Same-Sex Marriages Under New Illinois Law Will Be Entitled to Equal Estate and Gift Tax Treatment
November 2013 is in the books, and it was a historic month in Illinois. On November 5 the Illinois legislature passed a bill legalizing same-sex marriage. Surprisingly, the Chicago Sun-Times deemed this significant event the second most important story of the day after the death of chef Charlie Trotter.
How did the Chicago Tribune do?
Ahhhh, much better!
Governor Pat Quinn signed the bill on November 20. However, the bill does not take effect until June 1, 2014.
What does this have to do with estate planning?
The current state of the law is that same-sex married couples are entitled to the same federal tax benefits as heterosexual married couples. However, this does NOT apply to Illinois civil unions, because Illinois does not recognize a civil union as a marriage. After June 1, 2014, same-sex marriages will be entitled to the same federal estate and gift tax benefits as all marriages, including portability of the federal estate tax exemption and the unlimited exemption for gifts to a spouse. With equal access to these rules and proper estate planning, there is potential to significantly reduce a same-sex couple’s overall estate tax liability.
Side note: Even after poking fun above, I’ll forgive the Sun Times and assume that the story rankings on its mobile site are based on an algorithm—at least the paper didn’t put a picture of a random cat on its homepage.