2025 Estate Tax Update for Washington State

by Kristy Hoad, Senior Associate Attorney

At the end of the 2025 legislative session, ESSB 5813 was passed and signed into law on May 20, 2025. The most important updates that concern Washington residents have to do with the estate tax exemption amount.

Previously, the estate tax exemption for Washington residents has been frozen at $2.193 million dollars since 2018. When the new law goes into effect on July 1, 2025, the estate tax exemption amount will increase to $3,000,000. The new law also provides for inflation adjustments to the exemption amount, according to the Consumer Price Index for the Seattle metropolitan area beginning January 1, 2025. This is going to be good news for a lot of Washington families, but there’s more.

With the new increase in the exemption amount, comes an increase in the amount of tax owed on the portion of the estate that is over the exemption amount. The previous tax amount was between 10-20%, only reaching 20% when an estate’s value reached $9 million over the exemption. The new law provides a tax rate between 10% and 35%. This is a massive increase that is more in line with the Federal estate tax law, without the benefit of a $14,000,000 million dollar exemption. Families that are $1,000,000 over the exemption amount will pay 10% in estate tax which is the same as the previous law. Families that are $3,000,000 over the exemption with pay 19%, a 3% increase. Families that are $9,000,0000 over the exemption will now pay 35%, a 15% increase.

For clients whose estates are nearing or exceeding the exemption amount, they need to consider strategies to minimize the effects of the new law like life bypass trusts, insurance trusts, lifetime gifting, and most importantly, making sure their estate documents are updated to reflecting these changes. 

Contact Us  to make a plan or get your documents updated.