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For gay and lesbian couples, there are a number of variables that must be taken into account in the estate planning process. Illinois law does not allow for same-sex unions, nor are civil unions formally recognized. Therefore, the laws regarding estate planning and family succession apply only to marriages between men and women. In order for a gay or lesbian couple’s rights to be formally recognized, it will be necessary to create a number of binding legal documents.
Estate Planning
It is crucial for same-sex partners to prepare an estate plan. In an estate plan, each partner must have a will, a trust, and a health care power of attorney. A will is one method to determine who will receive assets at time of death. A will can be used to establish a guardianship for any minor adopted children as well.
The necessity of a will is fairly obvious. If a person in a same-sex partnership passes away without a will, their property will not automatically pass on to their partner, as Illinois does not recognize same-sex unions. Rather, any children would first have legal right to the estate. And if there are no children, any living parents or siblings would inherit. If a same-sex partners do not have a will, either partner will be legally barred from any right of inheritance. Considering what is at stake, the necessity of a will should be clear.
A trust is also a useful part of every estate plan. A trust is an arrangement where a person, known as the grantor, grants control of assets to another person or institution, such as a bank. The person controlling the assets is known as the trustee. The trustee manages the assets for the benefit of the grantor or any beneficiaries. One advantage of a trust over a will is that assets in a trust avoid probate proceedings. Other advantage, for sizable estates, is that assets in a trust cannot face the estate tax. Trusts can either be revocable or irrevocable. A trust can be used in combination with a will to determine distribution of assets upon one’s death.
The final estate planning document necessary for any same-sex couple is a power of attorney. A power of attorney allows someone to appoint an agent to make decisions for them if they become incapacitated. A power of attorney can be assigned to make health care decisions, or financial decisions. For same-sex partners, appointing a partner as a health care power of attorney has obvious benefits. Because Illinois does not recognize same-sex marriages or civil unions, a same-sex partner has no legal right to make decisions for their partner if they become incapacitated. However, a power of attorney gives each partner that right. A power of attorney for financial decisions in the event of incapacitation is useful as well.
Domestic Partnership Agreements
While estate planning documents protect the rights of same-sex partners during death or incapacitation, it may make sense for same-sex partners to seek financial protection during the course of their relationship. One way to do this is through domestic partnership agreements. A domestic partnership agreement delineates the rights and responsibilities of each partner. These agreements commonly determine how property will be divided upon separation. It may be particularly useful if one partner has accumulated substantially more assets than the other partner.
In order for these documents to fully express the wishes of each partner, it is useful to get them updated every few years, or upon a major event. While same-sex marriage and civil unions are being recognized in an increasing number of states, they are not yet recognized in Illinois. Until that day, same-sex partnerships will have to employ the protections provided by carefully drafted estate planning documents and domestic partnership agreements.