Estate and Gift Tax FAQ

Questions:

• Will my estate have to pay federal estate tax after I die?
• What is the tax rate for taxable estates?
• Are there ways to avoid federal estate taxes?
• Can't I just give all my property away before I die and avoid estate taxes?
• Do some states impose estate tax?
• Can I avoid paying state estate or inheritance taxes?

Answer:

Can I avoid paying state estate or inheritance taxes?

If your state imposes estate or inheritance taxes, there probably isn't much you can do. However, if you live in two states -- winter here, summer there -- your inheritors may save money if you can make your legal residence in a state that doesn't impose these taxes.

For a comprehensive guide to estate planning, get Plan Your Estate, by Denis Clifford (Nolo).