The federal estate tax is a tax on your right to transfer property at your death—whether by will or intestate succession (transfer to heirs when a person dies without a will, as provided by state statute). The estate tax consists of an accounting of everything you own or have certain interests in on the date of your death.

The fair market value of these items is used—not necessarily what you paid for them or what their values were when you acquired them. The total of all your assets at death is your "gross estate." The property included in your gross estate may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

In Pennsylvania, the federal estate tax applies to the transfer of property at death, including transfers through a will or according to state intestate succession laws when there is no will. The tax is based on the total value of the deceased person's assets at the time of death, which is referred to as the 'gross estate.' This includes a wide range of assets such as cash, securities, real estate, insurance, trusts, annuities, business interests, and more, valued at their fair market value, not the purchase price or value at acquisition. As of the knowledge cutoff in 2023, the federal estate tax exemption is significantly high, meaning that only estates exceeding a certain threshold are subject to the tax. This threshold is adjusted periodically for inflation. It's important to note that Pennsylvania also imposes its own inheritance tax on the transfer of property from a decedent to beneficiaries, which is separate from the federal estate tax. The rates and exemptions for the Pennsylvania inheritance tax differ from the federal estate tax and depend on the relationship between the decedent and the beneficiary.