How do you save my parents money from estate tax after they die?

Federal estate tax doesn't kick in until the estate is worth $3.5 million. State taxes vary by state, of course.

The key to avoiding estate taxes is careful planning before they die.

One way to avoid estate taxes is by setting up irrevocable life insurance trust (this has to be done at least three years in advance).

Another method is for parents to make gifts to children (each parent can give up to $13,000 a year to each child) in advance.

A third method is to set up an elaborate scheme called a "Crummey Trust". This requires lawyers and Accountants who specialize in this sort of thing.