An estate tax is a levy imposed on the transfer of a deceased person’s estate to their beneficiaries. It is assessed based on the total value of the estate, which includes assets such as real estate, cash, investments, and personal property, after debts and allowable deductions are subtracted. The tax is typically paid before the remaining assets are distributed to heirs. Estate tax laws vary by country and, in the United States, by state—some jurisdictions impose their own estate or inheritance taxes. This tax is sometimes referred to as the “death tax,” and is a key consideration in estate planning.
For more information on estate tax and thresholds visit the IRS website.