What are Estate Taxes?

Estate taxes are those applied by the federal government in the case that a person dies and transfers his/her estate and valuable assets to those included in a will. However, typically speaking, when the transfer of the estate is between a married couple, estate taxes will not apply. Estate taxes are determined by the federal government through use of certain factors, often similar to those imposed for income tax.

The main factor is the overall value of the estate and assets, which can include real estate property, funds, and investments. In certain instances, possessions such as life insurance and annuities may also be included in the the determination of estate taxes. Overall, if the total summation of the estate is less than 2 million dollars, estate taxes are not applied. However, some states will impose their estate taxes in addition to all applicable federal estate taxes, so it is important to be aware of existing state laws as well.

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