ABA Family Legal Guide

Estate Planning

Death and Taxes

Ever since Caesar Augustus imposed an estate levy to pay for imperial Roman exploits, death and taxes have walked hand in bony hand. No one really likes paying taxes, but let's not forget that they pay for most of the things we value in modern society: defending the nation; providing health care, jobs, and housing; paving the roads; and so on.

Death taxes also have been a way of redistributing wealth. Franklin Roosevelt used the estate and gift tax system to do so during the Great Depression. It enabled the transfer of money from those with wealth to those who were unfortunate during those hard times. This section explains the basics of federal and state estate taxes.

1. I'm not rich. Do I have to worry about federal estate taxes?
2. The law allows me to leave everything to my spouse tax free, right? How can we use that to our children's maximum advantage?
3. What about state death taxes?
4. I'm the owner of a business, and I understand that my estate would have to pay taxes on the value of the business if I don't do anything—but what can I do to lighten the tax load?
5. What if I receive a bequest and don't want it?