What Is a Civil Union?

Anna Burton is a lead planning excellence consultant at Northwestern Mutual.

While many couples are eager to walk down the aisle, others aren’t entirely sold on the idea of getting married. In fact, a survey by Thriving Center of Psychology found that 85 percent of millennials and Gen Z don’t think marriage is necessary to have a fulfilled, committed relationship. A civil union is an alternative option that can provide many of the same benefits as marriage, but it isn’t available in all states.

Since 2022, the federal government and all states must recognize the marriages of couples, including same-sex and interracial couples—as long as the marriage was valid in the state where it was performed. But civil unions aren’t recognized at the federal level or by all states.

From spousal rights to tax implications, here are the most important things to know about a civil union vs. marriage.

What is a civil union?

A civil union is a legally recognized partnership that grants certain rights to couples at the state level. Once marriage equality legalized same-sex marriage, civil unions became less common. But they might work for couples who’d rather not get married.

The main difference between a marriage and a civil union is that civil unions are recognized only in the following states:

• Colorado
• Hawaii
• Illinois
• New Jersey
• Vermont, which no longer issues civil union licenses but recognizes existing civil unions

That leaves over 40 states that don’t recognize civil unions. If you move to one of them, you may lose some of the protections. This can affect things like property rights, inheritances and health care decisions.

And these benefits are generally limited to the state in which the civil union was established. In other words, a civil union is typically a state-specific recognition. Each state has its own specific laws and requirements for entering into (and dissolving) a civil union. On the other hand, marriages are recognized in every state and are “portable” from one state to another.

What does it mean to be in a civil union?

If you’ve entered into a civil union at the state level, that can give you these rights:

• Be covered by your partner’s employer-sponsored health care plan, and vice versa
• Make medical decisions for your partner if they become incapacitated
• Enjoy joint parental rights if you have children together
• File a joint state tax return
• Inherit your partner’s assets tax-free after their death, even if they don’t have a will
• Seek alimony and/or child support if you choose to dissolve your civil union

When it comes to ending a relationship, dissolving a civil union is equally complex as ending a marriage with a divorce. In both cases, you’ll need to file in family court, negotiate the terms and then unwind finances—such as joint bank accounts, retirement savings accounts, mortgages and loans—and potentially alimony or child support.

Civil union vs. marriage

Unlike a civil union, marriage is recognized at the federal level. So, on top of having the legal rights mentioned above, married couples can also:

• File a joint federal tax return: One of the biggest tax benefits of marriage is the ability to file a joint tax return. Doing so can make it easier to claim certain tax deductions and credits. Married couples also get a higher standard deduction.
• Have access to their spouse’s Social Security benefits: If you’re not able to collect Social Security benefits based on your own work record, you might be able to claim benefits as a married spouse. You may also be entitled to survivor benefits when your partner passes away. These federal benefits are not guaranteed to couples in a civil union.
• Have access to their partner’s Veterans Affairs benefits: Spouses of veterans can receive certain VA benefits like health care, education benefits and more. Whether the VA recognizes a civil union will depend on the state.

How would being in a civil union affect taxes?

When considering a civil union vs. marriage, it’s important to understand the tax impact and other financial implications. Here are some highlights.

Pros

• You get some protection but avoid marriage: You might want an alternative to marriage due to the marriage tax penalty or financial reasons—or because you don’t agree with the tradition’s religious connections or social conventions. With a civil union, you get the right to manage joint bank accounts, co-own property and share financial responsibilities.
• You can still file state taxes jointly: That can leave the door open for certain tax breaks in your state, including deductions and credits.
• You might get benefits from your partner’s employer (and vice versa): Some employers recognize civil unions with benefits to partners such as health insurance, family leave and bereavement leave.

Cons

• You won’t get the same federal tax benefits as married couples: Remember, a couple who enters a civil union can’t file a joint federal tax return. That means you’ll have a smaller standard deduction, and you may not qualify for certain tax credits and deductions of marriage.
• You can’t contribute to a spousal IRA: A spousal IRA allows a working spouse to make retirement contributions on behalf of a nonworking spouse. That can be especially helpful if one spouse temporarily leaves the workforce to care for young children.
• You aren’t eligible for the federal estate tax marital deduction: When one spouse in a married couple passes away, they can leave an unlimited amount of assets to the other spouse without incurring federal estate tax. Civil unions do not qualify for this deduction, so assets transferred to a partner in a civil union may be subject to federal estate tax.
• Your gift tax exclusion is smaller: In 2025, you can gift up to $19,000 without having to file a gift tax return. But that number jumps up to $38,000 for married couples. If you’re using a 529 college savings plan to save for your child’s future, those contributions can count toward your gift tax exclusion.

Financial planning for couples often looks different for those who are in a civil union. Like a domestic partnership, it can affect your taxes and long-term savings plan.

Ultimately, your financial plan should be tailored to you, your lifestyle and your goals. Your Northwestern Mutual financial advisor can help you and your partner make plans that match your values—helping you uncover blind spots and find opportunities to help prepare you for your individual and collective goals.