Yorkville Estate Tax Planning Lawyers

Attorneys Helping Families Reduce Estate Taxes in Yorkville, Illinois

Many people assume that estate taxes are only a concern for people and families who are very wealthy. At the federal level, that is largely true, since only estates worth many millions of dollars will owe federal estate tax. However, in Illinois, state estate taxes apply to estates worth more than $4 million. The value of a home, a family farm, a business, retirement accounts, investments, and life insurance can add up quickly. Without careful planning, a significant portion of what you have built could go to taxes instead of to your children and grandchildren.

At Gateville Law Firm, our lawyers help families in Yorkville, Kendall County, and the surrounding areas understand how estate taxes may affect them and what steps can be taken to reduce or avoid those taxes. We have years of experience working with families to create estate plans that address both federal and state tax rules. Our goal is to help you keep more of your wealth within your family while making sure your plan reflects your values and meets the needs of the people you love.

The Importance of Estate Tax Planning

Estate taxes are paid from the assets of an estate before beneficiaries receive their inheritances. When an estate is made up mostly of property that cannot easily be sold, such as farmland, a family business, or real estate property, heirs may be forced to sell assets to pay the tax bill. Planning ahead can help families avoid these difficult choices and ensure that property will be passed to the next generation.

Tax planning is also important because the rules change over time. Exemption amounts, tax rates, and available strategies may shift as new laws are passed. A plan that worked well 10 years ago may no longer produce the best results today.

When Estate Taxes May Apply

Federal Estate Tax

For people who die in 2026, the federal estate tax exemption is $15 million per person. This amount is adjusted for inflation every year. The value of assets above the exemption may be taxed at rates up to 40 percent.

The federal exemption is "portable" between married spouses. When the first spouse dies, the surviving spouse can claim any portion of the exemption that was not used. To take advantage of portability, the executor of an estate must file a federal estate tax return, even if no tax is owed. Married couples can also pass unlimited amounts of property to each other without federal estate tax being applied to these transfers.

Illinois Estate Tax

The Illinois Estate and Generation-Skipping Transfer Tax Act (35 ILCS 405) applies to Illinois residents with estates worth more than $4 million. Nonresidents who own real estate or other property in Illinois may also be covered by this law. Unlike the federal estate tax exemption, the Illinois estate tax exemption does not increase based on inflation, and it is not portable between spouses.

The way Illinois calculates estate tax can also create a sharp increase in tax liability once an estate crosses the $4 million threshold. An estate worth slightly more than the exemption may owe a substantial tax bill. The rates may be as high as 16 percent.

Consider a married couple in Yorkville with a home, retirement savings, investment accounts, and a small business, with all of their assets being worth a combined total of $6 million. They will not owe federal estate tax. However, if everything passes to the surviving spouse, and no other plans have been made, the full $6 million may be counted as part of the surviving spouse's estate, and Illinois estate tax could be owed when that spouse dies. With proper planning, the couple may be able to take advantage of the $4 million exemption for each spouse and shelter up to $8 million from Illinois estate tax.

Strategies to Reduce or Eliminate Estate Taxes

Our attorneys can help families determine the best estate planning and tax planning strategies based on their assets and goals. Strategies that may be used include:

• Credit Shelter Trusts: These are also called bypass or family trusts, and they can hold assets up to the Illinois exemption amount when the first spouse dies. The surviving spouse can still receive income and other support from the trust, but the trust assets will not be counted as part of the survivor's taxable estate.
• Annual Gifts: Federal law allows each person to give away a certain amount of assets without being subject to gift taxes. In 2026, the gift tax exemption is $19,000 per recipient. For a married couple, both spouses can use their gift tax exemption to give up to $38,000 per recipient per year. Making gifts that fall below the annual gift tax exemption can reduce the size of an estate over time and bring it below the estate tax threshold.
• Irrevocable Life Insurance Trusts: Life insurance proceeds are generally included in the estate of a person who owns the policy. Placing a policy in an irrevocable trust can keep the death benefit out of the taxable estate while still providing funds for loved ones.
• Charitable Planning: Gifts to charities are deductible for estate tax purposes. Charitable remainder trusts and similar tools can provide family members with income, support causes that a family cares about, and reduce estate taxes.
• Family Business and Farm Planning: Family limited partnerships, LLCs, and succession plans can help transfer ownership of assets gradually while reducing the taxable value of business interests.

How Our Law Firm Can Help With Tax Planning

Estate tax planning begins with a clear picture of what a family owns and how each asset is titled. We will work with families to review current documents, estimate potential federal estate and Illinois estate tax exposure, and explain the options that will be the best fit for a family's situation. We also help families review their plans as laws, asset values, and family circumstances change.

Frequently Asked Questions About Estate Tax Planning

Contact Our Yorkville, IL Estate Tax Planning Attorneys

Through credit shelter trusts, strategic gifting, life insurance planning, and other tools, families can often reduce or eliminate estate taxes and preserve more of their wealth for future generations. At Gateville Law Firm, we can review an estate plan and provide guidance on how to protect assets and minimize taxes. Contact our Yorkville, Illinois tax planning lawyers at 630-780-1034 and schedule a consultation.