What Assets are Considered Part of My Taxable Estate?

As you may be aware, both the State of Illinois and the Federal government impose estate taxes. An estate tax is a tax that is levied upon a person’s death. The tax takes a percentage of a person’s entire estate. Both Illinois and the Federal government have an exemption amount, both of which have been changed now and again. The exempt amount means that a certain amount of your assets will not be subject to tax, but anything greater than that amount will be subject to tax. So if you take that in 2018 the Illinois Estate Tax exemption is $4,000,000.00. The first $4,000,000.00 of your estate is not subject to a tax, but anything greater than that amount will be. For a further explanation of the tax, see our blog post here.

The Asset Calculation

The following types of assets are common assets that will be included in the calculation for a taxable estate:

• Tangible personal property. These are your personal possessions, but also your automobile, collections, etc.
• Money in checking and savings bank accounts, whether held individually or jointly;
• Investment accounts;
• Retirement accounts, including 401Ks, IRAs, 403Bs, SEP Plans;
• Pensions with a death benefit;
• Your home, whether held individually or jointly. This is often a person’s biggest asset;
• Life insurance death benefits. If you have a life insurance policy that pays a death benefit, this will be included in your taxable estate. People are often surprised to learn that their $2,000,000 death benefit life insurance policy is calculated as part of their taxable estate, often pushing their estate over the exemption amount;
• Claims against other parties. This can include a debt owed to you by another person, but also if you have a legal claim against another person, say for a personal injury, the claim itself is part of your taxable estate;
• Beneficial interests in other estates. If your parent has passed away leaving you an interest in his or her trust, then your interest is part of your taxable estate;
• Business interests. If you have an interest in a business, then you will need to determine the value of the interest to understand whether you are over the exemption amount and will need to start estate tax planning. A good business appraiser can help you better understand the business value;
• Foreign assets.

This is not an exhaustive list, but as you can tell, things can start adding up quickly. It is important to understand the full value of your estate so that you can know in advance whether you will need some form of estate tax planning. It is also beneficial to provide your attorney with a complete picture of your assets so if you are to pass away your family will know the exact assets you had and where to find them. This will save your family time and energy by laying out everything they need to administer your estate in the most efficient way possible.

Contact a Libertyville Estate Planning Attorney at Johnston Tomei, Lenczycki & Goldberg LLC Today to Discuss your Estate

If you are unsure what assets are part of your estate and want to know whether you will need more advanced planning, it is important to speak with a Libertyville estate planning attorney today to get a clear picture of your legal needs. The estate planning attorneys at Johnston Tomei Lenczycki & Goldberg LLC will be able to assess your estate and propose an estate plan that is the right fit for your needs. Call Johnston Tomei Lenczycki & Goldberg LLC today at (847) 549-0600 to plan your estate and make sure your assets are properly transferred to your loved ones upon passing while minimizing estate taxes.