Understanding Estate Taxes
3. Individual estate tax exemption
Your estate will have to pay estate taxes if its net value when you die is more than the "exempt" amount set by Congress at that time. How much of your estate will be exempt depends upon when you die.
For example, in 2009, the federal estate tax "exemption" was $3.5 million. Currently, in 2010 there is no federal estate tax; it has been "repealed," but only for one year. Under the current law, it is scheduled to come back in 2011...with the exemption at $1 million.