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Spousal Benefits for Same-Sex Marriage in Illinois
By Gardi, Haught, Fischer & Bhosale LTD
September 18, 2014
On June 1, 2014, the Religious Freedom and Marriage Act (HB5170), (the “Act”) which applies to same-sex marriage in Illinois, officially went into effect. The law provides, that “all laws of this State applicable to marriage apply equally to marriages of same-sex and different-sex couples and their children.” The law, in effect, extends many legal rights to same-sex-couples that, until recently, were reserved only for different-sex couples. For example:
1) Tax-Free Gifts. Different-sex couples have always been allowed to make tax-free gifts to his/her spouse during his/her life or upon his/her death. Under the Act, same-sex couples are eligible to make qualified tax-free gifts as well.
2) Real Estate Ownership. Under the Act, same-sex couples can now take and hold title to real estate constituting the couple’s “primary residence” as “tenants by the entirety”. Even before June 1, 2014, same-sex couples in a recognized civil union were allowed to own their principal residence as tenants by the entirety. However, prior to the recognition of same-sex civil unions, same-sex couples could only own real property together as “tenants in common” or in “joint tenants.”
Tenants in common own real estate in a designated percentage. Each tenant is able to pass his/her interest to another without the consent of the other tenant. Also, unlike joint tenancy and tenants by the entirety, a tenancy in common interest in real estate passes pursuant to the deceased tenant’s will rather than by operation of law. This may necessitate opening a probate estate in order to pass the deceased individual’s interest in the real estate.
Prior to the act, same-sex couples can hold real estate as “joint tenants”. In a joint tenancy, each partner has a one hundred percent (100%) interest in the real estate and neither partner can transfer that partner’s interest in the real estate, or the real estate itself, without the other partner’s consent. Upon the death of one partner, one hundred percent (100%) of the deceased partner’s interest in the property would automatically pass to the other spouse, thereby avoiding probate. The only main disadvantage of “joint tenancy” is that a creditor of one of the spouses can force the sale of the property to satisfy a judgment against that spouse, even if the other spouse is not a party to the underlying obligation.
Now, the Act permits same-sex couples to hold their primary residents as “tenants by entirety.” “Tenancy by the entirety” provides all the advantages of “joint tenancy”, described above. However, an added advantage with tenancy by the entirety is that the judgment creditor described above is not able to force a sale of the house to satisfy a judgment. The legal spouse can remain in the home and the creditor can only collect the debt upon the sale of the home.
Where the benefits of “Tenancy by Entirety” were once only reserved for different-sex couples, same-sex couples can now claim the right on their principal residence under the Act.
3) Employment Benefits. The Act also guarantees that same-sex spouses will enjoy the same benefits offered by a spouse’s employer in compliance with federal law as well as state law. These include:
– Family and Medical Leave Act (the “FMLA”). Under the FMLA, a same-sex spouse has the right to take leave (with job security rights) to care for a same-sex spouse.
– IRS Code. Same-sex spouses can claim a tax deduction on their income tax return for health benefits paid for a same-sex spouse. In addition, they can file as “married, filing jointly”, thereby taking advantage of preferential income tax rates.
– Health Plans. Spouses of same-sex couples are entitled to enroll for qualified benefits from an employer’s health plan.
– Benefit Plans. Same-sex couples are entitled to any employer-sponsored program offered for spouses, including qualified joint and survivor annuity and qualified pre-retirement survivor annuity rights.
Gardi, Haught, Fischer & Bhosale LTD Ltd. can defend your rights within a same-sex marriage in Illinois. If you have questions about the new law, or how it applies to a certain situation, call Gardi, Haught, Fischer & Bhosale LTD at 847-944-9400.
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