In general, what are Estate Taxes and how do they work?

• On June 7, 2001, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001, which made significant changes to Federal estate, gift and generation-skipping transfer taxes.
• Generally, the government assesses estate taxes when the gross value of your estate exceeds the applicable federal exclusion during the year of your death. Currently, the following exclusion amounts apply:

This means that if your gross estate is less than the applicable exclusion amount during the year of your death, your estate will pass to your heirs estate tax-free. If your estate exceeds this amount, your estate will pay significant estate taxes prior to distribution to your heirs.

• Click here for more information about estate and gift taxes from the Internal Revenue Service (IRS). Click here for the Internal Revenue Code.