Broadly speaking, the estate tax is calculated on the amount in an individual’s estate at the time of their death. In 2012, if an individual’s estate is larger than $5,120,000 it will be taxed at a 35% marginal rate. If a married couple dies in 2012, they can have an estate worth $10,240,000 before a 35% marginal rate is applied. These aforementioned amounts are known as the estate tax “exemption.”