Washington Estate Tax Cases
Last updated: 07 Nov 2025 •
Washington Estate Tax — Case Notes & Practitioner Commentary
Washington imposes a stand-alone estate & transfer tax under RCW 83.100, administered by DOR with rules in WAC 458-57. Reported appellate cases squarely on modern RCW 83.100 issues are limited; positions lean on statute, WAC, DOR instructions (return/addenda), and federal conformity (valuation, deductions, marital). Below are “authorities-first” notes on issues that matter in filings and audits. RCW 83.100 • WAC 458-57
Framework & Federal Touchpoints (RCW 83.100; WAC 458-57)
What it’s about
Washington computes a state estate tax using a WA-taxable estate derived from the federal system, with state-specific exclusion, brackets, addenda, and special deductions.
Holding / Rule
Federal schedules (706/706-NA) are scaffolding for valuation/deductions; the WA computation (including QFOBI, apportionment) is controlled by state law.
Comment
Start with the DOR packet. Align asset descriptions, valuations, and deduction support to minimize DOR follow-ups; keep a pro-forma federal package if no 706 is required.
Nonresident Situs & Apportionment (Addendum #4)
What it’s about
Nonresidents are taxed on WA real property and tangible personal property. Most nonresident intangibles are not WA-situs; WA limits liability via an apportionment fraction.
Holding / Rule
Compute a pre-apportioned tax, then multiply by WA-situs gross estate ÷ worldwide gross estate. Certain farm-deduction property is excluded from both numerator & denominator.
Comment
Document location, possession, and use. For vessels/aircraft/equipment temporarily in WA, maintain objective evidence. Use Addendum #4 to clearly present the fraction.
Marital Deduction & State QTIP
What it’s about
WA recognizes marital deduction planning aligned with federal concepts, incl. state-only QTIP to defer WA tax until the survivor’s death.
Holding / Rule
Eligibility mirrors federal requirements (qualified income interest, spouse as income beneficiary). Consistency between WA filings and federal schedules/elections is expected.
Comment
Attach election statements and trust provisions. Track basis for state-only QTIPs where no federal election exists to avoid later discrepancies.
Qualified Family-Owned Business Interests (QFOBI)
What it’s about
A QFOBI deduction can reduce the WA base up to the statutory cap for the date of death, subject to ownership, size, nexus, and continuity tests.
Holding / Rule
When tests are met, deduction applies up to the cap; failure of continuity or eligibility can trigger denial and interest.
Comment
Start eligibility review early; maintain affidavits, minutes, returns, payroll and nexus support. Coordinate with valuation and trust design.
Administration Expenses, Debts & Probate Timing
What it’s about
Deductibility depends on substantiation and timing—court-approved commissions/fees, invoices, proof of payment, and correct allocation when mixed situs assets exist.
Holding / Rule
WA generally follows federal categories but expects documentation consistent with the state return and any probate orders.
Comment
Calendar creditor periods and approval hearings. If amounts are uncertain near month 9, consider a tentative payment and amend later.
Valuation, Alternate Dates & Difficult Assets
What it’s about
Fair market value drives both the pre-apportioned computation and the apportionment fraction. Real property and significant tangibles need robust appraisals; closely-held interests need defensible methodologies.
Holding / Rule
WA relies on federal valuation scaffolding but applies its own state computation. Keep appraisal evidence aligned with return attachments.
Comment
Use local WA appraisers for real estate; ensure consistency between inventory values, federal schedules (if any), and WA schedules to avoid DOR inquiries.
References
- RCW 83.100 — Washington Estate & Transfer Tax (scope, deductions, rates, special deductions, situs/apportionment).
- WAC 458-57 — Rules interpreting RCW 83.100 (apportionment mechanics, examples, definitions).
- Washington DOR — Estate Tax Return & Instructions (incl. Addendum #4 and QFOBI guidance).
- IRS Form 706 & Instructions — federal schedules used as valuation/deduction references where applicable.