Illinois Estate Tax FAQs

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Illinois Estate Tax FAQs | Mario Godoy | Chicago Estate & Probate Lawyer

Planning for the future of your loved ones is a big responsibility, and can seem overwhelming. Estate planning to protect your individual wealth and accomplish your financial goals is dependent on your understanding of Illinois estate tax and probate law to make good decisions that guide and protect your estate and give you peace of mind. 

10 Frequently Asked Questions About Illinois Estate Tax

1. What is the Illinois Estate Tax?
Illinois is one of twelve states to have its own estate tax separate from the federal estate tax.

2. Who is Required to Pay Estate Taxes in Illinois
Residents of Illinois with estates over $4 million must file an estate tax, as well as nonresidents of Illinois who have a property in Illinois that is valued over $4 million.

3. How Does Illinois Estate Tax Law Affect Spouses?
When both people in a married couple die, the exemption is still $4 million. As estate planning attorneys, we often recommend a marital trust for married couples to minimize estate taxes., which can change the asset level from $4 million to $8 million.

4. I Heard Estate Taxes Are Portable for Married Couples. What Does That Mean?
Portability means that when one spouse dies, the balance of the tax exemption is transferred to the remaining spouse. The Illinois estate tax is not automatically portable between married couples. When the second spouse dies, the estate can only use one spouse’s exemption. As trust attorneys, we often recommend couples establish a marital trust to reduce and avoid estate tax.

5. How Much Are Illinois Estate Taxes?
The Illinois estate tax rate is graduated and goes up to 16% on estates worth more than $4 million.

6. What is Included in An Estate?
The deceased individual’s property and assets are considered part of the estate for tax purposes, some but not all assets include:

    • Bank accounts
    • Life insurance policies
    • Investments such as stocks, bonds, CDs
    • Retirement accounts
    • Real estate
    • Interests in family-owned businesses
    • Interests in other businesses
    • Personal property (vehicles, antiques, jewelry, art)

 

7. When Are Estate Taxes Due?
All taxes owed by the estate must be paid by the estate within 9 months of the decedent’s death.

8. Who is Responsible for Filing an Estate Tax Return and Paying Estate Tax in Illinois
The executor of the will is responsible to determine the value of the estate assets, the estate debt, file the estate tax return and pay estate taxes. The executor can hire an estate attorney to manage the estate taxes, and pay them from the estate assets.

9. Is It Possible to Reduce Your Illinois Estate Taxes?
A trust or living trust can help you manage your assets to take advantage of tax laws and reduce your Illinois estate taxes.

1o. I Heard There Are New Federal Tax Laws. Does This Impact Illinois Estate Taxes?
The 2017 federal tax raise estate taxes from $5.5 million for individuals and $11 million for married couples to $11 million for individuals and $22 million for married couples. This does not impact Illinois estate taxes because they were already set at $4 million.

Do you have questions about estates taxes and marital trusts in Illinois? Our experienced trust attorneys in Lombard Illinois understand Illinois laws and advise you on the best options to protect your assets and loved ones. To talk to a trust attorney contact the Estate & Probate Legal Group at (630) 800-0112.