Illinois Estate Planning and Estate Tax Deductions

Your funeral expenses, debts you owe at your death and expenses required to administer your estate are expenses which will need to be paid from your assets when you die. These expenses are deductible on your estate tax return which can result in estate tax savings for your family. If you do not owe estate taxes at your death, many of these expenses can be taken as income tax deductions.

Four types of expenses which qualify as estate tax deductions:

Funeral Expenses. These expenses include funeral and cemetery charges and payments to officiating clergy.

Administrative Expenses. These expenses include fees paid to prepare your final income tax return, income tax returns for your estate or trust and your estate tax return. They also include attorney fees, executor fees, trustees fees, probate costs, appraisal fees and expenditures to maintain property prior to distribution to beneficiaries.

Claims. These expenses include final utility bills, credit card bills and income taxes due for income you earned in the year you died.

Mortgages. These include any indebtedness secured by a mortgage on real estate you own at your death.

In addition, casualty losses resulting from theft, fire or flood occurring during the administration of your estate not compensated by insurance are deductible.

Consult your estate planning attorney for further information.