![]() In Washington State, there is no inheritance tax. Don’t be caught in this trap! Does Washington State Have an Inheritance Tax? In Washington state, however, there is no such portability rule! Without careful estate planning, the first spouse can “lose” his estate tax exemption, leaving only the surviving spouse’s exemption amount. This portability rule, however, has significant drawbacks and limitations, so I encourage our clients not to rely on that for federal estate tax purposes. The problem with this strategy is that it can have unintended tax consequences as it increases the value of the surviving spouse’s estate, possibly subjecting them to estate taxes when they ultimately pass.įederal law addresses this situation by permitting a surviving spouse to apply any exemption remaining from a deceased spouse’s estate to their own estate under what is known as the “portability” rule. By way of example, an estate worth $3.193 Million will owe $100,000 to the State of Washington in estate taxes! Ahem… is this the kind of legacy you’d like to leave to your kids? But let’s talk turkey – Married couples benefit from an unlimited marital deduction that allows them to avoid paying estate taxes when property passes from a deceased spouse to a surviving spouse. Without careful planning, many estates may exceed this minimum and be subject to costly taxes. As stated above, Washington State’s basic exclusion amount is much, much lower at 2.193 Million per person. The federal tax exclusion amount for estate taxes in 2020 is presently $11,580,000, which is scheduled to sunset to a lower level in 2026. Sometimes, however, estate taxes may be unavoidable when dealing with a large estate at both the state and federal level.įederal estate tax laws include an exclusion amount that defines what portion of a deceased person’s estate passes free of federal estate tax. Strategic estate planning may aid in avoiding or limiting payment of these estate taxes. A carefully crafted estate plan creates a future for your loved ones free of financial confusion.Īn estate tax is the tax imposed on a person’s estate prior to its distribution after their death. Building a relationship with an experienced estate planning attorney alleviates unnecessary stress and allows you to address your changing estate throughout your lifetime. Even if you already have a plan, life circumstances change continuously. ![]() ![]() While it may be a difficult subject, it is vitally important to meet with an estate planning attorney to discuss what could happen to your assets upon your death. So, although you may not feel like a millionaire, you could be worth millions upon your passing! If you’re like me, you don’t want to pass on needless financial woes to your spouse or children. Remember, your “estate” includes life insurance, retirement, the value of your house, etc. This Washington tax begins at 10% and rises to 20% on a graduated scale, which may result in a significant tax burden against your estate. As you splutter out that sip of coffee, prepare yourself for another truth – that tax floor starts at just $2.193 Million.Īfter working a lifetime to build what you have, you want to make sure it goes to your family, not the government! Let’s start with the basics – Washington State has an estate tax. Washington State Inheritance Tax: What You Need To Know OctoMakiralegalbegal1
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