In a move aimed at addressing Washington State’s significant budget shortfall, the legislature recently passed a law that raises estate taxes—making them the highest in the country. The old adage about the certainty of death and taxes has never felt more relevant.
Since the announcement, we’ve received numerous calls and emails from clients wondering what they should do in response. Can they avoid the taxman’s reach? Should they move out of Washington? Give their assets to their children now? Set up an irrevocable trust?
After everyone pauses to take a breath, we gently remind them that we aren’t estate planners or tax professionals. We strongly encourage people to consult their attorney and accountant to discuss their individual circumstances. But, surprisingly, the answer might be: “It’s going to be okay,” and “You might not need to do anything at all.”
It really depends on where you fall on the wealth spectrum.
Some Good News for Many
Believe it or not, this legislation includes some positives for a large number of Washington residents. As of July 1, 2025, the estate tax exemption will increase from $2.193 million to $3 million, with annual inflation adjustments going forward. That means many estates that previously required an estate tax filing may now be exempt. This is welcome news for many Washingtonians—particularly those with “modest” estates in the $2–3 million range.
Challenges for the Very Wealthy
For wealthier residents, however, the new law brings more burdens. Estates valued above $3 million will be subject to a graduated tax, starting at 10% and climbing sharply to 35%. When combined with the federal estate tax, the effective rate can exceed 60%. For those in this category, working with an experienced estate planning attorney is essential.
Potential strategies they might recommend include:
- Relocating to another state – Establishing residency elsewhere takes time and commitment but could remove your estate from Washington’s tax jurisdiction.
- Partial relocation and asset movement – Buying property in another state and moving tangible assets—like cars, artwork, or boats—can reduce what’s subject to Washington’s estate tax.
- Gifting during your lifetime – Giving to heirs or charity now means those assets won’t be taxed later.
- Charitable bequests – Amounts left to qualified charities are excluded from your taxable estate. Whether you give some or all, this can reduce or even eliminate your estate tax liability.
Once you’ve identified your top five, do one of two things:
- Create a List: Write down those five items, noting the people you want to receive them. Sign and date the list and store it with your will so your Personal Representative can easily find it. After that, continue to enjoy these items while you’re alive—don’t feel the need to list every single item in your home. That can make the task unnecessarily complicated and often prevents you from getting started.
- Give Them Now: If it brings you joy, consider giving those five items away while you’re still alive. Giving them to the next generation now can avoid future conflicts and eliminate any ambiguity about your intentions. Plus, if you’ve named a professional Personal Representative, it can reduce the cost and complexity of settling your estate.
A Broader Perspective
When the subject of taxes comes up, I like to remind people that paying them often reflects a good problem to have—it means you’ve been successful, built wealth, and now have the opportunity to leave a legacy.
I also think it’s important to understand where this tax revenue goes. In Washington, estate tax collections primarily fund the Education Legacy Trust Fund. These dollars support public education through initiatives like smaller class sizes, teacher training, learning assistance programs, early childhood education, and access to higher education.
Benjamin Franklin famously said, “In this world, nothing is certain except death and taxes.” While the first is inevitable, the second can—and should—be planned for, ideally with the understanding that some level of taxation contributes to the society and public services we value.
Additional information available in our Washington Estate Exemption and Tax Rates PDF Sheet
WE Trust offers Estate Panning Services and much more.