September 2023 Sivia Segment: Leave a Legacy, Not a Tax Bill

Don't let your hard-earned legacy become a financial burden for your loved ones. Navigating the complex world of estate tax, inheritance tax, and gift taxes can be overwhelming. These are taxes imposed on the transfer of property, money, or assets from one person to another. However, with careful planning and the right advice, you can significantly reduce these taxes.

In Illinois, for instance, an estate tax applies to estates valued at over $4 million. The tax rates range from 0.8% to 16%, depending on the value of the estate. Moreover, Illinois does not have an inheritance tax. However, the federal government does impose a gift tax on any gifts valued at more than $15,000 in a year, and the tax rate can be as high as 40%.

In contrast, Missouri does not levy an estate or inheritance tax. However, federal gift tax implications still apply. It's important to remember that these laws can change, and it's crucial to stay up-to-date on the most current regulations to avoid any unexpected financial burdens.

There are several strategies you can use to reduce these taxes. 

1. Gift assets to your loved ones while you're still alive, keeping within the annual gift tax exclusion limit.

2. Establish a trust, which allows for the legal protection of your assets.

3. Consider life insurance which can cover potential estate tax costs.

4. Consider charitable donations which can reduce the overall value of your estate.

5. Leverage the unlimited marital deduction, which allows you to leave all or part of your assets to your surviving spouse tax-free.

Remember, each of these strategies requires careful planning and expert advice. Our team is ready to help you navigate these complex issues and ensure that your legacy is preserved for future generations.