It is the most natural estate plan anyone can think of.  You sit down with your spouse and agree: “If I go first, you get everything. When you go, the kids split what is left.”  It’s simple, it’s fair, and it reflects your marriage bond.  In estate planning, this is known as an “I Love You Will.”  However, in many situations, an “I Love You Will” is not the ideal estate planning strategy.

First Consideration: Failing to Use Your Spouse’s Washington Estate Tax Exemption

Washington’s estate tax provides each individual with a $3 million exemption (as of July 1, 2026) from the state estate tax.  When the first spouse dies with an “I Love You Will,” everything passes to the surviving spouse outright.  There is no estate tax due on the first death because of the unlimited marital deduction, which allows all assets passing to the surviving spouse to qualify for a deduction on the estate tax return.  This unlimited marital deduction applies to both federal and Washington estate taxes.

However, this exemption is specific to each individual and any unused amount does not transfer to the surviving spouse.  The problem arises when the second spouse dies; now, all those assets, your house, your IRA, and your brokerage account, are entirely in the surviving spouse’s name.  The surviving spouse’s estate only has the surviving spouse’s $3 million exemption.  The first spouse’s exemption has effectively disappeared because it was never used and it does not transfer.

The Math: assume your combined Washington estate is $4 million (you have a nice house in the suburbs and some retirement savings):

• With an “I Love You Will,” the surviving spouse has an estate worth about $4 million. At the second death, $4 million less the $3 million estate tax exemption equals $1 million subject to the Washington estate tax (at a 10% tax rate, this is  $100,000 of estate tax)
• One option to preserve the Washington estate tax exemption amount for the first spouse is an Exemption Trust. The Exemption Trust is a testamentary trust that is detailed in your Will and provides that an amount up to the first spouse’s Washington estate tax exemption amount (currently $3 million) at the time of their passing is transferred to a trust for the benefit of the surviving spouse.  The surviving spouse is the sole trustee and beneficiary of this trust.  Then, upon the second death, the trust assets would pass to the surviving beneficiaries, such as the children, and the second spouse will use their own $3 million exemption for the assets in their estate.  Using the numbers above, this would result in no Washington estate tax because approximately $2 million would be in the Exemption Trust, which is not included in the surviving spouse’s estate, and $2 million would be in the surviving spouse’s estate, which is below the $3 million exemption amount.

Second Consideration: A Blended Family

The “I Love You Will” is of particular concern to estate planners when second marriages or blended families are involved.  In Washington, if you leave everything to your new spouse, there is no guarantee that the children from a prior marriage will ever receive anything.  Once you are gone, your spouse owns those assets outright.  They can change their Will and leave everything to their children, a new partner, or a charity.

However, the use of an Exemption Trust or a Marital Trust will protect those assets for the next generation.  An exemption trust sets aside an amount up to the Washington estate tax exemption for the benefit of the surviving spouse, and upon the spouse’s death, the remaining trust assets pass directly to the beneficiaries that you named in the trust, such as your children.  In a similar vein, a Marital Trust, typically structured as a QTIP (Qualified Terminable Interest Property Trust), qualifies for the unlimited marital deduction, so no estate tax is triggered at the first death.  However, it restricts the surviving spouse’s control over where the assets will ultimately go.  The spouse will receive income and, in many cases, principal during their lifetimes; but whatever remains passes to the beneficiaries named in the trust, ensuring that your children (or other persons specified) receive your share of the estate.

In conclusion, the “I Love You Will” has a certain appeal because it is simple and provides for your family.  But in Washington’s estate tax regime, simple can lead to future estate tax consequences.  For couples with a combined estate approaching or exceeding the Washington estate tax exemption, a slightly more sophisticated estate plan involving trusts isn’t about making things more complex, rather it ensures that the “I love you” inheritance goes to your spouse and to your children in a tax efficient manner.

If you have questions about this, or other estate planning matters, the members of Lasher’s Estate Planning, Probate and Private Wealth Services team are here to help.