There are many things that can have significant financial impacts when a person passes away. One is what the value of the deceased person’s estate is. One of the financial issues estate value can substantially impact here in Washington state is the issue of state estate taxes.
For one, it can impact whether a state estate tax return will need to be filed in relation to the deceased person’s estate. Under current state law, such a return is required for deceased person’s estates that have a gross estate value that exceeds $2 million.
The value of a deceased person’s estate here in Washington also impacts whether there will be any state estate taxes issued against the estate. Currently, here in Washington, the exclusion amount for the state estate tax is $2,054,000. Generally, if the gross estate value of a deceased person’s estate does not exceed this exclusion amount, the estate will not be required to pay any Washington state estate tax.
Estate value can also play a big role in how much of a state estate tax will be issued to an estate if it is found that the estate does qualify for the tax. Here in Washington, what the initial tax amount and tax rate will be for an estate that qualifies for the tax depends on what specific bracket their taxable estate amount falls into. The taxable estate amount is calculated by taking the gross estate amount and subtracting it by the exclusion amount and any applicable deductions.
Given the major estate tax implications, estate amount can have, gross estate amount can be a very important thing for an elderly person to pay attention to when it comes to their estate planning. There are things a person with a fairly sizable estate may be able to do with their estate planning that could legally reduce the gross estate amount of their estate and thus reduce or eliminate the tax liability their estate would have upon their death when it comes to the state estate tax. Elderly individuals here in Washington who are wondering if state estate tax planning is something they should be including in their estate planning should think about discussing the matter with a lawyer skilled in elder law.
Sources: Washington State Department of Revenue, “Deaths on or after January 1, 2014,” Accessed April 21, 2015
Washington State Department of Revenue, “Estate tax tables,” Accessed April 21, 2015