The federal gift tax exemption allows individuals to leave amounts of money to their heirs without paying taxes on it, according to Bankrate. For tax year 2015, the exemption is $5.43 million, and the estate tax rate is 40 percent for estates that exceed the exemption amount.
Under the American Taxpayer Relief Act of 2012, effective Jan. 1, 2013, the exemption amount adjusts automatically based on changes in the inflation index, explains Bankrate. The act allows a surviving spouse to use any portion of the estate and gift tax exemption that the deceased spouse did not use. The surviving spouse must choose the option, called the portability option, at the time of filing the deceased spouse's estate tax return, even when the estate does not owe federal estate taxes.