Does Washington Allow Estate Tax Portability? No—Here's What to Do Instead

If you are settling a Washington estate and have been reading about federal estate tax planning, you may have come across "portability" — the federal rule that allows a surviving spouse to inherit their deceased spouse's unused exemption. It is one of the most powerful tools in federal estate tax planning.

Washington does not have it. The state explicitly rejects portability, and the consequences for married couples who don't plan around this are severe.

What Portability Means Federally

Under federal law, when a spouse dies with unused estate tax exemption — meaning their estate was below the $15,000,000 federal threshold — the executor can file IRS Form 706 to elect portability. This transfers the unused exemption to the surviving spouse, who can then add it to their own federal exemption.

A couple where the first spouse dies with a $5,000,000 estate can port $10,000,000 of unused federal exemption to the survivor. The surviving spouse now has a $25,000,000 federal shield — their own $15,000,000 plus the ported $10,000,000. For the vast majority of American households, this effectively eliminates any federal estate tax concern at both deaths.

Washington's Position: No Portability

Washington's estate tax statute does not include a portability provision. The $3,000,000 applicable exclusion is per person and expires at death.

When a Washington spouse dies and leaves everything to the surviving spouse — a completely natural and common estate plan — the unlimited marital deduction eliminates any immediate Washington estate tax. But the deceased spouse's $3,000,000 exclusion is permanently lost. It cannot be transferred to the survivor.

This creates the "exclusion waste" problem. The couple had two exclusions worth $6,000,000 combined. By leaving everything to the survivor, only one exclusion — $3,000,000 — remains available for the second death.

For a couple with $5,000,000 in combined assets:

• Without planning: At the second death, the surviving spouse has a $5,000,000 estate and a $3,000,000 exclusion. $2,000,000 is taxable. At Washington's graduated rates, the tax is roughly $280,000 to $320,000.
• With credit shelter trust planning: Both exclusions are preserved. Total shielded value at the two deaths combined: $6,000,000. Tax owed at both deaths combined: $0.

The difference is not hypothetical — it is the direct result of whether the estate plan includes a credit shelter trust (also called a bypass trust or A/B trust) that captures the first spouse's exclusion in an irrevocable trust at the first death.

The Spousal Personal Residence Exclusion: The Threshold Relief Valve

For estates that did not plan ahead with a credit shelter trust, Washington offers a different but narrower tool: the Spousal Personal Residence Exclusion.

Under this provision, if the decedent and a surviving spouse owned a primary personal residence, the decedent's portion of the home's value may be excluded from the gross estate for the specific purpose of determining whether the estate meets the $3,000,000 filing threshold — as long as the residence passes either outright to the surviving spouse or into a qualifying irrevocable trust for the spouse's benefit.

What it does: It can push an estate that would otherwise exceed the $3,000,000 threshold back below it, eliminating the requirement to file a Washington estate tax return at all.

What it does not do: It does not preserve the first spouse's exclusion for use at the second death. It does not reduce the tax on an estate that clearly exceeds the threshold. It is solely a threshold relief mechanism.

Example: Decedent's gross estate is $3,400,000. Of that, $500,000 is the decedent's half of a primary residence passing to the surviving spouse. The Spousal Personal Residence Exclusion reduces the gross estate for threshold purposes to $2,900,000. No Washington estate tax return is required.

The same estate with a $600,000 qualifying residence share, or where the remaining assets are slightly lower, might benefit significantly from this exclusion. In high-cost areas like King County, where homes are frequently worth $1,000,000 to $2,000,000 or more, the decedent's half of the residence can represent a substantial deduction.

Who Should Use Each Tool

Federal Portability Still Applies to Washington Residents

Even though Washington rejects state-level portability, federal portability is still available. If the gross estate of the first-to-die Washington spouse exceeds $15,000,000, a Form 706 can be filed to elect federal portability. Given that the federal and Washington exclusions are radically different ($15,000,000 vs. $3,000,000), most Washington estates encounter the Washington estate tax problem without ever triggering federal estate tax.

However, federal portability does not require a taxable federal estate to elect it. Any estate may elect portability, including those below the $15,000,000 federal threshold. Electing portability costs nothing (the Form 706 is filed by the nine-month deadline) and preserves the federal unused exemption. Given the possibility of the federal TCJA exemption reverting to pre-2026 levels if Congress does not act, banking federal portability now is generally prudent.

Summary: The Portability Gap in Washington

Washington's rejection of state-level portability is one of the most consequential features of the state's estate tax code for middle-to-high-net-worth families. It is the primary reason Washington estate attorneys recommend credit shelter trusts as the default estate planning tool for married couples with combined assets above $3,000,000.

The Spousal Personal Residence Exclusion provides relief at the margins — particularly in a state with high real estate values — but it is not a substitute for credit shelter trust planning when the estate clearly exceeds the threshold.

The Washington Final Tax & Estate Tax Guide at /us/washington/estate-tax/ includes the complete Table W tax calculation, a credit shelter trust overview, documentation requirements for the Spousal Personal Residence Exclusion, and a comparison of tax outcomes with and without exclusion preservation — the data you need to understand exactly what is at stake for your specific estate.

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