Washington’s Estate Tax Threshold
Washington imposes a state estate tax on estates exceeding approximately $3 million, based on recent thresholds, and this amount can change. Unlike the federal estate tax exemption, which is significantly higher, Washington’s threshold means more families may be affected than they realize. The tax rates are graduated, ranging from roughly 10% to 20% depending on the size of the estate.
Who Should Be Thinking About This?
If your total estate value, including real estate, retirement accounts, life insurance death benefits, and other assets, is approaching or exceeds $3 million, it’s worth discussing estate tax planning strategies during your consultation. Even if you’re below the threshold now, asset appreciation and life insurance proceeds can push an estate over the line.
Trust Structures That May Help
- Disclaimer trust — gives the surviving spouse flexibility to decide how much goes into a tax-sheltered trust after the first spouse passes
- Credit shelter or bypass trust — uses the first spouse’s estate tax exemption to shelter assets from tax at the second spouse’s death
- These structures are typically built into a trust-based estate plan and activated at the first spouse’s death
Important Caveats
Estate tax planning is highly dependent on individual circumstances. The right approach for your family depends on your total estate value, the types of assets you own, your family structure, and your goals. This page provides a general overview, not tax advice. During your consultation, we’ll discuss whether estate tax planning applies to your situation and what structures might make sense.
