As a professional communicator, I’ve always been fascinated with the way words are used to influence how people feel about a particular topic. One example I find particularly interesting is how policy makers talk about estate taxes. Those in favor of them are fine with the standard terminology, since the word “estate” signals that it’s a tax applicable only to the very wealthy. (In other words, “not me.”)
In the 1990s, politicians embraced the term “death taxes” as a way to get average voters riled up about an issue that generally doesn’t affect them. And it seems to have worked. While only a fraction of a percent of estates in the U.S. are subject to estate taxes, polling has shown that lower income households are more likely to oppose estate taxes than high-income households.
This general distain for “death taxes” has resulted in a federal exemption of $15 million ($30 million for married couples). Meaning only the richest .2% of Americans will ever pay the tax. So, should you even worry about estate taxes? Well, worry just causes more wrinkles, but if you’ve accumulated wealth over your lifetime, there are things you can do to be prepared.
Watch out in Washington
Washington State, where most Arrivity clients live, has an estate tax that applies to about 2,000 people each year. When I was researching this subject for my mom, I found out that Washington State uses estate tax funds to support education. This made my mom feel a bit better, in case her estate ended up bigger than expected.
Washington State’s tax applies to estates valued at more than $3,076,000 for someone who dies in 2026. Every million dollars above that amount is taxed at a higher rate, from 10% up to 35%. (In mid-February, state legislators introduced a bill that would change the rates back to those in effect in 2025, with a range of 10-20%). An estate includes all assets you own when you die. That’s something to think about considering the value of property in Washington these days.
I’m just laying out the facts. You will, of course, want to hire an actual trained and certified professional to work out the details for you and your family.
Estate tax strategies
As inevitable as death and taxes are, the best time to prepare is now. Your Arrivity financial planner can talk to you about various strategies and introduce you to professionals who can help:
- With proactive estate planning, a married couple can exempt twice the amount of assets from estate taxes. But that means drawing up some paperwork.
- You can gift money each year to family members – or anyone you want – and reduce the value of your estate. The amount you can give each person this year is $19,000.
- Charitable giving is also a great way to spread the wealth and reduce your family’s tax burden.
However you want to think about them – estate taxes, death taxes, or the inevitable – you’ll want to think about them now so your family doesn’t have to.
More about death and taxes
- If you live in one of the 13 states with estate taxes, talk to a qualified attorney about ways to structure your will in order to have a say in where your money goes.
- Be sure to keep your will, trust, and power of attorney documents up to date to reflect your wishes and your current family composition.
- Don’t be afraid to talk about what should happen when you die – even if you have to use euphemisms like “pass away.” Most family members would like to know how they can honor your wishes.
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Liz is a Late Boomer in the sandwich generation who started an independent writing and brand consulting practice after years as a senior marketing executive. She lives in Seattle, Washington. Her mother lives nearby and her daughter is a recent college graduate.
The foregoing content reflects the opinions or perspective of Liz Behlke and/or Arrivity financial planners and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful. Arrivity does not give tax or legal advice. Tax and/or legal strategies should be discussed with a professional before implementing.