In the United States, upon your death the federal government assesses a tax on the sum of your estate when you pass away. When your intended beneficiaries or executor/trustee take possession of your assets, they must pay a tax from the balance of the estate. This tax, with a rate up to 40%, primarily exists to encourage individuals to transfer their assets before they pass away. Understanding how to calculate your federal estate tax can be tricky. Here is a breakdown of how to understand it, and what you need to know.

The first step to finding your federal estate…

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