Many people sign an Estate Plan and then lock it away in a drawer and never look at it again.  But every good Estate Plan needs consistent review to make sure it’s up to date with your current needs and current laws. Now is the time to take that Estate Plan out of the drawer and have it reviewed by your attorney.

What is Estate Tax.  When assets are transferred after death they could be subject to an estate tax, both at the federal and state levels.  However, there are exemptions based on the value of the estate. The estate will be subject to tax on the amount that exceeds the federal or state tax exemptions.

Portability. The concept of portability was introduced by the federal government in 2013. It allows a married couple the opportunity to use the full exemption for both spouses. For example, assume the federal tax exemption were $5 million. If Mary and John are married and John has an estate worth $3 million at his death, Mary could carry over John’s remaining $2 million of exemption and apply it toward her exemption at her death, making her federal tax exemption $7 million.

Federal and State Estate Taxes.  Keep in mind, there are separate federal and state estate taxes and Illinois does not allow for portability.

New Tax Act. The Tax Cuts and Jobs Act signed into law on December 22, 2017 brought with it great changes for estate tax planning. The new law eliminated taxes for many higher income families. It doubled the federal estate tax exemption from $5.6 million per individual up to $11.2 million per individual.  The new tax law preserves portability meaning, if done correctly, a married couple’s estate could be exempt up to $22.4 million.

Illinois Estate Tax.  The new federal tax act certainly makes it easier for families to avoid having to pay federal estate tax.  However, Illinois has not changed its state estate tax exemption, which remains at $4 million. Therefore, the estate tax planning for Illinois residents has not changed. The Illinois estate tax rate goes up to around at 28.5%.

What Does This Mean?  This means a couple could have no federal estate tax, but still owe a state estate tax. Since Illinois has a lower estate tax limit of $4 million, extreme care must be taken for any individual or couple who are close to, or over, that level of assets. Though one spouse cannot port over another’s state estate tax exemption, a carefully constructed estate tax plan can ensure that both spouses are able to use the $4 million tax exemption.

 Estate Planning. Even if you are under the $4 million asset level, everyone benefits from a well drafted Estate Plan.  Any Illinois estate worth over $100,000 must go through the pricey and lengthy probate process.  An estate plan can not only avoid probate but make sure that your estate is distributed according to your wishes and allow you to direct your choices for healthcare and finances for when you have aged.

Why Work with AMC Legal.  I will work with you directly to make sure we develop a customized estate plan that addresses all your individual needs. I do not use off-the-shelf products but have carefully crafted my own set of documents to make sure address your specific wishes and all modern estate planning needs are properly handled. With AMC Legal you will have a lawyer who looks out for your best interests.

Need Help? Get In Touch.

Dr. Allison Cychosz
AMC Legal, P.C.
(630) 590-3640

Please call for a free consultation


This is not legal advice and you should seek the counsel of an attorney.

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