We gave Jack, the executor of his mother’s estate, a break in the past few columns, because it was so complicated (and important) to report the New Year’s changes to the federal and Illinois estate tax law. And we have determined that he will not have any estate tax to pay.
Unfortunately, that does not actually answer the question of whether he will have to file an estate tax return. If his mom’s assets were very close to the Illinois exemption amount of $4 million, he might have to prepare the federal estate tax Form 706 and file that with Illinois and an Illinois estate tax Form 700, in order to prove no taxes are owed.
This question is not a minor issue. Why? IRS Form 706 is now 31 pages long, not counting the required attachments (like appraisals and valuation reports), and requires information about everything Jack’s mother owned at her death, even if it was in joint tenancy with Jack or anyone else or if it was life insurance with Jack or someone else named as beneficiary.
The Form 706 is time consuming and expensive to prepare. Jack will want to legitimately avoid preparing it if he can. Here, because his mother died with well less than $4 million, he happily will not be required to do that work as part of serving as executor.
For advice about leaving your estate to your family with a minimum of fuss, please call our office at (815) 436-1996 for an estate planning appointment. © 2013 Gruber Law Office, Ltd.