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 Beecher, IL

A Primer on Estate & Inheritance Taxes in Beecher, 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 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 Beecher, IL
Davis Keith
103 N Main St
Bloomington, IL 61701
(309) 821-9966
General Practice Attorneys, Attorneys
Axia Law
200 N La Salle St Suite 2675
Chicago, IL 60601
(312) 546-9951
Personal Injury Law Attorneys, Employee Benefits & Worker Compensation Attorneys
Kopka Pinkus Dolin & Eads
200 N La Salle St
Chicago, IL 60601
(312) 782-9920
Attorneys,  Personal Injury Law Attorneys,  Insurance Attorneys,  Product Liability Law Attorneys
Mark Ingersoll
201 W Green St Ste C
Urbana, IL 61801
(217) 344-9906
Estate Planning Attorneys,  Attorneys,  Wills, Trusts & Estate Planning Attorneys,  Real Estate Att
Reilley James W
221 N La Salle St
Chicago, IL 60601
(312) 228-9870
General Practice Attorneys, Attorneys, Legal Service Plans
Frantz Keith
401 W State St # 200
Rockford, IL 61101
(815) 987-9820
Attorneys, Legal Service Plans
Ryan Gregory L
123 W Main St # 210
Urbana, IL 61801
(217) 367-9801
General Practice Attorneys, Attorneys, Legal Service Plans
Dunham Darrell
308 W Walnut St
Carbondale, IL 62901
(618) 549-9800
Attorneys, Legal Service Plans, Bankruptcy Law Attorneys
Christine Tennon
200 N La Salle St Ste 2650
Chicago, IL 60601
(312) 558-9800
Attorneys, General Practice Attorneys
Mallon Clifford P
200 N La Salle St # 2650
Chicago, IL 60601
(312) 558-9800
General Practice Attorneys, Attorneys
A Bankruptcy Attorney
213 E Court St
Kankakee, IL 60901
(815) 933-9800
Attorneys, Legal Service Plans
Prairie Legal Group Ltd
213 E Court St
Kankakee, IL 60901
(815) 933-9800
Bankruptcy Law Attorneys, Legal Service Plans, Attorneys
Harris Brendan P
231 S 6th St # 1
Springfield, IL 62701
(217) 789-9794
General Practice Attorneys, Attorneys, Legal Service Plans
Sawyier & Williams, LLP
205 N Michigan Ave # 2600
Chicago, IL 60601
(312) 856-9741
Attorneys, Elder Law Attorneys, Wills, Trusts & Estate Planning Attorneys, Estate Planning Attorneys
Phillip Kirby
415 S 7th St
Springfield, IL 62701
(217) 717-9712
Attorneys, Family Law Attorneys
James P. Ginzkey, Trial Attorney
221 E Washington St
Bloomington, IL 61701
(309) 821-9707
Personal Injury Law Attorneys, Attorneys, Insurance Attorneys, Product Liability Law Attorneys, Acci
Affordable Bankruptcy Chicago
35 E Wacker Dr
Chicago, IL 60601
(312) 725-9681
Accident & Property Damage Attorneys,  Legal Service Plans,  Bankruptcy Law Attorneys,  Attorneys,  
Rodriguez Osvaldo
1010 Lake St Ste 605
Oak Park, IL 60301
(708) 445-9674
Labor & Employment Law Attorneys, Attorneys, Legal Service Plans
Eubank Jr Frank J
126 N Church St
Rockford, IL 61101
(815) 961-9668
Wills, Trusts & Estate Planning Attorneys, Attorneys, Family Law Attorneys, Real Estate Attorneys, L
Pfaff & Gill Ltd
1 E Wacker Dr Ste 3310
Chicago, IL 60601
(312) 828-9666
Personal Injury Law Attorneys,  Attorneys,  Legal Service Plans,  Wrongful Death Attorneys,  Insuran
Mayster Larry S
221 N La Salle St # 2150
Chicago, IL 60601
(312) 444-9648
General Practice Attorneys, Attorneys, Legal Service Plans
The Deratany Law Firm
221 N La Salle St
Chicago, IL 60601
(312) 273-9617
Attorneys, General Practice Attorneys, Legal Service Plans
Butzow Robert H
150 N Michigan Ave # 1100
Chicago, IL 60601
(312) 372-9600
General Practice Attorneys, Attorneys
Attorney Dennis Leahy
1 Court Pl # 203
Rockford, IL 61101
(815) 964-9600
Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US