As an estate law attorney in Washington state, I often get questions about the estate tax and how it works. The estate tax is a tax on the transfer of property after a person’s death, and it is important to understand how it applies in Washington state.
Washington state is one of a handful of states that has an estate tax, in addition to the federal estate tax. The Washington estate tax applies to estates valued at over $2,193,000 million for individuals who die in 2023. The estate tax is based on the fair market value of the assets in the estate, including real estate, investments, and other property.
The estate tax in Washington is calculated on a progressive scale, with rates ranging from 10% to 21%. The tax rate increases as the value of the estate increases. For example, an estate valued at $3 million would pay a tax of approximately $118,000.
It is important to note that the Washington estate tax is separate from the federal estate tax. The federal estate tax applies to estates valued at over $12.92 million for individuals who died in 2023. If an estate is subject to both the federal and state estate taxes, the federal estate tax is credited for the amount of the state estate tax paid.
There are several exemptions and deductions available to reduce the amount of estate tax owed in Washington. For example, transfers to a surviving spouse or to a qualified charitable organization are exempt from the estate tax. Additionally, the estate may be eligible for deductions for expenses such as funeral costs and debts.
One important aspect of the Washington estate tax is that it is due nine months after the date of death. This can be a challenge for many estates, as it may take some time to gather all of the necessary information and determine the value of the assets in the estate. As a result, it is important to begin planning for the estate tax as early as possible.
Estate planning strategies such as trusts and gifting can also be used to reduce the size of an estate and minimize estate tax liability. Working with an experienced estate planning attorney can help you determine the best strategies for your unique situation.
The Washington estate tax can be a significant expense for estates valued over $2,193,000 million. It is important to understand how the estate tax works and to plan accordingly to minimize the tax liability. Working with an experienced estate law attorney can help you navigate the complexities of the estate tax and develop a comprehensive estate plan that meets your needs.
