Are you in a panic about the tax law changes being debated in Washington? One proposal includes reducing the death tax exemption to $3.5 million. Illinois farmers have lived under a $4 million state exemption for many years, so if you are thinking of a threshold at which you need estate tax planning, I’ve got good news: It won’t change much.
 
Let’s look back at a few points you may remember reading:
 
November 2019. With the Illinois exemption of $4 million, a couple with a farm worth around $16 million would incur Illinois tax of around $1.2 million — even after “A-B Trust” planning. But with more comprehensive planning, even larger estates could avoid all estate taxes.
 
October 2020. If your estate is $5 million, without proper tax planning, Illinois will collect $285,700 — and nothing in the 2020 election was likely to change that.
 
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