Try Not to Die in Washington

Washington state now by far has the highest estate tax rates in the country

Photo by Febiyan on Unsplash

Washington state has an estate tax that has historically had the highest rate at 20% for estates over $9 million.

However, effective July 1, the estate tax rates are even higher although a little bit of an offset with a higher exemption. The old exemption was $2.193 million (indexed) and now the new exemption will be $3 million.

However, the indexing stopped for a few years since the index the law referred to was obsolete and the legislature and the administration simply ignored it until this new law was passed.

Now for the really bad news. Instead of a maximum tax rate of 20%, it now is 35% for estates over $9 million. This means that if you owe both a federal estate tax and the maximum Washington state estate tax, your combined net tax rate will be 61% (40% federal plus 35% X 60% (since you can deduct the state estate tax on the federal return)).