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 Papineau, IL

A Primer on Estate & Inheritance Taxes in Papineau, 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 Papineau, IL
Mills Edwin Law Office
513 Broadway St
Lincoln, IL 62656
(217) 735-9600
General Practice Attorneys, Attorneys, Legal Service Plans
Perkins Y Jacquelin
350 W Kensington Rd Ste 110
Mount Prospect, IL 60056
(847) 870-9505
Criminal Law Attorneys, Attorneys, General Practice Attorneys
Lucas Figiel Law Offices
7111 W Higgins Ave
Chicago, IL 60656
(773) 763-9462
General Practice Attorneys, Attorneys
Miller, J Christian - Miller Tracy Braun Funk Miller
316 S Charter St
Monticello, IL 61856
(217) 762-9416
Attorneys, Legal Service Plans, Labor & Employment Law Attorneys, Civil Litigation & Trial Law Attor
A Low Cost Legal Provider
400 N Main St
Princeton, IL 61356
(800) 461-9402
Attorneys, Bankruptcy Law Attorneys
Strzalka Mary Alice
5507 N Cumberland Ave Ste 409
Chicago, IL 60656
(773) 631-9215
General Practice Attorneys, Attorneys, Legal Service Plans
Wright Brian E
5310 N Harlem Ave # 201
Chicago, IL 60656
(773) 792-8730
General Practice Attorneys, Attorneys, Legal Service Plans
Easterwood Rick
1400 N Elmhurst Rd
Mount Prospect, IL 60056
(847) 259-8638
Attorneys
Harris & Harris
101 1/2 S Kickapoo St Ste 13
Lincoln, IL 62656
(217) 732-8484
Wills, Trusts & Estate Planning Attorneys, Attorneys, Real Estate Attorneys, General Practice Attorn
Chamberlain Katherine P.C.
108 Park Ave W
Princeton, IL 61356
(815) 915-8351
Wills, Trusts & Estate Planning Attorneys, Attorneys, Real Estate Attorneys, Legal Service Plans
Thomas Steve
1031 Bucks Pond Rd
Monticello, IL 61856
(217) 762-8285
Family Law Attorneys, Attorneys, Legal Service Plans
Kiselstein Bruce
930 E Northwest Hwy
Mount Prospect, IL 60056
(847) 670-8200
Attorneys,  Estate Planning Attorneys,  Administrative & Governmental Law Attorneys,  Legal Service
Grimaldi Jim
303 S Kickapoo St # 3
Lincoln, IL 62656
(217) 651-8089
Attorneys, Criminal Law Attorneys, DUI & DWI Attorneys, General Practice Attorneys, Legal Service Pl
Michael R. Glenn
118 W Ryder St
Litchfield, IL 62056
(217) 324-7777
Attorneys,  Family Law Attorneys,  Accident & Property Damage Attorneys,  Corporation & Partnership
Robert G Lohman III Law Office
5555 N Cumberland Ave
Chicago, IL 60656
(773) 889-7451
Attorneys
Henneberry Sheri L CPA
408 S Main St
Princeton, IL 61356
(815) 875-6561
Accountants-Certified Public,  Attorneys,  Accounting Services,  Legal Service Plans
Angel Isaacson & Tracy
111 Park Ave E Ste A
Princeton, IL 61356
(815) 875-6551
Employee Benefits & Worker Compensation Attorneys,  Attorneys,  Family Law Attorneys,  Accident & Pr
Floreth Frederick D
202 E Ryder St
Litchfield, IL 62056
(217) 324-5986
Divorce Attorneys, Attorneys
Villadonga Edward A
720 N River Rd
Mount Prospect, IL 60056
(847) 298-5740
Attorneys, Legal Service Plans
Owens & Laughlin LLC
9 Crystal Lake Rd Suite 205
Lake In The Hills, IL 60156
(855) 789-5550
Attorneys, Criminal Law Attorneys, Accident & Property Damage Attorneys, Civil Litigation & Trial La
Nessler Frederic
202 S Chicago St
Lincoln, IL 62656
(217) 735-5502
Personal Injury Law Attorneys, Insurance Attorneys, Attorneys
Haas John C
115 S Emerson St # 2
Mount Prospect, IL 60056
(847) 255-5400
General Practice Attorneys, Attorneys
Divorce & Family Law
118 W Ryder St
Litchfield, IL 62056
(888) 261-5288
Family Law Attorneys, Attorneys
Comba A Randolph
777 S Main St Ste C
Princeton, IL 61356
(815) 872-5221
Attorneys,  Family Law Attorneys,  Accident & Property Damage Attorneys,  Corporation & Partnership
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US