Washington state enacted substantial estate tax reforms effective July 1, 2025. The exclusion amount per estate increased from $2.193 million to $3 million, with future automatic adjustments for inflation. This change exempts more modest estates from state tax, alleviating liability for many families, especially those near the prior threshold.
However, estates that exceed this exemption now face much steeper tax rates—specifically, the top marginal rate rose sharply from 20% to 35% for taxable values above $9 million, giving Washington the highest top state estate tax rate nationwide.
Deductions for qualified family business and farm property were modestly expanded and eligibility broadened, aiming to boost intergenerational farm succession and family business preservation. While more estates are now exempt, higher net worth individuals with large estates might want to head to a favorite estate planning attorney for a fresh look at existing plans.