The Impact of Civil Unions on Real Estate

The Illinois Religious Freedom Protection and Civil Union Act (Civil Union Act or Act), 750 ILCS 75/1, et seq., was signed into law on January 31, 2011, by Governor Pat Quinn and became effective June 1, 2011. The Act legalizes civil unions in Illinois, which are defined as follows: "a legal relationship between two persons, of either the same or opposite sex," established pursuant to the procedures in the act. Id. at 75/10. The Act defines a "party to a civil union" as a "spouse," "family," "immediate family," "dependent," "next of kin," and "other terms that denote the spousal relationship." Id. Once formed, parties may dissolve a civil union under the Illinois Marriage and Dissolution of Marriage Act. Id. at 75/45; 750 ILCS 5/101 et seq.

The Act has two purposes: (1) to provide adequate procedures for the certification and registration of a civil union; and (2) to provide persons entering into a civil union with the same obligations, responsibilities, protections, and benefits afforded to a spouse, whether they derive from statute, administrative rule, policy, common law, or any other source of civil or criminal law. 750 ILCS 75/5 & 20. The purpose section expressly states that the legislative intent is for the Act to be "liberally construed and applied." Id. at 75/5. By broadly giving parties in a civil union the same legal obligations, responsibilities, protections, and benefits as spouses in a marriage, the Act has far-reaching implications in all areas of practice in Illinois. This article focuses specifically on the effect of the Act on tenancy by the entirety, homestead rights, health care surrogacy, probate, and spousal privilege. Additionally, because the Act only applies within Illinois, this article will address implications for other states as well as some areas of tension with the federal laws.

Statutory Intent and the Scope of the Act

The Civil Union Act legally recognizes that partners to a civil union have the same rights as spouses in a marriage. Thus, all Illinois laws that refer to spousal relationships will also apply to civil unions. However, some laws use more specific language, such as "husband" and "wife," which are not listed in the definition of a "party to a civil union." 750 ILCS 75/10. There are two arguments for why laws that refer to "husband" and "wife" would also apply to partners in a civil union. First, the list of what constitutes a "party to a civil union" is not exclusive because the Act states that the definition includes "other terms that denote the spousal relationship, as those terms are used through the law." Id. Black's Law Dictionary defines "spouse" as "one's husband or wife by lawful marriage." 1533 (West, 9th ed 2009). Thus, the definition of spouse encompasses "husband" and "wife" and laws that use those terms should be interpreted as another term that denotes the spousal relationship. Second, the explicit legislative intent is for the Act to be "liberally construed and applied." 750 ILCS 75/5. A broad application of the spousal relationship would include "husband and wife" in its definition so that such laws would also apply to partners in a civil union.

Tenancy by the Entirety

Through the Joint Tenancy Act, Illinois recognizes tenancy by the entirety, which lets married couples hold property under equal ownership with right of survivorship. 765 ILCS 1005/1c. "No deed, contract for deed, mortgage, or lease of homestead property held in tenancy by the entirety shall be effective unless signed by both tenants." Id. Property held by tenancy by the entirety will automatically revert to the survivor when one spouse dies, bypassing probate. One of the protections of tenancy by the entirety is that creditors cannot take the property to satisfy the debts of only one of the parties. Tenancy by the entirety applies to married spouses and the statute uses the language of "husband and wife." Based on the broad statutory interpretation discussed above, the Civil Union Act would extend the right to hold property as tenancy by the entirety to parties of a civil union.

Tenancy by the entirety only exists if the tenants "remain married to each other." Id. "[U]pon a judgment of dissolution of marriage or of declaration of invalidity of marriage," the estate becomes a tenancy in common, unless the court directs otherwise. Id. Divorce is governed by the Illinois Marriage and Dissolution of Marriage Act. 750 ILCS 5/101 et seq. The Civil Union Act states that parties to a civil union can dissolve their civil union under the same Marriage and Dissolution of Marriage Act. 750 ILCS 75/45. Therefore, dissolution of a civil union would have the same effect as a divorce for a marriage, thereby terminating tenancy by the entirety.

Homestead Rights

If one person holds title to residential property and that person is married or a party to a civil union, the non-titleholding spouse or party to the civil union must execute a waiver of homestead, waiving homestead rights on the deed, mortgage, and contract. See generally 735 ICLS 5/12-904.

Health Care Surrogate Act

When there is no power of attorney for health care, the Health Care Surrogate Act (HCSA) allows certain people, designated as surrogates, the ability to make health care decisions for patients that lack decision-making capacity. 755 ILCS 40/25. Surrogate decision makers have the right to make medical treatment and end-of-life care decisions, including the right to terminate life-sustaining treatment, without judicial involvement. Id. at 40/5(b). The HCSA establishes a surrogacy list in order of priority:

1. the patient's guardian of the person;
2. the patient's spouse;
3. any adult son or daughter of the patient;
4. either parent of the patient;
5. any adult brother or sister of the patient;
6. any adult grandchild of the patient;
7. a close friend of the patient;
8. the patient's guardian of the estate.

Id. at 40/25(a).

Prior to the passage of the Civil Union Act, partners in a same-sex relationship would be relegated to the seventh priority, that of a close friend of the patient. See id. at 40/10 for a definition of "close friend." Under the Civil Union Act, parties to a civil union would be given the same rights as a spouse and bumped up to second in priority. Therefore, the Civil Union Act gives partners in a civil union the ability to make key medical care decisions on behalf of their partner when they may not previously have had the opportunity.

Probate Act

The Probate Act of 1975 broadly dictates the process of administrating the estate of a deceased person and protects the rights of the surviving spouse in receiving distributions of the decedent spouse's estate. 755 ILCS 5/1 et seq. There is less of an issue in applying the Probate Act to civil unions because the Probate Act uses the term "spouse" which is expressly included in the definition of a "party to a civil union." Therefore, the protections available to spouses in a marriage under the Probate Act are extended to parties to a civil union under the Civil Union Act. Below describes a few provisions where rights in the Probate Act are affected by the Civil Union Act.

Notice Requirement for "Interested Parties"
Similar to spouses, partners to a civil union would be an "interested person" entitled to notice and accounting. 755 ILCS 5/1-2.11; 5/6-3. If the account is approved by the court upon the hearing, then it is binding upon all persons to whom the notice was given. Id. at 5/24-2.

Probated Estates
If a decedent dies intestate, the rules of descent and distribution ensure that the surviving spouse receive a portion of the decedent's estate. 755 ILCS 5/2-1. Specifically, if there is a surviving spouse and descendant of the decedent, half of the estate would go to the surviving spouse and the other half would go to the descendants. Id. at 5/2-1(a). If there are no decedents, the entire estate would go to the surviving spouse. Id. at 5/2-1(c). Under the Civil Union Act, the rights and protections afforded a spouse under the Probate Act are extended to partners in a civil union so that they are able to obtain distributions from a deceased partner's estate.

Spousal Award
When a decedent dies testate or intestate, by default a surviving spouse is entitled to "a sum of money that the court deems reasonable for the proper support of the surviving spouse for the period of nine months after the death of the decedent." 755 ILCS 5/15-1. The sum cannot be less than $20K and an additional $10K for each child. Id. The Civil Union Act would allow partners to a civil union the ability to claim the spousal award.

Affidavits of Heirship
An affidavit of heirship identifies the spouse and all the heirs to the estate of a decedent who holds title to property. See 755 ILCS 5/5-3. Parties to a civil union under the Civil Union Act must also include whether the decedent was a party to a civil union and any children resulting from the civil union.

Letters of Administration
If a person dies intestate, letters of administration are issued according to priority. 755 ILCS 5/9. The first person on the list is the "surviving spouse or any person nominated by the surviving spouse." Id. at 5/9-3. The rest of the list only includes other family members or a representative, public administrator, or a creditor. Id. Prior to the Civil Union Act, partners to a civil union would not be given priority to act as administrator to their deceased partner's estate. Now that the Civil Union Act gives partners to a civil union the same rights as spouses, they would have first priority in receiving the letter of administration.

Right to Renounce a Will
When a surviving spouse is intentionally or unintentionally left off a will, that spouse is statutorily entitled to renounce the will and receive 1/3 of the entire estate if there is a descendant or 1/2 of the entire estate if there are no descendants, after payment of all just claims. 755 ILCS 5/2-8(a). The Civil Union Act would extend a surviving spouse's right to renounce a will to a surviving partner in a civil union.

Witnesses to a Will
The beneficiary of a will or his spouse cannot be a witness to the will. 755 ILCS 5/4-6(a). The legacy or interest of the will would be void to that beneficiary, unless there are a sufficient number of other witnesses. Id. The Civil Union Act similarly prevents a partner in a civil union from being a witness to a will if the other partner is a beneficiary of the will.

Dissolution and Wills
Upon dissolution of marriage or declaration of invalidity of the marriage, the testator's former spouse is deemed to have died before the testator of the will. 755 ILCS 5/4-7(b). The former spouse loses all benefits under the will and any interest or powers of appointment are revoked. Id. The Civil Union Act applies the Illinois Marriage and Dissolution of Marriage Act to declarations of invalidity of a civil union, thereby revoking a partner to a civil union's rights and benefits conferred by a former partner's will upon dissolution of the civil union. See 750 ILCS 75/45.

Spousal Privilege

Illinois protects communications between husband and wife as privileged. 735 ILCS 5/8-801. "[N]either may testify as to any communication or admission made by either of them to the other or as to any conversation between them during marriage." Id. The broad reading of the Civil Union Act would extend the privilege to protect communications between parties to a civil union. Consequently, partners in a civil union would have a right to be free from compelled testimony against the other partner.

Interaction with Other States and the Federal Government

The Civil Union Act gives parties to civil unions in Illinois the same state rights as spouses in a marriage. Under the reciprocity clause of the Act, marriages between persons of the same sex (but not common law marriages), civil unions, and "substantially similar legal relationship" from other states will be recognized as a civil union in Illinois. 750 ILCS 75/60. Those who have already obtained a civil union or a substantially similar union, such as domestic partnership, from another state do not need to reaffirm their relationship status in Illinois.

Federally however, the Defense of Marriage Act (DOMA) does not recognize same-sex marriages or civil unions. DOMA defines "marriage" as "a legal union between one man and one woman as husband and wife," so that a "spouse" means only "a person of the opposite sex who is a husband or a wife." 1 USC 7 (1996). Federal laws that confer rights and benefits to "spouses" in a marriage are not available to parties of a civil union from Illinois. The effect is significant because an estimated 1,138-plus federal rights and benefits use the term "spouse." Richard A. Wilson, A Guide to the New Illinois Civil Union Law, 99 Ill Bar J 232 & n38 (2011). Impacted areas include federal tax returns, estate taxes, and public assistance. For example, parties to a civil union may file joint taxes in Illinois, but must file separate federal tax returns. Another example is that generally upon dissolution of a marriage, the division of the estate is not taxable to either party. See id. While the Civil Union Act allows dissolution of civil unions in Illinois, parties may have to pay federal taxes when dividing the estate. This treatment also applies to maintenance and spousal support. Id.

Under DOMA, states are not required to recognize same-sex relationships from other states. 28 USC 1738C (1996). Consequently, if parties to a civil union formed in Illinois traveled to a state that did not recognize civil unions or substantially similar relationships, then their civil union would not be valid in that state and rights conferred to spouses would not extend to them. In order to ensure broad recognition of the rights of civil union partners, parties should secure piecemeal, contractual protections. See generally Wilson, 99 Ill Bar J (cited previously). Inheritance rights may be protected through powers of attorney, wills, and trusts and property rights may be protected by title. Id.

Litigation challenging the constitutionality of DOMA is pending in California, Connecticut, and New York federal district courts. The Massachusetts district court has already held DOMA unconstitutional in two cases: Commonwealth of Massachusetts v United States Department of Health and Human Services, 698 F Supp 2d 234 (D Mass 2010); and Gill v Office of Personnel Management, 699 F Supp 2d 374 (D Mass 2010). Currently, DOMA remains a constraint on state laws that recognize civil unions or similar relationships, such as Illinois' Civil Union Act.

Conclusion

In Illinois, the Civil Union Act offers parties to a civil union the same rights as spouses in a marriage. Both same-sex and opposite-sex relationships can apply for a civil union. The legislative intent is for the Act to be broadly construed so that it applies to most state laws that refer to terms a spousal relationship, including terms such as "husband" and "wife." However, the Act faces limitations federally and in other states, since DOMA does not recognize same-sex relationships. Federal rights and benefits from states that do not recognize civil unions are not available to parties to a civil union from Illinois.