Estate Planning Before 2026: What Illinois Families Should Update Before the New Year

Estate Planning

Your estate plan is not unchanging. In fact, you have to keep it up to date with any big changes or to plan for the New Year. As 2026 approaches and we leave 2025 behind, it is important to consider what has changed in your life lately. Perhaps you had a new child, a divorce, or your assets increased significantly. Or, you heard there are some changes in the estate tax landscape, and you want to handle things the right way. No matter what you need, we are here to help. 

The skilled estate planning lawyers at Bielski Chapman, Ltd. understand that the end of the year is busy for you, but it is also a time that could greatly impact your estate plan. Making some changes now could save you a great deal of money and better protect your assets. Give us a call to learn more.  

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Why 2026 Matters for Illinois Families

2026 isn’t just another year, there are some big things in the works. There are steps you can take to help get ready for them. 

  • Federal Estate Tax Changes: In 2017, Congress passed the Tax Cuts and Jobs Act of 2017. This law temporarily doubled the federal estate and gift tax exemption. That will expire on January 1, 2026. This means it will go back to prior levels if Congress does nothing, and it seems they will busy with other concerns. This could impact your family if you don’t update your estate plan. 
  • Illinois Estate Tax Updates: Illinois currently imposes estate tax on estates exceeding $4 million. New legislation modifies how the Illinois estate tax is calculated starting in 2026. Estates will be taxed based on the federal gross estate, with deductions and rates ranging from 5% to 16% depending on estate size.

Now, even moderately sized estates could have some pretty significant estate tax exposure, where they may not have before. Your estate plan could account for these higher thresholds, so an update is critical. 

Key Updates Illinois Families Should Make

1. Consider Your Exposure to Estate Taxes

  • You can looks at your estate’s value. This should include your business interests, life insurance, real estate, and so much more.
  • You will want to see if your estate exceeds the Illinois $4 million threshold or the reduced federal exemption. If so, you’ll need to update your plan.

2. Update Any Wills and Trusts You Have

  • If you have any revocable living trusts, you need to be sure they fit with the new tax laws.
  • You could also consider marital trusts or credit shelter trusts to help reduce the size of your estate for tax purposes.

3. Consider Strategic Gifts Before 2026

  • Families can gift assets now under the higher federal exemption.
  • Gifting reduces the taxable estate while transferring wealth to heirs tax-efficiently.

4. Revise Any Business Succession Plans

  • If you are an Illinois business owner, you’ll want to update your buy-sell agreements or your strategies for succession.
  • You could also limit your tax exposure through family limited partnerships or valuation discounts.

Risks of Not Updating Your Estate Plan Before 2026

  • Higher Tax Bills: Families who don’t act may see estate tax liability increase by millions.
  • Lost Opportunities: The current federal exemption allows larger tax-free transfers. Waiting until 2026 forfeits this advantage.
  • Compliance Issues: Outdated trusts or wills may not align with Illinois’s revised estate tax statutes.
Attorney gives the client a pen to sign a contract

Actions You Should Take Before the End of 2025

  1. Schedule a Review: Meet with your estate planning attorney before December 31, 2025.
  2. Run Projections: Model your estate under both current and 2026 rules.
  3. Use Gifting: Transfer assets now to lock in higher exemptions.
  4. Update Your Documents: Ensure wills, trusts, and powers of attorney reflect current law.
  5. Plan for Liquidity: Estates subject to tax may need cash or insurance to cover liabilities.

Update Your Illinois Estate Plan Before 2025 Ends

Regular updates are important anyway, but this is a critical time to update your estate plan. Big changes are coming to the estate tax landscape, and it is essential you act to be protect your financial interests. 

Let the experienced estate planning lawyers at Bielski Chapman, Ltd. help you update your plan. Contact us today for a free consultation.