When it comes to passing on your home to your children, there’s an important tax consideration many people overlook: the step-up in tax basis. Understanding this can save your heirs a significant amount of money when they eventually sell the property. What Is Tax Basis and Why Does It Matter? When you buy a home, the purchase price becomes your tax basis in that property. This means that if you sell the house later, you owe capital gains tax on…
If you live in Washington state and are planning your estate, understanding how estate taxes work is crucial. I’m Christopher Small, owner of CMS Law Firm, where we specialize in estate planning and probate. In this post, I’ll explain the two main estate taxes Washington residents should be aware of: the federal estate tax and Washington’s state estate tax. 1. The Federal Estate Tax The federal estate tax applies to estates nationwide, and currently, the exemption amount is around $14…
Washington residents face a unique challenge when it comes to estate taxes. If your estate exceeds the state’s exemption threshold, Washington’s estate tax can take a significant chunk of your assets. But there is a straightforward legal strategy that might help you avoid this tax altogether: moving out of Washington state. Why Moving Out of Washington Can Help You Avoid Estate Tax Hi, I’m Christopher Small, owner of CMS Law Firm. We specialize in estate planning and probate, helping families…
A good estate plan doesn’t just protect your assets—it can change the course of someone’s life. Without it, even well-meaning families can face chaos, conflict, and unnecessary hardship. With it, loved ones have clarity, stability, and resources when they need them most. A Real Story: How Planning Saved a Child’s Future A friend of mine, Scott, lost both of his parents at a young age. His father passed away from a sudden heart attack, and several years later, his mother…
Happy Sunday! First things first, sorry for taking two weeks to get this information to you. I promised to do this last week but forgot (and thanks for those who reminded me! Thanks for reading!). Here’s how you can double your estate tax exemption from $3m to $6m, if you’re married. Before I get into the weeds, the short answer is – you create a specific type of trust called a Credit Shelter Trust that captures both spouse’s $3m exemptions….
Happy Sunday! Today I wanted to talk about what happens when your estate plan isn’t set up properly – and show you in real life how that has consequences that you can’t fix after the fact. Gene Hackman spent a lifetime playing iconic characters (Hoosiers is literally one of my all-time favorite movies). When it came to his estate plan, though, he left the final act unfinished. At 95, Hackman passed away this February. His wife, Betsy, was the sole…
It’s been a long time coming, but Washington State FINALLY updated their estate tax laws.However, as is to be expected, when updates happen, there is a mix of good and bad.The good news is the exemption went UP and it will continue going up every year: Washington’s estate tax exemption is increasing from $2.193 million to $3 million for anyone that passes away after July 1, 2025. That exemption will now adjust for inflation each year. The bad news, however, is once you get over that exemption…
