Federal Estate Tax

What Does Federal Estate Tax Mean?

The federal estate tax is a tax applied to a person’s estate after their death. This tax is typically assessed once the person’s outstanding debts have been settled.

Death benefits from life insurance are generally exempt from the federal estate tax.

Insuranceopedia Explains Federal Estate Tax

Beneficiaries of large estates may lose a significant portion to federal estate taxes. To reduce this tax burden, many people engage in estate planning strategies. Life insurance policies exempt from estate taxes are one method used to help minimize federal estate tax obligations.