01
Estate & Gift Tax Planning
Structuring lifetime gifts and testamentary transfers within the unified estate and gift tax framework, so transfers are planned against the law in effect rather than figures carried over from a prior year.
Tax
Trusts & Estate Taxation
Estate, gift, and generation-skipping transfer tax planning, trust taxation, and wealth-transfer strategy. The tax work keeps a family's plan coherent as the assets, the family, and the law change.
The estate and gift taxes share one exemption, spent during life or at death and taxed at 40 percent once it is gone; the generation-skipping tax has its own, equal in amount and allocated separately. Congress made the exemption permanent in 2025 and set it well above most estates. Illinois did not follow, and taxes estates from a far lower threshold.
Basis is the quieter half. An asset given during life carries the donor's cost basis to the recipient; the same asset left at death takes a new basis equal to its value on that date. Assets held in an irrevocable grantor trust do not receive that step-up, as the IRS confirmed in 2023, and many older plans were not drafted around it.
We design the trust, see that it is actually funded, and file the gift and estate tax returns on which every later defense rests. Where a valuation is examined, we represent the family before the IRS.
What we do
Transfer-tax planning, trust taxation, and fiduciary compliance for individuals, families, and fiduciaries, from the first plan through administration and any dispute.
02
Generation-Skipping Transfer Tax Planning
Planning and allocation for transfers that skip a generation, including dynasty and other long-term trusts, coordinated with the estate and gift tax rules so that the GST exemption is allocated deliberately and the allocation is documented.
03
Trust Taxation & Structuring
Analysis of how a trust will be taxed, covering grantor versus non-grantor treatment, separate-taxpayer status, and the income-tax consequences of distributions, all mapped at the drafting stage.
04
Wealth-Transfer Strategy
Tax-efficient strategies for moving assets across generations, written into the estate plan so that the transfer-tax treatment serves the family's objectives.
05
Fiduciary Income Tax Compliance
Guidance on the fiduciary income tax returns that trusts and estates file, the treatment of distributions to beneficiaries, and the elections that shape how income is reported and where it lands.
06
Estate & Trust Administration Tax Support
Support for executors and trustees on the tax side of administration, including coordination of return preparation, valuation, and the timing decisions that arise as an estate or trust is settled.
07
Valuation & Appraisal Coordination
Coordination with appraisers and other advisors to develop and document the valuations that estate, gift, and GST tax positions depend on, so a position is supportable if it is later examined.
08
Estate & Gift Tax Controversy
Representation in matters before the IRS, including estate and gift tax examinations, valuation disputes, and administrative appeals, where the value of a transfer or the treatment of a trust is challenged.
What you should know
The ground rules of a trusts and estate tax strategy.
01
Portability has to be claimed
A surviving spouse keeps the deceased spouse's unused federal exemption only if an estate tax return is filed for the first death, even when no tax is owed. The IRS allows the election up to five years late for estates that owed nothing. Illinois offers no portability at all.
02
A grantor trust compounds untaxed
When an irrevocable trust is a grantor trust for income tax, the grantor pays the trust's tax each year and the IRS does not treat that payment as a gift. The trust grows undiminished. A swap power lets the grantor pull low-basis assets back before death for the step-up.
03
Illinois keeps its own table
Illinois taxes estates above a threshold well below the federal one, using a credit table Congress began retiring in 2001, and it has no gift tax. For a family above the state line and below the federal one, lifetime giving is the lever, and timing it is the work.
04
Trust income is taxed fast
A trust that retains income reaches the top federal bracket at a fraction of what an individual would need, so distribution timing is a tax decision. Distributions carry income out to beneficiaries, and a trustee has 65 days after year end to treat a payment as made the prior year.
05
Valuation is the whole dispute
A gift of a minority interest in a family entity is valued with discounts for lack of control and marketability, and the discount is what the IRS contests. A qualified appraisal attached to the return satisfies adequate disclosure and starts the three-year statute; without it the gift stays open indefinitely.
06
The calendar is statutory
An estate tax return is due nine months after death, with one six-month extension; the portability election rides on it. A gift tax return is due the next April 15, and GST exemption is allocated automatically unless the return elects out, which is how it gets spent by accident.
The arc of a transfer
How this work runs
A gift takes a moment, and its tax consequence lasts for good.
- Stage 01
The balance-sheet reading
Before anything moves, we map the family's balance sheet against the transfer-tax system: what is owned and how, which assets carry appreciation, where the grantor's exemption stands, and what the current law permits that a later year may not.
- Stage 02
Structure and funding
The trust is drafted with the grantor or non-grantor question, the GST allocation, and the situs settled in advance, and then it is actually funded. An unfunded trust is only a theory. Retitling the assets is what makes the plan real.
- Stage 03
The return and its file
The gift or estate tax return is filed with adequate disclosure and supported by a contemporaneous appraisal and the documentation an examiner will one day ask for. The position is made defensible on the day it is taken.
- Stage 04
Examination and defense
If the IRS questions the valuation or the trust's treatment, the response is already in the appraisal and the return. We represent the family through examination and administrative appeal on the record assembled when the transfer was made.
A transfer is taxed on the day it is made and defended with what was documented that day.
3 years
the statute of limitations on a gift adequately disclosed on a filed return
Frequently asked
Common questions on trusts and estate taxation.
What is the difference between estate planning and estate taxation?
Estate planning is the broader exercise of directing how assets are held, managed, and transferred through wills, trusts, and powers of attorney. Estate taxation is the tax side of that work. It asks how the federal estate, gift, and generation-skipping transfer taxes apply to a transfer and how the plan should be structured so those taxes are dealt with deliberately rather than by accident. The two are closely linked, and a sound plan considers both together.
How are trusts taxed?
Taxation depends on the type of trust. A revocable trust is generally treated as owned by the grantor for income tax purposes during the grantor's life, while an irrevocable trust may be a separate taxpayer or a grantor trust depending on its terms. Trusts file their own fiduciary income tax returns, and distributions can shift income to beneficiaries. Because the rules are detailed and the consequences are durable, the tax treatment is best mapped while the trust is being drafted.
When does the federal gift tax apply?
Whenever property moves to someone else for less than full value, which includes forgiving a loan, adding a child to a deed, or selling a family asset at a friendly price. Three transfers are excluded outright: gifts to each person up to the annual exclusion amount, gifts to a spouse who is a United States citizen, and tuition or medical bills paid directly to the school or provider. Anything above those is reported on Form 709 by the following April 15 and reduces the lifetime exemption; tax is actually paid only once that exemption is used up. Two further points shape the decision. The recipient takes the donor's basis, so appreciated assets are generally better left at death. And Illinois has no gift tax, so a lifetime gift leaves the state estate tax base as well.
What is the generation-skipping transfer tax?
The generation-skipping transfer (GST) tax is a separate federal tax on transfers that skip a generation, such as a gift from a grandparent to a grandchild, made outright or through a trust. It operates alongside the estate and gift taxes and has its own exemption and allocation rules. Dynasty and other long-term trusts are often drafted with the GST tax in mind, which is why the allocation of exemption should be planned and documented carefully.
Do you handle estate and gift tax controversies with the IRS?
Yes. When the value of a transfer, the availability of a deduction, or the treatment of a trust is questioned, we represent clients in matters before the IRS, including estate and gift tax examinations, valuation disputes, and the administrative appeals that follow. We also coordinate with appraisers and other advisors so the position is documented and supportable.
When should trusts and estate tax planning be done?
Before the event that sets the value. Interests in a family business are worth least, for gift tax purposes, before a buyer appears; once a letter of intent is signed the IRS will argue the deal price. A death starts the nine-month clock for the estate tax return and the portability election that rides on it. A move into or out of Illinois changes which estate tax applies. And every few years, or whenever Congress changes the exemption, an existing plan should be read again to see what it now does, because formula clauses written against one exemption can leave a surviving spouse with far less than intended under another.
Related
Adjacent tax practices.
Tax-Exempt Organizations
Formation, governance, and compliance for tax-exempt organizations, including charities, foundations, and other nonprofit entities used in charitable and wealth-transfer planning.
Explore →Cross-Border & International Tax
International tax strategy and compliance for individuals and families with foreign income, assets, or beneficiaries, including the reporting that cross-border estates require.
Explore →Real Estate & Property Tax
Tax planning for real estate transactions and holdings, including the property interests that frequently sit at the center of an estate or a wealth-transfer plan.
Explore →Tax Audits & Controversy
Representation in IRS examinations, appeals, and tax disputes, the broader controversy practice for matters before the IRS when a position is challenged.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice