Estate Tax

Estate tax is a tax that may be levied by the federal and/or state government on a person’s estate after their death, which must be paid before any property can be distributed to the intended beneficiaries. The estate tax, which may be referred to as inheritance tax or death tax in some jurisdictions, is based on the total value of a deceased person’s estate, including real estate, investments, personal belongings, and any other assets that don’t fall under allowable exemptions. 

Estates valued below the designated exemption threshold are not subject to estate tax. Estates that surpass the threshold are typically taxed on the portion of the estate that exceeds it. 

For individuals with significant assets, one of the primary goals of estate planning is to strategically mitigate estate tax, which increases in proportion to the value of the estate.