WHAT'S NEW

In late 2010, Congress revised the federal estate tax law to increase the federal estate tax exemption to $5 million per person for 2011 and 2012.  Based on a cost of living adjustment formula which was also contained in the law, however, the IRS recently announced that the federal estate tax exemption for 2012 is actually $5.12 million per person.  Unless Congress takes action before 2013, the federal estate tax exemption is scheduled to revert back to $1 million per person on January 1, 2013. 

The annual gift tax exclusion is also subject to cost of living adjustments.  Due to the mechanics of the computation, however, no adjustment resulted for 2012 and the annual gift tax exclusion accordingly remains at $13,000 per year per donee for 2012.

In early 2011, Illinois also took steps to reinstate the Illinois estate tax for 2011 and later years, but maintained the Illinois estate tax exemption at $2 million per person which is the same amount which existed in 2009.   (There was no Illinois estate tax in 2010.)

On December 16, 2011, Governor Quinn signed new Illinois legislation which increases the Illinois exemption to $3.5 million per person for 2012, and $4 million per person for 2013 and later years.

We will continue to update our web site with future developments.

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