What if you die without an estate plan?
Tax implications of an estate
It is imperative to understand
the federal and state tax implications of any will that you
sign. Federal law allows each individual to leave and estate
of an amount equal to the applicable exclusion (less any lifetime
transfers subject to gift tax) free of any federal estate
tax. Below are the current Federal estate tax figures. Please
note this does not include Washington State estate tax:
FOR
A TAXABLE ESTATE
|
THE
FEDERAL ESTATE TAX |
From |
To |
Is |
of
Amount Over |
$0 |
$10,000 |
18% |
$0 |
10,001 |
20,000 |
1,800 + 20% |
10,000 |
20,001 |
40,000 |
3,800 + 22% |
20,000 |
40,001 |
60,000 |
8,200 + 24% |
40,000 |
60,001 |
80,000 |
13,000 + 26% |
60,000 |
80,001 |
100,000 |
18,200 + 28% |
80,000 |
100,001 |
150,000 |
23,800 + 30% |
100,000 |
150,001 |
250,000 |
38,000 + 32% |
150,000 |
250,001 |
500,000 |
70,800 + 34% |
250,000 |
500,001 |
750,00 |
155,800 +
37% |
500,000 |
750,001 |
1,000,000 |
248,300 +
39% |
750,000 |
1,000,001 |
1,250,000 |
345,800 +
41% |
1,000,000 |
1,250,001 |
1,500,000 |
448,400 +
43% |
1,250,000 |
1,500,001 |
& Up |
555,800 +45% |
1,500,000 |
| |
UNIFIED
CREDIT |
If
You Die During |
Top
Estate Tax Rate |
Applicable
Unified Credit |
Equivalent
Exemption |
2003 |
49% |
345,800 |
1,000,000 |
2004 |
48% |
555,800 |
1,500,000 |
2005 |
47% |
555,800 |
1,500,000 |
2006 |
46% |
780,800 |
2,000,000 |
2007 |
45% |
780,800 |
2,000,000 |
2008 |
45% |
780,000 |
2,000,000 |
2009 |
45% |
1,455,800 |
3,500,000 |
2010 |
Repealed
for 1 year |
Unlimited |
Unlimited |
2011 |
55% |
345,800 |
1,000,000 |
Amounts over the applicable exclusion may be subject to taxation
at tax rates ranging from 37% to a maximum rate or 55%.
Current
Washington State Estate Tax Overview
The Legislature enacted and
the Governor signed into law a new Washington estate tax effective
May 17, 2005. Estates of decedents who die on or after the
effective date are subject to the tax. This is a stand-alone
estate tax that incorporates some provisions of the Internal
Revenue code as of January 1, 2005. However, the Washington
estate tax is not affected by the scheduled termination of
the federal estate tax in 2010.
The table below is then applied
to the Washington taxable estate (which is
generally defined as the value of a decedent’s assets
in excess of the $2,000,000 exempt amount):
If Washington Taxable |
The Amount of Tax Equals |
Of Washington Taxable
Estate Value Greater Than |
Estate is at Least |
But Less Than |
Initial Tax Amount |
Plus Tax Rate % |
|
| $0 |
$1,000,000 |
$0 |
10.00% |
$0 |
| $1,000,000 |
$2,000,000 |
$100,000 |
14.00% |
$1,000,000 |
| $2,000,000 |
$3,000,000 |
$240,000 |
15.00% |
$2,000,000 |
| $3,000,000 |
$4,000,000 |
$390,000 |
16.00% |
$3,000,000 |
| $4,000,000 |
$6,000,000 |
$550,000 |
17.00% |
$4,000,000 |
| $6,000,000 |
$7,000,000 |
$890,000 |
18.00% |
$6,000,000 |
| $7,000,000 |
$9,000,000 |
$1,070,000 |
18.50% |
$7,000,000 |
Above $9,000,000 |
|
$1,440,000 |
19.00% |
Above $9,000,000 |
|
