12Law Arrow 12Law Arrow  Easy Questions  
12Law Arrow 12Law Arrow Instant Legal Documents
 
 
FINANCIAL & MARITAL

Cohabitation Agreement coming soon!
Separation Agreement coming soon!
No-Fault Divorce coming soon!
Bankruptcy coming soon!
 
 

A Primer on Estate & Inheritance Taxes in Zip Code 62065

A Primer on Estate & Inheritance Taxes in Zip Code 62065


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 Create 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 Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Zip Code 62065
Lookofsky Walter B
PO Box 379
Shelbyville, IL 62565
(217) 774-9639
Attorneys
Freeman John V
220 N Morgan St
Shelbyville, IL 62565
(217) 774-9595
General Practice Attorneys, Attorneys, Legal Service Plans
Ford, Curt - Nash Nash Bean & Ford
5030 38th Ave
Moline, IL 61265
(309) 762-9368
Estate Planning Attorneys, Attorneys, Elder Law Attorneys, Wills, Trusts & Estate Planning Attorneys
Hanna Steven W Atty
1528 6th Ave
Moline, IL 61265
(309) 797-9000
Attorneys, Criminal Law Attorneys, DUI & DWI Attorneys, Legal Service Plans, Traffic Law Attorneys
Hanna & Ruud,
1528 6th Avenue
Moline, IL 61265
(309) 797-9000
Attorneys, Criminal Law Attorneys
Hanna & Ruud,
1528 6th Avenue
Moline, IL 61265
(309) 797-9000
Criminal Law Attorneys, Attorneys
PCS Healthcare Consultants
8351 W 99th St
Palos Hills, IL 60465
(708) 430-8860
Attorneys Referral & Information Service, Legal Consultants-Medical
Thompson Linnea E
5030 38th Ave
Moline, IL 61265
(309) 797-8787
Attorneys, Family Law Attorneys, Wills, Trusts & Estate Planning Attorneys, Real Estate Attorneys, A
Braverman William C
10059 S Roberts Rd Ste 1C
Palos Hills, IL 60465
(708) 598-8720
Criminal Law Attorneys, Attorneys, Legal Service Plans
Zanayed Law Office
8150 W 111th St
Palos Hills, IL 60465
(708) 671-8624
General Practice Attorneys, Attorneys
Califf & Harper Pc
506 15th St # 600
Moline, IL 61265
(309) 764-8300
Estate Planning Attorneys, Attorneys, Tax Attorneys, Business Law Attorneys, Real Estate Attorneys,
Derek Hancks PC
1504 7th St # 2
Moline, IL 61265
(309) 797-8188
Attorneys, Legal Service Plans, Bankruptcy Law Attorneys
Attorney Ray Choudhry
1630 5th Ave., Suite 200
Moline, IL 61265
(309) 797-8000
Personal Injury Law Attorneys,  Medical Law Attorneys,  General Practice Attorneys,  Juvenile Law At
Choudhry, Ray - Mid America Law Offices Ltd
1630 5th Ave # 200
Moline, IL 61265
(309) 797-8000
Social Security & Disability Law Attorneys,  Attorneys,  Family Law Attorneys,  Malpractice Law Atto
Neubauer & Johnston
701 E Hanover St # A
New Baden, IL 62265
(618) 588-7767
Attorneys, Family Law Attorneys, Divorce Attorneys, Wills, Trusts & Estate Planning Attorneys, Real
Metropolitan Family Services
10537 S Roberts Rd
Palos Hills, IL 60465
(708) 401-7687
Marriage, Family, Child & Individual Counselors, Social Service Organizations, Mental Health Service
Meersman H Moss
2006 16th St
Moline, IL 61265
(309) 762-7333
General Practice Attorneys, Attorneys
Benveniste Eric
PO Box 1166
Northbrook, IL 60065
(847) 498-6868
Attorneys
Maurizi Ernest
1618 Valley Ridge Ct
Naperville, IL 60565
(630) 946-6841
General Practice Attorneys, Attorneys, Legal Service Plans
Christine R Piesiecki
9800 S Roberts Rd
Palos Hills, IL 60465
(708) 233-6833
Social Security & Disability Law Attorneys,  Attorneys,  Wills, Trusts & Estate Planning Attorneys,
Griffin & Gallagher
10001 S Roberts Rd
Palos Hills, IL 60465
(708) 598-6800
General Practice Attorneys, Attorneys, Legal Service Plans
Farano Jr John
7836 W 103rd St
Palos Hills, IL 60465
(708) 598-6626
General Practice Attorneys, Attorneys
Delair Sidney C
1515 Welton Ct
Naperville, IL 60565
(630) 369-6550
Attorneys, Legal Service Plans
Coogan, James A Dwyer Mc Carthy & Assoc
10001 S Roberts Rd
Palos Hills, IL 60465
(708) 598-6060
Litigation & Tort Attorneys, Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US