My dad recently died and left an estate worth $5 million. Most of this he left to his wife, and some to his 3 daughters. Does the wife's share apply first to the $3.5 million estate tax exclusion, leaving the daughters to pay the inheritance tax?

Everything inherited by your dad's widow (if she is a U.S. citizen) is exempt from federal estate tax. If the daughters didn't inherit more than the estate tax exclusion ($3.5 million for deaths in 2009), the estate won't owe any estate tax. If tax is owed, check your dad's will to see whether he specified what property should be used to pay it.

No matter what, however, your dad's executor must file an estate tax return within nine months of death because the total value of the estate exceeds $3.5 million. These returns are tricky, to say the least, so the executor of your dad's estate will probably want to hire an experienced lawyer to handle it.