Are You, By Chance, A Millionaire?

If you live and work in the Seattle city limits, now the seventh wealthiest city in America according to the Seattle Times, there is a high probability that you may, indeed, be a millionaire.  In fact, based on a recent wealth study, Seattle is now has “54,200 millionaires, 130 ‘centimillionaires’ and 11 billionaires,” according to estimates from a U.K. wealth firm, Henley & Partners. To go a step further, if you adjust those figures for population, Seattle ranks No. 2 for “millionaire density,” in the United States with about 1 in every 14 people in the city being a millionaire. Id.

As Seattle’s population of millionaires continues to rise, Washington State estate tax liability should become a pressing concern for many. Strategic planning is crucial to minimizing this financial burden and ensuring that your wealth is passed down to your heirs efficiently. To do this effectively, it is important to regularly review your existing estate plan to account for any changes in state law or for your family’s situation. Options to reduce estate tax liability may include:

1. Utilizing Annual Exclusion Gifts: One effective strategy is making use of annual exclusion gifts.
2. Establishing Trusts: Trusts can be a powerful tool in estate planning for ensuring that a deceased spouse’s exemption does not go to waste. In Washington, the amount exempted from state estate tax liability is $2.193 million.
3. Charitable Giving: Charitable donations and bequests can significantly reduce estate tax. By donating to qualified organizations, you not only support causes you care about but also receive estate tax deductions.
4. Regularly Reviewing and Updating Your Estate Plan: Estate laws frequently change, so regularly reviewing and updating your estate plan with an attorney is essential. Staying informed about both federal and Washington State estate tax laws will help ensure the strategies you have chosen for your estate plan remain effective.

By employing these strategies, Seattle’s millionaires can effectively minimize their estate tax liability. Do you have any questions or concerns about Washington estate tax? If so, we’d be happy to help.