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Estate Planning:
Illinois State Senator Jil Tracy has introduced legislation to eliminate the Illinois estate tax. The tax now applies to estates over $4 million with the tax rate on what’s taxed starting at roughly 28% and, oddly, works its way down for larger estates to around 14%. No state that adjoins Illinois has an estate tax and only Iowa and Kentucky have an inheritance tax. An estate tax is on what a person has; an inheritance tax is on what a beneficiary gets. Even then, the Iowa and Kentucky tax doesn’t apply to spouses, children, grandchildren, and some others. Iowa phases out the tax entirely in 2025. Despite this, the University of Illinois School of Labor & Employment Relations and Center for Tax and Budget Accountability, are promoting the idea that the Illinois estate tax be increased by lowering the exemption to $1 million (Article Here). No wonder some folks are abandoning Illinois for more tax-friendly states including our neighbors. According to IRS data recently reported by The Wall Street Journal (Article Here) 105,000 folks left Illinois in 2021, taking with them some $10.9 billion in Adjusted Gross Income. The estate tax does make a difference. Could be time to let our politicians along with farm, business, and professional organizations know our thoughts.
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