Depending on the value of your estate, you may not have to deal with at least some of the federal taxes, but you or your surviving beneficiaries may have a substantial amount of tax-related paperwork to file. When estate planning, use these tips to understand what you're dealing with from a tax standpoint:

  • Most people don't have to pay the federal estate tax — the so-called "death tax" —because their estates fall below the federal threshold. But your estate may still be subject to state inheritance or estate taxes.

  • The federal gift tax and the federal estate tax are part of a unified tax system, so you need to pay attention to both of these taxes as you plan your overall estate tax strategy.

  • The little-known Estate Recovery Act can devastate your estate if you need to tap into certain types of government-paid health care. But you can protect your estate if you understand the rules.