Washington Estate Tax Legislative Update

by Paul Premack, CELA

State Capitol of Washington, Olympia

Earlier today (03/03/26) an attorney colleague alerted me to SB 6347 in the Washington legislature. Last year, the Washington estate tax underwent three significant changes: first, the tax rates were dramatically increased to top out at 35%; second, the exemption was raised from approximately $2.2 million to about $3 million; and third, the language was amended to ensure that the exemption could be adjusted for inflation.

Current Legislative Proposal

A new proposal, SB 6347, has been introduced and passed in the state Senate. This bill aims to roll back the recently increased tax rates to the more moderate rates of previous law. Specifically, the maximum rate would return to 20%, which is significantly more tolerable than the current maximum of 35%. The Senate's action represents a positive step toward making the estate tax more manageable for Washington residents.

Amendments in the House Finance Committee

When the bill reached the House Finance Committee, it was amended to revert the exemption amount back to its prior level of about $2.2 million. This would reduce the new exemption from $3+ million, exposing many more residents to the estate tax. Despite the exemption roll-back, the House retained the corrected language ensuring that the exemption could be adjusted for future inflation.

Concerns and Recommendations

In my view, the House should adopt the original Senate bill without amendments. With real estate values at record highs, many "middle class" clients are concerned they may be subject to the Washington estate tax, especially as their fears about the federal estate tax have diminished.

Rationale for Retaining the Higher Exemption

The legislature should lower the tax rates and keep the higher exemption. The 2025 law increasing the exemption from $2,193,000 to $3+ million merely corrected a past wording error that prevented annual inflation adjustments. The original intent was for the exemption to rise with inflation, but the faulty language kept it stagnant. Maintaining the $3+ million exemption would place the exemption amount where it should have been if the language granting the inflation adjustment been correct from the start. Reverting to the old exemption as per the House amendment would deny Washington residents the inflation adjustment originally intended.

Impact on Washington Residents

As an estate planning attorney, I have seen "middle class" clients worry about exposure to the Washington estate tax, especially now that concerns over the federal estate tax have subsided. There are families who have chosen to move to states without an estate tax, like Texas. Keeping the $3+ million exemption, lowering rates, and retaining inflation adjustments would help alleviate these concerns. If the exemption is reduced to $2,193,000, Washington may experience further migration, which could negatively affect the state's economy.

Call to Action

If you are a Washington resident or own real property in the state, I urge you to contact your state representatives and senator. Ask them to support the original SB 6347 without the amendments added by the House Finance Committee. Time will run out in the next few days.

Here is the link to submit comments on the bill: app.leg.wa.gov/pbc/bill/6347  

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Posted on 03/03/26

Paul Premack is an estate planning attorney licensed in Washington and Texas. He is certified as an Elder Law Attorney by the National Elder Law Foundation.