The federal estate tax applies to the transfer of property upon death. However, the beneficiaries of the estate are required to pay the tax if the estate does not pay it when due. Each beneficiary's liability is limited to the value of the part of the estate he or she receives.
States impose an inheritance tax, an estate tax, or both.
Unlike an estate tax, an inheritance tax is a tax imposed against a beneficiary inheriting property. The amount of the tax is normally based upon the familial relationship between the decedent and the beneficiary and the value of the inheritance. This rule applies regardless of whether the individual's property is located in the United States or abroad. For estate tax purposes, a resident is someone who was domiciled in the United States at the time of death. A person acquires a domicile in a place by living there, for even a brief period of time, with no present intention of moving from that place.