Probate: Do I Owe Inheritance Tax?
A common probate question or concern is inheritance tax. Today I’m going to alleviate those concerns.
To begin, in Washington State, there is no inheritance tax, either state or federal.
BUT, the reason for that is because we’re not defining the obligation properly.
Inheritance tax, technically, is a tax paid by the person inheriting the property.
So, for example, a probate is opened and $100,000 is distributed to three people. If the inheritance tax started at $90,000, each person who inherited money would pay tax on the $10,000 difference.
Now that we’ve gotten that out of the way, let’s talk about the tax you DO have to worry about.
Estate tax is a tax levied on the estate BEFORE distributions are made.
And if the person who died was a Washington resident or owned property in Washington, they are going to have to worry about two potential estate taxes.
The first is the federal estate tax. Of of the creation of this post, the federal estate tax starts at $11.4 million dollars for individuals and $22.8 million dollars for married U.S. citizens.
That means you don’t have to pay any tax until you are OVER those amounts.
If you are, talk to a probate attorney. You’re going to need some help.
The second tax you have to worry about is the Washington State estate tax.
This tax starts at $2.1 million dollars whether you are single or married.
That’s all you need to know for now. If you think you might have to pay taxes, or you want help with a probate, you should probably talk to a probate attorney.
PS – Click here to schedule a FREE strategy session with an estate planning attorney.
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