It’s summer in Seattle. And naturally, as you enjoy summer’s warmth and colors, your mind drifts to the recent changes in our Washington estate tax. Marisa Russell recently blogged about the changes to the Washington estate tax that became effective on July 1, 2025. Marisa explained, “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. . . . 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.”
Many Seattle residents, especially longtime homeowners, would owe Washington estate tax according to the old $2,193,000 exemption. Now, with the new $3 million threshold, those same estates may fall below the tax line. For people in that camp, the latest Washington estate tax law provides welcome relief. However, for those whose assets exceed $3 million, the base tax and the tax rate will be higher under the new law. The consequences will become more significant as the higher tax brackets are reached.
For example, the mythical Susan Smith and Larry Jones own a home in Seattle and have bank accounts and retirement assets. Their assets are $4 million. Under the prior Washington estate tax law, their assets exceeding the $2,193,000 Washington estate tax exemption would be $1,807,000. Susan and Larry would owe a base tax of $100,000 and would pay a 14% tax, for a total of $352,980 owed in Washington estate tax.
Under the current Washington estate tax law, Susan’s and Larry’s assets exceeding the $3 million Washington estate tax limit would be $1 million. They would owe a base tax of $100,000 and would pay a 15% tax for a total of $250,000 owed in Washington estate tax – a savings of $102,980.
Susan’s parents, Edward and Valerie Smith, own a house in Bellevue, a cabin in Leavenworth, and have bank accounts and retirement savings. Their assets are $8 million. Under the prior Washington estate tax law, their assets exceeding the $2,193,000 Washington estate tax exemption would be $5,807,000. Edward and Valerie would owe a base tax of $550,000 and would pay a 18% tax for a total of $1,595,260 owed in Washington estate tax.
Under the current Washington estate tax law, Edward’s and Valerie’s assets exceeding the $3 million Washington estate tax limit would be $5 million. They would owe a base tax of $610,000 and would pay a 23% tax for a total of $1,760,000 owed in Washington estate tax – an additional expense of $164,740. As you can see, the new Washington estate tax law can create savings for Washingtonians with lower assets while generating additional tax burdens for those with higher assets.
As you contemplate these Washington estate tax changes as part of your summer beach reading, please let us know if you have any questions. We’re always happy to help.
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