Inheritance tax is a tax that is imposed on the beneficiaries who receive property from the deceased. Each beneficiary will be accountable for any tax owed, and tax is calculated in different ways, depending upon the state you live in, the relationship you have with the deceased and other factors. Inheritance tax is separate to the estate tax, in that it is not imposed by the federal government, but instead belongs to the state.
The tax was originally created by the state to prevent extremely wealthy families passing on giant estates to the next generation.
The calculation is based on the value of the estate, and the relationship of the beneficiary to the deceased is used to apply a different rate. Immediate family, such as children or marital partner to the deceased will receive lower inheritance tax rates than other inheritors of the estate.
Because different states impose different rates of inheritance tax, it is well worth consulting a legal advisor on this matter, to find out exactly all the fees and taxes involved with the transfer of the estate. This particular area of estate law is extremely murky, and not an easy subject to research and handle alone. On the whole, you should not be eligible for inheritance tax if the value of the estate is less than $1.5 million. Other exemptions include reduced rates, or no payment whatsoever in some states, for immediate family members of the deceased.
The worse case scenario, where inheritance tax causes real jeopardy, is in the event of an uncle or aunt leaving a vast estate to a cousin. In this scenario, the cousin could be held accountable in tax for up to 50% of the worth of the estate.
Unfortunately, there is no quick fix to this scenario, nor are there any resources online that provide an online inheritance tax calculator, probably because each state varies so much on the percentages; so be sure to get legal advice when handling this matter.
The worse thing to do is to ignore any potential tax that you may be liable for. It is far better to handle these matters while the estate is being transferred. You should be receiving legal assistance with the estate as it transferred, so make the most of the abundant information around you. It could be far costlier in the long term if tax is overlooked.