{"id":287022,"date":"2016-04-04T10:45:46","date_gmt":"2016-04-04T15:45:46","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/estate\/planning-an-estate\/estate-tax-laws.html"},"modified":"2025-09-04T09:16:18","modified_gmt":"2025-09-04T14:16:18","slug":"estate-tax-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/estate-tax-laws.html","title":{"rendered":"Estate Tax Law"},"content":{"rendered":"\n<div class=\"wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n<div class=\"fl-page-articles fl-section-main fl-section-main-full-width\"><div\n    data-testid=\"fl-general-title\"\n    class=\"fl-general-title fl-flex fl-gap20 fl-items-end\"\n>\n    <div class=\"fl-general-title-heading fl-flex fl-flex-column\">\n        <h1\n            class=\"fl-h1 fl-general-title-title fl-no-spacing\"\n            data-testid=\"fl-general-title-title\"\n        >\n            Estate Tax Law\n        <\/h1>\n        <p\n            class=\"fl-general-title-description fl-text-xl fl-no-margin\"\n            data-testid=\"fl-general-title-description\"\n        >\n            Estate taxes are often discussed alongside inheritance taxes. These are sometimes referred to collectively as \u201cdeath taxes.&#8221; \n        <\/p>\n    <\/div>\n<\/div>\n\n\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw Staff<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/catherine-hodder-esq\/\">Catherine Hodder, Esq.<\/a>\n                | Last updated\n        <time>\n                            July 24, 2026\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n\n<p>Estate tax laws are regulations governing the taxation of a deceased person&#8217;s estate.<\/p>\n<p>An estate tax is collected directly from a deceased person&#8217;s estate before distribution to heirs. By contrast, beneficiaries pay <a href=\"https:\/\/dictionary.findlaw.com\/definition\/inheritance-tax.html\" target=\"_blank\" rel=\"noopener\">inheritance tax<\/a>&nbsp;after receiving a distribution from an estate.<i><\/i><\/p>\n<p>It is not uncommon to discuss estate taxes alongside inheritance taxes. Together, these are sometimes referred to as &#8220;death taxes.&#8221;<\/p>\n<p>The section below provides helpful links to estate tax laws:<\/p>\n\n\n\n<div\n    class=\"fl-category-overview\"\n    data-testid=\"fl-category-overview\"\n>\n    <div\n        class=\"fl-accordion fl-category-overview-container\"\n        id=\"category-overview\"\n        data-testid=\"fl-accordion\"\n    >\n                    <div\n               class=\"fl-accordion-item fl-category-overview-item\"\n               id=\"section-1-category-overview\"\n               aria-labelledby=\"button-1-category-overview\"\n               data-testid=\"fl-accordion-item\"\n            >\n                <h2\n                    class=\"fl-accordion-header fl-flex fl-items-center fl-justify-between fl-no-margin\"\n                    data-testid=\"fl-accordion-header\"\n                >\n                    <button\n                        id=\"button-1-category-overview\"\n                        aria-label=\"Category 1 content\"\n                        aria-expanded=\"false\"\n                        aria-controls=\"section-1-category-overview\"\n                        class=\"fl-accordion-button fl-flex fl-flex-auto fl-justify-between\"\n                        type=\"button\"\n                    >\n                        Reducing Your Estate Taxes\n                        <span aria-hidden=\"true\">\n                            <i\n                                class=\"fa fa-angle-down small\"\n                                aria-hidden=\"true\"\n                            ><\/i>\n                        <\/span>\n                    <\/button>\n                <\/h2>\n                <div\n                    class=\"fl-accordion-content\"\n                    data-testid=\"fl-accordion-content\"\n                    id=\"content-1-category-overview\"\n                >\n                    <ul class=\"fl-no-margin fl-list\">\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/10-ways-to-reduce-estate-taxes.html\" class=\"fl-list-item-link\">\n                                    <span>10 Ways To Reduce Estate Taxes<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/are-estate-planning-fees-really-tax-deductible-.html\" class=\"fl-list-item-link\">\n                                    <span>Are Estate Planning Fees Tax Deductible?<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/can-you-use-an-llc-for-estate-planning-advantages-.html\" class=\"fl-list-item-link\">\n                                    <span>Can You Use an LLC for Estate Planning Advantages?<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/transfer-your-life-insurance-policy-to-lower-your-estate-tax.html\" class=\"fl-list-item-link\">\n                                    <span>Transfer Your Life Insurance Policy to Lower Your Estate Tax<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                            <\/ul>\n                <\/div>\n            <\/div>\n                    <div\n               class=\"fl-accordion-item fl-category-overview-item\"\n               id=\"section-2-category-overview\"\n               aria-labelledby=\"button-2-category-overview\"\n               data-testid=\"fl-accordion-item\"\n            >\n                <h2\n                    class=\"fl-accordion-header fl-flex fl-items-center fl-justify-between fl-no-margin\"\n                    data-testid=\"fl-accordion-header\"\n                >\n                    <button\n                        id=\"button-2-category-overview\"\n                        aria-label=\"Category 1 content\"\n                        aria-expanded=\"false\"\n                        aria-controls=\"section-2-category-overview\"\n                        class=\"fl-accordion-button fl-flex fl-flex-auto fl-justify-between\"\n                        type=\"button\"\n                    >\n                        Estate Tax Law Basics\n                        <span aria-hidden=\"true\">\n                            <i\n                                class=\"fa fa-angle-down small\"\n                                aria-hidden=\"true\"\n                            ><\/i>\n                        <\/span>\n                    <\/button>\n                <\/h2>\n                <div\n                    class=\"fl-accordion-content\"\n                    data-testid=\"fl-accordion-content\"\n                    id=\"content-2-category-overview\"\n                >\n                    <ul class=\"fl-no-margin fl-list\">\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/estate-and-gift-tax-an-overview.html\" class=\"fl-list-item-link\">\n                                    <span>Gift Tax and Estate Tax: An Overview<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/state-laws-estate-taxes.html\" class=\"fl-list-item-link\">\n                                    <span>State Death Taxes: Estate, Inheritance, and Gift Taxes<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/how-us-tax-rules-apply-to-inheritances-and-gifts-from-abroad-.html\" class=\"fl-list-item-link\">\n                                    <span>How U.S. Tax Rules Apply to Inheritances and Gifts from Abroad<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                                <li class=\"fl-list-control-list-item fl-flex\">\n                            <div class=\"fl-list-control-container\">\n                                <i\n                                    class=\"fa fa-angle-right small\"\n                                    aria-hidden=\"true\"\n                                ><\/i>\n                            <\/div>\n                            <div class=\"fl-list-control-text\">\n                                <a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/federal-estate-and-gift-tax-laws.html\" class=\"fl-list-item-link\">\n                                    <span>Federal &#039;Death Taxes&#039; FAQ<\/span>\n                                <\/a>\n                            <\/div>\n                        <\/li>\n                                            <\/ul>\n                <\/div>\n            <\/div>\n            <\/div>\n<\/div>\n\n\n\n<p>A person&#8217;s gross estate is everything they own. As a measurement of the individual&#8217;s wealth, an &#8220;estate&#8221; is analogous to their net worth (i.e., the total value of their property minus debt). Their property may include:<\/p>\n<ol>\n<li><a href=\"https:\/\/corporate.findlaw.com\/business-operations\/property\/personal-property.html\" target=\"_blank\" rel=\"noopener\">Personal property<\/a>\u00a0(such as vehicles or jewelry)<\/li>\n<li><a href=\"https:\/\/corporate.findlaw.com\/business-operations\/property\/real-property.html\" target=\"_blank\" rel=\"noopener\">Real property<\/a>\u00a0(including buildings and land)<\/li>\n<li><a href=\"https:\/\/dictionary.findlaw.com\/definition\/intangible-property.html\" target=\"_blank\" rel=\"noopener\">Intangible property<\/a>\u00a0(for example, bank accounts, retirement plan accounts, annuity accounts, stocks, and patents)<\/li>\n<\/ol>\n<h3>Large Estates<\/h3>\n<p>A small minority of large estates owe estate taxes when the owner dies because the estates exceed the lifetime exclusion limit. Thus, people with large estates should engage in estate tax planning. Tax planning allows them to explore estate planning tools that will help reduce tax liability.<\/p>\n<p>High-net-worth individuals may also\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/reducing-estate-tax-gifts.html\">consider lifetime gifts up to the gift tax exclusion<\/a>\u00a0to minimize any tax liability on a gift tax return. Gifting to family members or other loved ones may also reduce tax liabilities on your income tax returns.<\/p>\n<p>This article explores the basic features and background of estate taxes in the United States. It concludes with a list of fast facts that illustrate the complexity of\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/estate-tax-laws.html\">estate tax law<\/a>.<\/p>\n<h2>Basic Concept and Law<\/h2>\n<p>There is no federal inheritance tax. The Internal Revenue Code provides for an\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/estate-tax\" target=\"_blank\" rel=\"noopener\">estate tax<\/a>. The Internal Revenue Service (IRS) describes the estate tax as &#8220;<a href=\"https:\/\/www.irs.gov\/statistics\/soi-tax-stats-estate-tax-statistics\" target=\"_blank\" rel=\"noopener\">a tax on the right to transfer property at death<\/a>.&#8221; There is also a federal\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/gift-tax\" target=\"_blank\" rel=\"noopener\">gift tax<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.irs.gov\/instructions\/i706gst\" target=\"_blank\" rel=\"noopener\">generation-skipping transfer tax<\/a>. For more, see FindLaw&#8217;s\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/federal-estate-and-gift-tax-laws.html\">Federal &#8216;Death Taxes&#8217; FAQ<\/a>.<\/p>\n<p>Large estates may face a\u00a0federal estate tax rate up to 40% (as of 2025) when the owner dies. However, very few estates actually need to file an estate tax return with the IRS. The <a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/frequently-asked-questions-on-estate-taxes\" target=\"_blank\" rel=\"noopener\">federal estate tax exemption<\/a> is $13.99 million in 2025. An estate is not taxable if its total value is less than this amount.<\/p>\n<p>That said, estates below this value may still be required to pay\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/state-laws-estate-taxes.html\">state-level estate taxes<\/a>. Exemptions vary according to state law. Twelve states (plus the District of Columbia) collect an estate tax as of 2023:<\/p>\n<ul>\n<li>Connecticut<\/li>\n<li>Hawaii<\/li>\n<li>Illinois<\/li>\n<li>Maine<\/li>\n<li>Maryland<\/li>\n<li>Massachusetts<\/li>\n<li>Minnesota<\/li>\n<li>New York<\/li>\n<li>Oregon<\/li>\n<li>Rhode Island<\/li>\n<li>Vermont<\/li>\n<li>Washington<\/li>\n<\/ul>\n<p>Additionally, the following states collect an inheritance tax:<\/p>\n<ul>\n<li>Kentucky<\/li>\n<li>Maryland<\/li>\n<li>Nebraska<\/li>\n<li>New Jersey<\/li>\n<li>Pennsylvania<\/li>\n<\/ul>\n<p>Iowa repealed its inheritance tax in 2025. Connecticut is the only state that imposes a state gift tax as of 2025.<\/p>\n<h2>Estate Taxes: A Brief History Lesson<\/h2>\n<p>In one form or another, estate and inheritance taxes have existed for a long time.\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-soi\/inhwlttr.pdf\" target=\"_blank\" rel=\"noopener\">According to the IRS:<\/a><\/p>\n<p><i>&#8220;Taxation of property transfers at death can be traced back to ancient Egypt as early as 700 B.C. Nearly 2,000 years ago, Roman Emperor Caesar Augustus imposed the Vicesina Hereditatium, a tax on successions and legacies to all but close relatives.&#8221;<\/i><\/p>\n<p>Taxation of a deceased person&#8217;s property is nothing new.<\/p>\n<p>In the early days of the United States, the federal government typically imposed this tax during wartime. The U.S. imposed federal death taxes four times:<\/p>\n<ul>\n<li><b>The Stamp Tax of 1797:<\/b><i>\u00a0<\/i>The federal government needed to build up the Navy because of an undeclared war with France. Thus, the U.S. government sought to increase revenue by taxing federal stamps. These revenue stamps were necessary for various aspects of\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/estate-administration.html\">estate distribution<\/a>\u00a0(e.g., probating wills and issuing letters of administration). Once the crisis ended in 1802, the tax ended through repeal.<\/li>\n<\/ul>\n<ul>\n<li><b>The Tax Act of 1862:\u00a0<\/b>The Civil War&#8217;s enormous price tag led to a reinstatement of federal death taxes. In addition to taxing administrative paperwork, the federal government also taxed inherited personal property. As the war raged on, the U.S. began taxing inherited real estate. Once the war ended, the taxes were phased out, ending by 1872.<\/li>\n<\/ul>\n<ul>\n<li><b>Estate Tax of 1898:<\/b>\u00a0The breakout of the Spanish-American War prompted Congress to revive the federal death tax. The government imposed the 1898 tax directly on estates. It was repealed in 1902.<\/li>\n<\/ul>\n<ul>\n<li><b>The Revenue Act of 1916:<i>\u00a0<\/i><\/b>In need of revenue after the U.S. entered World War I, cash-strapped Congress again began taxing decedents&#8217; estates. This tax still exists today, making it the longest-lived federal death tax.<\/li>\n<\/ul>\n<p>For more history, see &#8220;<a href=\"https:\/\/www.irs.gov\/pub\/irs-soi\/ninetyestate.pdf\" target=\"_blank\" rel=\"noopener\"><i>The Estate Tax: Ninety Years and Counting<\/i><\/a>&#8220;<i>\u00a0<\/i>(IRS, 2007) and &#8220;<a href=\"https:\/\/www.irs.gov\/pub\/irs-soi\/inhwlttr.pdf\" target=\"_blank\" rel=\"noopener\"><i>Federal Taxation of Inheritance and Wealth Transfers<\/i><\/a>&#8220;<i>\u00a0<\/i>(IRS, 1998).<\/p>\n<h2>The Estate Tax Debate<\/h2>\n<p>Taxing a deceased person&#8217;s property has long been controversial. Through the end of the Civil War, the federal government imposed these taxes in times of national crisis. As the crisis subsided, so did death taxes.<\/p>\n<p>This changed with the estate taxes introduced in 1898 and 1916. Estate taxes were largely driven by a desire to reduce wealth inequality as famous tycoons like John D. Rockefeller and Andrew Carnegie accumulated vast fortunes. But their workers often languished in poverty. Therefore, the modern estate tax sought to even out the field, in addition to funding wars.<\/p>\n<p>Whether ideological, moral, or practical, many of the old arguments in this polarized debate still resonate today. One side&#8217;s argument often feels like a tit-for-tat inverse of the other&#8217;s. The following table explores corresponding arguments from each side.<\/p>\n<table>\n<tbody>\n<tr>\n<td>\n<p><b>Topic<\/b><\/p>\n<\/td>\n<td>\n<p><b>Arguments Against Estate Taxes<\/b><\/p>\n<\/td>\n<td>\n<p><b>Arguments in Favor of Estate Taxes<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>1. Double Taxation<\/p>\n<\/td>\n<td>\n<p><i>Acquired assets are already taxed when acquired. They should not be taxed twice.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Acquired assets that are never resold but appreciate in value (i.e., unrealized assets) should be taxed when the owner dies.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>2. Meritocracy &amp;<\/p>\n<p>Individualism<\/p>\n<\/td>\n<td>\n<p><i>People should not be taxed for accumulating wealth through their individual efforts.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Wealth should be accumulated through individual effort, not inherited fortunes.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>3. Wealth Inequality<\/p>\n<\/td>\n<td>\n<p><i>Families should not be penalized for passing on their legally acquired wealth.<\/i><\/p>\n<\/td>\n<td>\n<p><i>When uncontrolled, multigenerational wealth accumulation entrenches unfair economic, social, and political advantages.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>4. Discrimination, No. 1<\/p>\n<\/td>\n<td>\n<p><i>It is not fair to single out the wealthy simply for being wealthy.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Wealth-building relies on collective economic activity. Therefore, wealth-builders should pay back proportionately to the collective.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>5. Discrimination, No. 2<\/p>\n<\/td>\n<td>\n<p><i>It&#8217;s not fair to single out the wealthy simply for being in the minority.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Tax exemptions ensure that very few people pay estate taxes.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>6. Work Ethic<\/p>\n<\/td>\n<td>\n<p><i>The government should not police individual work ethics. Further, accumulated fortunes allow heirs to engage in other beneficial activities (e.g., creative arts and politics).<\/i><\/p>\n<\/td>\n<td>\n<p><i>Accumulated fortunes disincentivize heirs to be economically productive individuals.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>7. Charity<\/p>\n<\/td>\n<td>\n<p><i>Multigenerational fortunes encourage charitable giving.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Charitable giving is often used as a mechanism to avoid estate taxes.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>8. Foreign Wealth Transfer<\/p>\n<\/td>\n<td>\n<p><i>Estate taxes encourage wealth transfer to other nations.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Many other nations also impose an estate tax.<\/i><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>9. Farms and Small Businesses<\/p>\n<\/td>\n<td>\n<p><i>Estate taxes disproportionately impact farms and small businesses.<\/i><\/p>\n<\/td>\n<td>\n<p><i>Tax exemptions ensure that very few farms and small businesses are disproportionately impacted.<\/i><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Fast Facts: 10 Things To Know About Estate Taxes<\/h2>\n<p>Governing\u00a0<a href=\"https:\/\/www.findlaw.com\/hirealawyer\/choosing-the-right-lawyer\/taxation-law.html\">tax rules<\/a>\u00a0are quite complex. The following list illustrates some of the many nuances of estate tax law in the United States.<\/p>\n<ol>\n<li>Very few people pay estate taxes:<i>\u00a0<\/i>According to the IRS, the estates of\u00a0<a href=\"https:\/\/www.irs.gov\/statistics\/soi-tax-stats-historical-table-17\" target=\"_blank\" rel=\"noopener\">less than 0.2% of adults who died<\/a>\u00a0had to pay the federal estate tax in recent years.<\/li>\n<li>Percentage of federal revenue:\u00a0According to the Congressional Budget Office, the federal estate, gift, and generation-skipping transfer taxes generally account for\u00a0<a href=\"https:\/\/www.cbo.gov\/publication\/41851\" target=\"_blank\" rel=\"noopener\">1-2% of federal tax revenue<\/a>\u00a0annually.<\/li>\n<li>&#8220;Pick-up taxes&#8221;:\u00a0These taxes are also known as &#8220;sponge taxes.&#8221; These state-level taxes once allowed states to skim federal estate tax revenue. This occurs without raising individual taxpayer bills. As a result of the\u00a0<a href=\"https:\/\/www.congress.gov\/bill\/107th-congress\/house-bill\/1836\/text\" target=\"_blank\" rel=\"noopener\">Economic Growth and Tax Relief Reconciliation Act<\/a>\u00a0(2001), these taxes were phased out entirely by 2005. This phase-out prompted a handful of states to begin taxing estates directly.<\/li>\n<li>No estate tax in 2010:\u00a0Starting in 2001,\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-soi\/ninetyestate.pdf\" target=\"_blank\" rel=\"noopener\">Congress began gradually phasing out the federal estate tax<\/a>. By 2010, there was no estate tax at all. However, Congress reinstated the estate tax the next year. It continues today.<\/li>\n<li>Basic Exclusion Amount (BEA): An essential component of the federal estate and gift tax exemption is the BEA. It applies first to any taxable gifts. The remainder of the BEA applies to the taxable estate. In 2025, the exemption amount is $13.99 million.<\/li>\n<li>Deduction for married couples:\u00a0The unlimited marital deduction allows a person to leave their entire estate to their surviving spouse tax-free,\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/how-us-tax-rules-apply-to-inheritances-and-gifts-from-abroad-.html\">as long as the survivor is a U.S. citizen<\/a>. The property must pass &#8220;outright&#8221; (i.e., completely) to the survivor. The survivor&#8217;s estate will then be subject to federal estate tax upon their own death. For more, see FindLaw&#8217;s article on\u00a0<a href=\"https:\/\/corporate.findlaw.com\/law-library\/the-marital-deduction-trap-and-how-to-avoid-it.html\" target=\"_blank\" rel=\"noopener\">The Marital Deduction Trap and How to Avoid It<\/a>.<\/li>\n<li>&#8220;Fair market value&#8221;:\u00a0For tax purposes, an estate&#8217;s valuation is based on the &#8220;<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/frequently-asked-questions-on-estate-taxes\" target=\"_blank\" rel=\"noopener\">fair market value<\/a>&#8221; of everything in it. The IRS provides the following open-ended definition: &#8220;The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.&#8221;<\/li>\n<li>Taxable estate vs. probate estate: A <a href=\"https:\/\/www.findlaw.com\/estate\/probate\/the-probate-basics.html\">probate<\/a>\u00a0estate includes all assets titled under the decedent&#8217;s name on their date of death. A taxable estate includes everything owned or controlled by the decedent on their date of death, even if they do not hold the title itself (e.g., assets in a revocable trust). The IRS\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/frequently-asked-questions-on-estate-taxes\" target=\"_blank\" rel=\"noopener\">makes clear<\/a>\u00a0that a taxable estate &#8220;will likely include non-probate as well as probate property.&#8221;<\/li>\n<li>Revocable vs. irrevocable trusts:\u00a0Individuals commonly use\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/trusts.html\">trusts<\/a>\u00a0for estate and tax planning. Trusts may be\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/trusts\/revocable-living-trust.html\">revocable<\/a>\u00a0(changeable by the creator) or\u00a0<a href=\"https:\/\/www.findlaw.com\/estate\/trusts\/irrevocable-living-trust.html\">irrevocable<\/a>\u00a0(unchangeable by the creator). Again, because the creator retains some control over a revocable living trust, the trust assets are still part of their taxable estate.<\/li>\n<li>Charitable Remainder Trust (CRT):<i>\u00a0<\/i>One way to reduce estate taxes is to leave assets to a charity through a CRT, a type of irrevocable trust. The trust creator can receive income from the trust fund while they are alive by naming themselves as a beneficiary. Once they die, the trust assets avoid the estate tax. Further, if the charity sells the assets, the assets avoid the\u00a0<a href=\"https:\/\/www.findlaw.com\/tax\/federal-taxes\/what-are-capital-gains-.html\">capital gains tax<\/a>.<\/li>\n<\/ol>\n<h2>Have Legal Questions? An Attorney Can Help<\/h2>\n<p>So-called death taxes are as persistent as they are controversial. This area of\u00a0<a href=\"https:\/\/www.findlaw.com\/tax.html\">tax law<\/a>\u00a0can be complex. You may be exploring tax planning strategies. Or you may be uncertain whether a deceased loved one&#8217;s estate should file a federal estate tax return. A local tax or\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/estate-planning\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">estate planning attorney<\/a>\u00a0can help with these issues or related estate planning matters.<\/p>\n\n\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        >\n            <span class=\"was-this-helpful__button-text fl-text-bold\">Yes<\/span>\n            <i class=\"was-this-helpful__button-icon\">\n                <svg width=\"22\" height=\"22\" viewBox=\"0 0 22 22\" fill=\"none\" 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Many attorneys offer free consultations.<\/p>\n\n            <\/div>\n                            <div class=\"fl-editors-summary-content-link fl-flex\" data-testid=\"fl-editors-summary-content-link\">\n                <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                <p class=\"find-attorney\"><a href=\"https:\/\/lawyers.findlaw.com\/estate-planning\/#USER_GEO\/?fli=esum\" title=\"Estate Planning Directory\" target=\"_blank\" rel=\"noopener\">If you need an attorney, browse our directory now.<\/a><\/p>\n\n            <\/div>\n            <\/div>\n<\/div>\n\n\n\n\n    <div class=\"popularDirectory\">\n        <div class=\"general-popular-directory \">\n            <div class=\"general-popular-directory-title\">\n                <h3>Popular Directory Searches<\/h3>\n            <\/div>\n            <ul>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/estate-planning\/\" target=\"_blank\" rel=\"noopener\">Estate Planning Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/trusts\/\" target=\"_blank\" rel=\"noopener\">Trusts Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/wills\/\" target=\"_blank\" rel=\"noopener\">Wills Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/divorce\/\" target=\"_blank\" rel=\"noopener\">Divorce Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/taxation-law\/\" target=\"_blank\" rel=\"noopener\">Tax Law Attorneys<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/elder-law\/\" target=\"_blank\" rel=\"noopener\">Elder Law Attorneys<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/probate-estate-administration\/\" target=\"_blank\" rel=\"noopener\">Probate and Estate Administration Lawyers<\/a><\/li>\n                            <\/ul>\n        <\/div>\n    <\/div>\n<\/div>\n<\/div>\n\n\n<div class=\"popularRecent\">\n    <div class=\"row popular-recent\">\n        <h2 class=\"popular-recent-title\">Looking for More Information?<\/h2>\n        <div class=\"popular-recent-item\">\n            <div class=\"popular-recent-item-image\">\n                <img decoding=\"async\" src=\"https://www.findlaw.com/static/c/images\/images\/w_1200,c_limit,dpr_auto\/f_auto,q_auto:eco\/v1745849290\/ability-law\/wp-prod\/general-components-popular-recent-popular\/general-components-popular-recent-popular.svg?_i=AA\"\n                    alt=\"\">\n            <\/div>\n            <div class=\"popular-recent-item-content\">\n                <h3>Popular Law Articles<\/h3>\n                <ul class=\"fl-list\">\n                                            <li class=\"fl-list-item fl-flex\">\n                            <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                            <a class=\"fl-list-item-link\" href=\"https:\/\/www.findlaw.com\/forms\/resources\/estate-planning\/estate-planning-checklist.html\">Estate Planning Questionnaire<\/a>\n                        <\/li>\n                                            <li class=\"fl-list-item fl-flex\">\n                            <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                            <a class=\"fl-list-item-link\" href=\"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/state-laws-estates-probate.html\">State Laws: Estates &#038; 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Some property and assets are taxed.<\/p>\n","protected":false},"author":41135,"featured_media":0,"parent":287010,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"app\/Http\/Controllers\/Templates\/OverviewPageController.php","meta":{"_acf_changed":false,"_stopmodifiedupdate":false,"_modified_date":"","_autodraft_ids":[],"_cloudinary_featured_overwrite":false,"_sb_is_suggestion_mode":false,"_sb_show_suggestion_boards":false,"_sb_show_comment_boards":false,"_sb_suggestion_history":"","_sb_update_block_changes":"","_is_real_time_mode":false,"_realtime_collaborators":"","footnotes":"","cf_checklist_status":[]},"categories":[2728],"tags":[],"state_laws_tags":[],"flmsa":[],"class_list":["post-287022","page","type-page","status-publish","hentry","category-estate"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/287022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/users\/41135"}],"replies":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/comments?post=287022"}],"version-history":[{"count":0,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/287022\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/287010"}],"wp:attachment":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/media?parent=287022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/categories?post=287022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/tags?post=287022"},{"taxonomy":"state_laws_tags","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/state_laws_tags?post=287022"},{"taxonomy":"flmsa","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/flmsa?post=287022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}