re: I don't understand inheritance tax

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(I don't really have much of my own opinion on estate taxes, as it'll probably never be my problem)

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To be fair, it isn't really a problem for people who know what they're doing. The biggest problems arise from people who had no clue it was coming and/or didn't give a damn.

In reality, most estate planning happens far too late in the process. You don't usually acquire an estate worth over $5M-$10M without having some legal and accounting advice along the way. Anyone worth their billing should start the planning process as you near those levels.

Without going into details, you can basically "gift" $5M to a trust and eliminate the inheritance tax on that gift down the road. It can grow to be worth $50M, but as long as the value was under the lifetime exclusion when it was placed into the trust, the gains are not taxable under the inheritance tax.

That is a simplified explanation of a myriad of ways the money/assets can continue forward in the family.