Virginia does not have a state estate tax

Virginia imposes no tax on the transfer of property when someone dies. This means your heirs will not owe Virginia state tax on what they inherit from you, regardless of the estate's size. The only estate tax that may apply is the federal estate tax, which only affects estates larger than a threshold set by federal law (currently $13.61 million for deaths in 2024, though this amount changes yearly and is scheduled to drop in 2026).

Because Virginia has no state-level estate tax, probate and inheritance in Virginia are simpler than in the 17 states that do impose their own estate taxes. You do not need to file a Virginia estate tax return or worry about state tax liability when planning your estate.

Key Takeaways

  • Virginia has no state estate tax, so your heirs pay no Virginia tax on inherited property.
  • Federal estate tax may still apply if your estate exceeds the federal threshold, which is $13.61 million for 2024 but scheduled to decrease in 2026.
  • Virginia does have an inheritance tax on certain beneficiaries in limited circumstances, though most heirs pay nothing.
  • The absence of a state estate tax does not eliminate the need for a will or trust to control how your property passes to your heirs.

How Virginia's lack of estate tax differs from other states

Twelve states currently impose an estate tax, and five states impose an inheritance tax (a tax paid by the person receiving the inheritance rather than by the estate itself). Virginia is in neither group. This means Virginia residents do not face a second layer of tax on top of any federal estate tax that might apply.

States with estate taxes typically exempt smaller estates and tax only the portion above a state-specific threshold. Because Virginia has no such tax at all, the planning process is more straightforward for most Virginia residents. You do not need to structure your estate differently to avoid a state tax, and your executor does not need to file additional state tax forms after your death.

Federal estate tax still applies to large Virginia estates

Even though Virginia has no state estate tax, the federal government taxes very large estates. For 2024, the federal exemption is $13.61 million per person. Estates larger than this amount owe federal estate tax on the excess at a rate of 40 percent. A married couple can combine their exemptions to $27.22 million.

This federal threshold is temporary. Under current law, it is scheduled to drop to approximately $7 million per person (adjusted for inflation) on January 1, 2026, unless Congress changes the law. If your estate may exceed the current exemption or the future lower threshold, you may want to discuss tax planning strategies with an estate attorney or tax professional.

The federal estate tax applies regardless of where you live, so Virginia residents with large estates face the same federal tax as residents of states with their own estate taxes. The difference is that Virginia residents do not face a second state tax on top of the federal tax.

Virginia's inheritance tax on specific beneficiaries

Virginia does not have a general inheritance tax, but it does impose a tax on certain transfers to specific types of beneficiaries in limited situations. This tax is rare and applies only when property passes outside of a will or trust — typically through joint ownership or beneficiary designations on accounts like life insurance or retirement accounts.

The tax applies only to transfers to people who are not lineal descendants (children, grandchildren) or spouses. In practice, most Virginia estates do not trigger this tax because most property passes through a will or trust, or to spouses and direct descendants. If your estate includes unusual ownership structures or you plan to leave money to people outside your immediate family, an estate attorney can tell you whether this tax might apply.

What you still need to do without a state estate tax

The absence of a Virginia state estate tax does not mean you can skip estate planning. You still need a will or trust to direct where your property goes, name a guardian for minor children, and appoint someone to manage your estate. Without these documents, Virginia's intestacy laws determine who inherits, which may not match your wishes.

If you own property in multiple states, have a complex family situation, or have an estate that may exceed the federal exemption threshold, you should consult an estate attorney. They can help you structure your estate to minimize federal tax if needed and ensure your heirs receive what you intend to leave them.

How to plan your Virginia estate

Start by listing all your property: real estate, bank accounts, investments, retirement accounts, life insurance, and personal items of value. Note how each asset is titled (in your name alone, jointly with someone, in a trust, or with a named beneficiary).

Next, decide who you want to inherit each asset and in what order (in case your first choice dies before you do). Write or update your will, and consider whether a revocable living trust makes sense for your situation. A trust can help your heirs avoid probate and gives you control over how and when they receive money.

Review beneficiary designations on life insurance, retirement accounts, and transfer-on-death accounts. These pass directly to the named beneficiary and do not go through probate, but they override what your will says. Make sure the designations match your current wishes.

Frequently Asked Questions

Do I need to file an estate tax return in Virginia?

No. Virginia has no state estate tax, so you do not file a Virginia estate tax return. Your executor may need to file a federal estate tax return if the estate exceeds the federal exemption threshold ($13.61 million in 2024), but that is a federal form, not a Virginia one.

Will my heirs owe tax on what they inherit?

Not to Virginia. Your heirs pay no Virginia state tax on inherited property. They may owe federal estate tax if the total estate is very large, but that tax is paid by the estate before distribution, not by the heirs themselves.

What happens to my property if I die without a will in Virginia?

Virginia's intestacy laws determine who inherits. Generally, your spouse and children inherit first, then parents, then siblings. If you want someone else to inherit or want to control how much each person receives, you need a will or trust.

Is a living trust necessary in Virginia?

Not always. A will is sufficient for many estates. A living trust can help avoid probate and gives you control over property management if you become unable to manage your own affairs. Whether one makes sense depends on your assets, family situation, and goals. An estate attorney can advise you.

What if I own property in another state?

Property in another state is subject to that state's laws and taxes. If you own real estate in a state with an estate tax, that state may tax the property even though you live in Virginia. You may need to probate property in multiple states unless you use a trust or other planning strategy.