Call Us630-665-2500

124C S. County Farm Road, Wheaton, IL 60187

Subscribe to this list via RSS Blog posts tagged in death tax

Wheaton wills and trusts attorneysWhile some people may be rejoicing the recent pass-through of the House's Tax Cut and Jobs Act, others may be experiencing uncertainty over the future. Sadly, this apprehension can cause those individuals to delay or even completely forgo estate planning. Learn why this is usually a poor decision, gain insight on how the bill might affect your heirs if it is passed into law, and discover what an experienced attorney can do to protect your family after your death.

The Danger of Estate Planning Delays

It can be tempting to put off estate planning, especially if you are young and healthy, but doing so can have dire consequences. Accidents occur, and even the healthiest of people can suffer a tragic illness. If one occurs and you pass away or are rendered incapacitated, you and your heirs may suffer. For example, there may be no one to make medical decisions for you, so you may be forced to endure the standard of care, despite not wanting resuscitation. Another possible consequence is that your family could be left without access to money for bills and daily expenses if you have not named a power of attorney. Thankfully, such issues can be mitigated against (and perhaps even avoided altogether) with a carefully thought-out estate plan.


DuPage County estate planning lawyer, well-formulated estate plan, estate tax, federal estate tax, death tax, business estate planA well-formulated estate plan gives estate owners peace of mind knowing their assets and funds are going to the right place. One reason why it is important to develop an estate plan is to potentially reduce or eliminate federal estate taxes, also known as the "death tax." Calculated at 40 percent, these taxes not only diminish funds from loved ones but they can also severely impact a private company.

According to an article in Forbes, an estate is only subject to federal estate tax if it is valued at more than $5.34 million. Moreover, there is a marital exemption. If you are married, you and your partner will not have to pay federal estate taxes unless your combined estate is valued at more than $10.6 million. Although these limits mean most Americans will not need to pay estate tax, those who do could see a substantial loss in wealth. If a business is owned, there are a number of other criteria, including death or retirement of the key asset holder, that can affect a business's equity before estate tax comes into effect. Understanding these factors can put a person in a position to keep these taxes low.

In addition, Forbes contributor Steve Parrish notes that business owners may also face the challenge of not having "sufficient liquidity to carry the estate through to distribution to the beneficiaries." Creditors may need paid off or lost revenue may need supplemented. However, this can be avoided by having an estate plan that is sufficient in funds. A well-formulated estate plan considers all factors "that can challenge the successful transfer of wealth, including the estate tax," states Parrish.


Posted on in Estate Execution

According to the American Association of Retired People (AARP), "Congress hasn't made estate planning any easier with its ping-pong approach to the estate tax," and the federal estate tax rates are slated to change again in 2013. Finding a qualified and competent attorney is the most important step to begin estate planning. Not only can a professional help you to ensure that your inheritors get the most of your estate, but also help you to wade through the necessary and complicated paperwork and legalese. In 2010, the federal estate tax rate was zero—and has moved upward since. The New Year marks a new rate, unless Congress decides otherwise. Now's a better time than ever to begin the process.

Consider it a holiday gift to yourself and your family. According to the AARP, "until January 1, 2013, the amount of your estate exempted from federal tax is $5 million for individuals, $10 million for couples." These numbers don't include gifts of up to $5 million that are exempt before paying a gift tax ($10 million for a couple).

The changing of this isn't just for the very wealthy—an oft-overlooked subset of the population regarding estate tax are the solidly middle-class farmers, whose land is counted as part of an estate. As property values have risen dramatically (especially for large swaths of farmland located near large cities, like Chicago), farmers have been hit especially hard by rising estate tax rates.

Back to Top