Illinois Estate Tax
Hi Terry, On the library presentation last night, you briefly touched on the Illinois Estate Tax and referred to your website for more info. I couldn’t find it. Please help. Thanks.
Terry Says
Well, the Federal estate tax isn’t much of a worry these days. It starts at $14 million for individuals ($27.98 million for married couples) — and only hits the very wealthiest of people (who have lawyers setting up trusts etc, so rarely pay the estate tax)!
But Illinois is one of only a handful of estates that impose a “death tax” (estate or inheritance tax) on those who die residing or owning property in Illinois. Illinois exempts the first four million dollars in value from tax. If your estate exceeds that, the effective tax rate on the next $1,400,000 is around 28%. As the estate size goes up from there, the effective tax rate regresses until it levels off at around 15%.
So $4 million sounds like a lot of money. BUT, it includes all your savings/investment accounts (even retirement accounts) and your home (even if you have two homes with one out-of-state) and it includes the FACE VALUE of your life insurance if you are the owner (even if your child is the beneficiary). So that can add up quickly.
It’s the reason that everyone should have some kind of estate plan. Watch this video:
https://www.terrysavage.com/wp-content/uploads/2022/10/Terry-Talks-Wills-Trusts-Estate-Planning.mp4
