All adults should have an estate plan.
We recommend you review your estate plan every few years, and especially in event of:
- Marriage
- Birth or adoption of a child
- Establishing a residence in a new state:
- Illinois has a separate state estate tax in addition to the Federal estate tax. Individuals or couples who are Illinois residents with total assets more than $4,000,000.00 need to plan differently than in most other states.
- Illinois is not a community property state.
- Inheritance
- Increased wealth
- Growing older
- Death of a loved one
- Remarriage
- Divorce
- Changes in tax law
- Will
- Revocable trust
- Power of Attorney for property
- Power of Attorney for health
- Appointment of agent to control disposition of remains
The specific documents you need will vary with your individual circumstances.
A will allows you upon your death to dispose of your assets not in a trust and without either a beneficiary designation or survivorship rights according to your own wishes rather than by the law of intestacy; to name an executor who will be responsible for administering your probate estate property. Upon your death, your assets not in a trust and without either a beneficiary designation or survivorship rights are known as your “estate”. You may in your will name guardians for your children upon your death.
A revocable trust is a document that appoints a trustee, usually yourself, and successor trustees, to hold the assets you put in the trust during your lifetime for your benefit, and provides for the manner of distribution of your trust assets upon your death. The assets you put in your revocable trust when you die are in the name of the trustee of your revocable trust rather than your own name individually. The trust assets, unlike your assets that are titled in your individual name that are without beneficiary designations or survivorship rights, are not subject to the court probate process. Unlike a will, the revocable trust is legally effective upon signing. You can amend or revoke the revocable trust at any time. One’s revocable trust typically becomes unamendable and irrevocable upon one’s death.
Administering assets in an estate requires the opening of a probate estate in court. Assets in a trust bypass the court probate process and, therefore, administering assets in a trust takes less time and money than administering assets in your estate.
For each client with a revocable trust, we, as a backstop should the client not place an asset without beneficiary designations or survivorship rights in the trust, also prepare a will for the client that provides that upon the client’s death the client’s estate be distributed to the client’s revocable trust. This type of will is referred to as a “pour over will”. Like other wills, the will allows for the appointment upon your death of an executor of your estate and guardian for your children.
The trusts we prepare are designed to eliminate or minimize estate and GST taxes and simplify asset administration without court involvement.
Creating an estate plan with a revocable trust and a will requires the same amount of meetings and correspondence as creating an estate plan with only a will. Preparing an estate plan with only a will, versus with a will and revocable trust, take comparable work and time expense.
Creating an estate plan with a will but no revocable trust over a lifetime can actually lead to duplicate estate planning legal fees as clients at some point in time in the future likely will decide to create a new estate plan with a revocable trust. Clients realize that creating an estate plan with a revocable trust prior to death avoids probate, which saves time and preserves assets by reducing your need for legal representation.
Unlike with a will, after the estate plan is created there is follow up for the client to fund a revocable trust to be able to avoid probate. If a revocable trust is never funded, an estate plan with a will and a revocable trust functions in a similar manner as an estate plan with only a will.
There are too many potential changes in circumstances for a client to confidently rely upon beneficiary designations and survivorship rights as a substitute for a will or trust. If changes in circumstances should occur, you may not have the capacity or wherewithal at that time to change the beneficiary designations of each and every account at every financial institution.
Unlike with a beneficiary designation, we can create a will, or a will and revocable trust, that effectively anticipates changes in your circumstances.
Without a will, or a will and trust, you cannot effectively plan around estate tax and GST tax, name an executor or other fiduciary to oversee your affairs, name guardians and other considerations.
An estate plan is especially important when you have young children. A will enables you to appoint the best candidate, or succession of candidates, as legal guardian for your children if you pass away.
Similarly, a trust enables you to name an appropriate trustee for your children until the children are mature enough to control their own inheritances. Having the ability to appoint guardians and create trusts for children is why so many parents come to us for estate plans.
The Federal estate tax is a 40% tax on the fair market value of all the assets in the deceased’s taxable estate after deducting the total amount of exemptions applicable to the taxable estate. “Taxable estate” for estate tax purposes is all of one’s assets, including those in their revocable trust, assets with beneficiary designations, and other assets wherever located, and not just their “estate” for Illinois probate purposes.
Bequests to surviving spouses that qualify for the marital exemption or to charities that qualify for the charitable exemption are examples of exemptions from the Federal estate tax that reduce your taxable estate on a dollar-for-dollar basis.
The Federal gift tax is a 40% tax on the fair market value of all non-exempt gifts made by you for a particular year. Bequests to surviving spouses that qualify for the marital exemption or to charities that qualify for the charitable exemption, or gifts to a particular person up to the annual exemption amount, are exempt gifts. Qualified educational and qualified medical payments also are examples of exempt gifts. A gift tax return is required to be filed for any year during which non-exempt gifts (i.e. “taxable gifts”) were made.
Payment of tax on an otherwise non-exempt gift can still be avoided if you formally elect to apply your available lifetime gift tax exemption to the gift by making that election on a federal gift tax return. The use of your lifetime gift tax exemption reduces the amount of your own available Federal estate tax exemption amount upon your death on a dollar-for-dollar basis. For this reason, the Federal estate and gift tax exemption is referred to as a “unified” or “lifetime” exemption.
The lifetime Federal estate and gift tax exemption amount is $10,000,000 (inflation adjusted) ($13,990,000 for 2025). In 2026, the lifetime Federal estate and gift tax exemption amount reverts to $5,000,000 (inflation adjusted).
Bequests and lifetime gifts in unlimited amounts to U.S. citizen spouses and qualified charities are exempt from Federal estate and gift taxes.
Non-exempt lifetime gifts reduce on a dollar-for-dollar basis the Federal estate exemption amount available to you upon your death.
The surviving spouse can use the unused Federal exemption of a deceased spouse (“DSUE”) with the timely filing of a federal estate tax return for that deceased spouse. The DSUE amount is additional exemption added to the surviving spouse’s own lifetime estate and gift tax exemption.
Other than for gifts to a non-U.S. citizen spouse, the annual gift tax exemption amount for gifts during any year, which are not otherwise exempt, is $19,000 (2025). The annual federal gift tax exemption for gifts to a non-U.S. citizen spouse for 2025 is $190,000.
Illinois does not have a gift tax. However, lifetime non-exempt gifts are considered in calculating the Illinois estate tax upon death.
We are happy to share gifting strategies that may allow you to reduce the size of your Illinois estate tax bill.
We definitely have strategies for using the current, larger Federal estate and gift tax exemption amount to reduce the size of your taxable estate —or reduce your estate tax upon death. Some of these strategies may take time to implement, so you should not delay until the second half of 2025 to discuss the possible advantages of these strategies for you. Gifts that use lifetime exemption amounts require the filing of a federal gift tax return.
The Federal GST tax is a 40% tax on certain generation skipping transfers to direct or indirect “skip persons”. Descendants of yours other than your children, such as your grandchildren or your great grandchildren, generally are examples of “skip persons”. Individuals of two lower generations also are examples of skip persons. There is not a GST tax on transfer of assets to which lifetime GST tax exemption is allocated or which otherwise are GST exempt.
The lifetime Federal GST exemption amount is the same amount as the lifetime estate and gift tax exemption amount, being $10,000,000.00 (inflation adjusted to $13,990,000.00 for 2025). In 2026, the lifetime Federal GST exemption amount reverts to $5,000,000.00 (inflation adjusted).
Gifts qualifying for the annual gift tax exemption to an individual, or certain qualifying gifts in trust, also are GST tax exempt.
An individual may allocate GST exemption to lifetime transfers.
The Illinois estate tax is a one-time tax that applies to the taxable estates of Illinois residents, and non-Illinois residents with assets that Illinois real estate or tangible personal in Illinois. Illinois defines the taxable estate the same as the federal taxable estate. Assets in a deceased’s taxable estate above the Illinois estate tax exemption amount are taxed at a rate most easily determined by the Illinois Attorney General calculator, https://illinoisattorneygeneral.gov/estate-taxes/2013-2022-estate-calculator.
The state of a non-Illinois resident with a taxable estate that includes real estate or tangible personal property of any value located in Illinois at the time of death (“Illinois situs property”) is subject to the Illinois estate tax if his or her taxable estate exceeds the Illinois’ estate tax exemption amount. The Illinois estate tax of the estate of a non-Illinois resident is only a fraction of the Illinois estate tax of the estate of a similarly situated Illinois resident — calculated based on the proportion that the Illinois situs property is in relation to the deceased’s Federal gross estate.
Bequests in unlimited amounts to U.S. citizen spouses and qualified charities are exempt from Illinois estate tax.
The Illinois estate tax exemption amount is $4,000,000. Unlike the Federal estate tax exemption amount, a surviving spouse cannot use the unused Illinois estate tax exemption of a deceased spouse.
Married couples with anticipated combined estates of more than $4,000,000 should consider dividing their assets between themselves to take advantage of both spouse’s Illinois estate tax exemption amounts to minimize Illinois estate taxes as the order of death of spouses is unknowable. We can prepare Illinois estate tax returns for you.
We recommend you consult with an experienced estate planning attorney to assist you with estate planning.
A trust is a private legal arrangement in which a trustee holds and manages assets for the benefit of specific individuals or entities. An estate refers to the assets, debts, and liabilities in the individual name of a person upon their death. Only an executor or administrator appointed by the court has the authority to act as to estate assets.
First, locate and secure the deceased’s last, original, signed (wet signature/inked) will. Illinois requires it to be filed with the Clerk of the Circuit Court of the deceased’s county of residence within 30 days of the death.
Be sure to secure the deceased’s property.
If you can, determine whether the deceased’s estate includes assets that require probate. We are happy to help you with this. If appropriate, we help clients petition the court for a probate estate to be opened and for you to be appointed as executor if there is a will, or administrator if there is no will or the will does not name an executor. The executor or administrator should apply for a FEIN for the estate.
If the deceased had a revocable trust for which the deceased was trustee, be sure to document the successor trustee’s acceptance upon the deceased’s death. You should obtain a FEIN for the deceased’s trust. We can help you with both steps.
The trustee, or estate administrator or executor, should contact financial institutions holding assets and establish new accounts under the name of the trust for trust assets, or under the name of the estate for estate assets, with income for the assets reported under the trust FEIN, or estate FEIN as the case may be, rather than the deceased’s social security number. The trustee, or executor or administrator is a fiduciary and is required to protect trust or estate assets from inappropriate risk.
The trustee is required to safeguard trust assets until the trustee distributes or holds the assets, as provided in the declaration of trust.
Trustees are also required to administer trusts, as provided in the declaration of trust. They have fiduciary obligations, including filing income tax returns and – in some instances – filing estate tax returns, if required or appropriate. We have considerable experience helping people administer trusts.
Probate is a process in which the court appoints an executor or administrator to transfer assets in the deceased’s estate to the people who are entitled to receive the assets. The administrator or executor is responsible for filing the deceased’s final tax returns, and performing other administrative tasks.
Assets in the deceased’s estate generally are assets that are not in trust and are without beneficiary designations or survivorship rights.
If the assets are not in trust and are without beneficiary designations or the survivorship rights total less than $100,000, one can usually avoid a formal probate court process using a Small Estate Affidavit.
If assets not in trust and without beneficiary designations and survivorship rights total more than $100,000, you usually need to petition the court to appoint you executor or administrator of the deceased’s estate. We help clients with these petitions.
The “executor” is the person named in a will to administer an estate. The “administrator” is the person appointed by the court to administer an estate when there is no will, or a will does not appoint an executor, or no person named in the will as executor is able or willing to serve.
Executors and administrators both are referred to as a “personal representative.”
After being appointed, the executor or administrator is required to safeguard the probate assets until the assets are properly distributed.
Additionally, executors and administrators have obligations that include sending notices to known creditors and publishing for unknown creditors. Unknown creditors have six months to file a claim from the time of publication. Regardless of the claims period after publication, claims against an estate are barred two years after the decedent’s death.
The executor or administrator also is required to file the deceased’s and estate’s income tax returns and may be required to, or may elect to, file a Federal or Illinois estate tax return.
The executor or administrator should safeguard probate estate assets until they are distributed to the proper recipients.
The probate estate remains open until the court closes the estate and discharges the executor or administrator.
Feel free to contact us to help you with the probate process so that estate assets are efficiently and correctly transferred from the name of the deceased to the proper recipients.
The probate court can appoint an administrator for the deceased’s estate, (known as “Administrator with will annexed”) if the named executor named in the will is unable or unwilling to act or there is no executor named in the will.
Typically, when clients have a revocable trust, they also have a will that stipulates that assets in the deceased’s estate shall be transferred to the deceased’s revocable trust. This type of will is known as a “pour over will.”
If there are assets in the deceased’s estate, the executor or administrator will be required by the pour over will to transfer the assets to the trustee. Even if a client does not have a revocable trust and the deceased’s estate assets total less than $100,000, probate of the estate assets may still be avoided using a Small Estate Affidavit.
If the deceased died without a will, the assets not in the deceased’s trust (and without beneficiary designations or survivorship rights) are distributed to the deceased’s heirs under the rules of intestacy.
If there is no will, the deceased’s probate assets are distributed to heirs as provided by Illinois intestacy laws. The probate court can appoint an administrator to administer the deceased’s probate estate if there is no will. The law outlines who has preference in acting as, or nominating, an administrator of a deceased’s probate estate.
We create a seamless web of service for you by coordinating with you, with accountants and with financial institutions to ensure a prompt and efficient administration of estates and trusts. We help trustees, and executors and administrators in all phases of trust and estate administration. Typically, we will prepare required estate tax returns for you, while your CPA will prepare the trust and estate income tax returns.
The trustee, and executor or administrator should confirm the deceased’s residence is physically secure and determine whether real estate taxes are paid. Be sure to gain access to the deceased’s mail. Also make sure the deceased’s papers, devices and accounts are secure, and if possible you have located any passwords. The trustee, and executor or administrator should make sure that the deceased’s residence is properly insured under the name of the trust or estate, or new owner. If the property is unoccupied, make sure that it is insured as unoccupied to support a proper insurance claim in the instance of loss or damage.
Trustees, and executors and administrators will want to make sure that trust or estate assets are not subject to undue market fluctuation. A deceased’s assets, other than IRAs, 401(k)s, 403(b)s, and other retirement accounts, typically are entitled to an adjustment in basis for income tax purposes to the fair market value of the assets on the date of death. As such, the decision to sell a deceased’s assets subject to market fluctuation does not have the same capital gains tax considerations as sales by the deceased.
A Federal estate tax return filing is required when the deceased’s combined taxable estate and lifetime taxable gifts are more than the deceased’s available Federal estate tax exemption amount, currently $13,610,000.
Even if you are not required to file a federal estate tax return, you may elect to file a federal estate tax return to make various tax elections, including:
- Electing for the surviving spouse to use the unused federal lifetime estate and gift tax exemption of the deceased spouse (“DSUE”) on top of their own lifetime Federal estate and gift tax exemption.
- Making a QTIP election for all or a portion of the deceased’s trust so the trust qualifies for the federal marital exemption.
- Allocating GST exemption to trusts.
An Illinois estate tax return filing is required when the deceased’s combined taxable estate and lifetime taxable gifts total more than the Illinois estate tax exemption amount, currently $4,000,000.
The filing deadline is nine months from the date of death. The executor is entitled to file for an automatic six-month extension with the IRS and the State of Illinois.
The payment deadline is nine months from the date of death. An extension to file an estate tax return does not extend the date required for payment of the estate tax.
Hiring an experienced and skilled professional law firm is recommended to navigate the complex legal and financial aspects of administration of a trust and estate and to ensure compliance with applicable laws.