Estate planning is the process of organizing and preparing for the distribution of your assets after your death. It’s an essential part of life, ensuring that your loved ones are taken care of and that your wishes are carried out. 

However, for domestic partners, the estate planning process can be more complex than for married couples. In Illinois, there are several laws and regulations that people in committed relationships should be aware of when planning their estates because unmarried partners are not afforded the same legal protections when it comes to inheritance and property rights

While more and more couples are choosing to share their lives without being legally wed and creating a loving but non-traditional family unit, the State of Illinois does not formally recognize domestic partnerships or “common-law” marriages. To automatically receive state-protected benefits such as visitation rights and inheritance, adults over 18 of either the same or opposite sex may enter into a civil union that is filed with the appropriate county clerk. 

No matter how you quantify your relationship, it’s crucial to work with an experienced family law advocate to help you build a detailed estate plan and guarantee your partner, family, and assets are protected. Let’s take a closer look at some of the most important considerations for domestic partners and planning for the future. 

The Unique Needs of Life Partners

Domestic partners do not have all of the same rights as married couples. For example, they are not entitled to file joint tax returns or receive Social Security benefits based on each other’s earnings. 

But cohabitation without marriage has become increasingly prevalent in the US. The Census Bureau estimates there are hundreds of thousands of cohabitating couple households in the state of Illinois in 2021. Even though Public Act 98-0597, titled the Religious Freedom and Marriage Fairness Act, legalized same-sex marriage in Illinois and was signed into law by Governor Pat Quinn in 2013, many LBGTQ+ couples choose not to legally marry.

If you don’t have legal documentation in place, you may face expensive and stressful challenges when it comes time to make medical decisions and funeral arrangements or to inherit property or assets from your partner. That’s why it’s vital to take the following steps to enshrine your rights with the assistance of a skilled estate planning attorney in case the unthinkable should happen.

Create a Will

One of the most foundational estate planning documents for life partners is a will. This legal tool allows you to specify exactly how you want your assets to be distributed after your death. Without a will, the state will decide how your assets are distributed, which may not reflect what you really want.

In your will, you can name your partner as the executor of your estate, which means they will be responsible for managing your assets and distributing them to your other heirs. You can also leave specific assets to them, such as a home or a car, and make provisions for any dependents you have. Be sure to work with an attorney to ensure that your will is valid and legally binding.

Consider a Trust

A trust is a legal arrangement that allows you to have your estate managed by your trustee, who manages them for the benefit of your beneficiaries. This framework can be particularly useful for unmarried couples, as it can help you avoid probate, which can be a lengthy and expensive process in Illinois. Additionally, a trust can provide ongoing support for your partner, even after your death. 

You can name your partner as the trustee and/or as a beneficiary. As a trustee, this ensures that they have access to those assets after your death. A trust can also provide protection for your assets, as any property inside the trust will not be subject to probate court proceedings.

Setting up an iron-clad trust is especially vital if you or your partner have underaged children, together or from previous relationships. Your trustee can be an honorable and responsible individual or a third–party financial institution.

Review Your Beneficiary Designations 

Many assets, such as retirement accounts and life insurance policies, allow you to name one or more beneficiaries. It is critical to review these designations regularly to ensure they reflect your current situation.

If you want your partner to receive these assets after your death, you must file the appropriate paperwork naming them as beneficiaries. Otherwise, these assets may be distributed according to your default heirs, according to Illinois probate law. 

Power of Attorney and Medical Directives

A power of attorney is a legal document that allows you to appoint someone to make financial or medical decisions on your behalf if you become incapacitated. This can be particularly important for couples who are not legally recognized as spouses.

By creating a power of attorney, you can ensure that your partner has the authority to make decisions about your medical care or finances if you are unable to do so yourself. Sometimes referred to as an “agent” or “attorney-in-fact,” this trusted person will be able to buy and sell property on your behalf and ensure you get the best medical care — instead of those choices being made by the State.

Long-term care planning is an essential consideration for domestic partners, as they may not have the same support system as married couples. Long-term care insurance can help cover the cost of nursing home care or in-home services if you need it later in life.

If you want to designate your partner as the person in charge of your medical decisions, you’ll need to file documents through your attorney that outline your wishes for care and treatment, and be sure to name your partner as your agent for these purposes.

Tax Implications

Finally, you may want to work with an expert financial advisor to review the tax implications of your estate plan. The Illinois estate tax only applies to estates worth over $4 million, but any wealth you’ve accumulated that you want to pass on to your partner or family should be protected. 

For those with a larger net worth, wise legal counsel can help you safeguard your assets and help build a legacy of tax-advantaged generational wealth through various trusts and other tools. A comprehensive estate plan minimizes tax liability and reduces the chance of legal actions.

A Celebration of Life

Sitting down to have a conversation about estate planning can be challenging, particularly for unmarried couples who have built a wonderful life together. However, taking the time to construct a plan can provide priceless peace of mind and legal protection for you and your partner. 

By working with a skilled and compassionate estate planning attorney and an experienced financial advisor, you can ensure that your estate plan is valid and legally binding, while also minimizing tax liability. Partner with an advocate who can help protect your loved ones, regardless of your marital status — reach out to us today!