Throughout life some people in Chicago have been able to amass significant amounts of assets. These assets may come in the form of real estate, investments, retirement accounts, collectables and other forms. People know that they will not be able to bring these assets with them when they pass away and want to make sure that their loved ones will be able to enjoy them after they pass.
However, people with large estates may be required to pay estate taxes which will reduce the amount that they will be able to leave to their loved ones. In 2020, the current tax law allows people to exclude $11.58 million from their taxable estate. This higher exclusion is set to expire after 2025 though. It is unknown at this time what the excludable amount will be at that time, but before 2018 when the increase began, the excludable amount was only $5 million and it could go back to that amount in only five years.
So, there are many estates that may be facing significant estate taxes in the near future. Therefore, people with estates above $5 million and certainly those above the current excludable amount may want to consider setting up trusts for their assets. This way the assets can pass to a spouse through the trust and allow them to control and utilize them while they are alive, but it does not pass ownership to the spouse. Therefore, they will not need to pay the estate tax when the first spouse passes, which can save a significant amount of money.
People in Chicago work hard for their money and many would like to make sure their family is taken care of when they pass away. There are different ways that people can ensure this happens, but in order to save on potential estate taxes, utilizing a trust can be very important. Setting up the trust can be a complicated process, which includes ensuring the trust is properly funded. Consulting with experienced attorneys may be beneficial.