What is the U.S. Federal Estate Tax, and how does it apply to inherited assets?

The U.S. Federal Estate Tax is a tax on the right to transfer property at death. It applies only to estates exceeding a specific exemption threshold, currently $13.61 million per individual for 2024. Beneficiaries generally receive inherited assets income tax-free, but the estate itself may owe the federal government tax if its value exceeds the exemption.