Recent Changes to the Washington State Estate Tax Law

Posted Wednesday, October 30, 2013 by Emily C. Rao.

alt textIn June 2013, Washington State Legislature made four significant changes to Washington estate tax laws. These changes are important to know as they may affect your existing or prospective estate plans. The changes are summarized below:

  1. The new legislation increases the top four estate tax rates by one percentage each. Right now, the tax rates range from 10-19%. Pursuant to the new legislation, estates with above $9 million dollars will be taxed at 20% (instead of the previous 19%)

  2. The Washington estate tax exemption, which is currently $2 million, will be indexed for inflation starting in 2014, based upon the Seattle-Tacoma-Bremerton metro area consumer price index.

  3. The new legislation also allows a deduction from the Washington taxable estate up to $2.5 million for the value of the decedent’s “qualified family-owned business interests” (QFOBI), where such interests are valued at $6 million or less and certain other criteria are met.

  4. Last but not least, the new legislation requires a marital Qualified Terminable Interest Property (“QTIP”) trust to be subject to estate tax upon the second spouse’s death, even if the QTIP trust was created before the enactment of the Washington State estate tax in 2005.

For more information on the new legislation, please contact Pivotal Law Group, PLLC.

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