Beresford Booth PLLC – Per Oscarsson
The State of Washington recently enacted law to change its estate tax. Two of the changes are of particular interest.
The first change concerns the “applicable exclusion amount”, which is the amount that passes free of estate tax. For the past several years, Washington’s applicable exclusion amount has been $2,000,000. Only the amount in excess of $2,000,000 was subject to Washington’s estate tax (assuming no other exclusions or other deductions were applicable, such as the unlimited marital deduction). Under the recently enacted law, Washington’s applicable exclusion amount remains at $2,000,000 for calendar year 2013. However, beginning on January 1, 2014, Washington’s applicable exclusion amount will be adjusted annually based on the percentage change in the most recent October consumer price index for the Seattle-Tacoma-Bremerton metropolitan area over the same index in October 2012, rounding the result to the nearest $1,000. The adjustment will only occur if the applicable exclusion amount would increase; if the adjustment would result in the same or a smaller applicable exclusion amount than the amount for the immediately preceding calendar year, the adjustment will not be made. The effect of this change is that progressively larger estates will pass free of Washington’s estate tax as the consumer price index rises.
The second change is the tax rate that applies to certain estates with a value greater than the applicable exclusion amount. Under current Washington law, the taxable estate is taxed at increasing rates from 10% to 19% as the amount of the taxable estate increases. Under the new law, the rates for taxable estates greater than $4,000,000 are increasing, to a maximum of 20% for taxable estates greater than $9,000,000.
If you need assistance with your estate planning, contact Per Oscarsson or one of the other attorneys in Beresford Booth’s Estate Planning and Probate Group
Beresford Booth PLLC (425.776.4100), www.beresfordlaw.com
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