Washington Estate Tax Reform: New Spousal Exclusion
The new estate tax reform in Washington State, effective January 1, 2025, brings significant changes to the estate tax filing requirements. Previously, estates exceeding $2,193,000 in total gross value, were required to file a Washington estate tax return, even if no tax was due.
House Bill 1867: If a decedent passes on or after January 1, 2025, a Washington estate tax return is not required to be filed if:
the decedent’s estate is not required to file a return to claim a specific election;
the decedent was survived by a spouse and the decedent’s interest in the qualifying family residence passed from the decedent to the spouse; and
The value of the decedent’s gross estate after deducting the value of the decedent’s interest in the qualifying residence is less than the applicable exclusion amount (currently $2,193,000).
For example, an estate valued at $2.5 million with a home valued at $750,000, the estate would previously need to file a tax return. Under the new law, the home value is deducted, reducing the estate value to $1.75 million, which is below the threshold, so no return is required.
It is important to consult with a probate attorney to understand how these changes might apply to specific situations, as property values and other factors can vary.
Kelley has extensive experience in estate planning, including charitable gift planning, tax-exempt entity establishment, and navigating complex tax laws. She brings a wealth of knowledge to the table. From drafting wills and trusts to offering counsel on lifetime and post-mortem tax planning strategies, she is equipped to address all aspects of your estate planning needs.
