No matter how you intend to distribute your estate assets, or pass your family business, estate tax planning is very important to preserving your wealth for future generations. At Nicolosi & Associates, we counsel and represent professionals, business owners, executives, and shareholders of closely held companies in all areas related to individual, corporate, and inheritance tax planning. We structure our advice and strategies to take into account the personal and family needs of every client.
In the year 2010, estates will be entirely free from federal taxation. However, the law that includes these provisions expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax rules will then revert to those prevailing in 2001. That being said, not all estates will be taxed while the estate tax is in effect. First, spouses can leave any amount of property to their spouses free of federal estate taxes as long as their spouse is a U.S. citizen. Second, the federal tax applies only to estates which exceed in value the amount set by federal law for the year. The federal government allows you this tax credit for gifts made during your life or for your estate upon your death. Third, gifts to charities are not taxed.
Illinois does have an estate tax. This is a so-called “sponge” tax, which ultimately does not cost your estate. Illinois takes advantage of a provision in the federal estate tax which permits a deduction for taxes paid to the state up to certain limits. Illinois simply takes the full amount of what you are allowed to deduct off the federal taxes.
Federal Estate Tax Table
2010
Unlimited
Unlimited
2011
55%
1,000,000
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