Washington, D.C. Estate Planning Guide 2026

Washington, D.C. operates its own estate tax with an exemption significantly lower than the federal threshold — and, critically, that exemption cannot be shared between spouses. For married couples with combined estates above roughly $5 million, this "non-portability" rule creates a planning gap that can expose hundreds of thousands of dollars to tax if left unaddressed. This guide covers everything DC residents need to know about estate planning in 2026.

Overview: DC Estate Planning in 2026

The District of Columbia is among a small number of jurisdictions in the United States that imposes its own estate tax entirely separate from — and with a much lower exemption than — the federal estate tax. In 2026, the federal estate tax exemption stands at $15 million per person (permanently extended and indexed for inflation by the One Big Beautiful Bill Act of 2025), while DC's exemption is approximately $4,988,400. That gap of more than $10 million per person means that a DC resident with a $7 million estate pays zero federal estate tax but owes DC estate tax on roughly $2 million of that estate.

On the other side of the ledger, DC residents enjoy two significant tax advantages: no inheritance tax and no state gift tax. Unlike Maryland — the only state in the country that imposes both an estate tax and an inheritance tax — DC taxes only the estate itself, and only at death. Beneficiaries pay no DC tax on what they receive, regardless of how large the inheritance or their relationship to the decedent.

The most consequential and least-understood feature of DC's estate tax regime is that the exemption is not portable between spouses. Under federal law, a surviving spouse can use the deceased spouse's unused federal exemption — effectively doubling the married couple's combined shield to $30 million in 2026. DC does not follow this rule. A married couple can only use one DC exemption, not two. Without careful advance planning, the first spouse's $4,988,400 DC exemption may be entirely or partially wasted, leaving the surviving spouse with a much larger taxable estate than necessary.

DC also has its own probate system, governed by the DC Superior Court's Probate Division, with both standard and abbreviated procedures depending on estate size. Residents who own real property in multiple jurisdictions — a common scenario in the DC/Maryland/Virginia corridor — face additional complexity with potential multi-state probate proceedings.

DC Estate Tax: Rates, Exemption, and Non-Portability

The 2026 Exemption

DC's estate tax exemption is indexed for inflation based on a $4 million legislative baseline. For 2026, that inflation-adjusted figure is $4,988,400. Estates valued at or below this amount owe no DC estate tax. Estates above this threshold are taxed only on the amount exceeding the exemption — the portion below the exemption is always shielded.

It is worth noting that DC's 2026 exemption of approximately $4,988,400 is slightly lower than Maryland's $5 million exemption, making DC one of the more restrictive jurisdictions in the mid-Atlantic region for estate tax purposes. Virginia, by contrast, eliminated its estate tax entirely in 2007 and imposes no estate or inheritance tax of any kind.

DC Estate Tax Rate Table (2026)

DC uses a graduated rate structure, meaning higher brackets apply only to the portion of the taxable estate falling within each range. The rates run from 11.2% on the first dollars above the exemption up to 16% on amounts exceeding $10 million:

As a practical illustration: a DC resident who dies with a $7 million estate would owe approximately $249,299 in DC estate tax — roughly 3.6% of the total estate. A $10 million estate would face approximately $729,299 in DC estate tax. These figures assume no deductions beyond the exemption; proper planning can substantially reduce the taxable base.

What Assets Are Included in a DC Taxable Estate?

DC follows federal "gross estate" concepts for defining what is included. The DC taxable estate generally includes:

• All real property located in DC owned by the decedent (solely or in part)
• Bank accounts, investment portfolios, brokerage accounts, and cash
• Retirement accounts (IRAs, 401(k)s), though these also carry income tax implications for beneficiaries
• Life insurance proceeds where the decedent held "incidents of ownership" over the policy at death
• Business interests, including LLC memberships, partnership interests, and closely held stock
• Personal property such as vehicles, artwork, jewelry, and collectibles
• Revocable living trust assets (these avoid probate but are still included in the taxable estate)

The DC estate tax return (Form D-76 or D-76EZ) is due within nine months of the decedent's date of death. A six-month extension is available for filing, but any tax owed is still due within nine months to avoid interest and penalties.

The Non-Portability Problem in Detail

Federal law allows a surviving spouse to "port" the deceased spouse's unused federal estate tax exemption. Under current federal law, if Spouse A dies in 2026 with only $2 million in their individual name, the remaining $13 million of their $15 million exemption can be carried over to Spouse B — giving Spouse B a combined $28 million federal shield. DC has not adopted this portability rule.

In DC, each spouse has exactly one $4,988,400 exemption — and it must be used at that spouse's death or it is lost forever. If Spouse A leaves everything outright to Spouse B (using the unlimited marital deduction), Spouse A's DC exemption is never used against any assets. When Spouse B later dies, their estate includes everything — and only one DC exemption ($4,988,400) offsets the tax. The result is that a married couple with a $9 million combined estate could end up with $4 million exposed to DC estate tax that could have been fully sheltered with proper planning.

No DC Inheritance Tax or Gift Tax

No Inheritance Tax in DC

Washington, D.C. does not levy an inheritance tax. This means that beneficiaries who receive assets from a DC estate — whether children, siblings, friends, business partners, or unrelated individuals — pay no DC tax on what they inherit, regardless of the amount. The tax burden, if any, falls entirely on the estate before distribution, not on the recipients after distribution.

This is a significant advantage compared to states like Maryland, which imposes a 10% inheritance tax on assets passing to non-lineal heirs (nieces, nephews, cousins, friends, and unmarried partners — though spouses, children, parents, grandparents, and siblings are exempt). Pennsylvania and New Jersey also impose inheritance taxes. DC's lack of an inheritance tax simplifies planning considerably for DC residents who wish to leave assets to non-family members.

No DC Gift Tax

DC does not impose a state-level gift tax. This creates a meaningful planning opportunity: DC residents can make substantial lifetime gifts to reduce the size of their taxable estate without incurring any DC tax on the transfer. The gift removes assets from the estate that would otherwise be subject to DC's estate tax at death.

However, the federal gift tax rules still apply to DC residents in full. In 2026, the federal annual gift tax exclusion is $19,000 per recipient. Gifts at or below this amount per recipient per year are not counted against the federal lifetime exemption ($15 million in 2026) and require no gift tax return. Gifts above the annual exclusion amount count against the lifetime exemption and require filing a Form 709 federal gift tax return, though no tax is typically owed until the lifetime exemption is exhausted.

Common gifting strategies for DC residents include:

• Annual exclusion gifting: Each spouse can give $19,000 to each recipient per year tax-free. A couple with three adult children can give $114,000 per year ($19,000 × 2 spouses × 3 children) without touching the lifetime exemption.
• Direct tuition and medical payments: Payments made directly to educational institutions for tuition, or directly to medical providers for qualified medical expenses, are entirely excluded from gift tax — with no dollar limit. These payments do not count as gifts at all.
• 529 plan "superfunding": Up to five years of annual exclusion contributions ($95,000 per beneficiary per donor in 2026, or $190,000 for couples) can be made to a 529 education savings account in a single year by electing to spread the gift over five years for gift tax purposes.

Probate in Washington, D.C.

The DC Probate System

Probate in Washington, D.C. is administered by the DC Superior Court, Probate Division. When a DC resident dies with assets held in their individual name — meaning assets not held in a trust, not jointly owned with right of survivorship, and not payable to a named beneficiary — those assets generally must pass through the probate process before transferring to heirs or beneficiaries under a will.

DC law distinguishes between standard probate and abbreviated (small estate) procedures, with the applicable process depending primarily on the size of the estate.

Standard Probate

Standard probate in DC involves filing a petition with the Probate Division, having the will admitted (if one exists), and obtaining "letters testamentary" or "letters of administration" that authorize the personal representative to act on behalf of the estate. The process typically includes:

1. Filing the petition and original will (if any) with the DC Superior Court Probate Division
2. Publication of a notice to creditors in a local newspaper (creditors have six months to file claims)
3. Inventory and appraisal of estate assets
4. Payment of valid debts, taxes, and administrative expenses
5. Filing an accounting with the court showing all receipts and disbursements
6. Final distribution of assets to beneficiaries and closing of the estate

DC standard probate typically takes 12 to 18 months from opening to closing for estates with no complications. Contested estates, large or complex asset inventories, or IRS audit activity can extend the timeline significantly. Attorney fees, court filing fees, and personal representative compensation are all costs borne by the estate. Attorney fees in DC probate are often calculated as a percentage of the estate's gross value or billed hourly, and total administration costs often run 2% to 5% of estate value.

Abbreviated (Small Estate) Procedures

DC provides a simplified process for smaller estates. If the gross estate does not exceed $40,000, heirs may use the small estate affidavit procedure — a streamlined process that avoids full court supervision. The personal representative files a relatively simple form with the court and, after a waiting period, can distribute assets without the full probate process.

The $40,000 small estate threshold applies to the total value of assets subject to probate, not to the total estate. Assets that pass outside probate (trusts, beneficiary designations, joint ownership) are not counted toward this threshold, which means that a well-structured estate plan can keep the probate estate below $40,000 even for a larger overall estate.

Intestate Succession in DC

If a DC resident dies without a valid will — a situation called dying "intestate" — DC law determines who inherits through a fixed priority scheme. Under DC's intestate succession rules:

• If the decedent is survived by a spouse and no descendants: the entire estate passes to the surviving spouse
• If the decedent is survived by a spouse and descendants: the estate is split — one-third to the surviving spouse, two-thirds to descendants equally
• If the decedent has no spouse: the entire estate passes to descendants in equal shares
• If no spouse or descendants: the estate passes to parents, then siblings, then more distant relatives under DC's statutory scheme

Notably, unmarried partners — however long-standing the relationship — receive nothing under DC intestate succession. A person's estate would pass to more distant relatives rather than to a non-married domestic partner unless a will or other estate planning document directs otherwise. This makes a will or other formal designation absolutely essential for anyone in an unmarried committed relationship.

Avoiding Probate in DC

Probate is not mandatory for all assets. A well-designed estate plan can transfer most or all of a person's wealth entirely outside the probate process, saving time, money, and the burden on loved ones. The following tools are available to DC residents.

Revocable Living Trusts

A revocable living trust is the primary tool for avoiding probate in DC. Assets titled in the name of a living trust during your lifetime pass directly to beneficiaries at death according to the trust's terms — with no court supervision, no probate delay, and no public record. The trust is fully revocable and amendable during your lifetime, and you remain in control of all assets as the trustee. At death, a successor trustee steps in to distribute assets according to your instructions, typically within weeks rather than the 12–18 months that probate can take. See our complete guide to living trusts for detailed information on how these structures work and when they make sense. For a short will-versus-trust decision, see Will vs. Living Trust.

For DC residents, a revocable living trust serves an important secondary function: it is the vehicle through which a credit shelter (bypass) trust is most cleanly implemented to address the non-portability issue. The living trust of the first-to-die spouse can be structured to automatically split into a credit shelter trust (funded with up to $4,988,400) and a marital trust at death, preserving both spouses' DC exemptions.

Joint Ownership with Right of Survivorship

Assets owned jointly with right of survivorship (JTWROS) pass automatically to the surviving co-owner at death without probate. This is a common arrangement for real estate and bank accounts between spouses. However, joint tenancy has significant limitations as an estate planning tool: it only defers the probate problem until the survivor's death, it can have unintended gift tax consequences when adding a non-spouse as co-owner, and it can complicate estate tax planning by making it harder to fund a credit shelter trust at the first spouse's death.

Beneficiary Designations

Many asset types allow you to designate a beneficiary directly, allowing those assets to pass outside probate entirely:

• Retirement accounts (IRAs, 401(k)s, 403(b)s): pass directly to named beneficiaries and never go through probate
• Life insurance policies: death benefit passes directly to named beneficiaries
• Payable-on-death (POD) bank accounts: funds pass directly to the named POD beneficiary at death
• Transfer-on-death (TOD) brokerage accounts: securities transfer directly to the named beneficiary

Beneficiary designations override your will. A retirement account will pass to whoever is named on the beneficiary form — regardless of what your will says. Keeping these designations current and coordinated with your overall estate plan is critical. Outdated designations — for example, a former spouse still named on an IRA — are one of the most common and costly estate planning mistakes.

Estate Planning Strategies for DC Residents

Credit Shelter Trusts: The Essential Tool for Married Couples

Given that DC's estate tax exemption is not portable, a credit shelter trust (also called a bypass trust or B trust) is the most important planning tool for married DC couples with combined estates exceeding roughly $5 million. The strategy works as follows:

At the death of the first spouse, instead of leaving everything to the surviving spouse outright (which would waste the first spouse's DC exemption), the estate plan directs that an amount equal to the DC exemption — up to $4,988,400 — be funded into a credit shelter trust. This trust typically provides income and access to principal for the surviving spouse's benefit during their lifetime, while sheltering the assets from both spouses' estate tax. When the surviving spouse later dies, the credit shelter trust passes to the ultimate beneficiaries (usually children) without being included in the surviving spouse's taxable DC estate. The remaining assets above the credit shelter trust amount can pass outright to the surviving spouse using the unlimited marital deduction.

The result: both spouses' DC exemptions are fully utilized, and a married couple with a combined $9,976,800 estate can potentially pass it to heirs with zero DC estate tax — rather than paying $537,000 or more in tax that would have been owed without the trust.

AB Trust Planning

The traditional AB trust structure divides the deceased spouse's trust into two components: the "A trust" (the marital trust, which qualifies for the unlimited marital deduction and is includible in the surviving spouse's estate) and the "B trust" (the credit shelter or bypass trust, which shelters the exemption amount and is not includible in the surviving spouse's estate). This classic structure remains highly effective in DC specifically because of non-portability. The B trust shelters the first spouse's exemption regardless of how large the surviving spouse's estate eventually grows.

It is worth noting that with the federal exemption now at $15 million per person, the AB trust's federal tax savings have largely disappeared for most families. But DC's much lower $4,988,400 exemption and non-portability rule mean that this structure retains significant DC estate tax value for couples in the $5–$15 million range — a substantial number of DC households given DC's high property values and concentrations of wealth in certain professional sectors.

Lifetime Gifting Strategies

Because DC has no gift tax and the federal gift tax annual exclusion is $19,000 per recipient in 2026, lifetime gifting is a powerful way to reduce a potentially taxable DC estate. A systematic gifting program can move substantial wealth out of the estate over time:

• A couple with three adult children can give $114,000 per year gift-tax-free ($19,000 × 2 donors × 3 recipients)
• Gifts to grandchildren, nieces, nephews, or friends can also be made tax-free up to $19,000 per year per donor
• Tuition payments made directly to educational institutions and medical payments made directly to healthcare providers are unlimited exclusions — in addition to annual exclusion gifts
• Gifts of appreciated assets (real estate, securities) remove future appreciation from the estate, though recipients take the donor's cost basis (important income tax consideration)

Spousal Lifetime Access Trusts (SLATs)

A Spousal Lifetime Access Trust (SLAT) is an irrevocable trust created by one spouse for the benefit of the other. The donor spouse makes a gift into the trust — removing those assets from both spouses' taxable estates — while the beneficiary spouse retains access to trust income and principal if needed. SLATs can be particularly effective for DC residents looking to reduce a large taxable estate while maintaining some indirect access to the assets through their spouse. They require careful drafting to avoid estate inclusion under IRS rules, and "reciprocal trust" issues must be addressed if both spouses create SLATs simultaneously.

DC vs. Maryland vs. Virginia: The Corridor Comparison

The DC/Maryland/Virginia metropolitan area is unique in that three jurisdictions with dramatically different estate tax regimes share a single real estate market and workforce. Understanding where your estate stands relative to your neighbors is important context for planning decisions, including whether relocation might be a consideration for high-net-worth individuals.

Maryland is notably the only jurisdiction in the United States that imposes both an estate tax and an inheritance tax — making it the most complex tax environment in the corridor. However, Maryland's estate tax exemption ($5 million) is portable between spouses, which is a meaningful planning advantage over DC for married couples. Virginia remains the most tax-favorable for estate planning, with no state-level estate or inheritance taxes at all.

Irrevocable Life Insurance Trusts (ILITs)

Life insurance owned by the decedent is included in the DC taxable estate. For individuals with large life insurance policies, an Irrevocable Life Insurance Trust (ILIT) can own the policy, keeping the death benefit out of the taxable estate while providing liquidity to pay estate taxes or support beneficiaries. ILITs require careful setup — the trust must be irrevocable, Crummey notices must be properly maintained, and the insured should not retain any "incidents of ownership" over the policy. See our tax planning guide for a detailed discussion of ILITs and other estate tax reduction strategies.

Powers of Attorney and Healthcare Directives in DC

Estate planning encompasses more than asset distribution at death. Equally important are the documents that govern who makes financial and healthcare decisions for you if you become incapacitated during your lifetime. DC has specific requirements for each of these instruments.

Durable Power of Attorney (Financial)

A durable financial power of attorney authorizes a designated agent to manage your finances — paying bills, managing investments, filing tax returns, managing real estate, and handling other financial matters — if you become unable to do so yourself. The "durable" feature means the document remains effective even if you become mentally incapacitated; a non-durable POA would terminate at incapacity and be useless precisely when you need it most.

Under DC law, a durable power of attorney must be signed by the principal (you), acknowledged before a notary public, and signed by two adult witnesses who are not named as the agent. DC requires that witnesses not be related to you by blood, marriage, or adoption. The document should expressly state that it is intended to be durable and remain effective notwithstanding subsequent disability. Without a durable POA, your family may be forced to petition the DC Superior Court for a guardianship or conservatorship — a costly, time-consuming process — to manage your finances if you become incapacitated.

Healthcare Power of Attorney

A healthcare power of attorney (also called a healthcare proxy or healthcare agent designation) authorizes someone to make medical decisions on your behalf if you are unable to make them yourself — for example, if you are unconscious, severely ill, or cognitively incapacitated. Your healthcare agent can consent to or refuse medical treatment, authorize surgery, choose among treatment options, and work with your medical team on your behalf.

DC's healthcare POA requirements are governed by the DC Healthcare Decisions Act. The document must be in writing, signed by the principal, and witnessed by two qualified adults. The witnesses cannot be the designated healthcare agent, the principal's healthcare provider or an employee of that provider, or anyone who would benefit financially from the principal's death. A healthcare POA does not require notarization in DC, though having it notarized can ease practical administration.

Advance Directive (Living Will)

An advance directive (sometimes called a living will) states your specific wishes about end-of-life medical treatment — particularly about life-sustaining measures such as mechanical ventilation, artificial nutrition and hydration, and resuscitation. Unlike a healthcare POA, which delegates decision-making authority to another person, an advance directive states your own preferences directly.

Under DC law, an advance directive can be combined with a healthcare power of attorney in a single document. DC's statutory form includes space for both the agent designation and your specific treatment preferences. The combined document must meet the same witnessing requirements as the healthcare POA. DC also recognizes the POLST (Physician Orders for Life-Sustaining Treatment) form, which translates advance directive wishes into physician orders for use in emergency situations and clinical settings.

HIPAA Authorization

In addition to the core documents above, a HIPAA authorization form allows your designated agent to access your medical records and communicate with your healthcare providers. Without a signed HIPAA authorization, healthcare providers may refuse to share information with family members — even your spouse or adult children — due to federal privacy law requirements. This document is separate from a healthcare POA and should be included in any complete DC estate plan.

When to Consult a DC Estate Planning Attorney

DC's non-portability rule changes the calculus for professional estate planning. In states like Maryland (where the exemption is portable) or Virginia (where there is no state estate tax at all), a married couple might comfortably handle straightforward planning with online documents. In DC, the non-portability of the exemption creates structural complexity that makes professional guidance highly advisable for a broader range of clients. The same complexity screen is on DIY vs. hiring an attorney.

You Should Strongly Consider a DC Estate Planning Attorney If:

• You are married and your combined estate exceeds approximately $5 million — a credit shelter trust requires professional drafting to be effective
• You own real property in DC and one or more other jurisdictions (multi-state estate planning and ancillary probate avoidance require careful coordination)
• You own a business, professional practice, or partnership interest — business succession and valuation discounts require specialized expertise
• You have children from a prior marriage, blended family dynamics, or a non-married long-term partner — standard documents may not address these situations correctly
• You want to minimize DC estate tax exposure through lifetime gifting strategies, ILITs, SLATs, or other advanced structures
• You have a beneficiary with special needs who receives government benefits such as Medicaid or SSI — an inheritance can inadvertently disqualify them unless structured through a special needs trust
• Your estate is likely to be contested — family disputes, disinheritance, or multiple marriages increase the risk of a will challenge
• You want to make substantial charitable gifts in a tax-efficient manner (charitable remainder trusts, donor-advised funds, charitable lead trusts)

Planning Is Cost-Effective at Any Estate Level

Even for DC residents with estates well below the $4,988,400 DC exemption, a basic estate plan is inexpensive relative to what it prevents. A will, durable POA, healthcare POA, and advance directive can typically be prepared by a DC estate planning attorney for $1,500 to $3,000 for a married couple — less than 1% of a $500,000 estate. A more comprehensive plan including a revocable living trust, pour-over wills, and all ancillary documents typically runs $3,000 to $6,000. For estates with DC estate tax exposure, the tax savings from proper planning can be 100 times or more the cost of the plan itself.

DC estate planning attorneys can be found through the DC Bar's lawyer referral service, the DC Estate Planning Council, and through referrals from financial advisors or CPAs who work regularly with clients in the estate tax range. When interviewing attorneys, ask specifically about their experience with DC estate tax planning, credit shelter trust drafting, and multi-jurisdiction property ownership — these are DC-specific competencies that not all general practice attorneys possess.