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 61562

A Primer on Estate & Inheritance Taxes in Zip Code 61562


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 61562
Mann Elizabeth G
15127 S 73rd Ave # F
Orland Park, IL 60462
(708) 429-9999
General Practice Attorneys, Attorneys, Real Estate Buyer Brokers
The Lawyers Closing Network
15127 S 73rd Ave
Orland Park, IL 60462
(708) 429-9999
General Practice Attorneys, Attorneys
Abbey Law Offices
105 Revere Dr # E
Northbrook, IL 60062
(847) 291-9995
General Practice Attorneys, Attorneys, Legal Service Plans
Zeilenga, Rebecca - Anderson & Assoc Pc
707 Skokie Blvd # 600
Northbrook, IL 60062
(847) 509-9990
Attorneys, Family Law Attorneys, Divorce Attorneys, Legal Service Plans, Child Custody Attorneys
Joanna M. Leafblad
15426 Black Friars Rd
Orland Park, IL 60462
(708) 407-9957
Wills, Trusts & Estate Planning Attorneys, Attorneys, Civil Litigation & Trial Law Attorneys, Real E
Charles P Fox
3710 Commercial Ave Ste 6
Northbrook, IL 60062
(847) 205-9897
General Practice Attorneys, Attorneys
Kaplan Law Offices PC
950 Skokie Blvd Ste 310
Northbrook, IL 60062
(847) 509-9800
General Practice Attorneys, Attorneys, Legal Service Plans
Karpel and Milman
3000 Dundee Rd Ste 112
Northbrook, IL 60062
(847) 291-9800
Attorneys, Legal Service Plans
Huffman Brian A
2225 N Center St
Maryville, IL 62062
(618) 344-9330
Attorneys, Wills, Trusts & Estate Planning Attorneys, General Practice Attorneys, Legal Service Plan
K & R Family Specialists LLP
899 Skokie Blvd
Northbrook, IL 60062
(847) 715-9328
Family Law Attorneys, Legal Service Plans, Attorneys
Brozosky Martin
40 Skokie Blvd # 630A
Northbrook, IL 60062
(847) 559-9190
General Practice Attorneys, Legal Service Plans, Attorneys
Vaysman Yevgeniy
3400 Dundee Rd Ste 150
Northbrook, IL 60062
(847) 509-9119
General Practice Attorneys, Attorneys, Legal Service Plans
Lustig & Assoc
3400 Dundee Rd Ste 235
Northbrook, IL 60062
(847) 509-9090
Corporation & Partnership Law Attorneys, Attorneys, General Practice Attorneys, Legal Service Plans,
Schaffner Rabinowitz & Feinartz PC
1901 Raymond Dr
Northbrook, IL 60062
(312) 985-9090
Accident & Property Damage Attorneys,  Attorneys,  Social Security & Disability Law Attorneys,  Civi
Fotopoulos John S
14496 John Humphrey Dr
Orland Park, IL 60462
(708) 226-9000
Criminal Law Attorneys, Attorneys
Kantor & Apter
650 Dundee Rd Ste 160
Northbrook, IL 60062
(847) 272-8850
General Practice Attorneys, Attorneys, Legal Service Plans
Gleason and Gleason
4415 Harrison St Ste 216
Hillside, IL 60162
(630) 806-8716
Bankruptcy Law Attorneys, Bankruptcy Services, Attorneys
Buss Father Gregory Robert & Kay
1024 W 3rd St
Spring Valley, IL 61362
(815) 663-8701
Attorneys
Whitted Cleary Takiff
3000 Dundee Rd Ste 303
Northbrook, IL 60062
(847) 564-8662
Attorneys, Legal Service Plans
Fera Peter A
14496 John Humphrey Dr
Orland Park, IL 60462
(708) 403-8660
Attorneys, Legal Service Plans
Standard James R
209 N Main St
Monmouth, IL 61462
(309) 734-8481
Attorneys, Family Law Attorneys, Legal Service Plans
Family Law Real Estate
209 N Main St
Monmouth, IL 61462
(309) 734-8481
Family Law Attorneys, Attorneys
Glasgow Steven R.
93 Public Sq
Monmouth, IL 61462
(309) 734-8464
Criminal Law Attorneys, Attorneys
Clark David Reid
93 Public Sq
Monmouth, IL 61462
(309) 734-8464
General Practice Attorneys, Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US