Curated News
By: NewsRamp Editorial Staff
September 08, 2026
Illinois Estate Tax Trap: Why Couples Could Lose $4M Without Planning
TLDR
- Illinois couples can preserve both 4 million dollar exemptions with a credit shelter trust, avoiding hundreds of thousands in state estate tax that others pay.
- Kravets Law Group explains that Illinois lacks estate tax portability, so a credit shelter trust must be used to preserve the first spouse's 4 million dollar exemption.
- Kravets Law Group helps Illinois families protect wealth for children and surviving spouses by planning ahead, turning grief into security and ensuring a better tomorrow.
- Kravets Law Group notes that Illinois estate tax is a cliff, so once an estate exceeds 4 million dollars, tax applies to the entire amount, not just the excess.
Impact - Why it Matters
This news matters because estate planning is often overlooked, yet the financial stakes are enormous. For married couples in Illinois, failing to address the state's lack of portability can result in a tax bill of hundreds of thousands of dollars—money that could otherwise go to heirs. The discrepancy between federal and state law is a hidden risk that many families don't discover until it's too late. By understanding the power of credit shelter trusts, couples can protect their wealth, ensure their children from prior marriages are provided for, and avoid unnecessary taxation. With proper planning, families can preserve up to $8 million rather than $4 million, making early legal consultation not just prudent but potentially transformative for a family's financial legacy.
Summary
Kravets Law Group, a Chicago-based Kravets Law Group serving clients in Illinois, Pennsylvania, and New Jersey, is calling attention to a costly gap in Illinois estate law: the state does not permit portability of the estate tax exemption between spouses. Unlike federal law, which allows a surviving spouse to inherit any unused portion of a deceased spouse's exemption, Illinois forfeits the first spouse's $4 million exemption unless specific planning steps are taken during life. This means an Illinois couple with $8 million in combined assets who rely on outright transfers could face a state estate tax bill of several hundred thousand dollars at the second death, because Illinois applies its estate tax as a 'cliff'—taxing the entire estate once it exceeds $4 million, not just the amount above the exemption.
The standard solution is a properly structured credit shelter trust, also known as an AB trust or bypass trust. When the first spouse dies, up to $4 million of assets fund a trust for the surviving spouse, who can use the assets during their lifetime, but those assets are not included in their taxable estate at death. This preserves both spouses' exemptions, shielding $8 million from Illinois estate tax rather than $4 million. Beyond tax savings, these trusts offer creditor protection, preserve wealth for children from a prior marriage, and prevent asset redirection if the surviving spouse remarries. Founding attorney Daniel Kravets emphasized that planning must occur while both spouses are alive and able to sign documents, as options narrow after the first death. The firm offers complimentary consultations for married couples to review their estate plans.
Source Statement
This curated news summary relied on content distributed by 24-7 Press Release. Read the original source here, Illinois Estate Tax Trap: Why Couples Could Lose $4M Without Planning
