Tax Implications for Inheritance in Washington State and Oregon

Tax Implications for Inheritance in Washington State and Oregon

Tax Implications for Inheritance in Washington State and Oregon

Inheriting assets can be both a rewarding and overwhelming experience. In Washington State and Oregon, it’s important to understand the specific tax laws and estate regulations to help ensure that you navigate the process smoothly and make the most of your inheritance. This article outlines the tax implications in these two states.

Tax Implications of Inheritance in Washington State and Oregon

Understanding the tax implications of an inheritance is crucial, as both Washington State and Oregon have distinct rules that may impact the inheritance process. Below is a breakdown of how inheritance is taxed in each state:

1. Washington State: No Inheritance Tax, but Estate Tax Applies

Washington is one of the few states in the U.S. that does not impose an inheritance tax, meaning that beneficiaries do not have to pay taxes on the value of the inherited property directly. However, Washington does have a state estate tax that applies to estates valued above a certain threshold.1

  • Estate Tax: Washington State imposes an estate tax on estates with a gross value exceeding $2.193 million (for 2025). The tax is calculated based on the value of the estate, and the tax rate can vary between 10% and 20% depending on the estate’s value.1
  • No Inheritance Tax: While beneficiaries are not required to pay inheritance tax, it’s important to understand that the estate itself must settle any estate taxes before assets are distributed.2

2. Oregon: No Inheritance Tax, But Estate Tax Applies

Oregon also does not levy an inheritance tax, which means that heirs are not required to pay taxes on the property they inherit. However, Oregon has its own estate tax rules.3

  • Estate Tax: Oregon’s estate tax applies to estates with a value over $1 million. The tax rate varies from 10% to 16% depending on the value of the estate. If the estate exceeds $1 million, estate tax is applied to the amount exceeding that threshold.4
  • Exemptions and Deductions: Some exemptions and deductions may apply to Oregon estate tax, such as deductions for debts, funeral expenses, and other allowable costs. The estate must be properly appraised to determine the taxable amount.5-6

In both Washington and Oregon, these tax filings can be complex, so consulting with an estate attorney or tax professional is advisable to help ensure compliance with all tax requirements.

About Harlow Wealth Management

Harlow Wealth Management, Inc. is an independently owned and operated advisor. We serve clients living in the greater southwest Washington and Portland metropolitan areas, with an office in downtown Vancouver, Washington. While our firm was officially created in 2005, our founding president, Danny Harlow, has been serving the retirement financial planning needs of our community since 1973. We focus on helping those who are retired or about to retire by building a customized retirement strategy. Our proprietary approach, the “Harlow Way”, addresses the following 5 key areas: designing a sustainable retirement income strategy, addressing healthcare and long-term care risk, investments and growing your portfolio, taxes, and estate/legacy strategies.

 

References

  1. https://dor.wa.gov/taxes-rates/other-taxes/estate-tax-tables
  2. https://dor.wa.gov/taxes-rates/other-taxes/estate-tax/estate-tax-faq
  3. https://www.oregon.gov/dor/programs/businesses/Pages/estate.aspx?
  4. https://learn.valur.com/oregon-estate-tax-explained/
  5. https://apps.oregonlegislature.gov/liz/2025R1/Downloads/CommitteeMeetingDocument/289660
  6. https://apps.oregonlegislature.gov/liz/2025R1/Downloads/CommitteeMeetingDocument/289660

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