Unified Estate and Gift Tax Law and Legal Definition

The Unified Estate and Gift Tax is a federal gift and estate taxation system that is integrated into one unified tax system. The value of the estate plus gifts upon which no gift tax has been paid are combined to determine the assets upon which the tax is calculated.

Beginning in 2002, the amount you can pass tax free to your heirs increases from $675,000 in 2001 to $1.5 million in 2004 and then gradually to $3.5 million in 2009. In 2010, the estate tax (but not the gift tax) expires; in 2011, the estate tax again becomes effective at the 2002 exemption level for deaths occurring in 2011 and thereafter.