Will you be revising your estate planning documents in 2025? Or perhaps tackling your estate planning for the first time? If so, here’s what’s new and what’s the same in 2025:
- Federal Estate Tax. The federal estate tax exclusion amount is the amount that can be passed to heirs without triggering any federal estate or gift tax liability. That exclusion amount will remain the same as in 2024 – $13.61 million for individuals ($27.22 million for married couples). However, the Tax Cuts and Jobs Act (TCJA) which creates this high exclusion amount is scheduled to sunset on December 31, 2025, causing the federal estate tax limits to revert to approximately $7 million per individual ($14 million for married couples). Will Congress act to extend the current exclusion amount? Stay tuned!
- Annual Gifting. Some people facing potential estate tax liability on either the federal or the state level choose to limit their exposure by making annual exclusion gifts. Please see this link for a more detailed explanation of how these annual exclusion gifts work. In 2024, you could make annual gifts in the amount of $18,000 per individual. In 2025, that amount has been increased to $19,000 per individual.
- Washington Estate Tax. Last year, I reported that the Washington estate tax exclusion amount would continue at its 2018 level of $2.193 million per individual. In 2025, that amount again remains the same. The Washington legislature will need to act before this estate tax exclusion can be updated. For now, unlike the current federal estate tax exclusion amount, the Washington estate tax exclusion amount is low enough to be an issue for many – particularly King County homeowners. The median price for a single-family home in King County is approaching a million dollars, which is almost half of Washington’s estate tax exclusion amount.
Do you have questions about how these 2025 changes (and non-changes!) might impact your estate planning? Please let us know. We’d be happy to help.
Phone: (206) 784-5305
