Illinois Estate Planning Considerations

Common-Law State

Illinois is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over their own her income and property.

Last Will and Testament

Will Creation

The minimum age of a person competent to make a will is 18 (or an emancipated minor). The number of witnesses necessary to execute a will is two.

Uniform Transfers to Minors Act (UTMA)

The original custodial gift may be a life insurance policy or annuity contract.

Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.

The custodial arrangement terminates when:

  • The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, or trust, or exercise of a power of appointment.
  • The minor child reaches age 18 concerning other custodial transfers.
  • The minor child dies.

Dying without a Last Will, the Illinois laws of Intestacy.

The estate goes to the surviving spouse, as follows:

  • If there are no surviving descendants, —100% of the estate
  • If there are surviving descendants, —50% of the estate
  • If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
  • 100% (or applicable portion) to descendants, per stirpes

If there is no surviving spouse or descendant:

  • 100% to parents, siblings, or descendants of a deceased sibling in equal parts, with descendants of deceased siblings taking per stirpes
  • If only one parent survives, that parent takes a double portion

If none of the above:

  • Intestacy laws outline further distribution steps to the level of grandparents, then kindred and descendants. See 755 ILCS §5/2‐1(e), (f), (g).
  • If no legally described recipient can be found, estate assets go to the state of Illinois.

Creating a Trust

You can create a trust by drafting a trust document that sets out what property is to be put into the trust, who the trustee and beneficiaries are, and how to deal with the property in the trust. As with preparing a will, you should consult with a lawyer and possibly other professionals in drafting a trust.

Avoiding Probate

You may decide to create a trust for many reasons. Many individuals choose to create a trust simply to avoid having their estate go through probate. However, contrary to popular belief, avoiding probate does not avoid estate taxes, and estate taxes must be paid just as they would when someone has a will.

 Trust Statute

(760 ILCS 5/) Trusts and Trustees Act, et. seq.

  Definition of a Trust

A trust is created by will, deed, agreement, declaration, or other written instrument. A “Trust” is a legal arrangement you create in which you split the legal rights to the property.

  Definition of Trustee

A Trustee is a fiduciary responsible for overseeing the day-to-day management of property owned by a trust. A Trustee can be an individual, an institution, such as a bank or trust company, or a combination of both.

  Definition of Beneficiary

A person or institution for whose benefit the trust was created. A beneficiary is frequently a close relative of the settlor but need not be. Other typical beneficiaries include charities, friends of the settlor, and others whom the settlor wishes to benefit somehow.

Digital Assets

Illinois follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.


Inheritance Tax

Illinois does not impose an inheritance tax.

State Estate Tax

Illinois imposes an estate tax and generation-skipping transfer tax (GST tax) but provides a combined exemption of $4,000,000. The estate is permitted to elect a QTIP for Illinois estate tax purposes (up to the difference between the federal and state exemption amounts).

Gift Tax

Illinois does not impose a gift tax.

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