Estate planning includes a lot of small details. Whether your spouse is your estate’s executor or not, they’ll have to deal with those details — and taxes could be near the top of the list. Even in death, you may still need to pay federal and state levies, depending on what your estate’s financial picture looks like. But which ones, if any, will apply? Learning about them may help you plan better and make life easier for your spouse after you’re gone.

The 411 on Estate and Inheritance Taxes

You may have heard of estate and inheritance taxes. Investopedia explains that they’re levies placed on an estate’s fair market value instead of what the deceased paid for these assets. This accounts for value gained or lost since their acquisition.

First, there’s an important distinction between the two types of levies. Estate taxes are charged by the state in which a deceased person lived at the time of death. They’re determined by the total value of the estate after its debts have been paid. On the flip side, inheritance taxes are paid to the state in which an heir is living.

Taxes Levied and Estate Values

Do only rich people need to worry about estate and inheritance taxes? These levies are becoming less common, thanks to critics’ opposition to what they call “death taxes.” Also, the federal estate tax doesn’t apply until a deceased person’s assets value at $11.70 million or more. For married couples, that’s a combined total of $23.4 million. Spend Me Not reveals that there are 20.27 million Americans with a net worth of $1 million or more — about 8% of the U.S. adult population. So this levy doesn’t affect many people.

With state levies on inheritances and estates, it gets a little more complicated. AARP mentions that 11 states currently charge an estate tax. Five states have only levies for inheritances: Iowa, Kentucky, Nebraska, New Jersey, and Pennsylvania. Maryland charges both. These 17 states have all different taxing structures and limits.

AARP’s John Waggoner offers additional tax details for each state.  Most don’t start taxing until an estate hits the million-dollar mark. Some tax all inheritances, but only up to a certain percentage. Exemptions can also differ. Kentucky, for instance, doesn’t require tax payments from immediate family such as spouses and children.

Marriage and Estate Taxes

Married couples may have less to worry about with estate and inheritance levies. The unlimited marital deduction applies here. It allows people to transfer a limitless number of assets to their spouses, and it doesn’t matter when such transfers take place. Thanks to this provision, neither the estate nor the recipient spouse pays estate or gift taxes. This means that your spouse probably won’t have to pay inheritance taxes. Meanwhile, your executor only has to worry about levies on any remaining assets after your spouse’s portion.

Your Final Income Tax Return

Even if your estate isn’t large enough for estate or inheritance levies, it will still have to pay income taxes. Your estate’s executor is responsible for filing the final tax return. The IRS explains that most of the same filing rules apply to returns for living individuals. There are some important details to note:

• The return must include all income up until your date of death.
• Your estate can claim the usual credits and deductions.
• An executor may need to file for previous years if you haven’t done so already.

Solid Planning for You and Your Spouse

Estate planning and settling are both complex matters. Unless you’re wealthy, neither of you will have to deal with estate or inheritance taxes. But your estate will pay income taxes after your death. Knowing these ins and out can help you make smart decisions so your loved one — and your executor — do not face undue hardships.