Seattle, WA estates & probate lawyer Jacob M. Menashe explains how gift taxes work in Washington.
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When it comes to gifting and Washington’s estate tax, it’s really important to know Washington only has an estate tax. We don’t have a gift tax. Clients think all the time, “Oh, I can only give away $15,000 per year per person.” But that only applies to the federal estate and gift tax. And all that actually means is it chips away at the $11.4 million that we can all give away during life or death free of federal gift and estate tax.
But back to the State of Washington, the fact that we don’t have a gift tax means that there is often planning that can be done, where someone makes a substantial gift to a child, reduces – or to a loved one, reduces their estate below the Washington estate tax threshold, which is $2,193,000, and estate tax can be avoided, or in some cases, minimized. So that really is some powerful planning. A lotta people don’t realize that Washington doesn’t have a gift tax. And the fact that we don’t have one definitely presents opportunities.