Updated: 2020-09-14 by
Washington residents are subject to an estate tax for estates of more than $2,193,000 million. This tax falls on the estate of the person who died, the beneficiaries or heirs inherit what's left. There is no inheritance tax in Washington, this would be tax that falls on the heirs and beneficiaries, not on the estate of the person who died. The maximum Washington estate tax rate is 20%, which is significantly lower than the federal maximum rate of 40%.
This state estate tax is in addtion to the federal estate tax. For the federal tax, there is an exemption of $10 million, which is indexed to inflation and is currently $11,580,000, and only people who die with an estate larger than that exemption will have to pay estate tax. It is estimated that only the richest .14% of Americans will be subject to the federal estate tax, or only two out of every 1,000 people who die.
If someone dies in Washington with less than the exemption amount (currently $11,580,000), their estate doesn't owe any federal estate tax, and if someone dies in Washington with an estate worth less than $2.193 million, there is no Washington estate tax, either. The heirs and beneficiaries inherit the property free of tax. They don't pay income tax on it, either, because inherited property is not ordinary income. The only exception to this are inherited retirement accounts, which are subject to income tax as the assets are withdrawn.
More information about Washington’s estate tax can be found at the state Department of Revenue’s website.
You may also be interested in:
Here is an overview of how this site works and what articles you'll find most useful. It can be confusing to sort out the process, the taxes, and the issues that arise after someone's death. This site will help.
Each state has its own rules about probate. Find out how they do it in Washington.
When beneficiaries inherit assets, those assets generally receive what's called a "step up"in basis. Understand how this saves beneficiaries taxes on appreciated assets.