The estate tax is a significant potential expense that could force your heirs to pay much of the money that you worked hard to save and invest to the government. Families that have large estates need to plan in advance to minimize the impact of this tax.
Not every family needs to pay federal estate taxes. In fact, most families have estates that fall under the threshold for estate tax obligations. However, there is a Washington State estate tax that reaches estates.
The federal government might begin to tax estates that exceed a value of $12.92 million in 2023. The estate tax threshold is indexed to inflation and has increased considerably in recent years. The government has raised the thresholds to exempt more estates. The estate tax is on a per-person basis, meaning a married couple has the first $25.84 million exempted. Federal taxes on an estate are usually 40%, meaning that they will take a large bite out of what your heirs can inherit.
More families will over Washington State taxes. On the state level, the exclusion is $2.193 million per person. The beginning tax rate above that amount is 10%. For every $1 million in taxable amounts, the rate gradually rises. If the taxable amount exceeds $9 million, the rate will rise to 20%.
As you can see, large estates can take a significant hit at both the state and federal levels, making timely estate planning vital if you want to protect more of what you have worked a lifetime to accumulate.
Bountiful Law works with Washington families in King and Snohomish Counties to develop effective estate plans. To speak with an experienced attorney, you can send us a message online or call us today at 425.517.3051.