Why Same Sex Couples Need An Estate Plan
Same sex couples need estate plans just like opposite sex couples need estate plans. Proper planning ensures that the appropriate legal documents are in place to guarantee a person’s wishes will be carried out in the event of incapacitation or death.
Although same-sex couples in all 50 states now have the same right to marry as opposite-sex couples and are entitled to all the same benefits, laws can change, and same-sex partners need to be proactive about protecting their interests and their loved ones.
The Chicago estate planning attorney at Plan Forward Legal assists LGBTQ+ couples with planning for their futures, whether married or not. We understand that same-sex couples may face unique estate planning challenges, and we empower our clients with the legal tools they need to achieve their goals.
- Why Same Sex Couples Need An Estate Plan
- What Happens When Same Sex Couples Have No Estate Plan
- An Estate Plan Protects the Children of a Same Sex Couple
- An Estate Plan Allows Same Sex Married Couples to Minimize Estate Tax
- Recommended Estate Planning Documents for Same Sex Couples
- Estate Planning Tips for Same Sex Couples in Illinois
- Plan Forward Legal: Competent and Compassionate LGBTQ+ Estate Planning
What Happens When Same Sex Couples Have No Estate Plan
The law operates differently depending on whether a same sex couple is married or not. Marriage (and civil union) affords a same sex couple the rights and responsibilities granted to opposite sex married couples under Illinois law.
Same Sex Married Couples with No Estate Plan
If you are married in Illinois, you have certain rights as a spouse even if you don’t have an estate plan. If you do not have a healthcare power of attorney and your spouse becomes incapacitated and cannot make healthcare decisions, state law gives a legal spouse the authority (after a patient’s legal guardian) to make healthcare decisions.
If you die without a will (or trust), state intestacy laws will determine who is to receive your property. A surviving spouse will inherit the entire estate if a decedent has no descendants. If there are legal descendants, a surviving spouse is entitled to only half of the property, and the remaining half is split among descendants.
However, if your spouse becomes incapacitated and has not granted you a financial power of attorney, you cannot make business decisions regarding your spouse’s individual assets without going to court and getting appointed as your spouse’s legal guardian.
Non-Married Same Sex Couples with No Estate Plan
State law does not recognize either partner in a legal relationship with the other when not married or joined in a civil union. Without a will, the law recognizes only lineal family relations, which can lead to unintended and perhaps even devastating results.
If there are children involved, it can get really messy for the non-biological partner, who can end up without visitation or decision-making authority. Children may not be eligible for certain benefits through a non-biological parent.
An Estate Plan Protects the Children of a Same Sex Couple
In Illinois, there is a presumption that both partners are the legal parents of any child born to either of them if they are married or in a civil union. The Illinois Parentage Act of 2015 removed references to gender when determining the parent-child relationship.
The presumption of parenting also extends to same sex couples in the following situations.
- The marriage or civil union of a same sex couple is terminated, and one partner gives birth to a child within 300 days.
- A marriage or civil union is entered into before one partner gives birth to a child.
- After one partner gives birth to a child, a marriage or civil union is entered into, and the non-birth partner gives written consent and is named on the birth certificate.
A presumed parent may establish a legal parent-child relationship by executing a Voluntary Acknowledgment of Parentage (VAP), which has the effect of a court order. However, a VAP does not guarantee visitation or custody rights. Visitation and custody rights must be separately acquired by petitioning the court or through adoption.
When same sex couples are not married or in a civil union, and one gives birth to a child, there is no presumption that the non-biological partner is the child’s parent. Naming the non-biological partner on the birth certificate is not sufficient to establish parental rights. Adoption is the only way to guarantee legally recognized, secure parental rights.
Having an estate plan makes it harder to challenge presumptions of parenting because it legally documents intentions, including child guardianship nominations, and establishes inheritance rights. Legalizing intentions with an estate plan is especially important when one or both partners have children from previous relationships.
An Estate Plan Allows Same Sex Married Couples to Minimize Estate Tax
Only same sex married couples can use the federal tax code to minimize their estate tax liability. Any legal relationship other than marriage (including a civil union) is not recognized as a marriage under federal law.
At the federal level, each spouse is allowed a tax exemption of $15 million in 2026 or $30 million combined. Married partners don’t need to worry about paying estate tax until the survivor dies. The unlimited marital deduction allows the assets of a decedent to pass to a (U.S. citizen) survivor tax-free until the survivor’s death.
Tax exemptions are portable at the federal level, meaning that if one spouse does not use their entire tax exemption, the survivor can add the leftover exemption to their own and protect more assets from tax.
Illinois is one of the few states to impose an estate tax. The current estate tax exemption is $4 million per individual, which exposes more Illinoisans to the state’s estate tax than to the federal estate tax. An unlimited marital deduction also applies at the state level, but the exemption amounts are not portable, and specific planning is required to preserve unused exemption amounts.
Also, unlike the federal estate tax, if an estate’s value exceeds the Illinois exemption threshold, the entire estate is taxed, not just the value of assets above the exemption. Couples potentially facing state or federal estate tax liability must be strategic in minimizing taxes to retain more assets for beneficiaries and heirs.
Recommended Estate Planning Documents for Same Sex Couples
Estate planning can be pretty straightforward for most couples, but it can become more complex depending on the value, type, and location of assets, as well as specific family dynamics. A basic estate plan includes documents that have no regard for gender, but must be carefully crafted for same sex couples to ensure they can withstand scrutiny or changes in current laws.
The following documents should be included in an estate plan for a same sex couple.
Will
In a will, you can specifically direct where you want your property to go and nominate who you prefer to be the guardian of minor children. You can also include provisions that explain your decisions and explicitly address any anticipated challenges to avoid future conflict. Most wills must go through court-supervised probate to give effect to their terms.
Living Trust
A living trust is an alternative to a will for persons who wish to avoid probate. Living trusts can distribute property upon death without court involvement, thereby protecting family privacy. Living trusts do not protect property during the lives of the trust creators, but the provisions are much harder to challenge than those of a will.
Power of Attorney for Property
A power of attorney lets you appoint a person as your agent to manage your financial and business affairs. The power can be effective immediately or only upon your incapacitation. A power of attorney can grant broad, general authority or be limited to a specific time or purpose. Powers of attorney are typically effective until revoked or upon the death of the person granting the power.
Power of Attorney for Healthcare and Advance Directive
A healthcare power of attorney lets you appoint the person who is authorized to make healthcare decisions for you if you are unable to make them.
An advance directive (also called a living will) is a declaration of your desires about receiving life-preserving medical procedures if your condition will not improve. Advance directives let doctors know your wishes and guide the decision-making of the person appointed in your healthcare power of attorney.
HIPAA Authorization Form
HIPAA authorization forms allow medical providers to share a patient’s medical information. A validly executed Authorization to Disclose/Obtain Information backs up a power of attorney for healthcare and has the added advantage of being recognized in all 50 states.
Getting an estate plan is a great starting point, but it’s not something you can complete once and then forget about. Because life happens and circumstances can change, it is always a good idea to periodically review your documents to make sure everything is up to date, especially after a major life-altering event.
Estate Planning Tips for Same Sex Couples in Illinois
Same sex couples should keep the following information in mind regarding estate planning in Illinois.
- Only married same sex couples can take advantage of the benefits of federal estate tax laws.
- Although civil unions are afforded the same rights as marriages under Illinois law, they are not recognized as valid marriages under federal law or in many other states.
- The property of same sex couples without wills may end up in the hands of biological relatives.
- Same sex couples without some type of legal relationship have few legislated protections and must execute private, legal documents to ensure recognition of their relationship and to protect their rights.
- If your estate plan has been in effect for a while, it’s important to review your documents for compliance with current laws and make sure appointments and beneficiary designations are appropriate.
- Beneficiary designations on bank accounts, retirement accounts, investment accounts, and insurance policies need to be kept up to date and should coordinate with your estate planning documents.
Estate planning is about being prepared and knowing you have taken the necessary steps to manage an uncertain future, protect your property, and make things easier for your family.
Plan Forward Legal: Competent and Compassionate LGBTQ+ Estate Planning
Laws are in place to protect individual freedoms, and we’re certainly glad they are. Unfortunately, laws alone may not achieve their goals without action by those who stand to benefit. Creating an estate plan eliminates uncertainty and protects your right to make the decisions about the important things in your life.
Plan Forward Legal is a comprehensive estate planning law firm proud to serve the LGBTQ+ community in the Chicago area.
