What is an estate freeze and how does it work?

An estate freeze is an estate planning tool used to limit the amount of money that can be taxed when constructing an estate plan. It is designed to protect the estate from future tax consequences arising from the appreciation of assets over time. The estate freeze is often used to lock in the current market value of assets by transferring the ownership of those assets to other family members or trusts. In Illinois, an estate freeze involves transferring assets to a trust or other entity, such as a Limited Liability Company or family company. This transfer locks in the current value of the assets and prevents them from rising in value with inflation. The transfer also allows the real estate owner to keep control of the assets while transferring ownership of the assets to someone else. The estate freeze also helps to reduce estate tax liability. When assets are transferred from the estate, the new owner of the assets can usually avoid estate taxes by taking advantage of Illinois estate tax laws. The assets are then only taxed when the new owner dies or transfers ownership to someone else. By freezing the current value of assets, it can prevent large estate taxes from being incurred. This can also help maintain the estate’s ability to generate income for the family for future generations. Estate freezes can be an effective way to protect the value of an estate and reduce the tax burden associated with it.

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What is an estate freeze and how does it work?

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