In addition to the federal estate tax, Washington State charges its own estate tax. It also holds the fairly rare distinction of being a “community property” state, combining nearly all assets of anyone who’s married or in a domestic partnership. So if you live in Washington, it’s incredibly important that you understand these rules and the many other nuances of the state’s inheritance laws. For professional help managing your Washington estate and inheritance plans, consider finding a financial advisor with SmartAsset’s free matching tool.
Does Washington Have an Inheritance Tax or Estate Tax?
Many people planning their estate believe all they have to worry about is the federal estate tax, which the vast majority of families avoid as it is. This is largely because of the exorbitantly high $12.06 million estate exemption the federal government now levies for the tax. But for Washington residents and those who own property in the state but live elsewhere, there is a Washington estate tax to be mindful of. There are no inheritance taxes, though.
For 2022, residents don’t have to file a state estate tax return if the value of their estate is less than the tax exempt amount of $2,193,000, according to Washington inheritance laws. The same applies to non-residents with property in Washington, though solely the value of their property in the state is subject. Depending on how far you go over the exclusion will dictate what your tax rate will be. As of now, it ranges from 10% to 20%.
Other Necessary Tax Filings
When you die, there are many federal and estate tax situations that need to become a priority for those who survive you. Besides the state estate tax, you need to look out for the following:
- Final individual federal and state income tax returns: each due by tax day of the year following the individual’s death
- Federal estate/trust income tax return: due by April 15 of the year following the individual’s death
- Federal estate tax return: due nine months after the individual’s death, though an automatic six-month extension is available if asked for prior to the conclusion of the nine-month period
- This is required only of individual estates that exceed a gross asset and prior taxable gift value of $12.06 million ($24.12 million for couples)
Tax returns of any kind are not filed in the name of the decedent, but rather his or her estate. Because an estate does not have a Social Security number, the IRS calls for the estate to register for an employer identification number (EIN). Feel free to take care of this online, by fax or via mail.
Dying With a Will in Washington
At a bare minimum, the testator must sign the will for his or her estate in front of two witnesses. Be sure to name an executor in the will, as they’ll be the official handler of your estate after your death. The state requires that this all take place in the presence of a public notary as well. Washington also requires all wills to be filed with the court of the county where the individual died. Should you meet these specific stipulations, your will is considered “testate,” or valid.
Next, you’ll need to determine if probate is necessary. The probate process is a legal proceeding before a Washington court that’s meant to protect the rights of a decedent by ensuring his or her will is valid and has its instructions carried out exactly as planned.
In nearly every instance where a decedent was in sole ownership of real property, a probate proceeding needs to be filed. Regardless of whether there’s real property or not, an estate with more than $100,000 in personal property will probably also have to pass through probate court. If neither of these circumstances is valid, a successor of the decedent can file as a small estate to avoid the probate process, according to Washington inheritance laws.
Even with a testate will, before inheritances are granted by the court, any outstanding debts, liabilities or final expenses of the decedent must be taken care of. The executor of the will, not the court, will handle this.
Dying Without a Will in Washington
For those who want to leave property to specific relatives, friends or other people, passing away without creating a valid will isn’t ideal. Washington inheritance laws title these types of estates as “intestate,” meaning without a valid will. In order to complete the inheritance process, the court will then follow intestate succession laws. These are meant to find just about any possible relative, such as a spouse, children, brothers, sisters, parents, grandparents and more, who could inherit your property.
Valid wills name an executor to physically take care of the estate of a decedent, so what happens in a situation where there is no executor? The court will appoint its own, with the idea that it will be someone who has at least a background knowledge of the decedent’s family and property.
There are surely extenuating factors that come into play for why an individual might die intestate. But a lot of the time, it’s an extremely avoidable issue. So don’t wait around if you’re nervous about building an estate plan. If you need it, get the help of a financial advisor.
Community Property in Washington Inheritance Law
Unlike most states in the U.S., Washington is a community property state. This means that it views any property acquired during a marriage or domestic partnership as legally that of both partners.
While the above holds true in nearly every situation, it does not include inheritances and gifts given to one partner. These are legally labeled as “separate property.”
Separate Property in Washington Inheritance Law
The easiest way to imagine the concept of separate property is to think of it as everything that isn’t community property. For unmarried individuals, though, all property is considered separate, as there’s no one with whom to have community.
Separate property boils down to two types: real property and personal property. Real property is real estate – land houses and any property directly affixed to it. By comparison, personal property covers just about everything else, like valuables, cars and jewelry.
As stated above, gifts and inheritances automatically fall under separate property. In turn, that title follows anything you purchase with these assets, keeping them in your sole legal possession. But if you combine separate property into a jointly-owned account with your spouse, it will likely become community property.
Spouses in Washington Inheritance Laws
If you pass away intestate without surviving parents, siblings and children, your surviving spouse receives not only your half of the community property, but every bit of your separate property as well, according to Washington inheritance laws.
While your spouse will always be entitled to your community property shares, how your separate property is inherited can vary depending on who survives you. So if any of the aforementioned groups of relatives are around when you die, the following situations will play out:
- If you leave a surviving spouse and children, your spouse will receive:
- Half your separate property, with the other half going to your children
- If you leave a surviving spouse and parents, but no children, your spouse will receive:
- Three-quarters of your separate property, with the remaining one-quarter going to your parents evenly
- If you leave a surviving spouse and siblings, but no children and parents, your spouse will receive:
- Three-quarters of your separate property, with the remaining one-quarter going to your siblings evenly
Divorce in Washington Inheritance Law
Did your marriage end in divorce or some other form of legal dissolution? Then you’ll absolutely want to create a new testate will.
In this situation, Washington inheritance laws consider any mention of your former spouse in the will completely invalid. So if you were to pass away without creating another will, intestate succession will take over. The only way to get around this rule is to state explicitly in your will that regardless of whether the marriage survives, your ex-spouse should be given the property that’s listed for him or her.
Children in Washington Inheritance Law
First and foremost, if any of your children survive you and you are unmarried, they are the sole heirs to your estate. But when there is a surviving spouse, matters change a little bit. In this case, your spouse is entitled to your half of the community property and half of your separate property. Your children are allotted the other half of your separate property.
|Intestate Succession: Spouses & Children|
|Inheritance Situation||Who Inherits Your Property|
|– If spouse, but no children, siblings or parents||– Entire estate to spouse|
|– If children, but no spouse, siblings or parents||– Entire estate to children|
|– If spouse and children||– Decedent’s share of community property to spouse |
– 1/2 separate property to spouse
– 1/2 separate property to children evenly
|– If spouse and parents, but no children||– Decedent’s share of community property to spouse |
– 3/4 of separate property to spouse
– 1/4 of separate property to parents evenly
|– If spouse and siblings, but no parents and children||– Decedent’s share of community property to spouse |
– 3/4 of separate property to spouse
– 1/4 of separate property split evenly between siblings
Biological children remain the most common type of child in intestate succession law. However, children who have been adopted by you hold just as strong of rights to your intestate estate as their biological counterparts. On the other hand, stepchildren and foster children, if they’re not legally adopted, are not included in that group.
Washington inheritance laws say that if a child is born within a marriage or domestic partnership recognized by the state, that child will be considered the offspring of the two partners. A paternity test can change this ruling, though.
Grandchildren are not automatically subject to intestate inheritance rights in Washington. But if their parent (your child) predeceases you, they become intestate heirs in their stead.
Any children you’ve had, put up for adoption and had adopted by a new individual or family, lose all ability to be your intestate heir. The same does not apply, though, to any children you might have outside of your marriage, if paternity can be proved.
If you had conceived a child prior to passing away, but did not live long enough to see his or her birth, the child receives a full biological children’s right to your estate.
Unmarried Individuals Without Children in Washington Inheritance Laws
Washington has some of the more unique rules surrounding the intestate inheritances of spouses and children. But the rest of its laws that spell out who an estate should be left to if there is no surviving child or spouse are fairly straightforward. Intestate succession arranges it like this:
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|– If parents, but no children or spouse||– Entire estate to parents or parent|
|– If no parents||– Estate split evenly between siblings|
|– If no siblings||– Estate split evenly between paternal/maternal grandparents|
|– If no grandparents||– Estate split evenly between paternal/maternal aunts and uncles|
Even with this extensive process ready to back you up and ensure that your relatives inherit your estate, it’s still highly recommended that you build your own testate will so that you remain in full control of your property’s legacy. If you don’t, and the intestate succession process cannot find a suitable heir, your estate will be subject to escheatment, which gives full ownership to Washington state.
Non-Probate Washington Inheritances
Certain assets are not part of the probate process in Washington, namely because they already have beneficiaries listed. A little tip: if you’d rather that the assets below become part of your estate, list the estate as their beneficiary:
- 401(k)s, IRAs
- Life insurance policies
- Any items in a living trust
- Pay-on-death bank accounts
- Joint tenancy real property
- Pay-on-death investment accounts
Other Situations in Washington Inheritance Law
Washington, as with many other states, halts the inheritance rights of murderers if they stood to inherit from their victim. But where it extends further than most states is in its laws protecting elderly individuals from financial abuse. If an individual takes advantage of the assets of an older citizen under false pretenses or for his or her own profit, the state will void the person’s inheritance.
To become valid under intestate succession law, an heir must survive you for no less than 120 hours. Should this not happen, that individual would not inherit your property.
Similar to most other states, Washington treats half-blood relatives the same as full-blood relatives. This always remains true, unless the inherited property came from deceased full-blood relatives, in which case it must remain with full-blood descendants.
As far as Washington inheritance laws are concerned, it doesn’t matter whether or not your intestate heirs are illegal residents or not U.S. citizens. They receive full inheritance rights, regardless.
Resources for Estate Planning
- A financial advisor can help you build a comprehensive estate plan that accounts for your state’s inheritance laws. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Managing your own estate, or handling the intricacies of inheriting money from the estate of a loved one who has passed away, combines many intricate factors to deal with. It can be such an overwhelming venture — with taxes to file, possible court proceedings to go through and more — that you might want some help.
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