June 3rd 2025.
Washington state is known for its beautiful landscapes, delicious apples, and now, its high estate tax rate. As of July 1, 2025, the state will levy a new rate of up to 35% on the estates of individuals who have passed away. This rate is currently the highest in the country, a significant increase from the previous top rate of 20%.
If you or someone in your family is facing the possibility of paying Washington state estate taxes, it is important to understand how this tax works and what steps can be taken to minimize the burden. To help with this, we have put together this long-ish blog post. It will explain the new formula for calculating the estate tax and highlight some tax planning strategies that may be beneficial for those affected.
First, let's review the basic formula for Washington state estate tax. For decedents who pass away on or after July 1, 2025, the following formula will be used:
- Estates up to $3,000,000 are exempt from estate tax due to an exclusion amount.
- Estates between $3,000,000 and $12,000,000 are subject to a graduated tax, starting at 10% and increasing steadily to the top rate of 35%.
For example, an estate worth $12,000,000 created between July 1 and December 31 of 2025 would owe $1,930,000 in estate taxes. The table below outlines the tax brackets in more detail.
Despite this increase in the estate tax rate, there are still some strategies that may help to minimize the burden for affected taxpayers. It is important to keep in mind that these strategies may not be applicable or beneficial for everyone, so it is best to consult with a professional before making any decisions.
One potential strategy is to gift assets during your lifetime. By giving away assets before you pass away, you can reduce the overall value of your estate and potentially lower the amount of estate tax owed. However, this approach may come with its own tax consequences, so it is important to carefully consider the pros and cons.
Another strategy is to set up a trust. A trust can help to protect assets from being subject to the estate tax, and also provide for your loved ones in a tax-efficient manner. However, setting up a trust can be complex and costly, so it is important to seek guidance from a professional.
In conclusion, the new higher-tax-rates Washington state estate tax formula may pose a challenge for some individuals and families. It is important to understand how the tax works and explore potential strategies to minimize the burden. If you are facing the possibility of paying this tax, we recommend consulting with a professional for personalized advice and guidance.
Washington state has a high estate tax rate of 35%, which applies to the estates of individuals who passed away on or after July 1, 2025. This is currently the highest estate tax rate in the entire country and is a significant increase from the previous top rate of 20%. This means that if you or someone in your family is facing the possibility of paying Washington state estate taxes, particularly at the top 35% rate, it's important to have a thorough understanding of how the estate tax system works and what steps can be taken to minimize the financial burden.
To assist with this, we have prepared a detailed blog post that breaks down the new Washington state estate tax formula and highlights some tax planning strategies that may be beneficial for affected taxpayers. Let's start by reviewing the basic formula that Washington uses to calculate estate taxes for decedents who passed away on or after July 1, 2025.
Firstly, estates up to $3,000,000 are exempt from paying any estate tax due to an exclusion amount. For estates between $3,000,000 and $12,000,000, a graduated tax is applied, starting at 10% and gradually increasing to the top rate of 35%. For example, an estate worth $12,000,000 created between July 1 and December 31 of 2025 would incur an estate tax of $1,930,000. The table below summarizes the different tax brackets and the corresponding tax rates.
Taxable Estate
Tax Equals Initial Amount Of
Plus Tax Rate Percentage Of
Greater Than
But Less Than
Taxable Estate
$0
$1,000,000
10%
$0
$1,000,000
$2,000,000
$100,000
15%
$1,000,000
$2,000,000
$3,000,000
$250,000
17%
$2,000,000
$3,000,000
$4,000,000
$420,000
19%
$3,000,000
$4,000,000
$6,000,000
$610,000
23%
$4,000,000
$6,000,000
$7,000,000
$1,070,000
26%
$6,000,000
$7,000,000
$9,000,000
$1,330,000
This means that the higher the taxable estate, the higher the corresponding tax rate. For example, an estate worth $2,500,000 would only pay a tax rate of 15%, while an estate worth $7,500,000 would pay a tax rate of 26%. It's important to note that these rates only apply to estates created on or after July 1, 2025.
If you are concerned about potentially paying Washington state estate taxes, it's crucial to understand these tax rates and how they may impact your estate. Additionally, there may be certain tax planning strategies that can help minimize the amount of taxes owed. It's always a good idea to consult with a financial advisor or tax professional for personalized advice and guidance.
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