What Are Estate Taxes?

Estate taxes are a form of death tax levied against the estate of the decedent by the federal and state governments. The tax is levied on any property in which the decedent has any incident of ownership at the time of death, i.e., life insurance, jointly held property, annuities, etc.

A will can provide for substantial estate tax savings by careful planning and the use of such devices as the marital deduction and trusts. A will can also direct how the estate shall pay the estate taxes. The shares of certain beneficiaries may pass "free" of taxes while others may pay their share or more. If there is no will, or no provision in a will, a statute determined the allocation of taxes among the beneficiaries.