While an estate has to pay taxes on the total assets of the estate, some expenses that an estate makes are tax deductible. One of those expenses is funeral expenses. If Joan Rivers has the funeral that she said she wanted, then her estate will have a lot to deduct.
The recently deceased Joan Rivers was almost a larger than life figure. She was an iconic comedian who loved the Hollywood lifestyle and she made no attempt to hide her wealth. She even spoke about the type of funeral that she wanted, which was to be large with paparazzi and Meryl Streep crying in five different accents.
In "Saying Goodbye to Joan Rivers: The Bigger The Funeral, The Bigger The Tax Deduction," Forbesnotes that an elaborate funeral could be paid for by Rivers' estate and the amount could be deducted from the estate tax. Rivers, who famously hated paying taxes, would be very happy to have known about this. The IRS actually has very few rules about tax deductions for funeral expenses. The deductions are allowed as long as they comply with state and local laws and they are reasonable in light of the deceased's lifestyle. An ordinary person could not have a funeral like Rivers wanted and have the estate deduct it all. However, for someone like Rivers, the full deduction appears to be appropriate.
If you are administering an estate that might have to pay the estate tax, then you should speak to an estate planning attorney about deducting funeral expenses and what other types of expenses can be deducted. It can save the estate a lot of money, leaving more money for the heirs.
Reference: Forbes (September 7, 2014) "Saying Goodbye to Joan Rivers: The Bigger The Funeral, The Bigger The Tax Deduction"