The vast majority of Americans will not have to worry about federal estate taxes, but they may be liable for estate taxes at the state level. The estate tax can also be referred to as the “death tax,” and it is a tax which is paid out of the estate when a person passes away. A married couple can combine their estate tax exemption amount, but they don’t get to share their exemption until one of the spouses dies. Whatever state a person resides in will impact how much that person pays in state estate taxes. There are also a handful of states that have a separate inheritance tax which heirs may have to face. It is important for people to stay educated and informed about their states policies and regulations concerning the estate tax.
See Tracy Craig, 4 Things You Probably Don’t Understand About Estate Taxes, Money, March 28, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
