Center on Halsted Reviews Civil Union Legislation
As the one-year anniversary of The Illinois Religious Freedom Protection and Civil Union Act (750 ILCS 75) approaches, many couples have questions about benefits and liabilities of Illinois Civil Unions. Attorney Robert Iverson, an expert in estate and tax planning from Lavelle Law, Ltd., has spent the last year studying the implications of the Act for Illinois same-sex couples.
On May 16, the Center on Halsted hosted a seminar by Iverson and his colleague, Kristina Buchthal Regal. They provided an overview of the Act and a review of the protections and limitations of Civil Unions from a tax, estate planning, and family law perspective.
"The process [of entering into a civil union] is nearly identical to that for entering into marriage," Iverson said, with the notable exception that both parties seeking a civil union must be 18. (Heterosexual couples between 16 and 18 can present evidence of parental or judicial consent.)
Within Illinois, partners in a civil union are treated as spouses. Thus, civil unions allow same-sex partners to file Illinois tax returns jointly and shelter same-sex partners from Illinois gift and estate taxes. Civil unions also secure rights to make medical decisions for an incapacitated partner under the Illinois Health Care Surrogate Act (IHCSA).
Surviving partners are also ensured the rights of a spouse in terms of property distribution if the other partner dies with no will or trust in place, as well as the right to renounce a partner’s will. Finally, civil unions extend the Illinois Presumption of Parentage to same-sex partners, meaning a child born to one partner is legally assumed to also be the partner’s child.
Unfortunately, many of these rights and protections end at the Illinois state line.
"We can use the analogy of a driver’s license," Regal noted. "If you’re from Michigan, your driver’s license doesn’t become invalid when you leave the state." In the case of civil unions, though, this may be exactly what happens.
The terms of the 10th Amendment of the U.S Constitution, the 1996 Defense of Marriage Act, and the fact that marriages are not legally "judgments" (and thus not protected by the constitutional "Full Faith and Credit" clause) leave same-sex couples without federal protections and at the mercy of state-by-state legislation.
The uneven legal landscape exposes same-sex couples to a number of risks and burdens. For example, employees whose same-sex partners receive health care benefits have employer contributions to their partners’ benefits taxed as income.
According to Iverson, same-sex couples are also subject to "double taxation" at the federal level if they divorce: Both partners are taxed on divided assets and on maintenance/alimony payments, whereas heterosexual divorce is "tax neutral," meaning that one spouse’s tax burden is reduced and the other’s is increased.
The gap between state and federal law can also complicate decisions related to houses and other property for same-sex couples. For example, same-sex couples might choose to hold property as "Tenants by the Entirety" to protect it from non-joint creditors and to ensure that it automatically transfers to the surviving partner upon the death of the other.
However, because same-sex couples, unlike heterosexual couples, cannot transfer unlimited gifts to one another during life or at death, taking advantage of civil unions and their in-state protections may leave them facing Gift and/or Estate Tax liabilities.
The Q & A session following the lecture focused on whether civil unions provide advantages over specific legal measures like advance medical directives, trusts or stand-alone wills that specify how their property should be divided, and second-parent adoptions (which are legal judgments, constitutionally protected by the Full Faith and Credit Clause).
Iverson and Regal both stressed the wisdom of specific measures given the state-to-state gaps and the lack of federal protections. But they also noted that in their litigation experience, civil unions have benefits that are less clearly defined; for example, in giving legal weight to partners’ claims and rights in cases where a trust or will is challenged.
With 750 ILCS 75, Illinois became the fifth state to recognize civil unions. Eight states and the District of Columbia issue marriage licenses to same-sex couples, leaving them with few or no rights in 37 states. Federal protections and rights that do not end at the state line can only be secured by affirmative federal mandate or a decision by the U.S. Supreme Court.
In terms of the way forward to equality for same-sex couples, Iverson noted, "Repeal of DOMA alone is not the answer."
The seminar was webcast live through Illinois Legal Aid Online. A recording of the seminar and following Q & A will be available on their website at http://illinoislegalaidonline.org