Virginia does not have a state estate tax

Virginia has no estate tax of its own. When you die, your estate will not owe Virginia state taxes based on its size or value. This is different from the federal estate tax, which the IRS collects on estates above a certain threshold, but Virginia itself does not layer on an additional state-level tax.

This matters because some states do impose their own estate taxes alongside the federal one. Virginia is not one of them. If you live in Virginia or own property there, you will not face a Virginia estate tax bill, though you may still owe federal estate tax depending on your estate's total value.

Virginia also has no inheritance tax, which is a separate tax some states charge to people who receive money or property from a deceased person. So beneficiaries in Virginia do not pay tax on what they inherit based on Virginia law.

Key Takeaways

  • Virginia imposes no state estate tax on estates of any size, regardless of how much money or property you leave behind.
  • Virginia also has no inheritance tax, so beneficiaries do not owe state tax on what they receive from a deceased person's estate.
  • The federal estate tax still applies to Virginia residents and Virginia property if the estate exceeds the federal threshold, which changes yearly.
  • Neighboring states have different rules—some have estate taxes and some do not—so your state of residence matters for tax planning.

How federal estate tax differs from state estate tax

The federal government taxes large estates through the IRS, while states that have an estate tax collect their own version. Virginia has chosen not to impose a state version at all. The federal threshold—the amount your estate must exceed before federal tax applies—changes each year based on inflation. In 2024, for example, the federal threshold was $13.61 million per person, but this amount is set to drop significantly in 2026 unless Congress acts.

Because Virginia has no state estate tax, you do not have to worry about a Virginia-specific calculation or filing. However, if your estate is large enough to trigger the federal tax, you will still need to file a federal estate tax return with the IRS and potentially pay federal tax, even though Virginia will not collect anything.

The absence of a state estate tax does not mean your estate avoids all taxes. Your heirs may owe income tax on certain inherited assets, and some assets like retirement accounts or life insurance have their own tax rules. But those are different from an estate tax.

States that do and do not have estate taxes

Roughly half of U.S. states have no estate tax at all. Virginia falls into this group. Other states without an estate tax include Florida, Texas, Wyoming, and many others. However, some states do impose an estate tax—including Maryland, which borders Virginia—and a few states impose both an estate tax and an inheritance tax.

If you have moved to Virginia from another state or own property in multiple states, the rules of each state where you own property may explore. For example, if you own real estate in Maryland, Maryland's estate tax could explore to that property even if you live in Virginia. This is why people who own property across state lines sometimes work with an estate planning attorney to understand their full tax picture.

The federal estate tax applies to all U.S. residents regardless of which state they live in, so Virginia residents are subject to it just like residents of any other state. The difference is that Virginia does not add a state layer on top.

When you might still owe estate-related taxes in Virginia

Even though Virginia has no estate tax, your estate may still owe taxes in other forms. If your estate includes a retirement account like a traditional IRA or 401(k), your beneficiaries will owe income tax on the withdrawals they make from that account. If your estate includes appreciated stock or real estate, your heirs may owe capital gains tax when they sell it. These are income taxes, not estate taxes, but they reduce the amount your heirs actually receive.

Life insurance proceeds are generally not subject to income tax when paid to a beneficiary, but if your estate is very large, the life insurance death benefit itself can be counted as part of your taxable estate for federal purposes. The same applies to retirement accounts and other assets—they count toward your total estate value for the federal threshold calculation.

Virginia also has probate fees and court costs associated with settling an estate, though these are not taxes. These fees vary depending on the size of the estate and whether the estate goes through the full probate process or uses a simpler method.

How Virginia's lack of estate tax compares to neighboring states

Virginia's neighbors have different approaches. Maryland has a state estate tax with a threshold of $5.75 million per person (as of 2024, though this changes yearly). Washington D.C. also has an estate tax. North Carolina, West Virginia, and Kentucky have no state estate tax. This means if you live near the Virginia border and own property in multiple states, you could face different tax rules depending on which state owns what.

For people considering where to retire or relocate, state estate tax policy is one factor among many. Since Virginia has no estate tax, it may be attractive to people with large estates who want to avoid state-level estate taxation. However, other states without estate taxes may have higher income taxes or property taxes, so the overall tax picture depends on your specific situation.

What you should do if you have a large estate

If your estate is likely to exceed the federal threshold—currently $13.61 million per person in 2024—you may want to work with an estate planning attorney or tax professional to understand your federal tax exposure. Virginia has no state estate tax to worry about, but the federal tax can be substantial, and there are legal strategies to reduce it, such as gifting, trusts, and charitable donations.

Even if your estate is below the federal threshold, you should have a will or trust in place to direct how your property is distributed and to name guardians for minor children if applicable. Virginia probate courts will follow your will if you have one, or Virginia's intestacy laws if you do not. These are separate from estate tax but equally important for your heirs.

If you own property in more than one state, an attorney can help you understand whether any of those other states have estate taxes that might explore. You should also review your beneficiary designations on retirement accounts, life insurance, and payable-on-death accounts, since these pass directly to the named beneficiary and do not go through your will.

Frequently Asked Questions

If I move to Virginia from a state with an estate tax, do I still owe that state's tax?

No. Once you establish Virginia residency, you are subject to Virginia's tax laws going forward. However, if you still own property in your former state, that state's laws may explore to that specific property. Your residency is determined by where you live, work, and have your main home, so moving to Virginia and establishing residency there means Virginia law applies to your overall estate.

Does Virginia tax inherited money or property?

Virginia has no inheritance tax, so beneficiaries do not owe Virginia state tax on what they inherit. However, beneficiaries may owe federal income tax on certain inherited assets, such as distributions from retirement accounts. The type of asset and how it is structured determines whether income tax applies.

What is the federal estate tax threshold for 2024, and when does it change?

The federal threshold in 2024 is $13.61 million per person. This amount adjusts yearly for inflation. However, the law is currently set to drop this threshold to approximately $7 million per person in 2026 unless Congress changes it. Virginia residents should monitor this change since it affects whether a federal estate tax return is required.

If my spouse and I live in Virginia, can we combine our estate tax thresholds?

For federal estate tax purposes, married couples can use portability to combine their thresholds, which means the surviving spouse can use the unused portion of the deceased spouse's threshold. This is a federal rule, not a Virginia rule. An estate planning attorney can explain how portability works and whether it makes sense for your situation.

Do I need an estate plan if Virginia has no estate tax?

Yes. Even without state estate tax, you need a will or trust to direct how your property is distributed, name guardians for minor children, and avoid probate delays if you prefer. You also need to name beneficiaries on retirement accounts and life insurance. These steps protect your heirs regardless of whether estate tax is a concern.