was June 1, 2011.  The Civil Union Act provides that parties to a civil union are “entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses.”  The Civil Union Act also provides for reciprocity—Illinois will recognize a “marriage between persons of the same sex, a civil union, or a substantially similar legal relationship other than common law marriage, legally entered into in another jurisdiction.”   

 

In other words, parties to a civil union or other similar relationship are governed by, and may take advantage of, all of the Illinois laws applicable to same-sex married couples, “whether they derive from statue, administrative rule, policy, common law, or any other source of civil or criminal law.”  Both same-sex and opposite-sex couples may enter into an Illinois civil union.  Note, however, for Federal purposes, The Defense of Marriage Act (“DOMA”) is still in effect and thus there is no recognition of same-sex relationships for Federal purposes.

What does this mean for parties to a civil union in Illinois?  Some of the rights, benefits, and protections include:

1. Protection from disinheritance (if a person dies without a Will, his or her civil union partner is entitled to all (if no children) or 50% (if children) of the decedent’s estate);
2. Domestic relations rights and procedure, including protection as to “marital property” upon dissolution of a civil union;
3. Adoption and parental rights;
4. Spousal treatment for Illinois income tax purposes;
5. Spousal testimonial privilege;
6. State spousal benefits such as workers’ compensation and spousal pension coverage; and
7. Emergency medical decision-making power and hospital visitation rights.

In addition, civil union partners are treated as spouses for Illinois estate tax purposes, including the marital deduction for estate taxes.  BUT, because Federal law does not recognize civil unions, additional estate tax minimization planning must be considered for those with gross estates in excess of $2,000,000 (the current Illinois estate tax exemption).   Gifting is a great tool for estate tax minimization, particularly in 2012 while favorable Federal laws remain in place.  Civil union partners can also benefit from irrevocable life insurance trusts (“ILITs”).  By making the owner and beneficiary of any life insurance policy an ILIT, the death benefit can be passed to beneficiaries of the ILIT (which can include a civil union partner) both estate and gift tax free at the Federal and State level.