What is the Difference Between an Estate Tax and an Inheritance Tax?

An estate tax is a tax that is based on the net value of all property owned by a decedent at the time of death and is imposed on the decedent’s estate. An inheritance tax is a tax imposed on the beneficiaries who receive property from the decedent. States that have inheritance taxes frequently tax  the decedent’s surviving spouse and children at lower rates than other beneficiaries.