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All funds received as part of an inheretance are federal and state tax free to you. Estate taxes are
paid by the ESTATE prior to distribution.

In Pennsylvania if the estate does not pay the tax the person who gets the money will be liable. I would assume this would be a common pratice.

Lets assume the estate has 1,000,000 in joint name with right of survivorship and no other assets. The estate can not pay the tax because it has no money. I think most states and the IRS would come after the joint tenant.
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