What Is an Estate Tax in Illinois?
Planning what should happen with your estate after your death can be a difficult decision. This is not just because of the nature of the task, but because there can be a lot of different choices to be made. A key factor when making any decisions should be the Illinois estate tax. We will explain this below and discuss why it is important to take it into consideration when planning your estate. An experienced estate planning attorney can assist you through the process and ensure that your loved ones are properly cared for in the future.
Illinois Estate Tax Law
The Illinois estate tax is a graduated tax rate that goes up to 16 percent and is only applied on estates that are worth more than $4 million. If your estate is worth less than $4 million, the tax rate will not be applied and you do not need to consider it.
In some states, estate tax exemptions are portable, but not Illinois. Portability means that if one spouse dies but does not use any of his or her allotted estate tax exemption, that value can later be used by the other spouse. However, Illinois law is a bit simpler and only provides a $4 million exemption cap for each individual.
Other states only tax a certain portion of an estate, but in Illinois, if your estate exceeds a value of $4 million, all of it is taxed. To get an idea of the amount you could be taxed, look at a chart of the tax rates. Each bracket will have a base amount that must be paid, and then there is a marginal rate that is applied to any money above the bottom limit of that bracket.
If you have ever heard of inheritance and gift taxes, do not worry -- those will not play a role in your estate planning in Illinois, because Illinois does not have those taxes, only the estate tax.
One last detail to consider is that if your estate’s value is very high, you could also be subject to a federal estate tax. As of 2018, the federal estate tax exemption was $11.18 million.
Using Trusts to Lower Estate Tax
A common strategy that can help reduce estate taxes is to create legal trusts. There are a variety of trusts that you and your estate planning attorney can create, so that is why it is best to seek the advice of professional legal counsel since the types of trusts that could be applicable vary on a case-by-case basis. An example is an Irrevocable Life Insurance Trust, which is a designation for your life insurance benefits. If you have life insurance and you pass away, but you do not have this type of trust, the value of your life insurance benefits will be added to your estate and your beneficiaries could lose some of the money.
Contact a Will County Estate Planning Lawyer
Estate planning may seem daunting, but it does not have to be difficult. Prepare for the ongoing care of your loved ones by working with a respected Plainfield, IL estate planning attorney. At The Law Offices of Tedone & Morton, P.C., we have extensive legal experience and a history of caring for the best interests of our clients. Begin planning for the future of your estate by calling us today at 815-666-1285 to schedule your free consultation.
Source:
http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500050HArt.+IV&ActID=2104&ChapterID=60&SeqStart=5300000&SeqEnd=6800000
Please provide your Name or Case Number when submitting a payment. Thank you.
Will County Divorce Attorney, Plainfield Residential Real Estate Lawyer
Contact Our Firm
The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.
I have read and understand the Disclaimer and Privacy Policy.
