Big Changes to Washington State Estate Tax: What You Need to Know in 2025
- Davies Law Office
- May 22
- 2 min read
If you live in Washington State, significant changes just went into effect to the estate tax laws that could impact your legacy planning. On July 1, 2025, updates to the state’s estate tax system will go into effect, thanks to new legislation recently passed in Olympia. As your estate planning attorneys, we want to explain what these changes mean for you and your family — in plain English.
What’s Changing?
✅ Higher Exemption Amount
Currently, estates in Washington owe estate tax if they exceed approximately $2.2 million. Starting July 1, 2025, that threshold will jump to $3 million.
This is great news for many Washingtonians — it means more of your assets can be passed to your heirs without being subject to estate tax. Even better, this new exemption will increase with inflation over time, helping it keep pace with rising property values and investments.
💰 New Tax Brackets for Larger Estates
The unfortunate news for families with larger estates is that the state has also updated the tax rate structure to be more progressive, meaning higher-value estates will see higher tax rates. While smaller estates may pay the same or less, taxable estates above $1 million will face increased rates.
Here’s a snapshot of the new estate tax brackets:
Washington State Estate Tax Exemption 2025 Chart
Taxable Estate (Above Exemption) | Tax Rate (starting July 1, 2025) |
$0 – $1 million | 10% |
$1 – $2 million | 15% |
$2 – $3 million | 17% |
$3 – $4 million | 19% |
$4 – $6 million | 23% |
$6 – $7 million | 26% |
$7 – $9 million | 30% |
Over $9 million | 35% |
This is a significant increase from today’s top rate of 20%. If your estate could fall into one of the higher brackets, it’s especially important to plan ahead.
🏢 Expanded Family Business Deduction
Good news for small business owners: the deduction for qualified family-owned businesses will increase from $2.5 million to $3 million, and it too will be indexed for inflation. This deduction can help preserve your business across generations without triggering estate taxes.;
🧾 What Should You Do Now?
Even though these changes don’t kick in until mid-2025, now is the perfect time to review your estate plan:
Are you close to the new $3 million exemption? If so, it may be time to revisit your will or trust strategy.
Do you own a business or high-value property? The increased tax rates could affect your heirs.
Do you want to avoid surprises? Proactive planning may help minimize taxes and maximize your legacy.
Read more on the recent tax changes affecting you and your family here - 5813-S.E SBR APS 25
Review Your Estate Plan Today
As always, we are here to help guide you through these changes and tailor a plan that fits your values and goals.
Contact us today - 425-440-3494 or office@dlolawgroup.com
