What is Estate Tax?

Estate tax is a tax a beneficiary receives on assets they inherit. Luckily, most people don’t need to worry about paying estate taxes. In 2023, the federal estate tax exemption was over $12 million. As long as the amount inherited is below that number, it is not subject to federal estate taxes.

However, it’s important to know that state taxes may apply. For example, the Minnesota exemption amount is $3 million. Wisconsin and Iowa do not levy an estate tax.