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Discuss Your Estate Concerns With An Experienced And Compassionate Lawyer
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Discuss Your Estate Concerns With An Experienced And Compassionate Lawyer

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Examining the state of federal, state estate tax laws

Examining the state of federal, state estate tax laws

| Sep 26, 2018 | Estate Planning

Estate tax law is in flux thanks to the Tax Cut and Jobs Act of 2017. The federal government recently released the 2019 federal estate tax limit for 2019: $11.4 million per tax filer, up from $11.18 million in 2018 – and up from $5.5 million in 2017. That means a married couple can give gifts of up to $22.8 million before or after death before having to face estate taxes.

The federal estate tax is 40 percent. The gift tax exclusion remains at $15,000.

Some states have estate, inheritance taxes

Some states impose their own estate taxes (12 states and D.C) or inheritance taxes (six states). Only one (Maryland) imposes both taxes.

Washington state has an estate tax rate of between 10 percent and 20 percent.

The states with an estate tax are Washington, Oregon, Hawaii, Minnesota, Illinois, New York, Vermont, Massachusetts, Rhode Island, Connecticut, Maine, Maryland and the District of Columbia.

The states with an inheritance tax are Nebraska, Iowa, Kentucky, Pennsylvania, New Jersey and Maryland.

Some states have moved away from estate and inheritance taxes: Tennessee, New Jersey and Delaware have done away with estate taxes while Indiana has done away with its inheritance tax.

Details about Washington stateestate tax

The Washington state estate tax must be paid when property is transferred following death by anyone living in Washington state or anyone who owns property in the state.

All funds from the estate tax go to the Education Legacy Trust Account and can only be spent on public schools or expanding access to higher education.

The amount of the tax is determined by the gross estate:

  • Bank accounts
  • Investment accounts
  • Stocks and bonds
  • Personal effects
  • Cars, boats and planes
  • Money owed to you
  • Life insurance
  • Retirement accounts
  • Closely held businesse3s
  • Real estate
  • Trust assets
  • Lifetime gifts of more than $11.4 million

The tax maxes out at 20 percent for estates of more than $9 million. The lowest rate is 10 percent. Taxes must be paid within nine months of the decedent’s death.

Transfers to a spouse are exempt.