Washington State levies a tax on the estate of of residents based upon their total “taxable estate”. The current estate tax, or death tax, rates range from 10% to 19% and are given in the table below. The tax is also applied to non-residents based upon the total property located in Washington State. Here are a few details regarding the Washington State estate tax:
- The “taxable estate” includes both probate and non-probate assets, so transferring assets into a revocable living trust does not protect them from state estate taxes.
- A married person’s “taxable estate” includes all of their separate property plus 1/2 of the community property. Life insurance proceeds are generally included 100% in the taxable estate.
- The value of all assets inherited by a surviving spouse are exempt from tax. However, without proper estate planning this only serves to delay and not eliminate or reduce the tax due.
- Washington State exempts the first $2 million in assets from the “taxable estate”. Since this exemption is less than the current federal exemption of $5 million, Washington State estate tax considerations should be a part of every estate plan.
- The $2 million exemption is not “portable” to a surviving spouse, meaning the decedent’s estate must use the exemption or lose it.
- Washington State does not have a tax on lifetime (“inter vivos”) gifts(unlike the IRS which taxes you on the value over $13,000 gifted to each individual each year). This raises very important lifetime gifting opportunities for those Washington residents with estate valued over $2 million. You should discuss these strategies with an Estate Planning Attorney.
- The Washington State estate tax return is due 9 months from the date of death.
I have included the Washington State estate tax table below, remember that a “taxable estate” in Washington is the taxable assets minus the $2 million exemption (in other words, the “taxable estate” is the amount over $2 million).
See my a previous post for more discussion on the 2011 and 2012 estate tax landscape, both federal and state for Washington residents.
|If Washington Taxable Estate||The Amount of Tax Equals||Of Washington Taxable Estate Value Greater Than|
|Is at Least||But Less Than||Initial Tax Amount||Plus Tax Rate %|
|Above $9,000,000||$1,440,000||19.00%||Above $9,000,000|