Chicago Area Tax Planning Attorneys
Estate Planning Lawyers Addressing Estate, Gift, and Income Taxes in Illinois
Every family should make sure they have plans in place that address what will happen in the future. A comprehensive estate plan can provide financial protection for family members while making decisions about how matters should be handled after a person’s death. This process also allows families to determine the best strategies for minimizing the taxes they will be required to pay, providing them with more control over how assets will be used and who will receive them.
The lawyers of the Gierach Law Firm understand that tax planning is a key part of the estate planning process, and we will make sure you have fully considered the implications of the decisions you make. Attorney Denice Gierach is a Certified Public Accountant, and she and the team at the Gierach Law Firm, LLC have more than 30 years of experience assisting clients in creating estate plans that address their financial concerns.
Tax Considerations in Your Estate Plan
There are a variety of strategies that can be used to reduce the amount of taxes you may be required to pay and maximize the value of the assets you can pass on to your family members. While nearly everyone is required to pay income taxes when they earn money, state and federal estate taxes may also apply to certain high-value estates after a person’s death, gift taxes may be levied when transferring large amounts of money or high-value assets to another person, and capital gains taxes may apply when money is earned by selling certain assets or property. Some strategies that can be used to reduce these tax obligations include:
- Annual gifts – Transferring money or assets to family members or other loved ones can reduce the total value of a person’s estate, which will lower the amount of estate taxes that may be due after the person’s death. The IRS sets a limit for the amount of gifts that can be given to a single person in a year without incurring gift taxes. Making these types of gifts on an annual basis can allow assets to be transferred to beneficiaries while avoiding both gift taxes and estate taxes. Depending on the size of your estate, you may wish to make a greater gift than the annual amount that the IRS allows. You may be using a part of your lifetime exemption, but for an asset that will appreciate substantially over the years, it may save estate taxes to make this type of gift.
- Holding assets in trusts – Different types of trusts can be used for asset protection purposes, and they can also help reduce the size of a taxable estate while avoiding gift taxes that may apply to the transfer of assets to beneficiaries. Some trusts that may be used for tax planning purposes include grantor retained annuity trusts (GRATs), irrevocable life insurance trusts (ILITs), education trusts, or special needs trusts.
- Charitable giving – In many cases, a person can take income tax deductions for money or assets donated to charity. Other types of charitable donations, such as charitable remainder trusts, charitable lead trusts, or family foundations, can also be used to help avoid capital gains taxes and estate taxes.
- Business tax planning – Business owners can employ a variety of strategies to reduce the tax burden for themselves and their companies. and business-related taxes and financial concerns can also play a role in the estate planning process. For instance, if a person’s business income comprises a certain percentage of their total taxable adjusted gross estate, they may be able to obtain a low-interest loan that will allow them to pay estate taxes in advance once the business owner passes away.
Contact Our DuPage County Estate Planning and Tax Planning Attorneys
Taxes can be complicated, especially when they apply to complex estates. At the Gierach Law Firm, LLC, we can explain the estate planning options that will help you reduce the taxes you currently pay and those that may apply in the future. We will work with you to make use of the available tools and help you put strategies in place to protect your assets and make sure you will be able to provide for your family and those you care about. To learn more about how we can address your estate planning needs, contact us at our Naperville office by calling 630-756-1160 or call us our Hoffman Estates office at 847-519-0505.