There are 3 different types of taxes that can affect a person's will: inheritance taxes, estate taxes and gift taxes. These taxes can be assessed by the state government, the federal government, or both.

Inheritance Taxes

Inheritance Taxes are paid by the person referred to as the beneficiary or heir who:

• Receives something of value from the deceased person; or
  
• Receives a gift from a person in anticipation of their death.

Estate Taxes

Estate taxes are paid by the estate of the deceased person based upon the size of the estate. This is a tax paid for the right to transfer property at the time of death or in anticipation of a person's death.

Gift Taxes

Gift taxes are paid by the gift-giver for transfers of money or certain types of property made during the giftor's lifetime.

• There is no gift tax on gifts of money or property with a value of less than $10,000 per year, per recipient. For example, a person could give $10,000 to a friend and $10,000 to a sibling without paying a gift tax.
  
• If a person's spouse wants to participate in the gift, the couple can give up to $20,000 tax-free to another individual, provided a gift tax return is filed.