On July 1, 2025, Washington State officially increased its estate tax exemption from $2.193 million to $3 million. Along with this adjustment, higher tax brackets now peak at 35%, and the exemption is indexed for inflation going forward. For individuals and families managing wealth transfer strategies, this shift offers both relief and new considerations. Working with an experienced estate tax planning lawyer may help residents understand how these updates affect long-term financial and legacy goals.
While Washington’s move represents one of the more significant state-level estate tax updates in recent years, it also draws attention to ongoing debates in other states—particularly in neighboring Oregon. There, proposed reforms would significantly raise the state exemption to $7 million, or potentially match the current federal exemption, while also introducing portability for spouses. If passed, these reforms could reshape estate planning strategies for Oregon families in ways similar to Washington’s new framework.
Understanding The Impact In Washington
The increase to a $3 million exemption is a welcome update for many Washington residents, as it reduces the number of estates subject to state-level taxation. The adjustment is especially relevant for homeowners in regions where rising property values have pushed estate sizes upward. Indexing the exemption for inflation means that the threshold will gradually rise over time, helping to prevent future bracket creep.
The top rate of 35% still makes Washington’s estate tax one of the more aggressive in the nation, particularly compared to states with no estate tax at all. This means individuals with larger estates still need to plan carefully to minimize tax liabilities. Common strategies—such as lifetime gifting, charitable trusts, and irrevocable life insurance trusts—can be tailored to work within Washington’s new rules while aligning with personal and family objectives.
Oregon’s Potential Shift In Policy
Oregon’s proposed reforms, while not yet enacted, are noteworthy. By raising the exemption to $7 million or matching the federal level (currently $13.99 million in 2025), Oregon could dramatically reduce the number of taxable estates in the state. The potential addition of portability for spouses would also give married couples more flexibility, allowing the unused portion of one spouse’s exemption to be transferred to the other.
If passed, these changes would align Oregon more closely with the estate tax approach in states that prioritize reducing the tax burden on families while still maintaining some level of taxation on larger estates. For residents living near the Washington–Oregon border, these reforms could influence decisions about where to live, retire, or transfer wealth.
Why Proactive Planning Still Matters
Even with higher exemptions, estate tax planning remains an integral part of preserving wealth and making certain that assets are distributed according to personal wishes. The right strategies can help reduce tax liabilities, avoid probate delays, and protect family harmony. For individuals with multi-state property holdings or potential exposure to both federal and state estate taxes, understanding current laws and proposed changes is imperative.
To explore strategies that align with your goals and keep pace with evolving laws, it may be time to review your plan with a professional. You can also list your services with Estate Planning Pros to connect with readers seeking guidance on these complicated issues. Our professionals offer a trusted platform for professionals and clients alike, helping ensure your expertise reaches those who need it most.