When a family member passes away, at what amount does estate taxes kick in? Is there a threshold?

A friend told me it is $600,000.00, of estate value.

Public Comments

1. Currently $2 million if they haven't used up any part of their "unified credit" giving large gifts while they were alive.
2. That threshold is old. It has been going up steadily so it depends on what year the death happened or happens. The threshold is currently $2 million (2006-2008), $3.5 million (2009) and estate tax is set to be repealed in 2010 and beyond (unless congress messes with it). If that isn't high enough, the family member can give away $12K per year to anybody, as well as paying medical and education expenses for anybody in any amount. Beyond that, they can give away $1 million total in their lifetime without incurring gift tax or having any other inheritance implications. That member's executor may want or need to form an estate (a legal entity with a tax id number, etc.) even if the threshold isn't met. If the assets aren't going to be distributed quickly, an estate may need to be created to manage the assets and collect any of the income those assets compile. But if they don't reach the threshold and the assets are going to be distributed quickly and easily, there shouldn't be any need to complicate things with an estate at all.
3. While the Federal threshold is currently $2 million, there are also state estate and/or inheritance taxes in most states which may kick in at lower amounts.