Washington Estate Tax Update (Again!)

Stacey recently covered the latest updates to Washington’s estate tax laws Washington’s estate tax laws – and it’s fair to say things have been changing quite a bit. If it’s starting to feel like a bit of a rollercoaster, you’re not alone.

To recap: On March 24, 2026, Washington Governor signed Senate Bill 6347 Senate Bill 6347, which once again changes the rules. Starting July 1, 2026, we’re mostly back to the pre-2025 system, but with a $3 million exemption instead of $2.193 million and no future inflation adjustments.

Let’s go back to the Washington estate tax hypotheticals we looked at in 2025 Washington estate tax hypotheticals we looked at in 2025 and see how they’ve been impacted by the 2026 changes.

In the first hypothetical, 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 current Washington estate law, their assets exceeding the $3,076,000 million Washington estate tax exemption would be $924,000. Susan and Larry would owe a base tax of $0 and would pay a 10% tax on the $924,000, for a total of $92,400 owed in Washington estate tax. Note that these calculations differ from the 2025 blog post due to the inflationary adjustment in the exemption amount.

Under the new Washington estate tax law, as of July 1, 2026, Susan’s and Larry’s assets exceeding the $3,000,000 million Washington estate tax limit would be $1,000,000. They would owe a base tax of $100,000 and would pay a 14% tax on the $1M, for a total of $240,000 owed in Washington estate tax – an additional $147,600 in estate taxes.

In the second hypothetical, 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 current Washington estate tax law, their assets exceeding the $3,076,000 million Washington estate tax exemption would be $4,924,000. Edward and Valerie would owe a base tax of $610,000 and would pay a 23% tax on the amount over $4M ($924,000), for a total of $882,520 owed in Washington estate tax. Again, these calculations differ from the 2025 blog post due to the inflationary adjustment in the exemption amount.

Under the new Washington estate tax law, as of July 1, 2026, Edward and Valerie’s assets exceeding the $3,000,000 million Washington estate tax limit would be $5,000,000. They would owe a base tax of $550,000 and would pay an 18% tax on the $1M, for a total of $730,000 owed in Washington estate tax – a decrease of $152,520 in estate taxes.

What this means: larger estates see more meaningful relief due to the rollback of higher tax rates. But going forward, the lack of inflation adjustments means more estates may become taxable over time.

We know this is a lot to keep up with, and we’re here to help you make sense of it and navigate whatever comes next.