A politician in Illinois is pushing for updates to a law that he says compromises local farming families. The legislative improvements would be designed to address estate tax issues that could cause problems for agricultural legacies in the state. Reports show that Illinois is one of the most antiquated states when it comes to inheritance tax for agricultural operations and land transfer after death. A new proposed bill would repeal the older laws, allowing the state to join the majority of other jurisdictions throughout the nation.
In all, Illinois enforces a tax that ranges between about 7 percent to 16 percent for estate transfers after death. Add to that the 35 percent estate tax that can be charged for federal estate tax, and taxation for larger estates can eclipse the 50 percent mark. For small family farms, this constitutes a major tax burden that can compromise their ability to keep their business operations up and running. Those land transfer taxes cause serious harm to agricultural operations in the state, according to one Illinois representative.
Families deserve to hold onto the land and assets that they have built through agricultural operations in the state. These families are crucial for the economic success of our state. They should not be challenged by losing their holdings to federal estate tax.
So, what are the options for families who are concerned about property transfer? These clients may benefit from consulting with a qualified team of estate law attorneys who can help them create an estate plan to meet their specific needs. The careful use of trusts and other estate planning tools can limit the burden posed by your taxable estate and provide your family with the assets they need and deserve.
Source: Metro East Sun, “Bourne pushes for end of taxes on land transfers to give farmers a chance to grow,” Caitlin Nordahl, May 10, 2017