Estate Planning in Illinois: What Every Homeowner Needs to Know

Most Illinois families assume estate planning is something for millionaires — until they add up their home equity, retirement accounts, and life insurance and realize they are closer to the state's $4,000,000 estate tax threshold than they thought. With a median home value of $327,918 and average retirement balances pushing past $600,000, a suburban couple in DuPage or Lake County can cross that line without owning a single luxury asset.

Illinois estate planning is also more complicated than in many states because of its common law property system, strict document execution rules, and a state estate tax that operates independently of federal exemptions.

The Five Documents Every Illinois Estate Plan Needs

A complete Illinois estate plan requires five separate documents, each with its own execution rules:

1. Last Will and Testament. Illinois requires the testator to sign in front of two witnesses who are at least 18 years old. The witnesses do not need to be disinterested, but they cannot be the same person as the notary. Illinois does not recognize holographic (handwritten, unwitnessed) wills.

2. Statutory Short Form Power of Attorney for Property. This covers financial decisions — paying bills, managing investments, selling real estate. It must be signed by the principal, witnessed by at least one person, and notarized. The witness and the notary must be different people.

3. Statutory Short Form Power of Attorney for Health Care. This names someone to make medical decisions if you cannot. It requires the principal's signature and one witness, but notarization is not required. The witness cannot be a family member, the agent, or a healthcare provider.

4. Living Will Declaration. This specifies end-of-life treatment preferences. It requires two adult witnesses who are not entitled to any portion of the estate.

5. Transfer on Death Instrument (TODI). This passes real estate directly to a beneficiary at death, bypassing probate entirely. It must be signed, witnessed by two people, notarized, and recorded with the county recorder before death. An unrecorded TODI has no legal effect.

How Much Does Estate Planning Cost in Illinois?

The cost range is wide depending on the approach:

• Attorney-prepared estate plan: $3,000 to $5,000 for a standard package (will, POAs, living will). Trust-based plans with credit shelter trusts run $5,000 to $10,000 or more.
• Online document builders (LegalZoom, Trust & Will, Nolo): $89 to $500, but these use nationwide templates that often miss Illinois-specific requirements like TODI recording rules and the dual POA structure.
• DIY with a curated guide: Under $50 for a kit that walks through each document with Illinois-specific execution checklists.

The hidden cost of doing nothing is far higher. Cook County probate filing fees alone are $479, creditor publication runs $100 to $500, and executor bond premiums add another $460 to $600 annually.

Common Illinois Estate Planning Mistakes

Leaving everything to a spouse outright. Illinois does not recognize portability of the state estate tax exemption. If one spouse dies and leaves everything to the other, the deceased spouse's $4 million exemption is permanently lost. A credit shelter trust preserves both exemptions.

Signing a TODI but not recording it. A Transfer on Death Instrument only works if it is recorded with the county recorder of deeds before the owner dies. Post-mortem recording is void under Illinois law, and the property falls into probate.

Using the same witness for both POAs. The property POA and health care POA have different witness requirements. The health care POA witness cannot be a family member, the designated agent, or a healthcare provider — rules that do not apply to the property POA.

Assuming the small estate affidavit covers real estate. Illinois raised its small estate threshold to $150,000 in personal property (effective August 2025), but real estate of any value is completely excluded. A $90,000 house still requires probate or a recorded TODI.

Building Your Plan

The Illinois Basic Estate Planning Kit provides step-by-step instructions for all five documents, an estate tax calculator worksheet, and execution checklists that specify exactly who signs, who witnesses, and what gets notarized for each form.

See more Illinois guides →