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:

Will my estate have to pay federal estate tax after I die?

Most estates -- more than 99% -- don't. The federal government imposes estate tax at your death only if your taxable estate is worth more than $5 million for deaths in 2011, $5.12 million for deaths in 2012 and $5.25 million for 2013 deaths. Property left to a spouse (as long as the spouse is a U.S. citizen) or tax-exempt charity is exempt from the tax.