Federal legislation was enacted on July 4, 2025, that will permanently increase the amount that can be used at death as a shield against estate taxes and/or during lifetime against gift taxes to $15,000,000 beginning January 1, 2026 (currently $13,990,000 for persons dying in 2025). Prior to this legislation, the federal estate tax exemption was scheduled to be cut in half as of January 1, 2026. The new exemption will also be increased annually for inflation beginning in 2027. The Illinois estate tax exemption remains at $4,000,000, and Illinois does not impose a state gift tax.
For individuals with assets exceeding or close to the exemption amount, consideration should be given to making gifts to utilize the exemption now rather than at death (and sooner rather than later), as that will allow the growth on the gifted assets to escape estate and generation-skipping transfer taxation.
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