Let’s say you’ve known for years that you are inheriting your father’s home when he dies.
Hopefully, you also know that he has a will that indicates clearly that the house will go to you.
Taxpayers making large gifts no longer have to worry about big federal estate taxes coming back to bite them years from now. However, the State of Illinois does take into account large gifts (more than $15,000 per person per year under current laws in 2020) when assessing the Illinois estate tax payable at death on assets in excess of $4,000,000 that pass to children or another non-spouse beneficiary.
Parents and grandparents often give children and grandchildren financial help to purchase a home or to carry them through hard times. It can be a wonderful, generous gesture with a lasting impact across generations of family members. But it can also create strife and intra-family conflict if parents fail to properly document the transfer as a loan.