[WSBAPT] Washington inheritance tax question

[Mike Zeno]

I am wondering if I am analyzing this correctly:

Client and spouse are Washington residents and sole members of an LLC.  The only assets of the LLC are real properties, some in Washington and some out of state.  Question is whether the value of the out-of-state properties would be subject to Washington inheritance tax.

Different heirs will receive difference properties.  I would expect the properties to be distributed in kind rather than sold.

The first question is whether the entire membership interest in the LLC would be considered intangible property, and so the value of all the properties in the LLC (both in state and out of state properties) would be subject to Washington tax.

The second question is whether the answer to the first question is unimportant if the LLC is dissolved and the properties distributed to the appropriate heirs, because Washington's inheritance tax is figure on the value of what is inherited and not on the value of the estate.  I think the answer to the second question is yes, but I am interested in what others think.

Mike Zeno


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