You may have heard about the estate tax on big news networks and the possibility that this tax would be repealed by Congress. However, it is important to understand that there are two estate taxes – a federal estate tax and a state estate tax. This means a repeal of the federal estate tax would have no effect on the state estate tax.  

What Exactly is an Estate Tax?

When property is transferred from someone’s estate to their designated beneficiaries, the estate could be subject to this tax (depending on the size of the estate). The actual tax is paid by the estate.

The Washington State Estate Tax

An estate of a deceased Washingtonian would be required to pay an estate tax if the total value of the estate is more than $2.12 million. That is a relatively low number when you compare it to the federal estate tax, which only kicks in on estates with a value in excess of $5.49 million (meaning married couples enjoy an $11 million federal estate tax exemption).

It is also important to note that when an estate is valued at more than two million dollars, an estate tax return needs to be filed, regardless of whether or not the value of the estate goes over the $2.12 million mark.

How to Effectively Navigate the Rules Around the Estate Tax

The rules and regulations governing the calculation of an estate’s value can be rather complex. For example, when assessing the potential taxes that may be imposed on an estate, certain assets the decedent never actually used or had access during their lifetime are considered (e.g. proceeds from life insurance).

If you believe your estate will be valued in excess of $2.12 million, it is important to obtain the advice and counsel of an experienced Washington estate planning attorney. An attorney can assist with preparing your estate plan so that it effectively minimizes or avoids a large estate tax bill.

Experienced Renton Estate Planning Lawyer Ready to Help

Estate taxes are complicated and can be extremely difficult to manage when you are trying to manage other aspects of your life. This is why it makes sense to contact the Law Offices of Dan Kellogg PLLC. Our legal team is ready to assist. Contact our office today to schedule a confidential, one-on-one meeting.