Law Change: 2025 Washington Estate Tax

Does the Estate Tax law change really effect you? Effective July 1, 2025, the Washington State estate tax exemption will increase from $2.193 million to $3 million per individual. This change represents a significant adjustment to the state's estate tax framework and offers potential tax relief for many Washington State residents with moderately sized estates.

With the new law taking effect on July 1, 2025, estates valued at or below $3 million will no longer be subject to state estate tax. This increased exemption could result in substantial savings for families and offers a meaningful opportunity to revisit existing estate plans. Additionally, the exemption amount will now be indexed for inflation, helping ensure that the exemption retains its value over time and adjusts to reflect changes in the cost of living.

Currently, the estate tax exemption allows each individual to pass up to $2.193 million in assets without incurring Washington State estate taxes. Any amount above that had been taxed on a graduated scale, with rates ranging from 10% to 20%, depending on the size of the estate.

 For many couples and individuals whose, this increase may remove or reduce the need for advanced tax planning strategies. However, for those with estates still exceeding the new threshold, careful planning remains essential. This is particularly true when considering non-traditional assets, such as digital property a.k.a. digital assets (see next article), which can often be overlooked but may carry substantial value.

If you have any questions about how this may affect your estate planning, please give Rehberg Law Group a call at 206.246.8772.