What is Estate Tax?
Estate tax is a federal tax on the transfer of wealth after a person passes away. It’s often called the “Death Tax.”
But here’s the key:
Only large estates pay it. Most Americans are exempt.
Who pays Estate Tax?
- In 2025, only estates valued over $13.61 million per person are subject to the federal estate tax
- Married couples can combine exemptions to shield up to $27.22 million
- The estate tax rate can go up to 40% on the value above the exemption
Who files & pays Estate Tax?
The executor of the estate (as named in the will or appointed by a court) is responsible for:
- Calculating total estate value
- Filing IRS Form 706 (United States Estate Tax Return)
- Paying the tax owed to the IRS
Deadline: File within 9 months after the date of death
Need more time? Request a 6-month extension using IRS Form 4768
What’s included in a taxable estate?
The gross estate includes all assets owned at the time of death, including:
- Real estate
- Bank accounts, stocks, bonds
- Retirement accounts (IRA, 401(k))
- Life insurance proceeds
- Business interests and startup equity
- Valuable personal items: jewellery, cars, collectibles, and art
Why estate planning matters (Especially now)
Even if your estate is below the current threshold, exemption amounts may decrease after 2025.
Smart estate tax planning can help minimize tax liability and ensure smooth wealth transfer.
Here’s how to plan effectively:
- Use irrevocable trusts to reduce your taxable estate
- Give $18,000 per person per year in gift tax-free transfers (2025 limit)
- Fund a life insurance policy to cover potential estate tax bills
- Create a business succession plan to protect your company and heirs
Protect your legacy!
- Minimize federal estate tax through early planning
- Simplify the financial process for your family
- Ensure your wealth is transferred according to your wishes
Let FinStackk help you with personalized estate tax strategies, IRS compliance (Form 706), trust planning, and succession guidance.