Elevated Estate Planning, P.S. | October 8, 2025 | Trusts
Estate planning in Spokane can start to feel complicated when looking at estate tax rules. This is especially true in Washington because it is one of the few states that imposes its own estate tax in addition to the federal estate tax. If your estate is large enough, you may be subject to both.
The good news is that there are planning tools, including trusts, that can help reduce these taxes in certain circumstances. Read on to learn more, including how an attorney can help represent your interests throughout the process.
Understanding Estate Taxes in Washington State and at the Federal Level
Before diving into how trusts can help, it’s important to understand the basics of estate taxes:
- Washington State estate tax: As of October 2025, Washington currently taxes estates valued above roughly $3 million (subject to change). This threshold is much lower than the federal exemption, meaning many residents who will never owe federal estate taxes could still face a state tax bill.
- Federal estate tax: At the federal level, only estates worth more than $13.99 million (for 2025, also subject to change) are taxed. Few families meet this threshold, but the tax rates are steep if you do.
If your estate could be subject to either tax, you need a strategy in place to protect what you’ve built. That’s where establishing a trust might be in your best interest.
How Trusts Can Help Reduce or Avoid Estate Taxes
A trust is a legal arrangement where you transfer assets to a trustee, who manages them for the benefit of your chosen beneficiaries. Depending on the type of trust you create, it may reduce the size of your taxable estate:
Revocable Living Trusts
Revocable living trusts do not reduce estate taxes. They are primarily used to avoid probate and streamline the transfer of assets. While useful, they do not remove assets from your taxable estate.
Irrevocable Trusts
Irrevocable trusts can be powerful tax-planning tools. Once you transfer assets into an irrevocable trust, you no longer legally own them. This means they are likely not counted toward your taxable estate, potentially lowering or eliminating your estate tax liability.
Specialized Trusts
Specialized trusts such as bypass trusts, charitable remainder trusts, and qualified personal residence trusts may also provide significant tax benefits while allowing you to support your family or favorite causes.
Each of these options comes with unique rules, and using the wrong type of trust may not provide the protection you need.
Factors to Consider Before Using a Trust for Tax Planning
Setting up a trust requires a careful look at the facts and circumstances of the situation at hand.
Whether it helps you reduce estate taxes depends on several factors, such as:
- The total value of your estate
- How your assets are titled
- Your goals for distributing wealth to family or charities
- Whether you are married and can take advantage of spousal planning opportunities
- Your willingness to give up control of assets placed into an irrevocable trust
Washington’s estate tax threshold is relatively low compared to the federal exemption, which means more high-net-worth families in the state often need to consider trusts than they might in other parts of the country.
Contact a Spokane Estate Planning Attorney for an Initial Consultation
So, can a trust help you avoid Washington State and federal estate taxes? The short answer is yes, but only with the right type of trust and careful planning. Revocable living trusts alone won’t provide tax savings, but irrevocable and specialized trusts can significantly reduce your taxable estate.
As the law in this area is constantly evolving, it’s wise to consult an experienced estate planning attorney who can guide you through the process.
Please contact Elevated Estate Planning, P.S. or call us at (509) 328-2150 to schedule a free consultation. We have five convenient locations in Washington, including Spokane, Kennewick, and Yakima.
Elevated Estate Planning, P.S. Spokane
9507 N Division St # B, Spokane, WA 99218
(509) 328-2150
Elevated Estate Planning, P.S. Kennewick
6855 W Clearwater Ave A103, Kennewick, WA 99336
(509) 328-2150
Elevated Estate Planning, P.S. Yakima
1115 W Lincoln Ave Suite 109, Yakima, WA 98902
(509) 328-2150