Federal Gift and Estate Taxes are applied on the transfer of wealth during life (Gift Tax) or at death (Estate Tax). Beneficiaries should be aware of these taxes as, after all, these and other taxes, ultimately can lower the amount inherited. Since the beneficiary is often left out of the discussions during life, they should have at least some idea about some of the tax-avoidance techniques and ramifications so as to avoid confusion during the estate wind-down process.