Easy Questions  
Free Legal Documents

A Primer on Estate & Inheritance Taxes in Albers, IL

A Primer on Estate & Inheritance Taxes in Albers, IL


Me and my dad are the biggest promoters of an estate tax in the US. It's not a popular position.
 
- Bill Gates


When you die, you leave your home, your possessions, your money, and other things of monetary value to spouses, children, family members, friends, charity or religious institutions. The government wants its share. Some argue that estate taxes can provide for future generations. Others argue that is robs inter-generational businesses of the capital they need to keep growing.

Your estate may be subject to inheritance tax, estate tax, state and federal tax statutes, and a host of exemptions that can pass more of the estate to inheritors of your choosing.

What are the differences between Estate Taxes and Inheritance Taxes?

Let's start with estate tax. Your estate is the total of your possessions and debts left behind when you die. An executor, either named in the will or appointed by law, will pay off outstanding debts, cover funeral expenses, and administrative costs (e.g. executor's fees). If necessary, executors may liquidate property to pay taxes, debts, or fees. After federal and state estate taxes are paid, the remainder goes to the heirs. So, the estate tax is a tax on the total amount of the estate, after creditors are paid but before any heirs get their bequest. The tax is paid by the estate itself.

Inheritance tax occurs after the heirs receive their payouts. It is a tax on the amount received and is paid by the heir. Inheritance taxes are levied by the states. This means that in many cases an estate is taxed twice -- first by the federal estate tax, then by the state inheritance tax.

The estate includes cash on hand, bank accounts, financial assets (stocks, bond, mutual funds, etc.), real estate, automobiles, boats, art pieces or rare collections, personal property, debts owed to the estate, business interests, etc. An estate is made up of all of these things. An appraiser will determine the fair market value of everything to determine the taxable value of the estate.

Inheritance Tax Exemptions

For large estates, sophisticated estate planners will work with the family and utilize trusts, charitable donations, non-taxable gifts and other techniques to meet the family's needs and minimize the tax burden.

For small estates, there are exemptions are applied to the taxable amount before estate taxes are collected. Exemptions can be relation based and amount-based.


There is an exemption when the estate is passed from a deceased person to their US citizen spouse. It will not be subject to any federal estate tax. States that levy an estate tax generally follow the federal government's rules for this, as well. If the estate is passed to children, siblings or golfing buddies, the exemption doesn't apply.

Amount-based exemptions are $5.34 million for an individual, $10.68 million for a couple as of 2014. It is indexed for inflation, so it will probably grow over time.

State inheritance taxes vary a great deal and can make things much more complicated. There might be exemptions for some family members, or different tax rates depending on whether you are a spouse, a child or just a friend. Many states tie their inheritance tax directly to the federal estate tax and exemption rate. Some have much lower thresholds than the federal threshold.

There are a few other miscellaneous deductions, such as a mortgage, usually deducted from the estate's value before taxation. Family businesses and farms may be taxed at a lower rate. Inheritance taxes tend to be set up on a progressive scale, meaning as the value of the estate increases, the tax rate rises and the taxes increase exponentially.

 
Personalize & Print a Free IL Last Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free IL Power of Attorney Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Albers, IL
Lynch Jennifer M
119 S Kennedy Dr
Bradley, IL 60915
(815) 802-9999
General Practice Attorneys, Attorneys, Legal Service Plans
Edelson Leon
PO Box 230
Deerfield, IL 60015
(847) 374-9797
Attorneys
Neil Simon
420 Lake Cook Rd
Deerfield, IL 60015
(847) 607-9649
Attorneys
Law Ofcs of Manotti L Jenkins
4922 S Cornell Ave # X
Chicago, IL 60615
(312) 208-9537
General Practice Attorneys, Attorneys
Katz Goldstein & Warren Pc
2345 Waukegan Rd Suite 150
Bannockburn, IL 60015
(847) 317-9500
Business Law Attorneys,  Arbitration Services,  Arbitration & Mediation Attorneys,  Litigation & Tor
Thollander David C
1048 Ogden Ave # 200
Downers Grove, IL 60515
(630) 971-9195
General Practice Attorneys, Attorneys
Davis Keith E
1525 E 53rd St # 628
Chicago, IL 60615
(773) 493-8700
Real Estate Attorneys, Landlord & Tenant Attorneys, Attorneys
Smith Patrick J
5116 Forest Ave # 1
Downers Grove, IL 60515
(630) 964-8450
Real Estate Attorneys,  Personal Injury Law Attorneys,  Bankruptcy Law Attorneys,  Employee Benefits
Smith Patrick J
4823 Stanley Ave
Downers Grove, IL 60515
(630) 964-8450
General Practice Attorneys, Attorneys
Chertkow Glenn
1525 E 53rd St
Chicago, IL 60615
(773) 493-8444
Traffic Law Attorneys,  Attorneys,  Real Estate Attorneys,  Transportation Law Attorneys
Dana Brisbon
PO Box 30
Dekalb, IL 60115
(815) 901-8419
Attorneys
Montville Jacqueline
515 Kendall Ln
Dekalb, IL 60115
(815) 758-8396
Bankruptcy Law Attorneys, Attorneys, Legal Service Plans
Edyta Salata
947 Maple Ave
Downers Grove, IL 60515
(630) 310-8356
Attorneys, Family Law Attorneys, Workers Compensation Assistance, Immigration Law Attorneys
Rothschild & Alexander Law Ofc
2207 Lakeside Dr
Bannockburn, IL 60015
(847) 945-8301
General Practice Attorneys, Legal Service Plans, Attorneys
Landau & Assoc Pc
515 Ogden Ave Ste 101
Downers Grove, IL 60515
(630) 852-8282
Estate Planning Attorneys,  Attorneys,  Legal Service Plans,  Criminal Law Attorneys,  Family Law At
Cochran David S Attorney
921 Curtiss St
Downers Grove, IL 60515
(630) 852-8250
Attorneys, Elder Law Attorneys, Family Law Attorneys
D Lakhami Law Offices
4930 Main St
Downers Grove, IL 60515
(630) 442-7954
General Practice Attorneys, Attorneys
Julie A. Monberg PC
1525 E 53rd St
Chicago, IL 60615
(773) 752-7660
Attorneys, Social Security & Disability Law Attorneys, Labor & Employment Law Attorneys
Price Marc
707 Lake Cook Rd Ste 314
Deerfield, IL 60015
(847) 405-7600
Real Estate Attorneys, Attorneys
Otis Law Group LTD
1525 E 53rd St # 405
Chicago, IL 60615
(773) 363-7300
General Practice Attorneys, Attorneys, Legal Service Plans
Stuart Reid Law Office
420 Lake Cook Rd
Deerfield, IL 60015
847-317-0566
Attorneys, Legal Clinics, Family Law Attorneys, Legal Service Plans, Divorce Attorneys
Narmont John S
101 N Iris Dr
Auburn, IL 62615
(217) 438-6414
Attorneys,  Family Law Attorneys,  Wills, Trusts & Estate Planning Attorneys,  Legal Service Plans,
Krajewski Brian J
1547 Warren Ave
Downers Grove, IL 60515
(630) 435-6340
General Practice Attorneys, Attorneys, Insurance
Boyle Law Dekalb
301 E Lincoln Hwy
Dekalb, IL 60115
(815) 756-6328
Insurance Attorneys, Attorneys, Business Law Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US