The remaining $8 million passes to a Marital Trust for Wife.

Article by Robert J. Kolasa Forms 10/10, Features Set 10/10, Ease of Use 10/10, Customer Service 10/10. New Law. than the USlegal™ brand. Dec. 2009 - Illinois Bar Journal This $1.5 million gap between the Federal and Illinois exemption amounts created an issue with respect to funding the bypass trust. A qualified terminable interest property trust, often referred to as a "QTIP" trust, allows a bequest to a spouse in trust that, after a proper election by the beneficiary spouse, qualifies for the unlimited marital deduction: In order that the property transferred to a surviving spouse by means of an inter vivos marital deduction trust qualify for the marital deduction, the property must be includible in the trustor's gross estate for federal estate tax purpose. Prior to 2009, the Federal and Illinois estate tax exemption amounts had been the same so that funding the bypass trust with the maximum federal exemption did not result in any Illinois estate tax. We speak your language, understand your issues and find commercially viable solutions to help drive business. This estate planning technique permits optimal funding of the credit shelter trust for federal estate tax purposes, without incurring Illinois estate taxes in the estate of the first spouse to die. Details of the cookies we use and instructions on how Technical complexities abound in implementation and administration of this technique.

As a result of the new law, married Illinois residents should have their estate planning documents reviewed because if appropriate planning is not in place, Illinois estate taxes which otherwise could have been deferred until the death of the surviving spouse may instead be due and owing at the first spouse’s death. 12. If the bypass trust is funded with the full Federal exemption amount of $3.5 million, an Illinois estate tax of approximately $210,000 would be due. This is an article describing in detail the important adoption by the Illinois legislature of the "Illinois QTIP Election" for 2009 and future years. The Illinois QTIP Election to the Rescue The new law authorizes a state only “QTIP” marital deduction election to be made upon the first spouse’s death, which will (1) permit the full utilization of the Federal estate tax exemption upon the first spouse’s death, and (2) defer Illinois estate taxes that could otherwise be due upon the death of the first spouse. As a result of legislation enacted in 2001, many states (including Illinois) have enacted their own separate estate tax regime. 11 Year Winner in all Categories:Forms, Features, Customer Serviceand Ease of Use. If the bypass trust is subject to an Illinois QTIP election (See Example 3), other forms of marital trust planning (such as a general power of appointment marital trust) may be utilized. Estate Tax Marital Deduction: Excess Exemption QTIP Trust - $0-$4,250,000 Fred’s Gross Estate + $10,000,000 + $10,000,000. Many estate plans were designed to fund the bypass trust based solely on the Federal exemption amount, which will cause an Illinois estate tax to be paid at the first spouse’s death.

www.kolasalaw.com The Illinois QTIP Election to the Rescue Article by Robert J. Kolasa Dec. 2009 - Illinois Bar Journal www.kolasalaw.com This is an article describing in detail the important adoption by the Illinois legislature of the "Illinois QTIP Election" for 2009 and future years.

Dec. 2009 - Illinois Bar Journal Newer estate plans are often designed to fund the bypass trust with the lesser of the Federal and Illinois estate tax exemptions. "The Forms Professionals Trust ™. Article by Robert J. Kolasa

USLegal has been awarded the TopTenREVIEWS Gold Award 9 years in a row as the most comprehensive and helpful online legal forms services on the market today. Let’s say that Clark Kent and Lois Lane are married, and Lois, through years of work as an intrepid reporter, has accumulated an estate with a value of $8 million. Discover everything Scribd has to offer, including books and audiobooks from major publishers. Bypass trust planning ensures that the Federal estate tax exemption of the first spouse to die is fully utilized.

“Bypass trust” planning (often referred to as Martial Trust-Residuary Trust planning) has been a staple of well-drafted estate plans. An inter vivos trust is a trust that becomes effective during the lifetime of the person creating the trust (the settler or trustor). This will allow a full marital deduction for Illinois purposes, and also utilize Husband’s remaining $1.5 million Federal estate tax exemption amount. The result is that both the Federal and Illinois estate tax exemption amounts are fully utilized and no Federal or Illinois state estate tax will be due at Husband’s death. to disable them are set forth in our, Maximizing Returns Through Effective Management of Engine Performance Restoration: Five Cases, CCPA Employee and B2B Exemption Extended Until 2022, New Rate of Stamp Duty Land Tax (SDLT) for Non-UK Residents. TopTenReviews wrote "there is such an extensive range of documents covering so many topics that it is unlikely you would need to look anywhere else". Attorney Advertising.

The recently enacted Illinois QTIP legislation allows the full use of the Federal estate tax exemption without the payment of Illinois estate taxes at Husband’s death by allowing the Executor of Husband’s estate to make a “state only QTIP election”. This is an article describing in detail the important adoption by …, 0% found this document useful, Mark this document as useful, 0% found this document not useful, Mark this document as not useful, Save The Illinois QTIP Election to the Rescue For Later. Assume Husband, a resident of Illinois, dies in 2009 with a taxable estate of $10 million and has his entire Federal and Illinois estate tax exemption amounts remaining ($3.5 million and $2 million, respectively). So how do AB Trusts work? Under this scenario no Federal or Illinois estate taxes will be due on Spouse A’s death, but $1.5 million of Husband’s Federal estate tax exemption has been wasted. See Robert J. Kolasa, The Illinois QTIP Election to the Rescue, 97 Ill Bar J 612, 614 (December 2009).

State. A qualified terminable interest property trust, often referred to as a "QTIP" trust, allows a bequest to a spouse in trust that, after a proper election by the beneficiary spouse, qualifies for the unlimited marital deduction: Assets in the bypass trust can be available for the benefit of the surviving spouse, even though the assets of this trust are excluded from the surviving spouse’s taxable estate upon the surviving spouse’s death. www.kolasalaw.com As of January 1, 2009, however, the Federal estate tax exemption increased to $3.5 million, while the Illinois estate tax exemption was frozen at $2 million. An inter vivos trust is a trust that becomes effective during the lifetime of the person creating the trust (the settler or trustor). In the past, the bypass trust has been funded upon the first spouse’s death with an amount of assets equal to the available Federal estate tax exemption. 13. Husband’s estate plan directs the funding of the bypass trust with the lesser of the Federal and Illinois exemption amounts—$2 million. 2009 - Also the Year of the Illinois QTIP – The Illinois QTIP election allows one to not have to underfund the credit shelter trust with the lower Illinois estate tax exemption amount and to not have to pay Illinois estate tax on the death of the first spouse to fully fund the federal credit shelter trust. The recent Illinois legislation affords an additional and very appealing option for married couples: an Illinois-only marital deduction election for qualifying trusts.

All forms provided by US Legal Forms, the nations leading legal forms A trust is a fiduciary relationship in which one party holds legal title to another's property for the benefit of a party who holds equitable title to the property. The Illinois QTIP Election to the Rescue publisher. USLegal received the following as compared to 9 other form sites. 14.

While this funding mechanism will eliminate Illinois estate taxes at the first spouse’s death, it will also waste a portion of the first spouse’s Federal estate tax exemption since the Illinois estate tax exemption ($2 million) is less than the Federal exemption ($3.5 million). Illinois Governor Patrick Quinn signed into law Illinois SB 2115 as Public Act 96-789 on September 8, 2009. Tax Act 2010, § 303(a) amending IRC § 2010(c). © 2020 Katten Muchin Rosenman LLP. When you need a legal form, don't accept anything less

The benefit of the new Illinois QTIP legislation is that the Federal estate tax exemption may now be fully utilized without incurring an Illinois estate tax at the first spouse’s death. Illinois Governor Patrick Quinn signed into law Illinois SB 2115 as Public Act 96-789 on September 8, 2009. We have placed cookies on your device to help us understand how you use our website. Description: Federal. The Illinois estate tax exemption requires the AB Trust planning technique to become portable.