death tax

estate tax   n.  A tax imposed on the right to transfer property by inheritance and assessed on the net value of a decedent's estate before distribution to the heirs. Also called death tax.

inheritance tax   n.  A tax imposed on the privilege of receiving property by inheritance or legal succession and assessed on the value of the property received. Also called death tax.

estate tax

A tax on the estate of the deceased before any distribution is made to the heirs. A federal unified gift and estate tax provides an exemption before any tax is paid. Although some states also levy an estate tax, it is generally at a much lower rate than the federal tax. Compare inheritance tax. Also called death tax.

inheritance tax

A state tax levied on the recipient of an estate rather than on the estate itself. The tax varies by state and its severity in a given state usually depends on the kinship between the deceased and the heir. Some states levy a tax on the estate instead of a tax on the amount inherited. Compare estate tax. Also called death tax.

How can I minimize inheritance tax? Estate and gift tax law is in a state of flux. An estate planning attorney will have the most up-to-date information available to assist you in minimizing your tax liability. Avoiding probate should also be a goal. Joint ownership, revocable living trust, irrevocable trusts, and life insurance may be useful tools to avoid or eliminate the estate tax and costs of probate, but only an experienced estate planning attorney can help you decide which of these tools will suit your needs best. Gloria Cole, Attorney, private practice, Weston, MA

Main Entry: estate tax
Function: noun
: an excise in the form of a percentage of the taxable estate that is imposed on a property owner's right to transfer the property to others after his or her death called also succession tax —see also UNIFIED TRANSFER TAX —compare GIFT TAX, INHERITANCE TAX

Main Entry: inheritance tax
Function: noun
: an excise tax that is levied upon the privilege of receiving property as heir or next of kin under the law of intestacy and that is measured by the value of the property received —compare ESTATE TAX