My father passed away 2 years ago and my mother this spring. I inherited some liquid assets and some farm ground that is going to be dangerously close to 2 million dollars, so I would then be liable for state estate taxes.
I haven't gotten the land appraised yet, so I don't yet know whether it's going to go over the 2 million cap.
I hear that the state of Illinois hits you pretty hard if you do go over the limit. Is this true and if so, is there any way to minimize the hit or help stay under the cap?
I really want to pass the farm ground on to my children someday and would be very sad to have to sell somet to pay the taxes.
Thanks for your help.
Answer
You are correct, Illinois does impose an inheritance tax on assets over $2 million. Did your parents have Wills or Trusts? If they had trusts, your father's exemption should have been utilized at his death.
I would need to review any estate planning documents that your parents left as well as a list of assets in order to give you an idea of whether there will be an estate tax liability and how to minimize the effect on the assets.
If you are interested in discussing further, please feel free to give me a call.
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Answer
Use some of those liquid assets and contact an Estate or Probate lawyer in your area. Farm land is a specialized area as is estate taxation. Its doubtful that you would have to pay taxes on the full 2M valuation since your father may have had a stepped-up basis at the time of your mother's death. If your assets are as indicated you can afford to pay a specialist in this area and you should do. Free advice given blindly is worth exactly what you pay for it.
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