Don’t forget about your own state’s inheritance or estate tax.  As we’ve seen with the federal estate tax, an estate tax is a tax based on the value of the estate regardless of who receives it.  An inheritance tax is a tax owed at death that varies based on the amount being transferred and the relationship between the deceased and the beneficiary.  In most states, this translates to the lowest inheritance tax rate for a spouse that increases for a minor child, adult child or parent, and finally a sibling.