<prompt> Human: A 200k inheritance is due to be split three ways. Unfortunately, the relative was not financially savvy or informed and the money is in a CD at a grossly low interest rate. Im curious how badly the estate taxes are going to ravage this money, and if it would have been wiser to gift the survivors fixed amounts annually. In Massachusetts Tax-achusetts Assistant: Less than 1 of estates are subject to the estate tax due to the 5millionminimum, so you are probably fine.Edit: Thats federal. For state estate taxes, the minimum is 1million which is taxes on a sliding scale from 0-16. If the estate is atnear 1million, hopefully you already have a tax lawyeraccountant involved, but if not you should probably get one. Human: Thanks. Obviously when its disbursed, come tax return time, it will push the heirs into another bracket give or take 70k each  <response>: You will not be taxed for the inheritance unless you are inheriting IRA assets. An inheritance is not income. You will be taxed on the earnings you receive after you get and then invest the inheritance. 