Will my children pay inheritance tax?
I'm attorney Amber Jade F. Johnson and you need to know whether your children will pay inheritance tax. I get asked this question a lot. For most people, about 98%, the answer is no. They will not pay inheritance tax. When I say that what I mean is they will not pay estate taxes because estate taxes are not due unless the estate is larger than $11 million. That is the exemption currently. If you have more than $11 million, the amount over and above that potentially will be subject to estate taxes. But almost none of us have those types of assets. 
                    
Let me talk about a much more common tax which is when a child inherits an IRA, an Individual Retirement Account or a 401k or a 403(b) plan, any kind of retirement accounts that are tax deferred. When you as the account owner take out money from your IRA, you will pay ordinary income tax on it. I'm talking about a traditional IRA and not a ROTH IRA, which is not taxable. But a traditional IRA is. If you pass away and you leave your $100,000 traditional IRA to your children, when they inherit it and they start taking money out of it, they will pay ordinary income tax rates at their bracket, and yes, they will have to pay taxes on those types of accounts. 
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