The federal estate tax exemption is $5.34 million in 2014. If you leave an estate behind that is less than that amount, the estate won't owe any federal estate tax.
All property left to a surviving spouse passes free of estate tax.
All property left to a tax-exempt charity is also free of estate tax.
The estate tax rate for estates valued over $5.34 million is 40%.
You can gift to individuals up to $14,000 in 2014 without triggering the gift tax. This includes charitable gifts, gifts to spouses, gifts to political organizations, gifts of educational expenses, and gifts of medical expenses. A unified credit applies to taxable estates and allows you to give away up to $5.34 million without having to pay gift taxes.
In addition to federal estate taxes, some states have estate taxes and inheritance taxes. In states with inheritance tax laws, taxes must be paid by the person who receives inherited property (as opposed to estate taxes which are paid from the decedent's estate). Inheritance tax exemptions and rates may vary depending on who received the property, i.e. the decedent's spouse may be taxed at a lower rate than would be a friend of the decedent. A number of states are phasing out their inheritance tax systems.
Be sure to consult with an estate planning lawyer or other professional.