Washington Estate Tax: Rates and Exemptions Explained
Apr 4, 2024
Washington Estate Tax: How Rates and Exemptions Affect Your Family
Washington has the highest state estate tax rates in America, and its exemption is much lower than the federal level.
Current Washington Estate Tax Rates
2025 rates: Progressive rates from 10% to 20%
Exemption amount: $2.193 million per person (significantly lower than the federal exemption, which is over $13 million in 2025)
Taxable estates: Only the portion of an estate above $2.193 million is subject to Washington estate tax.
Note: The exemption does not automatically double for married couples. Careful planning is required to maximize both spouses’ exemptions.
Washington Estate Tax Rate Schedule
$0 - $1 million (taxable amount): 10% rate
$1 - $2 million: 14% rate
$2 - $3 million: 15% rate
$3+ million: Up to 20% rate
These rates apply only to the portion of the estate above the exemption. For example, if your estate is $3 million, only $807,000 is taxable ($3 million minus $2.193 million exemption).
Real-World Impact Examples
$3 million estate: Could owe approximately $150,000 in Washington estate tax, depending on deductions and how the estate is structured.
$5 million estate: Could owe around $400,000 in Washington estate tax, but the exact amount depends on the composition of the estate and available deductions.
These are estimates. The actual tax bill can vary based on debts, deductions, and how assets are titled.
Washington-Specific Planning Strategies
Credit shelter trusts: These can help married couples use both spouses' exemptions, but require proper legal drafting and funding.
Gifting strategies: Lifetime gifts can reduce the size of your taxable estate, but large gifts may have federal gift tax consequences. Washington does not have a separate gift tax, but gifts made within three years of death may be pulled back into the estate for tax purposes.
Life insurance trusts: Placing life insurance in an irrevocable trust can keep the death benefit out of your taxable estate, but the trust must be set up and funded correctly.
Washington's estate tax can significantly impact your family's inheritance, especially for estates just above the exemption threshold.
Planning ahead is key. Even modest estates can face a substantial tax bill if not structured properly. Consider reviewing your estate plan regularly, especially if your assets are close to or above the exemption amount.
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Disclaimer: This blog post is for general informational purposes only and is not legal advice. Estate tax outcomes can vary widely based on your personal circumstances, the structure of your assets, and the evidence or documentation available. Always review your situation carefully before making decisions.