Washington has enacted significant estate tax reforms effective July 1, 2025, aimed at easing the tax burden on middle-income families while increasing obligations for high-value estates.

This week, Gov. Ferguson signed SB 5813 into law, meaning that Washington has enacted significant estate tax reforms effective July 1, 2025, aimed at easing the tax burden on middle-income families while increasing obligations for high-value estates. The exemption threshold has been raised from $2.193 million to $3 million, adjusted annually for inflation, reducing the number of estates required to file a return. Additionally, a new Spousal Personal Residence Exclusion allows a decedent’s share of the family home to be excluded from the estate’s value when determining filing requirements, provided the surviving spouse inherits the home and both spouses occupied it for at least six months prior to death. To fund education initiatives, the state has introduced a more progressive estate tax rate structure, with rates increasing up to 35% for estates exceeding $9 million. What are Washington’s estate tax funds used for? They provide funding for:

* The student achievement fund for reducing class sizes, professional development of teachers, extended learning such as before- and after-school programs, and pre-kindergarten learning;

* Learning assistance programs to help K-12 students who are not up to standards; and

* Higher education (which includes money for financial aid, supporting additional enrollment of students, adult basic education programs in community colleges, work-study programs, etc.).

These changes to the estate tax laws underscore the importance of proactive estate planning to navigate the evolving tax landscape. If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today.