Death can trigger estate and inheritance taxes, which differ: estate tax is paid by the deceased's estate on assets transferred at death, while inheritance tax is paid by heirs receiving assets. The federal government imposes only an estate tax with a high exemption threshold, but some states have estate and/or inheritance taxes with lower thresholds. Maryland uniquely has both. Strategies to reduce these taxes include gifting assets before death, moving to tax-free states, and setting up irrevocable trusts. Life insurance can help heirs cover inheritance tax bills.