- On October 5, 2016
Are You Ready?
Current Federal and Illinois Death Taxes
Currently, the federal government taxes estates worth over $5.45 million ($10.9 million for married couples with proper tax filings) at a flat rate of 40%. Illinois also taxes resident estates worth over $4 million ($8 million for married couples with proper estate planning documentation in place) with rates roughly ranging from 10% to 16%.
Hillary Clinton’s Death Tax Proposal
Hillary Clinton proposes to maintain the current federal estate tax system. Secretary Clinton also proposes to raise the base estate tax rate from 40% to 45%, decrease the estate tax exemption from $5.45 million ($10.9 million for married couples) down to $3.5 million ($7 million for married couples), and increase the highest estate tax rate to 65%! We will keep you updated if Secretary Clinton’s proposal changes.
Donald Trump’s Death Tax Proposal
Donald Trump proposes to repeal the current federal estate tax system and replace it with a new capital gains tax on predeath asset appreciation! This proposed capital gains at death tax will exempt small businesses and farms and also be limited by a $10-million-per-couple exemption. This new tax will likely be attained by adjusting the current step-up in basis laws benefitting heirs inheriting capital assets. As many details are currently unavailable regarding this proposal, we will keep you updated as Mr. Trump’s proposal evolves.
Planning Take-Aways & Action
The 2016 Presidential Election may be a catalyst for dramatic change to the current federal and Illinois death tax laws. With change in the air and a less certain future, it is important that will and trust documents are flexibly drafted to address change. Unfortunately, many will and trust documents are inflexible and should be reviewed and modified. For example, does your estate planning documentation contain Trust Protector language? Is your will and trust more than 3 years old? Time for a review?
The Estate Planning Group at Kelleher & Buckley, LLC is prepared and ready to assist. For more information, please immediately contact Andrew Kelleher, David Buckley, Robert Holland, Linda Fine, Vas Russis or another one of Kelleher & Buckley, LLC’s 22 attorneys at (847) 382-9130