Washington Estate Tax: How We Got Here and Who Pays
Navigating the Washington estate tax requires understanding specific exemptions and rates, essential for effective estate planning.
The Washington estate tax is a state-level levy on the transfer of property at passing. It operates independently from the federal estate tax and has its own rates, exclusions, and rules.
A Brief History
In 1981, voters approved Initiative 402. That measure repealed the state’s inheritance and gift taxes effective January 1, 1982, and replaced them with a “pick-up” estate tax tied to a federal credit. When Congress phased out that federal credit in the early 2000s, it threw Washington’s system off balance.
In 2005, the Washington Supreme Court’s Estate of Hemphill decision highlighted how dependent the old scheme was on federal law. Then, the Legislature enacted a stand-alone state estate tax (Chapter 83.100 RCW), breaking the link to the federal credit. Later, two cases—Bracken (2012) and Hambleton (2014)—led to clarifying amendments around QTIP marital trusts. Those changes now shape tax on certain spousal trusts.
For passings on or after July 1, 2025, Washington’s exclusion amount is $3,000,000. Therefore, only amounts above that figure are subject to state estate tax (but no inheritance tax). Also, the rate schedule is graduated. It starts at 10% and rises in steps to 35% for Washington taxable estates over $9 million. Earlier dates of passing use prior brackets and a $2,193,000 exclusion.
Washington also adjusts key amounts annually beginning in 2026, based on a CPI calculation the Department of Revenue updates each year. Check the state’s estate-tax table for the latest thresholds and rates.
Who Pays Washington Estate Tax
Residents pay tax on property located in Washington State. The statute treats a resident’s intangible property—like stocks or bank accounts—as located in Washington. Therefore, a state resident’s worldwide intangible assets can factor into the Washington estate tax, subject to deductions and the exclusion.
Nonresidents can still face tax on real estate and tangible personal property sited in the state, such as a vacation home or equipment kept here. The state uses an apportionment formula that taxes the in-state share only. It uses a ratio of Washington property to the gross estate.
(Learn More: Read about revocable trusts in Washington versus Nevada.)