Washington State Raises Estate Tax Threshold to $3 Million
By Matthew M. Luedke, Managing Attorney, Moulton Law Offices, P.S.
Big news for Washington families: starting July 1, 2025, the Washington State estate tax exemption increases from $2.193 million to $3 million. This change, along with new tax rates and adjustments, marks one of the most important estate planning updates in years. At Moulton Law Offices, our Spokane estate planning lawyers break down what is changing, who’s impacted, and how you can prepare.
Key Highlights of the Estate Tax Changes
Higher Exemption Amount
Estates valued up to $3 million per person will now be exempt from Washington’s estate tax, which is a long-overdue increase from the prior $2.193 million threshold.
Annual Inflation Adjustments
Starting January 1, 2026, the $3 million exemption will increase annually with inflation, helping protect families from future asset growth pushing them over the limit.
Increased Tax Rates for Large Estates
Estates over $3 million face steeper taxes, with a top marginal rate of 35% on estates exceeding $9 million (previously capped at 20%). To see how these increased rates might impact your estate, you can use our Estate Tax Calculator.
Larger Family Business Deduction
The deduction for qualified family-owned businesses rises to $3 million, offering added protection for closely held enterprises.
Contact our Spokane estate tax lawyers for mor information or assistance.
What This Means for You
Relief for Mid-Sized Estates
Families with estates between $2.2 million and $3 million will no longer owe Washington estate taxes, offering real meaningful tax relief.
Increased Exposure for Large Estates
Families with estates over $9 million will face a significantly higher tax burden due to the increased rates. Strategic planning is essential to preserve generational wealth.
Why You Should Update Your Estate Plan
Even if you fall below the exemption today, regular reviews ensure:
– Wills, trusts, and gifting plans stay aligned with current law.
– Married couples maximize available exemptions.
– Family business owners leverage the expanded deductions.
– Large estates use charitable or advanced planning to minimize taxes.
How Moulton Law Offices Can Help
At Moulton Law Offices, we create tailored estate plans that protect what matters most. Our experienced team, led by Managing Attorney Matthew M. Luedke, is ready to:
– Analyze how these new tax laws affect your situation.
– Recommend updates to keep your estate plan current.
– Develop custom strategies to preserve your family’s wealth and legacy.
We’re here to help you navigate these changes with confidence.
Schedule Your Strategy Session
Call us at (509) 328-2150 to schedule your confidential consultation.
Let our Spokane estate planning & estate tax lawyers make sure your estate plan works for you today and for generations to come.
