Big Changes to Washington’s Estate Tax in 2025

Estate planning often brings up one critical question: what exactly is the estate tax? According to the Washington State Department of Revenue, the estate tax “is a tax on the right to transfer property at the time of death.” In Washington, the revenue generated from this tax is not absorbed into the general state budget – instead, it is directly specifically to the Education Legacy Trust Fund, which supports public education across the state.

In 2025, Washington enacted a major update to its estate tax laws, primarily reflected in RCW 83.100. These changes could have significant implications for high-value estates. Here’s what Washington residents need to know – especially if your estate may exceed the newly adjusted threshold.

Increased Estate Tax Exemption: The estate tax exemption for 2025 was originally set at $2,193,000. However, under the new law, this threshold increased to $3,000,000 for deaths occurring on or after July 1, 2025. Beginning in 2026, the exemption amount will be adjusted annually for inflation. In practical terms, if the value of your estate falls below the $3 million exemption, no Washington estate tax will be owed.

Higher Tax Rates for Larger Estates: While the increased exemption  benefits most Washington taxpayers, the new law also raises marginal estate tax rates, which could increase the tax burden on high-value estates. More specifically, under the new law, Washington estates valued over $9 million face higher estate tax rates, the highest rate being 35%.

Minimizing the Impact of Estate Taxes: Proactive planning is key to reducing potential estate tax liability. Depending on your circumstances, strategies such as lifetime gifting, establishing Crummey trusts, and making charitable contributions can help lower the taxable value of your estate. Married couples may also benefit from using both spouses’ exemptions through disclaimer trusts. Given the recent changes in the law, this is a critical time to review your estate plan to ensure it aligns with your goals and takes full advantage of available tax-saving opportunities.

All in all, Washington’s updated estate tax law brings welcome relief for many families but also introduces increased complexity for larger estates. If you’re unsure how these changes may affect your planning, we’re here to help. Contact our office to schedule a consultation and ensure your estate plan is both up-to-date and working to protect what matters most.