• Illinois Now Allows Separate QTIP Marital Trust Election in 2009
  • September 30, 2009 | Author: Stephen A. Frost
  • Law Firm: Hinshaw & Culbertson LLP - Lisle Office
  • If you are married and reside in Illinois, this alert will be of interest to you. Although $3.5 million can be transferred tax-free for federal estate tax purposes, in 2009 Illinois allows only $2 million to be transferred tax-free. For married couples, this means that some Illinois estate taxes may become due upon the death of the first spouse to die in certain situations.

    Fortunately, a solution is now available to avoid this potential problem. Illinois passed a law on September 8, 2009, which allows a surviving spouse to make a special election related to QTIP marital trusts. By utilizing the new Illinois QTIP election, a surviving spouse may defer up to $209,124 in Illinois estate taxes that would otherwise be due upon the death of the first spouse. Additional federal and Illinois estate taxes may also be saved upon the death of the surviving spouse.

    Note that the tax savings can only be recognized if one’s estate planning documents accommodate the special Illinois QTIP election.