Who is exempt from Federal estate taxes?

Who is exempt from Federal estate taxes?

The estate of any decedent that does not exceed two million dollars is automatically exempt from estate tax. In addition, if an estate passes to a surviving spouse or to a charity, that estate also is totally exempt from estate tax. As a general matter, estate planners attempt to use both the two million dollar exempt amount, plus the marital deduction when they're planning for a married couple, to minimize the estate tax on the death of the second spouse. This is done by carving out the two million dollar exempt portion, putting it into a separate trust, and then giving the balance of the estate, whatever it is, to the surviving spouse in a manner wherein it qualifies for the marital deduction. What happens then is that there is no tax at the death of the first spouse, and at the death of the second spouse, the two million portion that was carved out is not taxed at the spouse's estate. So, the surviving spouse will only be taxed on his or her share of the estate after the two million dollar exempt amount. Using that approach, you can view the two estates as one, and minimize the amount of the estate tax on both deaths.