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 61859

A Primer on Estate & Inheritance Taxes in Zip Code 61859


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 61859
Ascheman Dale
300 N Monroe St
Marion, IL 62959
(618) 998-9988
Attorneys, Legal Service Plans
Limperis Peter
5624 W 79th St # 2
Burbank, IL 60459
(708) 857-9787
General Practice Attorneys, Attorneys
Thompson Julie
400 W Jackson St # B
Marion, IL 62959
(618) 997-9766
Attorneys, Legal Service Plans
Regional Law Office Svc Ltd
6 W Burlington Ave
Westmont, IL 60559
(630) 271-9700
General Practice Attorneys, Attorneys
Nelson Jay S
5757 N Lincoln Ave # 20
Chicago, IL 60659
(773) 907-9010
General Practice Attorneys, Attorneys, Legal Service Plans
Amanda Byassee Gott
208 N Market St
Marion, IL 62959
(618) 364-8788
Attorneys,  Family Law Attorneys,  Divorce Attorneys,  Accident & Property Damage Attorneys,  Person
Benson & Salimi
907 N Court St
Marion, IL 62959
(618) 998-8661
Wills, Trusts & Estate Planning Attorneys,  Attorneys,  Family Law Attorneys,  General Practice Att
Salimi Frances E
907 N Court St
Marion, IL 62959
(618) 998-8661
Estate Planning Attorneys, Attorneys, Family Law Attorneys, Divorce Attorneys, General Practice Atto
Joseph Lou
2915 W Devon Ave
Chicago, IL 60659
(773) 262-8484
Attorneys,  Business Bankruptcy Law Attorneys,  General Practice Attorneys,  Bankruptcy Law Attorney
Sanders & Associate PC
4501 W Deyoung St # B-103
Marion, IL 62959
(618) 993-8200
Attorneys, Legal Service Plans
Cavaness Dan
305 W White St
Marion, IL 62959
(618) 997-8060
Criminal Law Attorneys,  Divorce Attorneys,  DUI & DWI Attorneys,  Bankruptcy Law Attorneys,  Family
Macey Bankruptcy Law
1616 W Main St
Marion, IL 62959
(618) 445-8038
Bankruptcy Law Attorneys
Verity Duane P
602 Tower Square Plz
Marion, IL 62959
(618) 993-8000
Attorneys, Criminal Law Attorneys, General Practice Attorneys
Mc Neill Andrea
503 W Jackson St
Marion, IL 62959
(618) 997-7762
Attorneys, Legal Service Plans
Bradley Joshua M
709 N Carbon St
Marion, IL 62959
(618) 997-6534
Accident & Property Damage Attorneys,  Attorneys,  Family Law Attorneys,  Legal Service Plans
Josh Bradley Law
709 N Carbon St
Marion, IL 62959
(618) 997-6534
Attorneys
Woodcock Barbara
905 N Court St
Marion, IL 62959
(618) 997-6266
Attorneys, Family Law Attorneys, Legal Service Plans
Tetzlaff Glenn
500 N Holland St
Marion, IL 62959
(618) 993-6141
Attorneys, Probate Law Attorneys, Family Law Attorneys
Shahzad Raheel
2335 W Devon Ave
Chicago, IL 60659
(773) 942-6121
General Practice Attorneys, Attorneys, Legal Service Plans
Dudek Michael
8520 S Cicero Ave # 103
Burbank, IL 60459
(708) 424-6100
Attorneys, Legal Service Plans
Armstrong & Green
400 N Market St
Marion, IL 62959
(618) 993-6072
Attorneys, Commercial Law Attorneys
Armstrong & Green
400 N Market St
Marion, IL 62959
(618) 993-6072
Estate Planning Attorneys,  Attorneys,  Family Law Attorneys,  Divorce Attorneys,  Business Law Atto
Green Stephen
400 N Market St
Marion, IL 62959
(618) 993-6072
Accident & Property Damage Attorneys, Attorneys, Legal Service Plans
Gilles Mark E Atty
112 E Main St
Princeville, IL 61559
(309) 674-5994
General Practice Attorneys, Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US