New Illinois estate tax legislation may provide a way to defer Illinois estate tax. Currently there is $1.5 million difference between the Illinois and Federal estate tax credits. This could result in some estates for Illinois residents having to pay Illinois estate tax even though they were exempt from Federal estate tax.
For 2009 the Federal estate tax credit is $3.5 million. However, the Illinois estate tax credit is only $2 million. An Illinois resident with a $3.5 million estate would owe $0 of Federal estate tax, but would owe Illinois estate tax of $209,124.
The proposed legislation would permit a husband and wife to defer that $209,124 until the second spouse passed away. For this to work the couple would have needed to include a specific provision in their estate plan. This specific provision is called a qualified terminable-interest property trust. This type of trust is commonly known by its acronym as a QTIP trust.
If a husband and wife residing in Illinois have a combined estate over $2 million, a review of their estate plan might be worthwhile.
Disclaimer
This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.
An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.
Posts
