A bill updating the WA estate tax exemption and estate tax rates was recently signed into law by Governor Ferguson. The changes take effect for deaths on or after July 1, 2026.
The new law rolls back the significant increase in tax rates that took effect July 1, 2025, but it does lower the exemption (non-taxable portion of the estate) to $3,000,000. The highest rate for WA estate tax effective July 1, 2026 is 20%.
For deaths between January 1, 2026 and June 30, 2026, the highest rate is 35% and the exemption is $3,076,000.
What does this mean for you?
Planning is key
It is very important to be aware of the future Washington estate tax that your future estate may incur. You should consult with an attorney, your financial advisor, and your CPA to ensure the your assets have the correct beneficiary designations, your estate planning documents are up-to-date, and to discuss options to mitigate future estate tax.
Domicile matters
Many Washington residents are considering moving to a different state to avoid future WA estate tax. If your domicile is in Washington, any tangible assets located in WA state and any intangible assets you own are subject to WA estate tax. If your domicile is outside of Washington, only tangible assets located in WA state are subject to WA estate tax. If you move to a state that has state income tax and establish domicile, the income tax you incur may offset the estate tax savings.
The Shannon & Associates estate planning team is ready to assist with any questions you have! Get in touch!
