Practice Area
Yearly Gifting and the Illinois Estate Tax
Illinois has an estate tax. It starts at $4 million per person. Giving to your children and grandchildren each year is one plain way to plan for it.
How the Illinois estate tax works
The federal estate tax exemption is about $15 million per person.
Illinois is different. Its estate tax starts at $4 million per person. The house, retirement accounts, and life insurance count toward it.
There is no cliff. The tax phases in above $4 million. An estate of $4,100,000 owes about $28,571. An estate of $5,000,000 owes about $285,714.
Between $4 million and about $5.36 million, the marginal cost is about 28.6 cents per dollar. Above that, it is about 10.2 cents per dollar.
Find your band
I teach the estate tax in four bands. Each one is measured per person. Pick the one that sounds like you.
Ways to give each year
Legacy in Motion is my program for yearly gifting to children and grandchildren. Here are the main ways to give.
Annual exclusion gifts
The annual gift exclusion for 2026 is $19,000 per giver, per recipient. A married couple can give $38,000 to each person. For example, a couple with three children could give each child $38,000 this year.
Tuition and medical bills
Tuition paid directly to a school and medical bills paid directly to a provider are not gifts, in any amount. The check goes to the institution, not the person.
529 plans
A 529 plan can take five years of annual exclusion gifts at once: $95,000 from one giver, or $190,000 from a married couple, per beneficiary. A withdrawal that is not used for qualified education costs is subject to income tax on the earnings and a 10% additional tax on the earnings.
Larger gifts
Illinois has no gift tax. But gifts over the annual exclusion are added back into the estate calculation at death. A larger gift needs a plan behind it.
Gifts to grandchildren
The generation-skipping transfer tax is a separate federal tax on gifts that skip a generation. The exemption is about $15 million per person. I plan gifts and trusts for grandchildren with that in mind.
Giving to charity
Some families want part of what they have to go to a church, a school, or a cause. I build that into the plan and look at how it changes the tax picture.
More than a basic plan
A basic estate plan answers one question: who gets what when you die.
This kind of planning asks a second question. What can you give while you are living?
It looks across two or three generations: you, your children, and your grandchildren.
A gift made now can help with a first house, a tuition bill, or a new baby. And you are here to see it.
What clients have said
“Brandon was explaining how the plan work and the coverages in the way that easily for me to understand. Everything went well & smoothly.”
“Brandon Ayers at the Legacy & Life Law Firm, LLC, is an exceptional attorney who combines modern communication with warmth and charm. Brandon sets clear expectations and delivers timely, precise outcomes, ensuring no detail is overlooked. For a knowledgeable, reliable, and personable attorney, I highly recommend Brandon Ayers.”
These are individual clients' words about their own experience. Every family's situation is different, and no result is promised.
How I work
I start with the numbers
I add up what you own, including the house, retirement accounts, and life insurance. Then I show you which band you are in.
Plain English
I explain each rule and each gift. You should understand what you are doing and why.
Year by year
Gifting is a yearly habit, not a one-time event. The plan is built to be repeated.
One attorney
You work with me from the first conversation on.
Common questions
- What exactly is multigenerational tax planning, and how is it different from basic estate planning?
- A basic estate plan covers who gets what and who is in charge. Multigenerational tax planning looks further out. It asks how what you own passes to your children and then to your grandchildren, and how the estate tax, the gift rules, and the generation-skipping transfer tax apply along the way. In practice, much of it is steady yearly gifting.
- Why is Illinois state tax law particularly important for my family's plan?
- The Illinois estate tax starts at $4 million per person. The federal exemption is about $15 million per person. So a family can owe Illinois estate tax and no federal estate tax at all. Illinois also has no gift tax, but gifts over the annual exclusion are added back into the estate calculation at death. Both facts shape the plan.
- What is the Generation-Skipping Transfer Tax, and why should my plan address it?
- It is a separate federal tax on gifts and inheritances that skip a generation, such as from a grandparent to a grandchild. The exemption is about $15 million per person. If you plan to give to grandchildren, or to leave money in trust for them, the plan should account for it.
- How can multigenerational planning help with my family-owned business succession?
- A business is often the largest thing a family owns, and it counts toward the $4 million Illinois number. The plan should say who will own it, who will run it, and how any estate tax would be paid without a rushed sale. Gifting shares over time can be part of that. The Estate Planning page has more for business owners.
- Can charitable planning really benefit my family's tax situation and legacy?
- It can. If giving is already part of your life, I look at how to do it in a way that also helps the tax picture. The right tool depends on the size of the gift and what you want it to do. The first question is always what you want the gift to accomplish.
- When should my family start this type of planning?
- The annual exclusion is counted one year at a time, so yearly gifting rewards starting early and keeping at it. A good time to look is when what you own, including your house, retirement accounts, and life insurance, is getting near $4 million per person. The first conversation is free.
Start with a conversation
The first conversation is free. It is called a Legacy Mapping Session. Answer a few questions, then pick a time.
Book a Legacy Mapping Session