Navigating Inheritance and Estate Taxes: A Comprehensive Guide

Death can trigger estate and inheritance taxes, which are not the same. The federal government has an estate tax, while some states have both estate and inheritance taxes. Thresholds for these taxes are high, but they may change in the future. Inheritance tax rates vary by state and depend on the relationship with the deceased. Ways to avoid these taxes include gifting assets before death, moving to a state without these taxes, and setting up an irrevocable trust. If unable to avoid the inheritance tax, consider buying life insurance to cover the tax bill.