Planning the future of large and comprehensive estate after a person dies is a large responsibility, and it may seem impossible if one plans to do it on his or her own. An attorney with experience in estate planning is often a good idea to make sure that a person's wishes are properly executed after death.
One of the main purposes of estate planning is also to preserve the value of properties, money and other assets that a person intends to bequeath to family, friends or organizations. Illinois applies a tax to estates of a value above $4 million, while the federal government does the same on estates above $5.49 million in value.
Federal guidelines may change, however, under a new tax plan passed by the legislature in Washington. New laws have accountants and lawyers focused on estate law reading new guidelines to protect their clients' interests.
Possibilities include the structuring of trusts for bequests to people below the age of consent. The process of transfers to grandchildren, known as generation-skipping transfers (GST), may become less expensive with the reduction or elimination of a tax on these estate arrangements.
Illinois also imposes a GST tax of 2 percent on qualifying estates, although this may not apply if the grantor of a trust was not a resident of Illinois at the time of his or death. An attorney may help prevent confusion in setting up these trusts.
People with high-value estates should consider legal representation to address changes in federal tax law as well as Illinois state regulations on taxable bequests.
Source: Wealth Management, "Income Tax and GST Planning Under the New Tax Law," James G. Blase, Jan. 09, 2018