CONTRIBUTED CONTENT: Just across the line: How Washington’s estate tax can reach Idaho families

Idaho has no estate tax and no inheritance tax. The federal estate tax exemption is $15 million per person in 2026. So most North Idaho families reasonably conclude that death taxes simply aren’t their problem.

But drive twenty minutes west on I-90, and the rules change. Washington has its own estate tax, with a threshold a fraction of the federal one. And it doesn’t stop at people who live there. A rental property in Spokane Valley, a cabin on Lake Washington, or a retirement move closer to the grandkids can bring an Idaho family squarely within its reach.

Washington’s Numbers in 2026

For deaths on or after July 1, 2026, Washington taxes estates above a $3 million exclusion, at graduated rates from 10% to 20%. That exclusion is not currently indexed for inflation, so more estates will cross it each year as home values and investment accounts grow.

These rules also move quickly. For deaths between July 1, 2025, and June 30, 2026, the top rate was 35% before the Legislature rolled it back. A plan built around Washington’s estate tax needs a fresh look whenever Olympia acts.

Two Ways It Reaches Idaho Families

1. Moving to Washington. Some North Idaho retirees eventually move to Spokane to be near specialists, hospitals, or adult children. Once Washington is your domicile at death, its tax applies to your whole estate, including the Idaho house, the Idaho bank accounts, and the investment portfolio.

2. Owning Washington property while living in Idaho. Washington also taxes nonresidents who own real estate or tangible personal property located there. The tax is calculated on your entire estate as if you lived in Washington, then multiplied by the share of your estate that sits in Washington.

Consider a widowed Coeur d’Alene resident with a $4 million estate, including a $500,000 rental house in Spokane Valley. After the $3 million exclusion, her Washington taxable estate is about $1 million, which produces roughly $100,000 of tax at the 10% rate. Because one-eighth of her estate is located in Washington, her family would owe about $12,500 in taxes to Washington, before any deductions. This is true even though she never lived there a day in her life.

That same rental can also require a separate ancillary probate in Washington, adding cost and delay on top of the tax (though the probate issue can be solved by using a living trust).

Planning Options Worth Discussing

• Think before you buy or move. The cheapest Washington estate tax plan is the one made before the deed is signed or the moving truck is booked.

• Lifetime gifts. Washington has no gift tax, so gifts during life can reduce a future taxable estate. Gifts of appreciated property give up the step-up in basis at death, which creates an increased capital gains tax for the inheriting beneficiary if they sell later on, so weigh the trade-off carefully.

• How Washington property is held. Some families hold Washington real estate through an entity, which may change how the property is treated for a nonresident. Whether it works depends on the facts, so coordinate with Washington estate planning counsel before relying on this method.

• Document your Idaho domicile. If you split time across the state line, keep your driver’s license, voter registration, vehicle titles, and homestead exemption in Idaho. Domicile at death is a question of fact, and records matter.

The Bottom Line

Living in Idaho is a genuine estate tax advantage, but only if your estate plan keeps Washington out of the picture. If you own property across the state line, are thinking about moving there, or simply aren’t sure, a review now can save your family a five- or six-figure surprise later.

My law firm is currently offering free telephonic, electronic, or in-person consultations concerning probating estates or creating estate planning documents.

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Robert J. Green is an Elder Law, Trust, and Estate Planning Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, or powers of attorney, contact Kootenai Law at 208-765-6555, [email protected], or visit www.KootenaiLaw.com.

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.