Kravets Law Group Alerts Illinois Couples About the Estate Tax Portability Gap

CHICAGO, IL, November 02, 2026 /24-7PressRelease/ -- Kravets Law Group, an Illinois business, real estate, and estate law firm, is urging married couples to review their estate plans in light of a gap between federal and Illinois law. Federal law lets a surviving spouse use a deceased spouse's unused exemption, but Illinois estate tax portability does not exist, so a couple with a basic plan can lose one spouse's $4 million state exemption entirely.

How the Illinois Estate Tax Portability Gap Works

In 2026, each person can pass $15 million free of federal estate tax, and spouses can combine unused amounts through portability. Illinois applies a separate estate tax to estates above $4 million, so an estate can owe state tax even when no federal tax is due. Because Illinois has no portability, an exemption left unused at the first death is gone.

If a couple with an $8 million estate leaves everything outright to the survivor, the first spouse's $4 million exemption goes unused, and the survivor's estate stands well above the state threshold.

"Many couples assume the federal rules carry over to Illinois, and that assumption is where the problem starts," said founding attorney Daniel Kravets. "A home, retirement accounts, and a business interest can add up to more than $4 million faster than most families expect. Married couples estate tax planning has to address the state tax directly."

How an AB Trust in Illinois Uses Both Exemptions

An AB trust, also called a credit shelter or bypass trust, divides a couple's assets at the first death. Assets up to the first spouse's exemption fund a trust that the surviving spouse can benefit from during life, and those assets are not counted in the survivor's estate. The remaining assets pass to the survivor, so both exemptions are used and as much as $8 million can reach heirs without Illinois estate tax. Setting up an AB trust in Illinois must happen before the first spouse dies.

"An AB trust is not right for every couple, but for those near or above the threshold, it is often the most direct way to use both exemptions," Kravets added.

About the Firm:

Kravets Law Group is a Chicago-based law firm that serves clients across Illinois, Pennsylvania, and New Jersey in the areas of real estate and property law, estate planning, and business and corporate law. The firm was founded in 2020 by attorney Daniel Kravets, who was raised outside Philadelphia by a Russian immigrant family and built his practice around the belief that legal representation should feel like a partnership, not a transaction. Kravets Law Group offers free consultations for couples who want to review their estate plans in light of the Illinois estate tax.

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