Senator pushing to change estate tax

By Alex Davis |

Published 02/10 2014 12:52PM

Updated 02/10 2014 01:00PM

SPRINGFIELD -- A newly proposed bill in the Illinois Senate could be a money saver. It could benefit farmers and small business owners. WCIA-3's Alex Davis finds out why a local senator is pushing to make changes to the estate tax.

Attorney John Hoblit knows the ins-and-outs of estate planning. He has his own law practice.

"Farmers already bear a long and convoluted process. It's just become more and more complicated as the years have gone by in order to try to plan your estate."

He first learned about planning through his long line of family farmers.

"Obviously it's very important to them to keep some of their assets when handing their farmland off to the next generation."

Right now, the federal government only taxes your estate if it's worth more than $5 million, but Illinois taxes estates worth less.

"The actual tax rate is lower. It's $4 million, so anything about $4 million, any estate above $4 million is subject to tax."

That's one of many reasons Senator Jason Barickman (R) wants to change the rate.

"Look, because you live in Illinois, this is going to cost you more money than it would in another state that has estate taxes in line with the federal law."

The bill has the potential to impact a lot of people in the state, whether they own some farm ground or own and operate a small business here.

"They decoupled Illinois' estate tax from federal law, thereby making it more complicated for individuals to make an estate plan."

State and federal taxes combined reach nearly 60%.

"That's a penalty imposed on your small business owners, your farm families, and we're trying to eliminate that burden on them, save some of their out-of-pocket costs."

On top of that, they've got attorney and accountant fees, so Barickman says this move could really help.

"It may save them a few thousand dollars in their planning costs and I think that's significant to them."

The decoupling was put in place to generate revenue. The bill was filed at the end of January.

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