This article was first published on May 29, 2025, and has been updated as of October 10, 2025, to reflect recent changes in law.
Changes to the Washington Estate Tax
As of July 1, 2025, the State of Washington has changed how it taxes estates upon a decedent’s death. For many individuals, this change may have a significant impact on their estate plan and intended beneficiaries, particularly for individuals who want to maximize the amount of their estate passing to children, family members, or other non-charitable beneficiaries.
Washington is one of only a handful of states that impose a separate state-level estate tax, in addition to the Federal Estate Tax. Currently, the Washington Estate Tax applies to estates of decedents who are either (1) Washington residents at the time of their death, or (2) non-residents who own real estate or tangible personal property located in Washington.
For deaths occurring prior to July 1, 2025, the law remains unchanged and imposes a marginal tax rate ranging between 10% and 20% on the value of estates exceeding the “applicable exclusion amount” (think “credit”) of $2,193,000. This means that for each dollar of a decedent’s estate that exceeds $2,193,000, the estate is taxed between 10% and 20%, depending on the total value of the estate and deductions available to the estate.
For deaths occurring after June 30, 2025, the applicable exclusion amount is now increased to $3,000,000 per person and will be adjusted for inflation each year starting on January 1, 2026. However, the marginal tax rates applicable to estates in Washington are being expanded and increased. The following table summarizes the old and new tax rates applicable to amounts exceeding the available applicable exclusion amount:
| Portion of Estate Exceeding
Applicable Exclusion Amount |
Before July 1, 2025
Marginal Tax Rate |
After June 30, 2025
Marginal Tax Rate |
| $0 to $1,000,000 | 10% | 10% |
| $1,000,000 to $2,000,000 | 14% | 15% |
| $2,000,000 to $3,000,000 | 15% | 17% |
| $3,000,000 to $4,000,000 | 16% | 19% |
| $4,000,000 to $6,000,000 | 18% | 23% |
| $6,000,000 to $7,000,000 | 19% | 26% |
| $7,000,000 to $9,000,000 | 19.5% | 30% |
| $9,000,000 and up | 20% | 35% |
What do these changes in exclusion amounts and marginal tax rates mean practically? Broadly, residents with a gross estate of $8,800,000 can plan on paying less estate tax than they would have under prior law. However, Washington residents that have estates over $8,800,000 should plan on paying more estate taxes than they would under prior law. The following chart illustrates the difference in estate taxes for decedents dying before July 1, 2025, and those dying on July 1 or after:
|
Gross Estate Size |
Estimated Estate Tax
(Before July 1, 2025) |
Estimated Estate Tax
(After June 30, 2025) |
| $3,000,000 | $ 80,700 | $ 0 |
| $4,000,000 | $ 212,980 | $ 100,000 |
| $5,000,000 | $ 361,050 | $250,000 |
| $6,000,000 | $ 519,120 | $ 420,000 |
| $7,000,000 | $ 695,260 | $ 610,000 |
| $8,000,000 | $ 875,000 | $ 840,000 |
| $9,000,000 | $ 1,063,330 | $ 1,070,000 |
| $10,000,000 | $ 1,257,365 | $ 1,330,000 |
| $11,000,000 | $ 1,452,365 | $ 1,630,000 |
| $12,000,000 | $ 1,651,400 | $ 1,930,000 |
Note: the estimates provided above are for illustration purposes only and do not account for various tax deductions which may be available, such as deductions for administrative expenses, debts, and charitable bequests.
Importantly, for married couples who want to leave most of their estate to their spouse, an available marital deduction continues to permit the spouses to defer estate taxation for any amount of their estate passing to a surviving spouse. However, married couples should also consider that such amounts received from the deceased spouse would typically be included in the survivor’s estate at the survivor’s death, and potentially taxed. Additionally, the applicable exclusion amount available to the first-spouse-to-die is often wasted and unavailable to shield the transfer of assets to children (or other family members) at the surviving spouse’s death because the transfer from the deceased spouse to the surviving spouse was already covered by the marital deduction. This can leave the surviving spouse with only a single applicable exclusion amount to shield the joint estate from taxation when it is transferred to children at the survivor’s death. With advance planning incorporated into a Will or Living Trust, the spouses could structure their estate plan in a flexible manner that simultaneously permits the surviving spouse the lifetime benefit of the assets received from the deceased spouse’s estate, while also ensuring that the deceased spouse’s applicable exclusion amount is available to shield those assets from estate taxation when they are transferred to children or other beneficiaries, effectively permitting spouses to jointly transfer up to $6,000,000 of assets to children or other beneficiaries, instead of just $3,000,000.
Increases to the Federal Estate & Gift Tax and Generation-Skipping Transfer Tax Exclusions
While the State of Washington only imposes an estate tax on transfers at death, the Federal government imposes a separate and integrated Estate Tax and Gift Tax, as well as a Generation-Skipping Transfer Tax.
Unlike the Washington Estate Tax, the Federal Estate Tax and Gift Tax is a flat 40% tax on the value of assets transferred from a decedent’s estate or transferred during life as a gift. As a result of the “One Big Beautiful Bill” signed into law this past July, starting on January 1, 2026, each United States citizen and permanent resident will have a $15,000,000 “Unified Credit” which may be applied against transfers subject to the Federal Estate Tax, as well as transfers made during life which are subject to the Federal Gift Tax. The Unified Credit is indexed to inflation and will be adjusted each year. Importantly for married couples, unused portions of the Unified Credit may be transferred from a deceased spouse to the surviving spouse by timely filing a federal estate tax return (IRS Form 706). This allows a married couple to jointly transfer up to $30,000,000 of assets at death, or during life, without paying Federal Estate or Gift Taxes.
In addition to the Unified Credit, each person has an Annual Gift Exclusion of $19,000 (in 2025), which permits you to give up to $19,000 per person to as many people as you want each year. If the gift is $19,000 or less, the Annual Gift Exclusion does not reduce the Unified Credit for lifetime gifts, and no Gift Tax reporting to the IRS is required. The Annual Gift Exclusion is adjusted for inflation; however, the IRS has not announced whether the amount of the exclusion will be increased for 2026.
Finally, the Federal government imposes an additional Generation-Skipping Transfer (GST) Tax on gifts, made during life or at death, which have the effect of skipping successive generations and therefore avoiding estate and gift tax in the skipped generations. Starting on January 1, 2026, each United States citizen and permanent resident will have a $15,000,000 GST Tax Credit of $15,000,000, which may be applied to transfers which would otherwise be subject to the GST Tax. For married couples, it should be noted that unused portions of a deceased spouse’s GST Tax Credit may not be transferred to the surviving spouse for later use.
As with all legal and tax issues, the devil is in the details and the information provided above is a condensed summary of recent and upcoming changes. If you have any estate or tax planning questions, or want to know more about how these changes apply to your individual circumstances, please contact one of our knowledgeable attorneys or call us at 206-624-6271 for more information.
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