exemption of $2 million, there will be Washington estate tax due on $500,000 of the $2.5 millionestate (the amount in excess of Wife's $2 million exemption). At current rates this equals $50,000due to Washington State. While this amount is not a huge amount and only represents 2% of theestate, it could have been avoided entirely for a fraction of the cost through successful EstatePlanning. A simple way to avoid all taxes on both estates: While there are numerous Estate Planningtechniques that could have avoided all state taxes, the simplest would be that the Husband's willshould have passed on a portion of the estate to beneficiaries other than his wife in a trust whichcould still provide Wife with the income generated from those assets during her life. SupposeHusband's will had given at least $500,000 to his children in a credit shelter trust (or given his Wifethe ability to disclaim a portion of the estate into a disclaimer trust with the children as ultimatebeneficiaries) which provided that the income be used to support his wife during her life. His wifewould be no worse off since she could live off the income generated from both her assets and thetrust assets. Then when she dies, her estate consists of no more than $2,000,000, the creditshelter trust assets pass automatically to the children and are not part of Wife's estate, andeverything is completely exempt from Washington State estate tax. More assets = Happier Washington State Department of Revenue. 2. A working professional couple living in Washington State with the following: 1. Primary residence (worth $500,000; mortgage of $300,000) $200,0002. Bank accounts/CD's/Money markets $50,0003. Stocks/Bonds/Investments $100,0004. IRA's/401k/Retirement Accounts $250,0005. Term life insurance death benefits (for husband) $1,000,0006. Cars $40,0007. Misc. Personal Property (art, jewelry, clothes, etc.) $10,000Total $1,650,000 Husband and Wife have thought about Estate Planning only briefly and have established verysimple wills each giving everything to the surviving spouse. They have forgotten to account for thelarge term-life policy in the husband's name and think that their moderate assets of $650,000(without the life insurance benefits) shouldn't really cause any tax problems for their children. Thishypothetical is slightly different from the first in that we will assume that the assets will appreciatebetween the death of the Husband in 2011 and the death of the Wife. Upon the untimely death of the Husband, his estate is worth $825,000 ( of the total communityproperty). Assume that the Wife amasses more wealth and upon her death the $1,650,000 assetshave grown to $2,000,000 and she also has a term life policy of $500,000. The taxable portion ofher estate will be $500,000 (after the $2 million exemption) resulting in a tax bill of $50,000. If herestate were to be larger, even more tax would be due. This tax could have been avoided if theHusband's will had provided Wife with the ability to disclaim some of the property into a disclaimertrust naming the children as ultimate beneficiaries (or establishing a credit shelter trust) payingWife all income and even principal as necessary for her support.