An Illinois resident who owns a home in another state may need an estate-tax calculation that accounts for both the whole estate and the property’s location. Removing the home’s value from a simple asset total is not the same as applying Illinois’s apportionment rules.
The key term is tax situs: the location assigned to property for this tax. It depends on the kind of property and the decedent’s residency.
Real estate differs from a financial account
For an Illinois resident, the statute generally assigns Illinois situs to transferred property, including property held in trust, except real or tangible personal property physically in another state. For a nonresident, Illinois situs generally reaches Illinois real estate and tangible personal property. These rules appear in 35 ILCS 405/5.
An out-of-state house and an account at an out-of-state bank therefore present different questions. A bank’s mailing address does not, by itself, move an Illinois resident’s financial assets outside the Illinois estate-tax system.
Identify the legal owner, property type, physical location where relevant, and the basis for the reported value. Retain deeds and ownership records with the inventory.
Calculate the preliminary tax, then apply the allocation
The state’s return provides a sequence: calculate preliminary tax, determine the ratio of Illinois-situs property to the total property used for apportionment, and apply the percentage. Illinois QTIP adjustments can affect the entries. See Form 700, Schedules A and B.
As a simplified illustration, if the correctly determined preliminary tax were $200,000 and the applicable Illinois percentage were 75%, the apportioned amount would be $150,000. The difficult work is establishing those inputs, not multiplying them.
Do not substitute net home equity or an informal percentage of account balances for the values the return requires. Different figures can serve different purposes within the return.
Ownership through an entity deserves separate review
A person who owns an LLC interest does not directly own every asset held by the LLC. A rental property inside an entity therefore needs a review of the actual ownership arrangement before anyone assumes the same situs treatment as directly owned land.
Likewise, transferring a deed into a revocable trust is not proof that the estate-tax issue has disappeared. Give the adviser both the deed and governing documents so the analysis follows the actual interests involved.
Avoid changing ownership solely to obtain an assumed tax result without reviewing the consequences for management, financing, and the wider estate plan.
Use the calculator as a preliminary estimate
Our Illinois estate tax calculator assumes an Illinois resident with all property having Illinois situs. It does not perform apportionment. A user with property elsewhere should therefore treat its output as a preliminary figure requiring further work.
For a review, gather a complete estate asset inventory, property locations, deeds, entity records, debt information, and any prior QTIP election. Include all relevant property rather than only the assets you believe Illinois can tax.
A planning consultation can address the family’s Illinois and other-state connections together. That is particularly useful when residences, rentals, or business holdings are spread across the St. Louis region and beyond.