Death Taxes Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Death Taxes, written in plain English, along with examples of how it is used.

What is Death Taxes?

Taxes that are transferred upon the death of its owner. Estate taxes are federal death taxes and some states impose additional taxes on property heirs.

History and Meaning of Death Taxes

Death taxes, also known as estate taxes, refer to taxes imposed on the transfer of property upon the death of its owner. The concept of estate tax is not a new one, historians have found evidence of estate taxes as far back as ancient Rome. In the United States, federal estate taxes were first introduced in 1916 as a way to finance World War I. Since then, they have gone through various changes in rates and thresholds.

Today, the federal estate tax applies to estates worth more than $11.7 million for an individual or $23.4 million for a married couple. Some states also impose their own estate taxes on top of the federal tax. Opponents of the estate tax argue that it discourages saving, investment and job creation, while proponents argue that it promotes equality and fairness in society.

Examples of Death Taxes

  1. John inherited his mother's estate after she passed away. He had to pay estate taxes on the value of the estate before he could take ownership of it.
  2. Jane is planning her estate and is concerned about the impact of estate taxes on her heirs. She is working with an estate planning attorney to minimize the tax burden.
  3. The Smith family has a large estate that is subject to both federal and state estate taxes. They are exploring strategies to reduce their tax liability, such as making charitable donations or gifting assets to heirs before they die.

Legal Terms Similar to Death Taxes

  • Inheritance tax: Taxes imposed on the transfer of property to heirs, based on the value of the inheritance.
  • Gift tax: Taxes imposed on the transfer of property during one's lifetime, based on the value of the gift.
  • Generation-skipping transfer tax: A tax on gifts or bequests made to someone who is more than one generation younger than the donor, often used to avoid estate taxes.