Understanding Estate & Inheritance Taxes in Illinois and Missouri

Planning for the financial aspects of your estate is an essential part of comprehensive estate planning.

It's crucial to have an understanding of the potential taxes that may impact your estate or your children upon your passing.

In Illinois and Missouri, there are specific taxes to consider. Here's an overview:

1. Estate Tax: Illinois imposes an estate tax on the transfer of property upon death. As of the knowledge cutoff in September 2021, the estate tax exemption in Illinois is $4 million. If the value of your estate exceeds this threshold, the excess may be subject to estate tax at rates ranging from 0.8% to 16%. It's important to note that estate tax laws can change, so staying updated and consulting with an estate planning attorney is crucial.

2. Inheritance Tax: Illinois does not impose an inheritance tax. Therefore, beneficiaries inheriting property or assets from an estate are generally not subject to inheritance taxes in the state.

Missouri

1. Estate Tax: Missouri previously had an estate tax, but it was repealed effective January 1, 2005. Currently, Missouri does not impose a state-level estate tax. However, it's essential to stay informed about any future changes that may impact estate tax laws.

2. Inheritance Tax: Similar to Illinois, Missouri does not have an inheritance tax. Beneficiaries typically do not owe inheritance taxes on property or assets they inherit from an estate in Missouri.

Federal Estate Tax

It's worth noting that both Illinois and Missouri follow the federal tax laws regarding estate taxes. As of 2023, the federal estate tax exemption is $12.92 million per individual.

If the value of your estate exceeds this threshold, it may be subject to federal estate taxes at a rate that ranges from 18% to 40%. However, the federal estate tax laws are subject to change, so it's crucial to stay updated on any updates or revisions.

Planning Considerations

While Illinois and Missouri may not impose specific estate or inheritance taxes on the state level, it's important to remember that estate planning involves a comprehensive approach. Other financial considerations include income tax, capital gains tax, and property tax. Consulting with an experienced estate planning attorney can help you navigate the complexities of tax laws and develop strategies to minimize tax liabilities for your estate or beneficiaries.



Additionally, estate planning techniques such as creating trusts, gifting strategies, and utilizing other tax-saving mechanisms can help protect your assets and minimize tax burdens. Working with professionals who specialize in estate planning and tax law ensures that your estate plan is tailored to your specific circumstances and goals.

Understanding the tax implications in Illinois and Missouri, as well as on the federal level, is a crucial component of effective estate planning. Stay informed, seek professional guidance, and regularly review and update your estate plan to ensure it remains in line with current tax laws and regulations.