The federal estate tax, or “death tax”, is a tax on an estate that beneficiaries must pay when inheriting an estate. Instead of being paid out-of-pocket, the estate tax will be paid with money from the estate before the beneficiaries can receive it. Along with the federal estate tax, your state may also require an inheritance tax. As of 2013, only the value of the estate exceeding $5.25 million can be taxed, and that is at a maximum tax rate of 40%. Many people would like to know what they can do the reduce the amount of estate tax deducted from the their estate. Fortunately, there are a number of deductions available to ensure your beneficiaries inherit more from your estate.